Diesel cars are gradually disappearing, while electric cars, including those equipped with hybrid engines, continue to gain market share, according to automotive industry experts ahead of the Autofestival, an annual motor show held in Luxembourg.
The 62nd edition of Autofestival, which will take place from 24 January to 2 February, will see more than 90 car and motorcycle dealers offering special deals to get the year off to a good start. But this annual event is not just about discounts for those looking to buy a car.
‘In an uncertain car market and a national economy under pressure, Autofestival brings stability, benchmarks, confidence and visibility,’ said Philippe Mersch, president of Fedamo, a federation representing car distributors in the Grand Duchy. ‘It also acts as a pragmatic, rather than ideological, accelerator of the energy transition, as the automotive sector supports this transition and the visibility it now offers is essential.’ The Autofestival even serves as an ‘educational’ opportunity, allowing the sector to provide information to the public about new technologies such as electrification and digitalisation.
47,161 new cars were registered in 2025
This focus on the transition to electrification is essential. In 2025, the SNCA recorded 133,587 vehicle registrations (all categories combined), an increase of 3.4% compared to 2024.
Looking more specifically at the car category, 47,161 new cars were registered, an increase of 1.1% year-on-year. It should be noted that 62,017 used cars were also registered in 2025, an increase of 4.5% year-on-year. ‘The market is recovering, but it has not yet reached 2019 levels,’ when the SNCA recorded 55,008 new car registrations, noted Manuel Ruggiu, SNCA Director of Operations. On the other hand, the used car market experienced a recovery last year, with a 4.5% increase in registrations compared to 2024.
In recent years, the share of diesel cars among new registrations has been steadily declining. In 2019, they accounted for 41.9% of new registrations; by 2025, this figure had fallen to just 9.9%. ‘Diesel is increasingly becoming a niche market,’ added Manuel Ruggiu. Instead, hybrid and electric cars have taken over: the share of hybrid cars rose from 4.1% in 2019 to 29.3% in 2025. Electric cars also saw a dramatic increase in new registrations, rising from 1.8% in 2019 to 26.9% in 2025. Even plug-in hybrids saw an increase, rising from 1.7% in 2019 to 7.9% in 2025. This brings the share of cars that can be recharged from an electrical outlet to 34.7%, said Manuel Ruggiu, representing just over a third of new car registrations.
However, the figures for new electric car registrations have begun to stabilise. In 2024, electric cars accounted for 27.4% of new registrations. By 2025, this figure had fallen slightly to 26.9%. ‘There is a certain amount of stagnation,’ Manuel Ruggiu noted. “Theoretically, if we were following the curve, we should be exceeding 30%. But this is not the case. ”
More and more affordable electric vehicles
There are several reasons for this stagnation, said Fedamo President Philippe Mersch, including the uncertain economic climate in Luxembourg, unfavourable tax conditions and constraints related to the calculation of CO₂ emissions. ‘Let me give you an example: a hybrid company car emitting 50 g of CO₂ – which is very low – is currently taxed in the same category as a powerful diesel SUV. This makes no sense, significantly harms the company car sector and does not promote the energy transition.’
‘Today, only electric vehicles remain attractive as company cars. But unfortunately, this is often seen as a restrictive choice,’ said Philippe Mersch, due to the reduction in Klimabonus subsidies, the lack of charging infrastructure and a range that is often considered insufficient. The Fedamo president also urged the government to maintain the subsidy, which is due to expire at the end of June 2026, in order to continue supporting the transition to electrification. ‘This year should see an acceleration in the field of new electrified powertrains,’ concluded Philippe Mersch. “Not only will there be more and more affordable new electric vehicles on the market, but there will also be more and more hybrid powertrains, which manufacturers are clearly focusing on. ”
In neighbouring countries, the trends are not the same. In France, 1.72 million new cars were registered in 2025, a decrease of 5.2% compared to 2024. In Germany, however, the year ended on a high note with 2.85 million vehicles registered, representing growth of +1.4% according to the Kraftfahrt-Bundesamt (KBA). In Belgium, the market recorded around 420,000 registrations, a slight decline of 2.1% compared to the previous year. For the European Union as a whole, sales stood at 9.2 million vehicles, a moderate increase of +2.3% compared to 2024, according to consolidated data from trade associations.
