What lies ahead for dealer networks in 2025? We break down the top automotive trends affecting dealer networks, what they mean for you and how you can drive improvements:
Reflecting on 2024 Auto Industry Trends
Uncertainty and Changeability
Major macro changes created indecision in the market, leading brands to test various scenarios affecting both automotive brands and dealer performance - often at significant cost:
EV uncertainly:
“A common theme across many of our clients is the uncertainty around EVs – range anxiety, lack of infrastructure, current negative media coverage and the fact many consumers don’t fully understand EVs in the first place.”
Emergence of Chinese manufacturers:
“Chinese manufacturers are rapidly expanding their presence in the UK, onboarding customers with hybrids and petrol-based models for now, as well as a range of competitively priced EVs when the market is ready.”
Shifting strategies:
“We’ve seen multiple brands reversing their strategic stance, for example, re-evaluating their direct sales approach, as seen with Jaguar Land Rover, the Volkswagen Group and Stellantis.”
EVs as an economic choice:
“EVs are shifting from being a sustainable choice to an economic one, depending on people’s location and lifestyle.”
Connected car technology:
“OEMs are continuing to invest heavily in connected car technology to retain market share and build customer loyalty.”
Predictions for 2025 Automotive Trends Affecting Retailers
Accelerating Trends in the Automotive Industry
- Hybrid sales model: OEMs are transitioning from pure franchise models to customised hybrid approaches.
- Omnichannel sales approach: With 95% of buyers valuing physical retailers1, brands are merging online and in-person sales seamlessly.
- Technology adoption: The most successful OEMs will embrace technology trends in the automotive industry, not just in the products themselves, but also in the software the brand uses to monitor and manage the network’s performance.
- EV new sales (marginal growth): A growing used EV market is moderating new EV sales, driving brands to develop comprehensive aftersales services.
- Chinese brands taking more of the UK market: Chinese manufacturers are meeting demand for sustainable, affordable vehicles.
Decelerating Automotive Trends
- Agency sales model: Some OEMs, like Volkswagen Group UK, are rethinking their agency-style rollouts.
- A direct sales approach: Despite digital growth, consumers still rely on retailers for test drives, inspections and expertise, indicating full direct sales aren’t imminent.
- Siloed tools: OEMs using fragmented systems lack the real-time, comprehensive view needed to gain time savings, standardised practices and reporting. Giving retailers direct access to their performance data empowers them to align to brand standards.
- Affordable ICE vehicles in used market: With used ICE vehicles set to drop by 69% by 20282, retailers must accelerate EV aftersales infrastructure development.
- Certainty for retailers: Ongoing network consolidation and shifting OEM strategies continue to create instability for retailers.
How Have Automotive Performance KPIs Evolved for 2025?
We’ve witnessed first-hand how auto industry trends are shaping specific KPIs for the year ahead. We’re seeing significant developments in the following KPI categories:
- EV Readiness – The shift to electric vehicles requires significant changes to a dealership’s infrastructure and processes.
2025 metrics reflect how brands are preparing dealers for the shift to EVs through required changes to infrastructure and processes. In January 2025, the government announced a consultation on phasing out the sale of new petrol and diesel cars from 2030 (currently set at 2035 as part of the ZEV mandate).
Example EV KPIs to measure:
• EV inventory turnover.
• EV-specific customer lifetime value.
2. Strengthening aftersales – With slower EV growth, service plans and warranties will be key revenue drivers.
Due to the promise of a consistent revenue stream, we’re seeing an increased focus on aftersales. Prioritising customer retention through service plans, extended warranties and vehicle health checks will help build long-term profitability. More brands are leveraging connected technology to help dealers understand when and how to approach customers with tailored service offers.
Example Aftersales KPIs to measure:
• Parc penetration of older segments.
• Automation of service scheduling.
• Focus on specific parts sales.
3. Profitability – Increased competition and slower EV growth mean sales optimisation is critical.
With demand for new EVs slowing and competition intensifying, there’s an emphasis on chasing up all leads to maximise sales conversion. Combine this with enhanced customer interactions and a well-defined sales strategy brands can secure a larger share of the market.
Example Profitability KPIs to measure:
• Lead conversion through speed of contact.
• Appointment conversion rates.
We’re not seeing much traction on sustainability KPIs. This remains a brand-level concern but is likely to filter into dealer networks soon. We’re seeing more KPIs focusing on direct sales for brands adopting this approach. Sudden strategy changes in response to market demand continue to hinder progress in this area.
As the automotive industry braces for another year of transformation, adaptability is key. Brands that embrace hybrid sales models, invest in omnichannel approaches and prepare their networks for the EV transition will be better positioned to navigate ongoing market challenges. Effective balanced scorecards with well-structured KPIs around EV readiness, aftersales, and profitability will likely evolve to meet these demands.
Underperforming retailers, missed KPIs and inconsistent standards can hold networks back. Discover how Loop’s retailer performance management software helps automotive brands get the most from their dealer networks.
Sources:
1 - Autotrader's key takeaways from the road ahead for automotive retail conference
2 - Autocar - Dealers told to prepare for used ICE car supply to drop 69%