As the automotive industry enters 2025, a combination of consumer behaviour, technology and market dynamics will shape the road ahead.
The latest Auto Trader Insight webinar brought together Catherine Faiers, chief operating officer at Auto Trader, and Jason Cranswick, chief operating officer at Marubeni Auto Investment which owns Norton Way Motors, RRG Group and HPL, to discuss where opportunities lie in the coming year.
With a focus on electric vehicles (EVs), data-driven decision-making, and addressing innovation fatigue, the conversation painted a multifaceted picture of the challenges and prospects ahead.
Consumer Confidence: The Foundation of Success
Consumer confidence was at the heart of the discussion, with both executives agreeing that it is the single most important factor underpinning the industry’s trajectory.
“Consumer confidence is going to be the bit that underpins whatever happens in our business,” explained Cranswick, a former Jardine and Cinch director.
The continued demand for mobility means that the industry’s core purpose remains strong, however, despite external pressures such as economic uncertainty and evolving customer expectations.
Even so, Cranswick highlighted the consumer’s growing need for greater ease. “Customers are wanting greater transparency and ease, so they want the friction taken away.”
He said the industry’s task, therefore, is to remove unnecessary complexity from every touchpoint of the customer journey.
Regulatory changes such as Consumer Duty and commission disclosure reforms, while initially perceived as hurdles, could also ultimately strengthen trust and customer satisfaction, creating a more equitable playing field.
Back to Basics: A Focus on Fundamentals
As 2025 approaches, the importance of revisiting and reinforcing the business basics emerged as a central theme. Cranswick observed that while innovation and adaptation are necessary, the foundation of success lies in executing tried-and-true processes with excellence.
“There’s definitely a need for us as dealers to have a back-to-basics approach and make sure that we’ve got colleagues doing the right thing, who are conscious of what good looks like and good process.”
He pointed out that many dealerships face the dual challenge of high staff turnover and a younger workforce with limited pre-COVID industry experience. This dynamic necessitates not just initial training but an ongoing commitment to education and development.
Faiers echoed these sentiments, noting that success in 2025 would be less about reinvention and more about refining the fundamentals: “It’s mostly about fundamental things, not about reinvention or huge innovation, but about putting the customer at the centre of the journey.”
By focusing on these essentials, dealerships can ensure a more stable and consistent performance, even in a fluctuating market.
The Power of Data-Driven Decision-Making
A major theme in the conversation was the increasingly critical role of data in shaping decisions and streamlining operations.
Cranswick described data as a game-changer for retailers who choose to harness it effectively: “We’ve definitely got to use data. The data is there. You’ve just got to choose to use it.”
The ability to make objective, data-informed decisions – whether about stock, pricing, or timing – can be a powerful differentiator in a competitive market. However, Cranswick acknowledged that many in the industry still struggle with fragmented systems and a lack of seamless integration.
“Our technology stack doesn’t necessarily allow things to be easily plugged in. There’s lots of new things we’d love to do to turn our business into more of an omnichannel business, but if the data can’t flow through application to application, that’s hard.”
Despite these challenges, both speakers stressed the importance of persisting with technological improvements and making thoughtful investments to close gaps.
The EV Revolution: Balancing Risk and Opportunity
No discussion about the future of automotive retail would be complete without addressing the accelerating shift toward electric vehicles (EVs). Faiers noted the undeniable impact of EVs and their role in shaping both consumer demand and retailer strategies.
Cranswick acknowledged the complexity of navigating this transition, highlighting both the opportunities and the potential pitfalls.
“Electric vehicles have become much more accessible because the entry point on used electric vehicles has become much more attractive. But it’s not as if if we don’t look at it, it’s going to disappear. We’ve got to face up to it.”
He explained that hybrid models will likely serve as an important stepping stone for many consumers, bridging the gap between traditional internal combustion engines and fully electric powertrains.
At the same time, dealerships must equip their teams with the knowledge and tools necessary to guide consumers through this evolution.
“We’ve got to make sure that our colleagues are all very skilled in how to handle the customer’s needs on EVs. We need to have these bright sparks within our business that understand everything about the total cost of ownership and the experience of owning and living with an EV.”
“The other thing we’ve all got to make sure they’re not being caught out by those leaps of technology. So a customer buying an EV today is buying a very different car to the one they would have bought two years ago. For the customer buying the EV that’s two years old, we need to make sure our teams know what that car does versus the latest, so that we’re giving best advice to our clients.”
Partnering with Emerging OEMs
Another significant trend shaping 2025 is the rise of new original equipment manufacturers (OEMs), particularly from China, which are introducing a wealth of new brands and models to the market, ushering in a period of unprecedented choice for consumers
“Arguably, the new car market is incredibly exciting today because consumers have more choice than ever in terms of brands, products, and mix,” noted Faiers.
Emerging OEMs often bring innovative approaches but may lack the systems and processes needed to succeed in the UK market. Retailers must weigh these factors against the potential rewards of building strong relationships with fast-growing, disruptive brands.
For retailers like Marubeni, choosing which OEMs to partner with involves careful evaluation with Cranswick detailing the key considerations the business applies.
“When it comes to new brands, obviously the big question we’ve got as a dealer is, is this going to is it going to last? Is it going to scale? Is it going to deliver? I think the ease of doing business is what we look for. So a lot of new brands come with very sort of primitive systems and processes and maybe a high level of naivete to what the UK market really looks like and how it operates. So we spend quite some time trying to assess whether they’ll understand fleet, retail, Motability, tactical.”
Innovation Fatigue: Prioritising Wisely
While innovation is essential, both speakers warned of the risks of “innovation fatigue” of their employees. Cranswick described the challenges of introducing new tools and systems without overwhelming teams already grappling with significant change.
“There’s also a practical reality where there are colleagues that have innovation fatigue where they are almost hoping that another new thing isn’t going to come because they haven’t quite got their head around the last new thing we brought out. Certainly in our business, we are making sure that we don’t grab every new shiny thing. I think we’ve got to pick wisely, partner wisely, and make sure that we are doing things at the right time.”
Omnichannel Evolution: Blurring of the Lines
As the line between online and offline retail continues to blur, dealerships must also adapt to meet consumers’ expectations for seamless, flexible experiences.
Cranswick described the goal of creating connected journeys that cater to individual preferences: “Our mission is to try and give the customer that choice, that if they choose to start their journey in one environment, online or offline, they can follow it right the way through to the other end and stay within whichever environment they want.”
This evolution requires significant investment in technology, infrastructure, and training, but the payoff is a more cohesive and satisfying customer experience through the development of a unified platform.
“The likelihood is they’ll move out of an online space into a shared environment,” added Cranswick. “At some point they’ll self serve for some elements, and I think interesting things will happen in self serve in the next couple of years around finance and insurance products.”
“Customers also want to be able to compare where their choice is in the wider marketplace, so we’re working hard to bring more technology into our showroom environments – but it’s not easy. They don’t all glue together. It’s not like Lego blocks, unfortunately, so that’s where we’ve got to spend the time – making sure that our colleagues help the customer whichever journey the customers have come on.”
Resilience, Collaboration, and Simplicity
In closing, Cranswick offered practical advice for retailers preparing for the challenges and opportunities of 2025. First and foremost, he stressed the importance of mastering the basics.
“Stay brilliant at the basics. Be open to change. Change is going to happen and having that growth mindset is important.”
He also highlighted the value of collaboration within the industry: “Play nice with your “frenemies”. We’re never sure who the friends and enemies are, but if you adopt an attitude of “play nicely”, we’re actually collaborating. Then, I think everybody learns together.”