Infographic: Top 5 Automotive Predictions for 2025

The Top 5 Automotive Predictions for 2025

What they are and the key actions Dealers should take for success and profitability With 2024 in the rear-view mirror, it's time to look ahead at the Top 5 Predictions for the Automotive Industry in 2025 and understand the critical actions dealers need to take to ensure increased success and profitability. Highlighted are what our expert Jade Terreberry, Senior Director of Strategic Planning at Autotrader and Kelley Blue Book and host of the UnJaded podcast believes you should be planning for, as well as steps you should take to make shifts to create opportunities to win customers, capture more incremental revenue and gain market share.

Prediction #1:

Post Election: Time to Move Forward

With the election season behind us, both franchise and independent dealers need to get off “pause” and shift gears and focus to growth. Historically, consumer sentiment often improves in the year following an election, and early signs suggest that 2025 could follow this trend.

WHAT THE PREDICTION IS FOCUSED ON: Economic Health: The early signs are promising, with the economy responding favorably post-election.

However, upcoming policy decisions on tariffs, emissions, and EV incentives will play a critical role in shaping the year ahead.

Tax Policy: By year end, we should have a clearer picture of how tax changes might impact both the industry and consumer spending in 2025 and beyond.

Consumer Confidence: When optimism rises, so does spending on big-ticket items like vehicles, creating opportunities for dealers to capitalize on the momentum.

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Fence-sitters it’s time to ACT. Make a PLAN focused on the FUTURE

KNOW the supply and demand equation in YOUR market areas

MEASURE everything

ACTIONS TO TAKE IN 2025:

Prediction #2:

Vehicle Affordability: A Continued Focus

Affordability remains a pressing issue for both consumers and dealers. Recent data highlights this ongoing challenge, with new-vehicle prices reaching $48,724 on average in November 2024.

In 2025, we expect to see further shifts for dealerships to address affordability concerns, balancing cost pressures with consumer accessibility:

WHAT THE PREDICTION IS FOCUSED ON: Lower Rates, More Options: Credit availability is expanding, offering more consumers viable financing solutions.

Inventory Stability: Inventory levels are expected to hold steady or even grow, reducing some of the pricing pressure seen in recent years.

Rising MSRPs: With production costs climbing, manufacturers may continue to raise prices.

Dealers will need to balance these increases with creative strategies to maintain consumer interest.

ACTIONS TO TAKE IN 2025: 1

TRAIN your teams to speak to rate changes and 2 incentives MASTER talk tracks and processes on Trade-In Valuations

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PROVIDE insurance and peace of mind products 4 and consulting to every customer FOCUS on the importance of Fixed Ops

Prediction #3:

Market Outlook: A Return to Normalcy

After years of uncertainty driven by supply chain disruptions and shifting consumer behavior, the sales forecast for 2025 shows promise, hinting to a return to traditional market dynamics. This shift provides a foundation for dealers to focus on sustainable growth, while addressing the competitive pressures and evolving consumer expectations that continue to shape the industry.

WHAT THE PREDICTION IS FOCUSED ON:

New Vehicle Market: Sales are projected to surpass 16 million units for the first time since 2019, driven by improved incentives and inventory levels.

Used and Wholesale: A strong year for used vehicles and a positive trend in the Manheim Index suggest steady demand, though tight wholesale inventories may continue to pose challenges.

Margins and Revenue: Continued margin compression will require dealers to lean on datadriven strategies to uncover incremental revenue opportunities and navigate competitive pressures.

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DRIVE your MARKETSHARE​

CREATE processes specific to New, Used, and CPO

RECOGNIZE the importance of Distance Retailing, Digital Retailing, and eCommerce

ACTIONS TO TAKE IN 2025:

Prediction #4:

The EV Journey: An Evolving Landscape

Increasing global competition, policy-driven incentives, and advancements in technology are driving EV adoption at a rapid pace. The transition to EVs will remain a defining trend in 2025 as the industry works to meet growing demand and navigate challenges.

WHAT THE PREDICTION IS FOCUSED ON:

Global Influence: Countries like China are setting benchmarks with policies to encourage EV adoption, such as government-driven incentives. The U.S. market may see increased competition as global automakers enter with affordable, high-quality models.

Expanded Options: With more EVs and hybrids hitting the market, consumers will have greater variety—but questions around infrastructure and tax incentives remain.

The Used EV Market: As the EV market matures, more used options will enter the mix, creating opportunities for dealers to connect with eco-conscious buyers.

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BE a champion

KNOW your customer EV adoption is not onesize-fits-all

EDUCATE your sales consultants and get COMFORTABLE with products / charging

ACTIONS TO TAKE IN 2025:

Prediction #5:

Consumer Satisfaction: The Omnichannel Advantage

According to Cox' Automotive Annual Car Buyer Journey Study, consumer satisfaction continues to climb, thanks to a growing focus on seamless, personalized buying experiences and increased inventory. Building trust and delivering exceptional service is key to earning repeat business and turning one-time buyers into loyal advocates. For dealers, maintaining this positive momentum will require blending digital and in-store strategies effectively.

WHAT THE PREDICTION IS FOCUSED ON: Digital Empowerment: Consumers appreciate the ability to complete more of the car-buying process online, with tools that empower them to control the deal. The momentum continues for the omnichannel experience.

Increased Inventory: Both consumers and dealers are feeling the benefits of having more inventory, a perceived win-win for both sides feeling more in-control of the buying and selling process with more availability.

Personalized Experiences: Dealers are focusing on more than just selling cars—they’re creating lasting relationships with customers by tailoring the experience to individual needs and emphasizing personalized experiences both online and in-store.

Today’s consumers want, need, prefer and in most cases demand this personalized experience.

ACTIONS STEPS FOR DEALERS TO TAKE IN 2025: 1

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BE Your Brand​

EMPHASIZE how much every consumer contact matters

FIND the deal in every deal Don't let a deal walk out the door - REMIND your desk managers of this every single day and TRACK your TOs - if you miss a deal, you better KNOW the reason​

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ASK for the business and EARN the referral

REMEMBER Lifetime customer value is the lifeblood of our business

AUTHOR: JADE TERREBERRY

SENIOR DIRECTOR OF STRATEGIC PLANNING

Want to watch or listen to an in-depth conversation on this topic, as well as hear other industry experts weigh in? Be sure to check out the UnJaded podcast episodes that deep dive into the Cox Automotive 2025 Predictions and reveal new ways you should be shifting and shaping your business and marketing in 2025 to stay ahead of the competition

Faster. Smoother. More Profitable Deals

Have questions or want to learn how to leverage some of the suggestions and solutions we’ve designed for you to drive more revenue in 2025?

Contact your Autotrader Territory Sales Manager.

Not a current client? Find out more at b2b.autotrader.com/contact