The U.S. auto industry has reached peak truck, electric vehicles are here to stay, Korean brands are outpacing competitors, and technology is reigniting customer excitement and dealer profitability.
Those are some of the forecasts from the latest Dave Cantin Group Market Outlook Report (MOR), released during the 2025 National Automobile Dealers Association’s (NADA)annual conference. MOR is based on data from a variety of current sources, including unique research and modeling, as well as surveys and interviews conducted among U.S. consumers, dealership executives, OEMs, supply chain players and industry analysts.
The Dave Cantin Group is a leading advisor to retail automotive groups and their owners. The MOR, in partnership with Kaiser Associates, is published twice annually: at the start of NADA and again during Q2 earnings season in July. The MOR delivers an analysis and forecast of the automotive climate headed into 2025 by combining Dave Cantin Group’s automotive research and data with Kaiser’s industry analysis.
Truck Sales vs. Affordable Sedans
“The (report) identifies and reports on key industrywide trends and issues that auto dealers, consumers and the global industry are facing headed into 2025,” Dave Cantin, President and CEO of Dave Cantin Group, said. “Last year, the industry found its new normal, post Covid. That’s all out the window as we start 2025, because of U.S. and global uncertainty around politics and regulation.”
The headline for the report is that U.S. consumer love affair with trucks and SUVs is waning as they eye more affordable sedans, driven by concerns over vehicle affordability. This trend promises to challenge manufacturers lacking competitive sedan offerings.
Connected to that, consumer preference for Korean brands such as Kia and Hyundai are outpacing all others as the report states these manufacturers have achieved the perfect balance of product design, technology, pricing, and reliability leading to increased market share and positive consumer sentiment. “The improvements and affordability have found a sweet spot with consumers,” the report states.
The rises of Korean cars sales coincides with international competition is intensifying. Foreign governments— China, Korea, Japan, Germany—are providing substantial support to their automotive industries and comes at a time with President Donald Trump past criticisms of U.S. government intervention in the U.S. auto industry.
Trump Effect
Although there’s a bullish sentiment around automotive in the U.S., but the unpredictability of Trump’s trade policies and tariffs as well as any retaliatory actions is “creating challenges for the automotive sector. Post-Covid predictability just returned and now manufacturers and dealers must navigate this political uncertainty to make informed strategic decisions,” the authors of the report wrote.
One of President Trump’s first actions in taking office was eliminating the “electric vehicle mandate.” But the Cantin report declares that EVs “are undeniably here to stay. Together, hybrid and electric vehicles are undeniably a growth driver and with dealers becoming more receptive to selling these models, we can expect the combined segment to continue to steadily gain market share for the foreseeable future.”
Fueling the growth is maturing infrastructure, decreasing battery costs and new battery chemistries, potentially leading to the launch of lower-cost EVs in the coming years. It has also driven surprisingly strong fixed operations for dealers.
The Direct-to-Consumer Threat
EV manufacturers are continuing to stress dealerships, as they face new attempts at direct-to-consumer sales models from Tesla, Rivian, Lucid and now VW’s Scout. Additionally, automakers are exerting greater control over dealership networks and inventory management that is forcing dealers to adapt to new operational models and expectations.
“More than ever, auto dealers will need to evaluate automakers’ strategies, whether they will be successful and if they want to tie their fates to them,” said Cantin. “We anticipate automakers forging their own distinct strategic approaches to establish competitive advantages. Manufacturers will be placing more big bets than ever to win market share and this will lead to clear winners and losers causing industrywide disruption of the status quo.”
Part of the way to stand out are dealers introducing premium, personalized services—at-home mobile service and prime appointment times—to enhance customer satisfaction, increase customer retention, differentiate themselves in a competitive market, and drive more revenue.
And report notes the automotive industry is experiencing a technological renaissance, with innovations in vehicle features helping to reignite consumer excitement. Technology is driving more efficient dealer operations in every part of the store as dealers implement and use new technologies, such as AI and robotics, efficiently to drive profitability.
