The auto industry is facing its biggest change since the assembly line was invented 100 years ago. Regulation and consumer trends encouraging the rapid advancement and widespread use of electric vehicles (EVs) and CASE (connected, automated, shared, electrified) technology are the primary forces driving us into this new era.

The previous three years have been especially difficult for the sector in terms of maintaining profit margins. Raw materials and intermediary inputs like electronics and microprocessors are becoming increasingly expensive and scarce due to a confluence of factors, including supply chain disruptions, recent spikes in inflation and rising wages, and the effects of sanctions on Russia.

The automotive business has developed in response to a number of factors, including advances in technology and the changing tastes of consumers. Nearly all vehicle dealerships expect a dramatic increase in internet sales in the next few years, and most of them think this will be good for business. That's why it's more important than ever for car lots to come up with fresh ways to sell so they can stay competitive.

Customers are moving away from traditional retail the most in the areas of pricing and finance.
With the proliferation of technology and the Internet, customers have become more informed and empowered, making it simpler for them to compare prices. This has increased market competition, necessitating dealerships' adaptation in order to remain pertinent and competitive.


To overcome these obstacles, car dealerships must find new methods to connect with customers, differentiate themselves from competitors, and offer products and services that meet the requirements and preferences of their target market. This necessitates a comprehensive understanding of the automotive industry's shifting landscape and consumers' evolving needs and expectations.

With the aid of modern technology, dealerships can now utilize online tools to provide consumers with a more streamlined and customized shopping experience. For instance, virtual showrooms and online financing options allow customers to examine, compare, and purchase vehicles without leaving their homes. This can help reduce the time and hassle associated with purchasing a vehicle and enhance the consumer experience overall.

In addition, dealerships can capitalize on the increasing demand for eco-friendly vehicles by providing a variety of electric and hybrid models. This not only satisfies the demand for more environmentally friendly and sustainable transportation options, but also provides dealerships with a unique selling proposition that can help them distinguish themselves from the competition.


The key to success for automobile dealerships in the current market is to remain flexible, innovative, and customer-centric. By embracing technology, providing an exceptional customer experience, and remaining abreast of the most recent industry trends and customer preferences, dealerships can increase sales and maintain a competitive advantage.

The automotive industry is among the most important economic sectors in the United States. Car sales have been a key industry driver, and the volume of cars sold in dealerships is a crucial indicator of the industry's overall health.

Increased shipments to dealers helped propel sales growth for the top global automakers in the United States during the first quarter. Sales of automobiles by General Motors Company, which surpassed Toyota as the leading automaker in the United States in 2022, increased by 17.6 percent in the first quarter.

On April 3rd, 2023, GM reported that first-quarter sales in the United States were 603,208 units, up from 512,846 the previous year. Sales of Mazda, Honda, and Hyundai automobiles also increased.

Demand for alternative-fuel vehicles is expected to grow through 2035. PwC predicts that EV adoption in the United States will increase from its current 2% to 44% by 2035, and that adoption in the European Union and China will increase even more rapidly. However, PwC predicts that by 2035, around 16% of all new LV sales in the US will be of highly automated vehicles (L3, L4, and L5). These projections are very conservative and include assumptions on the forecasted expansion of EV-charging infrastructure and the assumption that EVs would reach total cost of ownership parity with ICE vehicles by 2025.

Due to the pandemic's effect on the availability of semiconductor chips and other raw materials, automakers were unable to keep up with the spike in demand for personal vehicles. Since then, businesses have been scrambling to make up for lost output as supply chain hiccups begin to lessen.

Analysts are keeping an eye out for signs of demand plateauing in an industry where most vehicle sales are financed with loans, but rising interest rates and recession fears may play spoilsport. Over the past year, there has also been an increase in the average selling price of automobiles.

It's not just about electric cars and internet connectivity that the auto industry is facing radical transformation. Similarly, OEMs and car dealerships may need to rethink their decades-long working relationship and how they sell to and interact with customers as a result of changes in customer expectations and behavior.

The automobile industry has undergone a significant transformation in recent years, and this is reflected in the manner in which automobiles are sold. Dealerships have been compelled to adjust to new consumer preferences and behaviors, which have been influenced by technology, shifting demographics, and the economy.

In addition, the COVID-19 pandemic has had a significant impact on automobile sales through dealerships, with many consumers turning to online car-buying options and avoiding dealership visits. Therefore, the dealerships had no alternative but to adapt. Let's take a closer look at the most recent car sales trends in dealerships over the past five years.

Emphasis on Digital Sales

The emphasis on digital sales has been one of the most significant trends in auto sales over the past five years. With the rise of e-commerce and online marketplaces, car dealerships have had to adapt to the new manner in which consumers conduct vehicle research and make purchases. Now, car dealerships are required to offer a comprehensive online experience, which includes virtual showrooms, test drives, and financing options.

Embedded finance solutions

Businesses may now provide their consumers with access to banking and other financial services without ever having to leave the app or website. It's been gathering steam recently, and it's going to revolutionize how companies in every sector do business.

The increasing prevalence of embedded financing in the automotive retail industry is an exciting development that has the potential to revolutionize the industry. Dealerships may boost client loyalty and retention with the help of embedded financial solutions. Embedded finance simplifies the process by providing a complete financial solution, allowing auto lots to provide settlements on the same day of the transaction. Dealerships may strengthen relationships with clients and boost the possibility of repeat action by providing a more streamlined and customized purchasing experience.

Individualization and Tailoring

Automobile dealerships are no exception to the trend of consumers desiring personalized and customized experiences. In the past, car dealerships sold cars with a one-size-fits-all approach, but now they offer more options and customization. Dealerships now offer a variety of customizable options, such as various colors, trims, and packages, to meet the specific needs and preferences of each customer.

