Top 8 Automotive Retail Trends Dealerships Need To Watch

Picture this: a potential customer strolls into your dealership, but instead of heading straight for the sales desk, they’re glued to their phone. Sounds familiar? Today’s buyers do almost all their research online before setting foot inside a dealership. And if they can’t find what they’re looking for on your website, they’ll quickly move on to one of your competitors. This is why understanding automotive retail trends is so important. They help auto professionals like you identify changes in buyer behavior so you can adjust your strategies accordingly. In this blog, we'll discuss the top automotive retail trends to help you generate quality car sales leads. So, keep reading to learn how to generate car sales leads.

One solution that can help you adapt to the latest changes in the automotive industry is Pam’s AI for car dealerships. By understanding and predicting buyer behavior, automotive AI can help you identify car sales leads and automate your communications with them to improve your chances of closing the deal.

The Shift in Automotive Retail

The automotive industry is in the middle of a transformation more rapid and far-reaching than anything we've seen before. From the rise of digital retailing to the accelerating adoption of electric vehicles (EVs), what it means to buy, sell, and own a car is changing, and it’s changing fast.

This isn’t just about a few new platforms or buzzwords. According to Astute Analytica, the global online car buying market was valued at US$304.7 billion in 2023 and is projected to reach US$885.1 billion by 2032, growing at a CAGR of 12.58%. That’s not just impressive growth, it’s a clear indicator that consumer habits are shifting fundamentally.

Leading the Shift in Automotive Retail

By 2025, experts predict that 30% of global vehicle sales will take place entirely online. Compare that to just 5% in 2022, and you can see just how fast the digital transformation is taking hold. Dealerships that once viewed websites and digital tools as optional extras now recognize them as essential for survival.

This blog doesn’t just explore the latest automotive retail trends; it helps you understand what they mean for your dealership, and more importantly, how to respond strategically. In a landscape where everything, from customer expectations to vehicle technology, is evolving at a rapid pace, the key to staying competitive is simple. Don’t just react, lead the change.

Related Reading

• What is a Dealer Management System
• Dealership Technology
• Car Dealership Conversion Rates

The Role of Technology in Shaping Automotive Retail

Technology is revolutionizing dealership operations. Dealer Management System solutions enable car dealers to efficiently manage vehicle inventory, track sales, and automate various administrative tasks, such as vehicle advertising and reporting.

Smart Systems Driving Dealership Success

Both the Dealer Management System and the Customer Relationship Management system have become invaluable tools for dealerships. These systems provide real-time insight into vehicle inventory levels, pricing, and vehicle history, enabling dealers to make informed decisions and optimize business spending.

Customer relationship management (CRM) systems help dealers organize and maintain customer data, enabling personalized interactions and targeted marketing campaigns that lead to frequent generation of new leads.

Digital Showrooms: Enhancing the Customer Experience

Technology has revolutionized the way that customers interact with dealers. In 2023, 95% of car buyers started their search online. To put this into context, this is twice as many as those who start their research at a dealership in person.

Digital Showrooms Redefine Car Buying

Throughout the pandemic, digital showrooms have proven to be an innovative tool that allows customers to explore and customize vehicles from the comfort of their own homes. The benefit of having a digital showroom is that it provides customers with comprehensive information about the cars that you are selling without needing them to attend your dealership in person.

High-definition images, 360-degree views, and interactive vehicle video tours provide a comprehensive understanding of the vehicle, enabling customers to make informed decisions from the comfort of their own homes.

Online Sales Tools: Simplifying Vehicle Purchases

The rise of online sales tools has made it easier for customers to research, select, and purchase vehicles online. Using different technology tools, dealers can now offer intuitive websites with user-friendly interfaces that showcase vehicle inventory, provide detailed specifications, and transparent pricing information.

Customers can compare different models that you have for sale, explore financing options, and even start the buying process entirely online. One of the most significant benefits that technology has facilitated is the digitalization of finance and paperwork processes.

End-to-End Car Buying Goes Digital

Online financial calculators help customers assess loan payments and affordability without needing to speak to the bank or a broker. Digital signature tools and a secure document exchange platform simplify paperwork, eliminating the need to visit your dealership in person.

With technology, customers can now buy a car entirely online without having to set foot in your dealership!

