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Q2 2025 Automotive Industry Recap: Key Challenges & Trends

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Q2 2025 Automotive Industry Recap: Key Challenges & Trends

The automotive industry experienced a complex second quarter in 2025, shaped by a blend of steady sales performance, shifting consumer behavior, and broader economic pressures. While some automakers and segments delivered strong results, ongoing affordability concerns, evolving electric vehicle demand, and the early effects of new global tariffs added layers of uncertainty. For dealerships, Q2 reinforced the importance of agility—both in inventory strategies and customer engagement efforts—as the market continued to evolve in unexpected ways.

Published: July 9, 2025

Automotive Internet Media | Digital Marketing Agency

Q2 2025 Auto Industry Challenges and Trends

Sales Highlights by Segment

  • Minivans made a surprising comeback this quarter, with models like the Toyota Sienna and Kia Carnival posting notable sales gains as families prioritized space and versatility.
  • General Motors led the U.S. automotive market for the first half of 2025, powered by strong demand for its SUV and pickup lineup.
  • Hyundai reported its best-ever first-half performance, with Q2 sales rising 10% year-over-year.
  • Electric vehicle (EV) trends were uneven: while the Nissan Ariya showed growth, other EVs like the Ford Mustang Mach-E and Hyundai Ioniq 5/6 experienced sales declines, signaling a potential recalibration in EV shopper preferences.

Tariffs Begin to Disrupt Global Sales

Newly implemented U.S.-China tariffs began to impact global luxury auto sales. Brands such as Mercedes-Benz and Porsche signaled slower projected growth as pricing pressure and geopolitical uncertainty influenced buyer confidence and dealer strategy.

Inventory & Incentive Adjustments

In several markets, tighter inventory conditions were reported following strong sales early in Q2. Some brands, particularly Chrysler, Dodge, Jeep, and Ram (CDJR), focused on clearing older model year inventory amid limited factory incentives on newer stock—prompting a shift in promotional focus for many dealers.

Key Trends to Watch in Q3 2025

📉 EV Rebalancing

After a period of overproduction earlier in the year, automakers are expected to shift Q3 strategies toward affordability, with increased marketing around hybrid options and practical pricing. While long-term EV adoption remains on track, near-term demand is being reshaped by price sensitivity and infrastructure concerns.

📈 Luxury & SUV Momentum

Despite economic headwinds, luxury SUVs and high-end EVs continue to gain traction. Dealers with inventory in these categories may find opportunity in targeting affluent buyers looking to upgrade.

🛠️ Fixed Ops & M&A Growth

Fixed operations remain a reliable profit center, prompting more dealers to invest in service, parts, and collision repair capabilities. At the same time, buy-sell activity is picking up, with larger dealer groups expanding through acquisition in metro markets to increase efficiency and scale.

🌐 Digital Retailing Is No Longer Optional

Digital-first car shopping behavior remains the norm. Buyers expect transparent pricing, flexible finance tools, and seamless online-to-showroom experiences. Dealerships embracing VIN-specific ads, live chat, and personalized outreach will stand out—especially as more shoppers re-enter the market in Q3.

The Bottom Line

Q2 2025 revealed both challenges and areas of growth across the automotive sector. According to Cox Automotive, overall dealer sentiment remained cautious—particularly among independent dealers—though franchised retailers showed more optimism. As the industry moves into Q3, success will depend on how well dealers adapt to evolving inventory dynamics, pricing pressures, and rising expectations around digital engagement.

Want to stay ahead of the curve? Automotive Internet Media can help you optimize your digital marketing strategy and connect with more in-market car shoppers. Contact us today to position your dealership for growth in Q3.

Recent Posts

How to Navigate Inventory Issues Caused by the COVID-19 Pandemic

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The impact that coronavirus is having on businesses unfortunately comes as no surprise. Auto dealers are seeing the negative impact of this pandemic even though they are considered essential businesses. The current environment is especially affecting independent dealers.

One issue that has arisen is a lack of vehicle inventory. Since many OEMs converted their manufacturing plants to produce ventilators, they are now trying to make up for lost time and dealers are asking how can I sell cars I don’t have? 

