Credit insurer Euler Hermes has forecast UK vehicles sales to go down 5% this year and 6% the next, after a five-year-long growth period.
Out of the eight countries surveyed in the company’s annual automotive industry report, the US was the only other market that was expected to shrink, by 2.5% in 2017 and 1.8% in 2018.
This would mark an end to good times for the UK’s new car sector, where dealers saw pre-tax margins of 8.6% last year, the highest across all countries surveyed.
Globally, sales for new cars are expected to grow 2.1% this year and 2.8% in 2018. The report forecast sales for 100m vehicles by 2019. China and India are to be the main drivers of growth, with sales in India booming 13.5% next year.
The slowdown in the UK and US, meanwhile, was linked by the report to a shift towards the second-hand market.
Against that trend, UK sales for electric vehicles (EVs) are expected to grow by the double digits. This is, the report noted, despite below-average subsidies and a lackluster charging infrastructure.
Global sales for electric were also forecast to grow strongly. 3m Evs will be circulating worldwide by the end of this year, three times as many as in 2015.
Maxime Lemerle, head of sector research and lead author of the study, said: “The report identified three levers for innovation: R&D expenditure, patentable technology and external growth. Traditional manufacturers in Germany, Japan and the U.S. lead the first two categories, while China and India exhibit aggressive growth.”