Significant shifts are underway in the new car market. May registration data showed Chinese brands doubling their market share across Europe—from 2.9% to 5.9%. MG has overtaken Fiat in volume with a 30% increase, while BYD, with an even steeper percentage gain, matched Tesla for May volume after outselling them in April. This surge presents a direct challenge to established brands fighting to retain share, and it carries major implications for future used vehicle supply.

In the UK, new registrations rose 2.83% year to date through May. But the topline growth masks more dramatic movements: Fiat down 51%, BYD up 570%. The competitive pressure from new entrants—especially Chinese manufacturers—is reshaping the market dynamic.

Adding further momentum, the UK government recently announced grants of up to £3,750 for new electric vehicles (EVs) priced under £37,000. Manufacturers are currently working through the fine print to determine which models meet the sustainability criteria required to qualify. These rules may exclude some Chinese brands, prompting several to introduce price cuts of their own in a bid to maintain competitiveness. While these discounts improve short-term affordability, they risk generating longer-term headwinds. Forcing new car supply into the market in this way is likely to depress residual values in 3–4 years. And if the discounts don’t fully translate into lower monthly finance payments, the upfront savings could be eroded by weaker resale values later on.

More worryingly, it highlights a growing disconnect in the used market, where there is significant risk of demand for EVs being outpaced by projected increases in supply. Without stronger incentives and support for home charging infrastructure, we risk flooding the market with used EV’s that lack adequate demand, further undermining residual values.

In the used car sector, dealers continue to struggle with tight supply and weak demand—two forces that squeeze both volume and profitability. In such an environment, quality control in procurement becomes paramount. Whether buying from fleets, auctions, online private sellers, or part-exchanges, each channel carries unique risks.

Automated digital checks are increasingly vital for identifying a range of issues including insurance write-offs (MIAFTR), salvaged vehicles, prior taxi use, mileage discrepancies, and outstanding recalls. Recalls have become especially problematic—due to parts on backorder and legal limitations on retailing vehicles with unresolved recalls. In a market where stock turn is king, unsellable inventory ties up capital and undercuts profitability. Yet recall data remains fragmented, with no single authoritative source, further complicating risk management.

This is where smart data fusion strategies matter most—empowering buyers and sellers to mitigate risk cost-effectively, even under supply pressure.

The balance of power is shifting in the new car market, and the aftershocks will continue to ripple through the used sector. Those who combine smart sourcing, proactive risk management, and data-driven insight will be best placed to weather the volatility—and seize the opportunities that emerge.

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