Fleet registrations dropped 11.9% in April, driving a 10.4% fall across the new car market, but the latest market forecast for 2025 has been revised up.

A total of 120,331 new cars were registered in April, down 10.4%

A total of 120,331 new cars were registered in the UK during April, latest figures from the Society of Motor Manufacturers and Traders (SMMT) reveal, equating to 13,943 fewer cars than in April 2024 and 25.3% behind pre-pandemic April 2019. It’s also the sixth fall in the new car market over the last seven months.

Demand was down across all sales types, with a 7.9% decline in demand from private drivers and a 10.9% drop from ‘business’ registrations to fleets with fewer than 25 vehicles, alongside the 11.9% drop among larger fleets. Continuing market trends, larger fleet buyers accounted for the lion’s share of new car activity, responsible for six in 10 registrations.

April is normally a quieter month after the March plate change but the decline was also due to the economic backdrop, weakened consumer confidence and the late timing of Easter, which resulted in fewer working days.

The SMMT also said the arrival of VED changes affecting all new cars, including the Expensive Car Supplement, which became applicable to many new EVs from 1 April, had led drivers to bring transactions forward into March as shrewd buyers got ahead of the tax increases.

Bucking the decline, battery electric cars (BEVs) provided pivotal support for the new car market in April, increasing 8.1% to 24,558 units and taking more than a fifth (20.4%) of the market; still significantly below the 28% target for 2025 under the ZEV mandate.

Plug-in hybrids (PHEV) were also up, rising 34.1% to take an 11.7% share.

Conversely, demand for hybrid electric vehicles (HEVs) fell 2.9%, with petrol and diesel registrations down 22.0% and 26.2% respectively.

The SMMT said the importance of incentives to boost volumes remains paramount. It’s called again for the Government to halve VAT on new EV purchases, scrap – or amend – the VED Expensive Car Supplement, and equalise VAT paid on public charging to help boost the market.

Mike Hawes, SMMT chief executive, said: “Recent government adjustments to flexibilities and compliance within the ZEV mandate are welcome and an important first step in relieving some of the pressure on the market and manufacturers. However, EV uptake is still being heavily and unsustainably subsidised by the industry, which is why a compelling package of measures from government is essential if consumers are going to make the switch.”

In the latest market outlook, the forecast for full-year 2025 new car registrations has been bumped up to 1.964 million units. But 2026 expectations remain below the two million mark for what would be the seventh successive year.

And market share expectations for new BEV registrations remain fairly constant with only a marginal revision downward from the January view, by 0.2 percentage points to 23.5% for this year, and by 0.3 percentage points to 28% next year, compared with the ZEV mandate targets of 28% and 33% respectively.

Next few months critical for UK motor sector

The figures show the continued challenges facing the UK automotive sector, which include the potential impact of US trade tariffs, downbeat consumer sentiment, economic uncertainty and changing regulations.

Novuna Vehicle Solutions’ MD Jon Lawes commented: “The next few months will be critical for the UK motor industry as it grapples with the impact of sweeping tariffs imposed by the US administration and fears over price hikes and disrupted supply chains.

“This injects a level of volatility into market, which the industry could do without. Affordability remains the key to EV adoption, and any threat to that risks stalling hard-won progress. As economic pressures mount, ensuring cost stability and policy consistency will be vital.

“The leasing sector, instrumental in the UK’s electrification journey, must remain agile to support businesses and drivers through a period of geopolitical uncertainty.”

And Jamie Hamilton, automotive partner and head of electric vehicles at Deloitte, said: “As tariffs on cars being sold to the US are implemented, the consensus view from industry analysts is that demand for new cars in the US is set to fall this year. This is likely to have a material impact on UK car production, with the US a key market for UK automotive companies.

“On top of this, Deloitte’s recent Q1 CFO survey highlighted that businesses were becoming more defensive, with a greater focus on cost control in light of geopolitics being rated as the top risk to businesses. With fleet sales continuing to drive growth in the sector, any pull back on investment could slow down the ability of fleet managers to replenish their stock of vehicles.”

Tariffs add to the complexity of the road ahead

EY also warned of the impact of tariffs amid growing industry challenges.

David Borland, EY UK & Ireland automotive leader, said: “The UK automotive sector was already under pressure before the recent US tariff announcements, with stress evident across the entire value chain, from suppliers to dealers. In fact, EY’s latest Restructuring Pulse Survey – a European survey of workout bankers – underscored these challenges, naming the sector as the most likely to undergo corporate restructurings in 2025.”

Maria Bengtsson, UK mobility leader at EY, said: “The recent introduction of US tariffs has presented a new and complex headwind to the UK automotive sector. Not only will the tariffs have an impact on UK exports to the US, but they have also caused significant uncertainty, which in turn could lead to delays in purchase decisions from consumers and businesses alike.”

Fleet and retail sales both under pressure

Maria Bengtsson added: “In March, in contrast to recent historical trends, both retail and fleet sales saw a significant year-on-year increase. However, in April, both channels saw a decline in sales, down 7.9% for retail and 11.9% for fleet, which suggests March’s recovery was a sign of seasonality rather than the start of a sustained recovery.

“Fleet sales were remarkably resilient last year, so the fact they are now facing a more challenging outlook is concerning. However, with fleet being the less profitable channel for automakers, the persistence of sluggish retail sales presents a larger issue for the UK’s automotive industry.

“A key question is how big a role the Government can play in supporting manufacturers with these challenges, and whether government incentives can provide a sustainable long-term solution.”