The UK new car market was down in July by 5.0% on last year, to 140,154 units, according to figures published by the Society of Motor Manufacturers and Traders (SMMT).
The performance was the weakest for the month since 2022 and some 10.8% lower than in pre-pandemic 2019, demonstrating the market’s volatility and a weak economic backdrop.
Go deeper with GlobalData
Demand from private and fleet buyers fell 3.2% and 6.5% to 51,646 and 85,594 units respectively, while registrations in the much smaller business sector climbed 10.4% to 2,914 units. Declines were seen across most segments, with only Dual Purpose, Mini and Luxury Saloon models recording growth.
GlobalData expects the UK car market to register around 1.96m units in 2025.
GlobalData says the forecast is subject to risks.
GlobalData analyst Jonathon Poskitt says the UK car market outlook remains challenging due to several headwinds. “The mood is somewhat cautious on the outlook,” he says. “There is a tightening of fiscal policy in prospect as well as the lagged effects of previous interest rate hikes, and the adverse impact of recent US tariffs – albeit mitigated by the US-UK trade deal.”
US Tariffs are shifting - will you react or anticipate?
Don’t let policy changes catch you off guard. Stay proactive with real-time data and expert analysis.
By GlobalData“One positive development is the rise in sales of electrified vehicles and pending government grants for BEVs as well as generally still heavy manufacturer incentives aimed at BEVs,” Poskitt points out.
Bucking the wider market performance, registrations of plug-in hybrid electric vehicles (PHEVs) rose 33.0% and battery electric vehicles (BEVs) 9.1% in July, although the latter is modest in comparison with the 34.6% increase recorded for the first half of 2025. July was the second weakest month of BEV growth this year, after April’s tax changes distorted the market in that month.
The newly announced Electric Car Grant (ECG) provides a much-needed fiscal incentive for BEV uptake, but full model eligibility has yet to be confirmed, causing some buyers to hold off pending confirmation of which vehicles will qualify for a discount of up to £3,750. BEV market share reached 21.3%, up from 18.5% in the same month last year, but remains short of the 28% required by the ZEV Mandate, demonstrating the importance of accelerating uptake over the remainder of the year.
Hybrid electric vehicle (HEV) transactions declined 10.0% to 18,551 units while combined petrol and diesel deliveries fell -14.0% to 74,289 units, but still accounted for more than half (53.0%) of July’s market.
Year-to-date, the overall new car market remains up 2.4% at 1.18m units, including more than a quarter of a million BEVs.
The SMMT said July’s decline is expected to be temporary, with the latest market outlook – undertaken before eligible ECG models were confirmed.
Mike Hawes, SMMT Chief Executive, 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.”