USA Today is reporting what many dealers are feeling, popular pickup trucks are getting hard to find. Big truck brands like Ford, Chevy, GMC and Ram dealers are the most seriously impacted. And with these models being typically higher priced inventory, it is hurting dealers’ bottom lines even more.

So how can your dealership navigate through inventory issues caused by the COVID-19 pandemic?

Try Out New Strategies

One way your dealership can get past inventory issues is to strategically promote the inventory you do have. Focus on cars that have been on your lot for a long time. AIM’s CarClicks Inventory Marketing can connect auto shoppers to your oldest inventory to help increase turn.

Another strategy is to pivot and get creative with your marketing of the models that you do have. Since pickup trucks are scarce right now, shift your advertising efforts to vehicles that are not. Try out eye-catching yet cost effective marketing. Promote smaller sized models to millennials using video promoted on connected devices.

Having trouble driving sales to your dealership because of the pandemic? Today more than ever, it is especially important to have a strong online presence. When shoppers don’t want to come to the dealership themselves, you have to be able to get your vehicles in front of their eyes. 

Expanding your online retailing can help you win more customers, making it easier for auto shoppers to browse your inventory online. Setting up video appointments and dropping off the vehicle to their driveway are all steps in the right direction for conquering the negative impact of COVID-19 on your dealership’s business. 

Ready to combat COVID-19 related inventory issues? Talk to us at (312) 473-0024 today.

 

Can CarClicks Be the Future of Dealership Advertising?

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AIM’s Tony French argues for a new approach to allocating your marketing budget that ensures getting more visibility on your inventory and more auto shoppers on your website. 

The CarClicks Inventory Marketing platform had a smooth ride in 2019, its best year yet. 

For dealership owners and managers, getting the best marketing platforms and vendors has always been a challenge. Many elect to work with the big players; but find themselves dealing with tighter and tighter guidelines and restrictions. These companies often struggle to achieve results equal to smaller marketing companies with more at stake. 

Competing with the major companies historically meant it was us or them, but now dealers see that diversifying their monthly ad budget can produce better results. With the right visibility, they can determine the best performing campaigns themselves. 

Here’s why CarClicks should be included in every dealership marketing strategy:

Paid traffic should (always) drive auto shoppers to vehicles: Before you launch any digital campaigns, you need to determine what goals you are trying to achieve. If you are paying for advertising to help you sell cars, when the shopper gets to your website, they need to shop your inventory. 

Track your results: When it comes to judging campaign performance, data and KPI’s beat your gut feeling every time. Regardless of the paid campaign, measuring the amount of inventory views, bounce rate, time on site and goal conversion is critical for all paid campaigns. 

Budget allocation & optimization based on results: On a monthly basis you should review the results of every campaign and decide how you want to move forward. If you discover one campaign is performing better than others, you should re-allocate budgets appropriately. Determine the cost per session for each campaign. If one campaign is driving higher quality traffic for less per session, you should increase that campaign’s budget taken from the poorer performing campaigns. 

Eliminate waste: The key to selecting the right media is to choose the sources that drive the highest quality traffic to your website. Paying to reach people that may not be in the market for a vehicle isn’t an effective spend. 

Allocate: A CarClicks campaign creates an integrated and cohesive approach to inventory marketing. We seamlessly promote your inventory to auto shoppers across multiple channels, while factoring in the different devices that auto shoppers are using to shop for your inventory. CarClicks Inventory Marketing Products will drive serious, highly engaged auto shoppers to your website while lowering your overall advertising costs.  

Changing landscape: With budgets under increasing pressure, dealerships must allocate every dollar with precision and purpose. 

Often, however, dealers and managers feel obligated to their OEM or by relationships with vendors. What dealerships need is an analytical, forward-looking approach that allocates marketing dollars to campaigns and products that have the highest performing results rather than those that are being pushed by the manufacturer. 

Differentiate your brand, dealership and most importantly, your inventory by allocating part of your budget to CarClicks Inventory Marketing. 

 

To learn more about how CarClicks can help your dealership, contact us at sales@aimyes.com.