The drop in demand was observed across both private and fleet buyers. Credit: lucky_pics / Shutterstock.com.
The latest data from the Society of Motor Manufacturers & Traders (SMMT) indicated a downturn in the UK’s new car market for July.
The market saw a 5% decrease in registrations, totalling 140,154 units.
According to the trade body, this represents the lowest figure for the month since 2022 and is 10.8% below the levels seen in the same period before the pandemic, reflecting the current volatility of the market and broader economic factors.
The drop in demand was observed across both private and fleet buyers, with registrations declining by 3.2% and 6.5%, respectively.
In contrast, the business sector, which accounts for a smaller proportion of the market, saw a 10.4% increase in registrations.
Despite downturns in most vehicle categories, certain segments such as dual-purpose, mini, and luxury saloon models experienced an uptick.
Electric vehicle registrations provided a silver lining, with plug-in hybrid electric vehicles (PHEVs) registering a 33% increase and battery-electric vehicles (BEVs) witnessing a 9.1% rise.
However, the growth in BEVs was relatively modest compared to the substantial 34.6% hike seen in the first half of 2025.
The SMMT said the introduction of the Electric Car Grant (ECG) is expected to stimulate further interest in BEVs, although the delay in confirming eligible models has led to some buyers postponing their decisions.
The market share for BEVs has grown to 21.3%, an increase from 18.5% in the previous year, yet it falls short of the 28% target mandated by the ZEV Mandate.
Registrations of hybrid electric vehicles (HEVs) saw a decline of 10%, and the combined figures for petrol and diesel vehicles dropped by 14%, despite making up more than half of the market in July.
Year-to-date figures, however, remain in positive territory, with a 2.4% increase in overall market registrations due to the release of new models and price reductions offered by manufacturers.
The forecast for 2025 has been adjusted upwards to 1.9 million units, with a marginal increase anticipated for BEV volumes, which are expected to account for a 23.8% share of the market.
SMMT chief executive Mike Hawes said: “July’s dip shows yet again the new car market’s sensitivity to external factors, and the pressing need for consumer certainty. Confirming which models qualify for the new EV grant, alongside compelling manufacturer discounts on a huge choice of exciting new vehicles, should send a strong signal to buyers that now is the time to switch.
“That would mean increased demand for the rest of this year and into next, which is good news for the industry, car buyers and our environmental ambitions.
In an earlier report, SMMT noted that the UK’s automotive sector can reduce its environmental impact through energy grid reforms, citing that the industry has already seen a 2.4% decline in production energy use and a 6.2% reduction in new car CO₂ emissions.
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