The UK's new car market has suffered another significant blow, with official figures revealing a 1.6 per cent drop in registrations during November 2025. Industry leaders are directly blaming the Labour government's Autumn Budget and its series of vehicle tax hikes for 'thwarting' drivers and destabilising the sector.
November Slump Marks Sixth Monthly Fall
Data released by the Society of Motor Manufacturers and Traders (SMMT) shows that just 151,154 new vehicles were registered last month. This decline represents the sixth monthly fall recorded throughout 2025. When compared to the same period in 2024, the overall drop in car purchases is even steeper, standing at 5.5 per cent.
The figures reveal a mixed picture across different buyer types. Fleet sales saw a marginal increase of 0.2 per cent, while business registrations experienced a more robust 18 per cent growth. However, this segment still constitutes a minor portion of total market volume. The most dramatic collapse was seen in diesel vehicle sales, which plummeted by 24 per cent to a mere 7,168 units. Petrol car registrations also fell, declining by 5.9 per cent.
Industry Leaders Issue Stark Budget Warning
Senior figures across the motor trade have expressed deep concern, stating the Chancellor's Budget has failed to provide reassurance. Sue Robinson, Chief Executive of the National Franchised Dealers Association (NFDA), commented: "As the year draws to a close and the final registrations are coming in, the Chancellor's Budget announcement has not reassured the industry."
Mike Hawes, SMMT Chief Executive, issued a direct warning to the government regarding its strategy for encouraging electric vehicle (EV) adoption. He said: "We should be taking every opportunity to encourage drivers to make the switch, not punishing them for doing so, else the ambitions of Government and industry will be thwarted."
The criticism extends to the specific taxes impacting electric vehicles. Melanie Lane, CEO of charging company Pod, argued: "A growth slowdown in November proves that now is the wrong time to introduce taxes on EV drivers. Further cost pressures for manufacturers and fleet managers will keep the sector from achieving a 28 per cent market share target set by the ZEV mandate."
The Impact of the 'Luxury Car Tax'
The political and fiscal context for this market downturn is clear. The November figures were recorded ahead of the Labour Party's Autumn Budget, which has been trailed as including further motoring tax increases. Analysis from one of the UK's largest motor retailers, the Marshall Motor Group, highlights the scale of the existing tax burden.
Their research indicates that over the past year, more than 426,000 cars have been subjected to the government's so-called 'luxury car tax'. This policy, combined with anticipated future hikes, is creating a climate of uncertainty that is discouraging consumer investment in new vehicles, both traditional and electric.
The consecutive monthly declines suggest a sustained negative trend within the UK automotive sector. With key industry figures using strong language like "thwarted" and warning of missed environmental targets, the pressure is mounting on the Treasury to reconsider its approach to motoring taxation in the new year.