Individualization and Tailoring

Automobile dealerships are no exception to the trend of consumers desiring personalized and customized experiences. In the past, car dealerships sold cars with a one-size-fits-all approach, but now they offer more options and customization. Dealerships now offer a variety of customizable options, such as various colors, trims, and packages, to meet the specific needs and preferences of each customer.

Subscription-Based Business Models

In recent years, subscription-based models have gained popularity. Rather than purchasing or leasing a single vehicle, customers can now choose to pay a monthly charge for access to a fleet of vehicles. This model is especially alluring to younger customers who value versatility and dislike being tied down to a single vehicle. According to PwC, over 70% of vehicle dealers believe subscriptions are a good way to run a franchise.

Emphasis on Sustainability

Sustainability has become a significant trend in car sales due to the increasing concern for the environment and the effect of automobiles on it. In addition to offering electric and hybrid vehicles, dealerships now promote sustainable business practices. In addition, they provide customers with information regarding the environmental impact of their vehicles and suggestions for reducing their carbon footprint.

Virtual Reality and Augmented Reality

In recent years, augmented reality and virtual reality have gained ground in the automotive industry. These technologies are now being utilized by dealerships to provide consumers with a virtual showroom experience, allowing them to view and customize vehicles in a more immersive manner. Customers can also visualize the car's features and functions prior to making a purchase decision using this technology.

The trends in automobile sales through dealerships over the past five years demonstrate the significance of dealerships remaining current with shifting consumer preferences and the newest technological innovations. By providing a diverse selection of vehicles, investing in electric and hybrid technology, and adapting to the challenges posed by the pandemic, dealerships can continue to thrive in a swiftly evolving industry.

On the market, car dealerships confront a number of obstacles, including shifting consumer preferences and increasing competition from online car-buying platforms. To remain competitive, dealerships must discover new ways to attract customers and boost their bottom line.

The shift toward online auto purchasing is one of the greatest obstacles car dealerships face. As a result, the traditional dealership model has been disrupted by the rising popularity of online automobile purchasing platforms. Car dealerships are investing in online sales tools, such as virtual showrooms and online financing options, to resolve this challenge. This enables dealerships to cater to tech-savvy shoppers who prefer the convenience of online purchasing.

In addition to shifting consumer preferences, car dealerships must contend with online car-buying platforms. To remain competitive, dealerships strive to provide a superior customer experience by providing individualized service and expert guidance. They are also investing in technology to enhance the car-buying process, such as virtual test drives and online financing options.

The increasing complexity and necessity of providing clients with different financial options is yet another obstacle for car dealerships. Dealerships are increasingly relying on the expertise of BaaS partners to launch their offering of financial services to customers. Because of the added regulatory scrutiny that comes with the sale of financial products, embedded finance firms typically shoulder this responsibility. More and more car lots will likely integrate financing into their operations as the market evolves.

Lastly, automobile dealerships encounter the difficulty of attracting and retaining talented employees. High attrition rates can have a negative effect on customer service quality and, ultimately, sales. To address this issue, dealerships are investing in employee training and development, providing competitive compensation packages, and fostering a positive work environment that promotes employee loyalty and retention.

1) Financing options: Offering financing options to customers is one of the most essential financial decisions car dealerships can make. By partnering with embedded finance companies, dealerships can offer customers the option to purchase a vehicle on their own terms. In the United States, over half of all businesses outside the financial sector have utilized or plan to use embedded finance. In addition, 88% are content with the integration overall, and 85% think embedded finance has contributed to their growth in customer base.

2) Leasing is another financial option that dealerships can provide, and it can be appealing to customers who do not want to commit to a long-term car purchase. Leasing offers customers reduced monthly payments and the option to switch to a new vehicle every few years.

3) Car dealerships can increase their ability to sell vehicles by effectively managing their inventory. This involves analyzing sales trends, determining top-performing models, and adjusting inventory levels accordingly. By doing so, dealerships can reduce the risk of overstocking or understocking and ensure they have sufficient inventory to meet consumer demand.

4) By investing in technology, dealerships can enhance the customer experience and streamline operations. Implementing a customer relationship management (CRM) system, for instance, can help dealerships manage their customer relationships more effectively, while online tools such as virtual showrooms and online financing options can help dealerships reach online shoppers.

5) Concentrate on customer satisfaction: Lastly, modern financial decisions can assist car dealerships in enhancing customer satisfaction, which is essential for boosting sales. By providing a superior customer experience, including personalized service, expert advice, and a streamlined purchasing process, dealerships can increase customer loyalty and repeat business.

In recent years, the hybrid model of car sales, which combines traditional offline centers with online solutions for financing and other services, has grown in popularity. Due to the popularity of both online and in-store purchasing, dealerships will likely need to improve their online offers and features while keeping their in-store experiences at a high standard.

The hybrid model of car sales enables dealerships to provide a more personalized and streamlined customer experience, resulting in more contented customers. About 80% of car buyers prefer to go to dealers in person to test-drive vehicles, receive expert advice from the sales staff, and examine the automobiles in question up close. In addition, consumers can utilize online solutions for financing and other services, which reduces the time and effort required to complete the transaction.

By integrating online solutions into the sales process, dealerships can increase their efficiency and decrease the time required to close a transaction. This can be especially useful for customers who are in a hurry to complete the transaction or who have limited time for in-person visits.

When it comes to financing and other services, the hybrid model of automobile sales provides consumers with more flexible options. Customers have the option of completing the transaction entirely online or visiting a dealership for a more hands-on experience. This versatility can help dealerships attract a broader spectrum of customers, including those who prefer a more conventional approach to purchasing a vehicle and those who prefer the convenience of online shopping.