British Auto Market in 2026 remains on grow path. Q1 sales grew by 5.9%, with leader Volkswagen slowing down 11.6% as new brands emerge. In particular, Jaecoo skyrocketed thanks to the Jaecoo 7’s performance while BYD keeps driving EV growth.
Economic Environment
The United Kingdom economy in 2026 is expected to grow by around 1.4%, slightly above trend, with a more stable outlook than in recent years despite ongoing global uncertainty. Inflation is projected to fall toward the 2% target, averaging about 2.3% for the year, allowing the Bank of England to cut interest rates to around 3.25% by year-end. However, global risks, including geopolitical tensions and potential financial market corrections, pose downside threats to growth. The labour market is weakening, with unemployment expected to peak at around 5.4% as labour supply increases, while wage growth slows to about 3.6%. Household consumption remains subdued because people continue saving at elevated levels despite rising real incomes.
Fiscal policy is tight following tax increases, with limited room for further government support as public debt rises. Structural challenges persist, including low productivity growth and the impact of demographic changes on public finances. Additionally, higher labour costs and policy changes are reducing hiring, especially in lower-paid sectors, and may be dampening overall labour market dynamism.
Automotive Industry Trend And Outlook
The UK car market is undergoing an expansion driven, among other thigns, to increased competition resuting from asian carmakers entering the market. However, geopolitical instability and material shortages could represent a key threat for the country’s automotive sector.
Looking at Q1 figures, car sales reached 614,854 units sold, growing about 5.9% in year-on-year volume.
Brand-wise, Volkswagen was still the best selling brand with a 7.6% share (-11.6%).
Kia -up 1 spot- ranked 2nd with a share of 5.6% (-1.3%) while BMW -down 1 spot- ranked 3rd with a 5.5% share (-4.6%).
Ford ranked 4th (-5.6%) followed by Audi -up 2 spots- in 5th (+8%), and Mercedes -up 2 spots- in 6th (+3.2%).
Opel -up 2 spots- ranked 7th (+1.7%) ahead of Toyota -up 2 spots- in 8th (-2.8%), Peugeot -down 4 spots- in 9th (-13%) and Skoda -up 3 spots- in 10th (+8.2%).
Looking at best-selling models, the leader was still the Ford Puma (+8%). The Jaecoo 7 –up 37 spots- skyrocketed into 2nd (+252.1%) while the Kia Sportage -down 1 spot- fell in 3rd (+10.3%).
EV Market Trend and Outlook
The leader became BYD, which climbed 2 spots to achieve 28.2% of the segment while growing 130.1%. Tesla slipped in 2nd, down 5.9% to a share of 15.5% while BMW ranked 3rd, losing 13.1% while securing 11.4%.
Medium-Term Market Trend
The decline of the British car market has been unfolding for decades, largely due to manufacturers shifting production to lower-cost European locations, with Brexit further accelerating the trend. After reaching a peak of 2.6 million car sales in 2016, the market contracted significantly, falling to 1.6 million in 2020 during the pandemic. Rather than rebounding strongly, sales remained subdued, rising by just 0.7% in 2021 before declining again by 1.6% in 2022. Broader global pressures—including inflation, high fuel costs, political instability, supply chain disruptions, and the shift toward electrification—have weighed on the market, with Brexit adding additional economic strain.
A recovery began in 2023, with car sales increasing by 17% to 1.9 million, followed by modest growth of 2.6% in 2024 despite ongoing policy uncertainty. Sales continued to improve into 2025, rising from 1.95 million in 2024 to 2.02 million, although overall volumes remain nearly 20% below 2014 levels. EV adoption has expanded over time but with noticeable volatility, including a slowdown in 2018–19. After peaking in 2023, EV growth weakened, with registrations falling from 262,740 in 2024 to 231,230 in 2025 as manufacturers faced challenges linked to the transition and wider market conditions. Reflecting this uncertainty, BMW postponed a £600 million investment in its Oxford plant for electric Mini production.
Tables with sales figures
In the tables below we report sales for the top 40 Brands and top 10 Manufacturers Groups and the top 10 models.
