With Christmas behind us, all eyes are on the new year and the new goals that await us. But before we jump into 2025, it’s important to look back and reflect on 2024. In today’s episode of Inside Automotive, David Kain, senior advisor and auto industry expert at NCM Associates, joins us to share his perspective on the past year and some of his predictions for 2025.
Kain opens up the discussion by highlighting some of the biggest wins in the industry for 2024. Many dealerships demonstrated strong business acumen this year by handling significant inventory issues. Despite these issues, dealerships continued to push forward, strategically balancing shortages and effectively clearing out bloated inventory by offering great incentives to their customers.
Kain notes that the affordability crisis is one of the market’s biggest challenges in 2024. Affordability is central to the retail experience for both the seller and the buyer. The average price of new vehicles has skyrocketed by almost 25% in the past five years and is sitting at $50,000. The average monthly payment is $725, nearly doubling what consumers are accustomed to.
With this decreased affordability, the industry sees many consumers leaning back into leasing as a solution. This rings true particularly with EVs, as they tend to be more costly than their internal combustion engine (ICE) counterparts.
Kain also discusses the growing role of artificial intelligence (AI) within dealerships. While many people have mixed feelings about AI, it is rapidly growing and making significant advances. Dealerships that get ahead of the curve, embrace AI, and use it to streamline their processes have seen incredible yields in their business.
AI can be used for virtually anything: summarizing a lead’s inquiry into an easy-to-read overview, sending follow-up emails, calls, and text messages to customers, or even updating customers on the status of their vehicle. Kain encourages dealerships to explore the available options and determine how they can effectively leverage it within their business.
Kain closes the conversation with a prediction for 2025: AI and technological advancements will pave the way for dealership staff to better service their customers.
The way that customers shop is rapidly changing, and consumers value convenience more than ever now. He advises dealers to keep a pulse on the Hyundai-Amazon platform, which is beta-testing and will fully launch next year. Dealerships should offer a variety of purchase paths: online, in-store, or hybrid. This will allow them to adapt to the way that consumers want to shop.
Kain’s clients who utilize digital retail are flourishing, and he stresses the importance of embracing the technology instead of feeling threatened by it. Gross averages are better, time on site is higher, and time inside the dealership is lower, clearly reflecting heightened customer satisfaction and experience.
Dealership teams that deeply embrace being helpful to the client and looking for new ways to serve them best always have a substantial advantage over their competitors. To do so, teams should embrace technological advancements such as digital retailing and AI, which will only become more prevalent in 2025.
"If you want to be successful in the car business, you've got to get out of the car business and into the people business." – David Kain
