British Auto Market in 2026 is increasing. January sales grew by 3.4%, with Ford emerging into the top 5 while BMW and Nissan report major losses. In particular, BMW dropped 12.6% and fell also in EV rankings, where it was displaced from the top spot by BYD, up 149.1%.
Economic Environment
The UK economy is forecast to grow 1.0% in 2026, before improving slightly to 1.3% in 2027 and 1.1% in 2028, according to the British Chambers of Commerce. Inflation is expected to rise to 2.7% in 2026 due to higher energy prices linked to Middle East tensions, before easing to 1.9% by 2027. The labor market is projected to weaken, with unemployment increasing to 5.5% in 2026 and remaining elevated through 2027 as high labor costs discourage hiring. Economic growth will remain subdued, reflecting weak productivity, limited business investment, and cautious consumer spending.
The services sector will continue to be the main driver of growth, while manufacturing and construction are expected to contract, highlighting structural weaknesses in the economy. Business investment is forecast to stagnate in 2026 before recovering modestly, with longer-term productivity gains potentially supported by increased adoption of artificial intelligence. Trade performance is also expected to remain weak, with export growth slowing to 0.7% amid global uncertainty and geopolitical tensions. Overall, the UK faces a challenging macroeconomic environment characterized by low growth, persistent inflationary pressures, rising unemployment, and ongoing external risks tied to global instability.
Automotive Industry Trend And Outlook
The UK car market continued in 2026 the trend of steady growth that characterized the prior year. In particular, January sales reported 144,127 units sold, up by 3.4%.
Brand-wise, Volkswagen was still the best selling brand with a 8.7% share (-7.6%).
Kia ranked 2nd with a share of 6.1% (-2%) while BMW ranked 3rd with a 5.9% share (+8.2%).
Ford -up 3 spots- ranked 4th (+1.1%) followed by Audi -up 3 spots- in 5th (-9.2%), and Opel in 6th (+1.4%).
Mercedes -up 2 spots- ranked 7th (-11.2%) ahead of Peugeot -down 4 spots- in 8th (-10.3%), Skoda -up 3 spots- in 9th (-13.1%) and Nissan -down 5 spots- in 10th (+4.4%).
Looking at best-selling models, the leader was still the Kia Sportage (+34.5%), followed by the Jaecoo 7 (+175.4%) and the Ford Puma (+59.3%).
EV Market Trend and Outlook
BYD became the new top brand, growing 2 spots and 149.1%, followed by BMW which lost its spot and fell 16.7%. Volkswagen dropped 23.5% and 1 spot to close the podium.
Medium-Term Market Trend
The UK vehicle market has been in long-term decline, shaped by the gradual relocation of manufacturing to lower-cost European countries, with Brexit further accelerating structural weakness. After peaking at 2.6 million units in 2016, sales fell sharply to 1.6 million in 2020 during the pandemic and remained subdued in the following years, with only marginal changes in 2021 and 2022. Although the market rebounded in 2023 (+17%), recovery has been uneven amid persistent headwinds such as inflation, high fuel costs, supply chain disruptions, and political uncertainty.
Sales improved to 1.95 million units in 2024 (+2.6%) and further to 2.02 million in 2025 (+3.5%), yet volumes remain significantly below historical highs, with an overall decline of nearly 20% compared to 2014 levels. The transition to electric vehicles continues to reshape the market, adding both opportunities and pressure for manufacturers. EV adoption has grown over time but remains volatile, reflecting shifting policies, cost challenges, and industry adjustments. Registrations rose strongly by 33.9% in 2024 to 262,742 units, but fell by 12% in 2025 to 231,230 units, indicating a pause in momentum. This uncertainty has also affected investment decisions, highlighted by moves such as BMW delaying 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.
