Paragon Automotive has predicted that new car registrations will increase by three per cent, which could put the automotive supply chain under stress, reports Fleet News.

Currently the automotive supply chain is operating at full capacity, including the ports, logistics networks and de-fleet services.

If new car registrations are to grow then Paragon has said that manufacturers and fleet operators will need to work closely with the supply chain in order to stem the expected demand over the next five years.

Supporting this, chief executive officer of Paragon Ian Carlisle said that as "records continue to be beaten, the supply chain is facing real challenges that can only be addressed by changing the way the industry works".

He continued on to say that there is a need for partnership in the industry to "create capacity through the supply chain". Doing so will enable a smoother volume output and opportunities for financial investment into the industry.