The automotive industry is transforming, and dealerships must keep pace with shifting auto sales trends to stay competitive.

Understanding what's ahead in the next five to ten years — from the growing dominance of digital retailing to the increased popularity of electric and hybrid vehicles — will help dealers make smarter business decisions.

The future of car buying is online

The car-buying process has become increasingly digital, and dealerships that invest in online sales tools will gain a competitive edge. Today, most car buyers start shopping online, and digital platforms offer a seamless way to compare prices, explore financing options, and even complete transactions.

The trends shaping digital retailing:

• Online car sales will continue to grow, with some buyers choosing a fully digital purchase process.
• Virtual showrooms and 360-degree vehicle tours are becoming the norm, giving customers a better online shopping experience.
• AI-powered chatbots and digital assistants are streamlining customer interactions and lead generation.

Dealerships should enhance their websites, integrate digital financing tools, and invest in targeted online advertising to stay ahead.

Dealership models are evolving

Dealers are moving towards new business formats, including:

• Multi-brand showrooms — Select dealerships are retreating from exclusive brand representation to offer a wider variety of vehicles under one roof.
• Mobility hubs — Some locations may transition into branded multipurpose spaces, offering vehicle sales, rentals, and subscriptions.
• Fewer physical dealership locations — As digital retailing grows, the number of brick-and-mortar stores may decline, with a focus on fewer but more tech-forward locations.

While the dealership of the future may look different, the human element remains critical — buyers still want expert guidance, personalized service, and test-drive experiences.

EVs and hybrids are gaining ground

According to S&P Global, EVs are projected to make up over 25% of new passenger car sales by 2030. Hybrids and plug-in hybrids are also on the rise.

As a result, dealerships should:

• Invest in EV training across all departments — Sales, service, and finance teams must understand battery range, charging infrastructure, and incentives.
• Expand inventory — Include more hybrid and plug-in hybrid options to serve a broader range of customers.
• Prepare for buyer concerns — Sales teams should be equipped to address customer hesitation over EV range, charging access, and total cost of ownership.

Sales volume and market dynamics are shifting

New and used vehicle sales are expected to grow moderately in the coming years. J.D. Power noted a 3.8% year-over-year increase in new cars sales along with several straight months of strong performance. Used vehicle sales are also trending upwards.

For dealerships, this means:

• A return to stability — While the industry saw big swings in supply and demand due to the pandemic, the market is settling into a more predictable rhythm.
• Stronger used car sales — Rising new car prices are pushing many buyers toward pre-owned vehicles, especially those priced between $15,000 and $25,000.
• Continued Certified Pre-Owned (CPO) sales growth — CPO is expected to outpace traditional used-car growth as buyers seek greater reliability and warranties.

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. This behavior change is driven by increased used vehicle transactions, a surge in customer demand, and greater financing accessibility.

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.

Overall profitability will look different

The record-high profit margins dealerships enjoyed in recent years won’t last forever.

• J.D. Power observed that increased competition and inventory levels has already pushed per unit profitability down 11.8% year-over-year.
• Analyst John Murphy predicts the average new vehicle gross profit per unit will fall from its peak of $6,000 to around $4,000.

Dealerships should focus on diversifying revenue streams to maintain strong financial performance. Service and F&I products will be key drivers of profitability in the years ahead.

What this all means

Auto sales trends will significantly change in the next five to ten years. Dealerships that thrive will be those that adapt quickly, embrace new technology, and stay ahead of evolving consumer preferences.

Key takeaways for dealers:

1. Digital transformation is a must — Invest in online sales tools, virtual showrooms, and AI-powered customer service.
2. Electrification is here to stay — Get ahead by training your staff and expanding EV and hybrid inventory.
3. Sales volume will increase as profit margins shift — Diversify revenue streams and adjust pricing strategies in response.
4. Used cars will continue to be a major revenue driver — Optimize inventory and offer financing options that meet demand.

As the industry changes, dealerships that innovate, invest in digital tools, and prioritize customer experience will continue to succeed.

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