Car dealers face 2025 head-on

The automotive retail industry is returning to a pace and rhythm that once led to sales of over 17 million new car units a year. Today’s totals may not be that high, but inventories and incentives are catching up to historic norms. And most importantly, shoppers are coming back to the dealership in large numbers. 

Each month, CDK tracks where shoppers complete the purchase process and for much of 2024, over 70% of shoppers were doing each step at the dealership. And in August and November, over 90% of customers said buying a car was easy. 

This should be good news for dealers heading into 2025, perhaps, even great news. But with more volume and a return to normal comes the selling pace and tactics that were employed before pandemic-derived inventory shortages. Because most salespeople only stay in the business for two years, the staff on the floor is scrambling to learn the old ways of … 2019. 

Look back at the year that was 2024 and there are reasons salespeople need to prepare themselves. New car sales hit nearly 16 million units. The industry bounced back from pandemic struggles far faster than it did from the Great Recession. Nearly every automaker saw sales increase in 2024, which means dealers did as well. But there were interesting wrinkles too. 

The year of EVs that wasn’t

EV hype translated to tepid sales while traditional hybrid sales boomed. Toyota sold nearly a million hybrids alone in 2024. That’s 6% of all sales. Total EV sales from all brands hit roughly 10% by most industry estimates. 

And if the industry was wary of EVs in 2024, political plotlines could make for an even murkier 2025 when it comes to electrics. 

No matter what the headlines might’ve said about EVs, more and more car shoppers are becoming familiar with the technology. In a recent CDK study, we asked both gas and hybrid shoppers if they’d buy an EV in the future. Last year, just 18% of gas shoppers said yes. This year, that number grew to 31! Today, 54% of hybrid shoppers said they’d buy an EV in the future, up from 38% last year. 

We also found that even the folks opting for a gas vehicle were becoming more familiar with EV technology, range and charging infrastructure near them. 

Inventory shifts impact sales teams

New car inventory also returned, growing to over 3 million units at the end of 2024. With the inventory came incentives. And both mean sales teams are busier than they’ve been in years. We asked dealers if their sales team have more or less time for selling activities and 17% said less time compared to a year ago. That response has ticked up from 14% last year but is considerably higher than the 7% response rate from when we asked the same question in 2021.  

What are they doing when they aren’t selling cars? Most sales teams are focused on following up on leads, but the area of focus that actually grew in 2024 was acquiring more inventory. There’s been a shift here — nearly doubling from the 9% who reported that as being a focus area in 2023 — to 16% in 2025. 

AI becomes the norm

AI is becoming less of a buzzword and more ingrained at the dealership as well. CDK found that 28% of dealers are already using AI in their stores, with 68% of them reporting a positive impact on their business. Whether used in the front or back office, AI is becoming a seamless part of the car business. 

Most dealers (62%) still feel AI is too new and unproven and are cautious about both its effectiveness and stability today. That number is actually up slightly from last year’s 60% response rate. 

But when asked about its impact in the future, slightly more (65%) said AI will have a positive impact on dealers down the road.

Preparing for the year ahead

It’s always difficult to offer predictions about what’s to come. Each year that goes by seems to present its own pitfalls for the country and for car dealers. Often, though, they’re completely divergent. While political winds may unsettle the masses, car dealers will likely be able to address their businesses with a laser focus. They should continue to utilize insights, build and train their teams, and deliver the customer experience they know is expected.