Economic factors such as rising prices, borrowing costs, and global trade policies still play a major impact in shaping the UK car market. As manufacturers endeavor to regain stability from the disruptions of the past few years, these financial factors impact production costs, pricing tactics, and overall industry trends (Grant Thornton UK LLP) (EY US).
Rising prices and higher interest rates have a direct effect on both production and buyer spending ability. Producers are obliged to implement cost-effective manufacturing techniques, like large-scale casting, to keep financial health while remaining price-competitive. These financial strains also impact customer behavior, with higher interest rates potentially reducing new car demand (Grant Thornton) (EY).
World trade rules, notably those related to tariffs on electric vehicles from non-EU countries, add another layer of complexity. The ongoing assessment of government support automotive indutry for Chinese EV makers and likely tax raises could cause industry changes and influence pricing approaches. As the sector deals with these obstacles, it stays dedicated to innovation and efficiency to sustain growth and meet consumer demands (Grant Thornton) (EY).