As the 2025 NADA Show in New Orleans approaches, original
equipment manufacturers (OEMs) and dealers are facing twin
pressures: rising vehicle inventory levels and a wave of new 2025
model launches. Automotive retailers and marketers must grasp these
marketplace dynamics to manage existing inventory while
establishing a pipeline for upcoming models.
The insights and solutions shared at NADA will be key for
dealers looking to navigate this complex landscape
successfully.
Rising inventory levels and upcoming launches bring
challenges
During the last week of November, the available retail
advertised inventory in the US climbed to 3.1 million vehicles, a
30% increase from the last week of December 2023. This trend shows
that vehicle inventories have fully recovered from the
semiconductor shortage two years ago, with surpluses returning to
pre-pandemic levels. Available inventory has exceeded three million
units for three consecutive months, and dealers must contend with
vehicles remaining on lots for an average of 81 days.
Rising inventory levels cut across most manufacturers, but seven
brands face more pressure to clear their lots. Cadillac, Ford, GMC,
Honda, Hyundai, Kia and Land Rover are all experiencing inventory
growth above 50% (Figure 1). Collectively, they have added more
than 523,000 units and account for 73% of the total inventory
increase in 2024.
And more inventory is on the way. More than 60 new vehicle
launches are planned for 2025, including 27 battery electric
vehicles from most of the industry's mainstream and luxury
brands.
Dealerships and marketers must balance two priorities:
attracting buyers to clear out existing stock, while building
demand for incoming new vehicles.
Hybrid vehicles' continued momentum will help shape the 2025
market
Despite the challenges, dealerships and marketers can take
advantage of market trends, including the growing popularity of
hybrid vehicles. Hybrid electric vehicles are gaining traction,
with their combined market share rising above 12% through the first
nine months of 2024. In this electric vehicle-focused market,
hybrid vehicles attract buyers by providing the benefits of
electrification without the high costs or charging infrastructure
challenges of fully electric cars.
Dealers can capitalize on the higher conquest rate of hybrid
vehicles compared with cars using other fuel types.
A recent S&P Global Mobility study found that hybrid
customers from competing brands are more likely to switch than
those using gasoline-fueled vehicles.
How automotive dealers and marketers can evolve their
strategies to succeed
With higher supply and more options for alternative fuel types,
consumers now have more control over the car buying process.
Successful dealers will need to balance reducing current inventory
while preparing for the new models.
This requires understanding local market dynamics—such as
competitive dealer sales, popular models and patterns of customers
switching between brands—to identify sales opportunities and
address any gaps in strategy. Dealers using targeted marketing
campaigns and smart pricing strategies will help to attract
customers and boost sales.
The automotive landscape is evolving, and as the industry
navigates these changes, staying informed about inventory trends,
consumer preferences and mutually beneficial pricing for customers
and dealers will be crucial for success in 2025.
Looking ahead: S&P Global Mobility at
NADA
As we prepare for the NADA Show 2025 in New Orleans taking place
Jan. 23-26, we're focused on helping car dealers accelerate their
sales and grow their businesses in today's market.
At the S&P Global Mobility booth #3735, we will showcase
innovative solutions designed to help dealers identify their best
selling opportunities, reach in-market shoppers ready to buy now,
and close the most profitable deals quickly, all while giving
customers an optimal monthly payment option.
Meet us at NADA and learn how we can support your
growth by:
- Identifying new opportunities: Market Impact
helps dealers uncover sales opportunities for new and used
vehicles. By providing insights into market share, customer loyalty
and dealership performance, it empowers dealers to make informed
decisions that uncover sales opportunities. - Targeting the right audiences: With Polk Auto
Direct, dealers can connect with high-value in-market shoppers.
Featuring more than 1,000 segments tailored for dealer advertisers,
the platform makes audience targeting easy, ensuring that your
marketing efforts reach the right consumers. - Optimizing sales processes: With Market Scan
mDesking, dealers maximize profitability by accessing real-time
data from multiple lenders. This helps reduce the time customers
spend in the dealership by allowing the dealer to quickly present
the best payment options, all while ensuring profitability.
We look forward to speaking with our customers and industry
connections about how they can make the most of these solutions at
NADA 2025! Attending NADA and interested to learn more?
Fill out this form to request a meeting
