The UK’s new car market experienced a modest pullback in July 2025, with total registrations falling 5% year-on-year, according to the latest data from the Society of Motor Manufacturers and Traders (SMMT). While a softening market may raise concern, Stuart Masson, Editorial Director of The Car Expert, believes the bigger picture reveals resilience among private buyers, continued electric vehicle (EV) growth, and evolving competitive dynamics in the industry.
Fleet Slowdown Drives Market Dip
“The headline 5% drop is driven primarily by a 6% fall in fleet registrations,” says Masson. “Private sales only slipped 3%, which suggests that consumer demand is more stable than fleet procurement activity.”
This contrast highlights a market undergoing cyclical realignments rather than systemic decline. Year-to-date figures remain positive, with total registrations up 2% compared to 2024. “Interestingly, private buyers are now growing faster than fleet, reinforcing the notion that everyday consumers remain committed to vehicle purchases, even as economic uncertainty and fluctuating interest rates continue to cloud the outlook,” Masson adds.
Regional Divergence Highlights Structural Weaknesses
Geographic breakdowns reveal a stark divergence between England and the rest of the UK. England saw only a 3% year-on-year decline in July, but Scotland, Wales and Northern Ireland registered far steeper drops – 16%, 14%, and 15% respectively.
Masson points to the decline in Motability scheme registrations – down 19% in the first half of 2025 – as a key driver. “This isn’t spelled out in the SMMT release, but there’s likely a strong correlation. Motability uptake is higher in places like Northern Ireland and parts of Scotland and Wales. The scheme’s dip is disproportionately affecting those regions.”
Electrification Defies Downturn
In a shrinking market, electric vehicles are bucking the trend. Battery electric vehicles (BEVs) grew by 9% year-on-year in July, marking a standout performance, especially considering a sharp 60% drop in Tesla registrations for the month.
“Tesla’s decline skews the numbers, but it’s more procedural than structural,” explains Masson. “Tesla operates without a traditional dealer model and delivers vehicles in batches, which creates volatility in monthly data. July was quiet, but June was strong, and September is likely to be another peak.”
Plug-in hybrid electric vehicles (PHEVs) surged even further, climbing 33% compared to July 2024. “PHEVs may be drawing some buyers away from BEVs, but they’re helping manufacturers meet Zero Emission Vehicle (ZEV) mandate targets. It’s a nuance that often gets lost in the wider EV debate,” Masson notes.
By contrast, traditional hybrid models fell by 10% – a sharper drop than the overall market, suggesting that this once-dominant transitional technology may be losing momentum.
Ford’s Rebound Gains Strength
Among legacy carmakers, Ford is enjoying a welcome return to form. July marked the third consecutive month of growth for the brand, which is now outperforming the wider market.
“A big part of Ford’s resurgence is their growing EV lineup,” says Masson. “They’ve gone from offering just one electric vehicle last year to four this year. That level of choice gives them real flexibility in adapting to consumer preferences, whether petrol or electric.”
Chinese Brands Gaining Ground
While several Chinese automotive brands continue to struggle for traction in the UK, two are rapidly establishing themselves as formidable players: BYD and OMODA/JAECOO.
“These brands are making real inroads – and they’ve clearly learned from each other,” says Masson. “They’ve embraced the dealer network, prioritised showroom availability, and achieved national coverage faster than many predicted.”
Their success puts pressure on both other Chinese brands still finding their footing and on established European manufacturers, who may need to accelerate their EV plans or risk ceding market share.
Looking Ahead
Despite a cooling in overall registrations, Masson stresses that July’s figures reflect a market in transition rather than trouble.
“Private demand remains relatively strong, electrification is still on an upward trajectory, and newer players are bringing fresh energy into the competitive landscape,” he concludes. “What’s key now is how manufacturers respond – whether with flexible product lineups, clearer EV incentives, or stronger regional support where it’s needed most.”
In a shifting landscape, the winners will be those who move quickly and smartly. July may have signalled a dip, but it also spotlighted the evolving forces shaping the UK’s automotive future.
