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New Car Market Declines By 10.4% In April 2025 As Tax Changes Impact Registrations
The UK car market experienced a 10.4% decline in April, with 120,331 vehicles registered, as reported by the Society of Motor Manufacturers and Traders (SMMT). This marks the sixth decrease in seven months, highlighting economic challenges and reduced consumer confidence. Compared to April 2019, registrations were down by 25.3%, with 13,943 fewer cars registered than the previous year.
Fleet buyers continued to dominate the market, accounting for six out of every ten registrations. Registrations fell across all sales types: private demand decreased by 7.9%, fleet by 11.9%, and business by 10.9%. The late timing of Easter also contributed to fewer working days in April.
Battery electric vehicle (BEV) registrations rose by 8.1%, reaching 24,558 units and capturing over a fifth of the market share at 20.4%. Despite this growth, BEVs remain below the Zero Emission Vehicle Mandate's target of 28%. Plug-in hybrid vehicles (PHEVs) saw a significant increase of 34.1% in registrations.
The SMMT emphasised the need for government incentives to boost electric vehicle adoption. Suggestions include halving VAT on new EV purchases and amending the VED Expensive Car Supplement. Equalising VAT on public charging with home charging could also encourage hesitant buyers to switch to electric vehicles.
Mike Hawes, SMMT Chief Executive, stated that while April's performance was disappointing but expected after March's surge, "Another month of growth for electric vehicle registrations is good news." He added that recent government adjustments are a step forward but more measures are needed to encourage consumers to transition to electric vehicles.
The UK's automotive industry plays a crucial role in the economy, contributing £93 billion in turnover and £22 billion in value added annually. It supports around 198,000 direct manufacturing jobs and employs approximately 813,000 people across various sectors related to automotive production.
Future Market Outlook
The latest market outlook projects full-year new car registrations for 2025 at 1.964 million units but expects figures for 2026 to remain below two million for the seventh consecutive year. BEV market share expectations have been slightly revised downward from January's forecast by -0.2 percentage points to 23.5% for this year.
The UK automotive sector exports goods worth £115 billion annually to over 140 countries worldwide. It manufactures a wide range of vehicles supported by more than 2,500 component providers and skilled engineers.
The SMMT continues to advocate for policies that support industry growth and sustainability while addressing challenges such as meeting emission targets and stimulating consumer demand for electric vehicles.
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