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, shares his perspectives on the past year and predictions for 2025.
Industry Gains Amid Challenges
Kain highlights the biggest wins in the industry for 2024. Many dealerships demonstrated strong business acumen by navigating significant inventory issues. Despite these challenges, dealerships pushed forward, effectively clearing out bloated inventory by offering attractive incentives to customers.
Addressing the Affordability Crisis
The affordability crisis remains one of the greatest challenges. The average price of new vehicles has soared by nearly 25% over the past five years, now sitting at around $50,000. The average monthly payment has also increased to $725, almost double what consumers have become accustomed to.
As a response to this affordability issue, more consumers are leaning towards leasing, especially with electric vehicles (EVs), which are often priced higher than traditional internal combustion engine vehicles.
The Rise of Artificial Intelligence
Kain discusses the increased integration of artificial intelligence (AI) within dealerships. While there are mixed feelings about AI, its rapid growth has been notable. Dealerships that embrace AI to enhance their processes have reported remarkable gains.
AI can assist dealerships in various ways: summarizing inquiries, sending follow-up communications, and updating customers about their vehicle status. Kain encourages all dealerships to explore and leverage available AI tools in their operations.
Looking Ahead to 2025
In his conclusion, Kain predicts that technological advancements, particularly in AI, will allow dealership staff to provide better customer service. The shopping habits of consumers are changing, with convenience becoming a top priority.
He advises dealers to monitor developments like the Hyundai-Amazon platform, which aims to offer a seamless buying experience, set to launch fully next year. Offering diverse purchasing options, whether online, in-store, or hybrid, will help dealerships align with evolving consumer preferences.
Dealership teams that prioritize client assistance and embrace new technological solutions will have a competitive advantage. Kain emphasizes that those utilizing digital tools are experiencing greater success, evidenced by improved gross averages and customer satisfaction.
‘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
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