AI and Machine Learning: The Future of Automotive Retail Technology

Going forward, there is no question that technology will continue to shape the automotive industry and the way dealers work. With the recent rise of artificial intelligence (AI) and machine learning (ML), new technologies are beginning to offer previously unthinkable capabilities, such as:

• Analyzing customer preferences
• Predicting buying behavior
• Personalizing recommendations

Connecting technology enables dealers to streamline their operations, enhance efficiency, boost sales, and refine their processes.

Boost Revenue 20% with Pam’s 24/7 AI Receptionist

Pam's 24/7 AI receptionist never misses a call, scheduling service, or nurturing leads even when your team is off the clock. Experience the technology that's delivering a 20% revenue increase and 10× ROI for over 100 dealerships nationwide, with seamless integration into your existing systems like Tekion and XTime.

See how Pam outperforms both human agents and competing AI solutions by scheduling your personalized demo today. Implementation takes just one day.

Book a demo to boost your revenue by 20%, like 100s of dealerships across the nation.

Top 8 Automotive Retail Trends Dealerships Need to Watch

1. Electric Cars: The Shift to EVs is on, But Watch Out for 2025

In recent years, the worldwide shift to electric cars has been one of the most prominent trends in the automobile industry. Environmental factors have driven the growth of zero-emission vehicle technology, and the popularity of cleaner and more environmentally friendly electric vehicles and hybrid electric vehicles has increased.

The battery technology and charging infrastructure required for electric vehicles are also evolving. For example, lithium-ion batteries that have certain limitations can now be replaced by solid-state batteries that have higher energy density, are safer, more stable, and cost-effective.

EV Slowdown Spurs Shift to Hybrid Vehicles

Despite optimistic forecasts, 2025 will be marked by a slowdown in EV sales. The following factors explain this:

• Ongoing trade tensions between China and the West
• Competition with Chinese EVs
• Infrastructure challenges (e.g., availability of charging stations, supply chain issues)
• High costs of electric vehicles' manufacturing and their high prices for customers

As a result, automotive manufacturers are expected to shift their focus to producing hybrid models, which are more cost-effective and adaptable. Hybrid vehicles are becoming increasingly popular, as they combine the benefits of electric power with the reliability of a combustion engine. Compared to electric cars, they don’t require charging, but at the same time, reduce carbon emissions.

China Maintains Lead in Global EV Production

In 2025, China is going to remain a leading manufacturer of electric vehicles. Currently, they sell most of the electric cars worldwide, and this year, they are expected to market more electric cars than combustion engine vehicles.

2. Software-Defined Vehicles: The Rise of the Machines

Software-defined vehicles are those that use software to conduct all operations (braking, driving, steering, providing infotainment, etc.). This software should be regularly updated to let users take advantage of the latest technological advancements and enhance vehicle performance.

Rise of Software-Defined Vehicles

This trend is gaining traction in 2025. At the recent Consumer Electronics Show, an event that showcases technological innovations across various industries, software-defined vehicles were a highlight. This means that automotive manufacturers will be producing more SDVs in the years ahead.

For example, Honda is partnering with Amazon Web Services to enhance data collection and software updates, thereby accelerating the transition to SDVs.

3. Automotive Supply Chain Issues: The New Normal

The automotive industry is one of the most severely affected by supply chain disruptions. Currently, its most significant challenge is uncertainty and instability, which are expected to persist this year. Several factors explain this:

• Talent shortages: Automotive manufacturers struggle with high employee turnover, a persistent issue.
• Shift to electric vehicles and advanced features: This causes a gap between the increased demand for specific components (e.g., semiconductors, batteries) and the available supply.
• Reliance on global supply chains: The COVID-19 pandemic exposed their vulnerability, prompting several auto manufacturers to relocate their production plants.
• Geopolitical tensions: Military conflicts in some regions of the world also contribute to intensifying supply chain challenges.

Currently, auto manufacturers and original equipment manufacturers (OEMs) are attempting to address the difficulties above and reduce their reliance on global supply chains. They are taking the following measures:

• Investing in automation
• Diversifying suppliers
• Localizing production
• Stockpiling some critical components

4. Online Car Buying is a Must for Dealership Success

Online car buying has moved from novelty to necessity. Customers now expect to browse inventory, get financing, and even complete trade-ins without setting foot in the showroom. What started as “click-to-buy” has evolved into fully digital retail journeys, including remote test drives and online document signing.

Dealers that enable seamless online experiences see fewer drop-offs and higher conversion rates. The convenience isn’t just appreciated, it’s expected. If your process isn’t frictionless, customers will find one that is.

5. Subscription Models & Mobility Services: The New Flexibility

Not everyone wants to buy a car. Some just want access. Subscription services, ride-sharing, and other mobility solutions are gaining traction, especially among urban and younger demographics. Think short-term leases with all-in-one pricing, insurance, tax, and maintenance.

Dealerships that explore mobility partnerships or launch their flexible ownership options can tap into new revenue streams. It’s also a gateway to building brand loyalty with customers who may eventually make a purchase.

6. Omnichannel Sales: Seamless from Showroom to Smartphone

Customers now move freely between online and offline channels. They might start with a web search, book a test drive on their phone, then finalize the deal in-store. They expect their experience to be consistent and connected, no matter where it starts.

Omnichannel isn’t just a buzzword; it’s a customer expectation. CRMs, digital retailing tools, and communication platforms must be connected to provide a smooth handoff from screen to showroom. When done correctly, omnichannel marketing builds trust and boosts customer satisfaction.

7. AI & Automation: Data That Drives Decisions

From AI-powered chatbots to predictive inventory tools, automation is making dealerships smarter and faster. Marketing can be personalized in real-time. Sales teams can be alerted when high-intent leads return to the website.

Inventory planning can anticipate demand shifts before they occur. AI isn’t replacing people, it’s enhancing performance. Automating the right tasks frees up your team to focus on what they do best:

• Selling
• Serving
• Connecting with customers

8. Used Cars Are a Rising Profit Center

Used vehicle sales are increasingly crucial to dealership profitability. As new car prices remain high, more consumers are turning to pre-owned options. Increased used vehicle transactions, a surge in customer demand, and greater financing accessibility drive this behavior change.

With Grand View Research projecting the global used car market will hit $2.7 trillion by 2030, dealerships should optimize their used inventory, price strategically, and leverage digital tools to capture a larger share of this growing segment.

Related Reading

• CSI Car Dealership
• Chatbots in Automotive Industry
• Car Dealership Marketing Strategies
• Digital Retailing Automotive Trends
• How to Sell More Cars

How Dealerships Can Adapt Strategically

Not every trend will be relevant to your dealership. For example, fully digital car buying journeys might be a hit in urban, tech-savvy markets, but in smaller communities, customers may still prefer a hybrid approach. Focus on the tools and strategies that solve problems for your audience, not just the flashiest innovations.

Choose Tech That Works Together

The best technology doesn’t operate in silos. A CRM that doesn’t speak to your digital retailing platform or DMS creates friction rather than efficiency. Look for integrated systems that provide a seamless flow of data across sales, service, marketing, and management. That’s how you build a dealership that runs like a modern business, not a patchwork of disconnected tools.

Invest in Your People, Not Just Your Platform

Technology is only as powerful as the people using it. As digital touchpoints grow, your team must be just as comfortable following up on a web lead as they are closing an in-person sale. Upskilling your staff to thrive in both environments, online and on-site, builds trust with customers no matter where they are in their journey.

Stay Agile—Small Changes, Big Impact

You don’t need to overhaul everything at once. Sometimes, a minor tweak, such as reducing response times to online inquiries or improving trade-in evaluation tools, can yield outsized results. Keep testing, learning, and adapting. The dealerships that win aren’t always the biggest; they’re the most agile.

Related Reading

• Automotive Marketing
• Car Dealer Lead Management
• CRM for Automotive Industry
• Dealership BDC Best Practices
• Dealership Marketing

Book a Demo to Boost your Revenue by 20% (Trusted by Hundreds of Dealerships Across the Nation)

Pam's 24/7 AI receptionist never misses a call, scheduling service, or nurturing leads even when your team is off the clock. Experience the technology that's delivering a 20% revenue increase and 10× ROI for over 100 dealerships nationwide, with seamless integration into your existing systems like Tekion and XTime.

See how Pam outperforms both human agents and competing AI solutions by scheduling your personalized demo today. Implementation takes just one day.

Book a demo to boost your revenue by 20%, like 100s of dealerships across the nation.