7:06 am, January 2, 2025
‘I hate to say I told you so’, has got to be up there with the awful ‘It is what it is’ when it comes to the lexicon of the most annoying phrases ever.
So I won’t bother with either. But I will ask you to cast your eye back to my predictions for 2024, published around this time last year, when I used some guess work as to what might happen in the motor trade this year.
I was right about Cazoo disappearing for good as well as more manufacturers ditching agency sales, but missed the mark with my prediction Vertu would finally go private. There’s always this year for that.
So, as is now tradition, and with 2025 already underway, here’s what I think might happen in the next 12 months.
We’ll see dealership failures
I am sorry to start on such a negative, but it’s a subject that’s been worrying me for some time. We’ve seen some disastrous results for 2023 and from what I am hearing 2024 has been worse for a lot of car dealers out there. A combination of high interest rates, continued cost of living concerns and brands pushing EVs that are hard to sell has caused many dealers to suffer. I have a horrible feeling a lot of this will be unsustainable and we’ll start to see some failures this year.
We’ll continue to bump along
From the chats I’ve had and the expert reports I’ve seen, there’s little to suggest 2025 will be a ballistic change in fortunes for the motor trade. There’s steady demand in the new and used car markets, but with little to suggest interest rates will plummet any time soon and a stagnant economy thanks to a poorly-received budget, I can’t see there being any surge in the car market.
The ZEV mandate will get a rethink…
Finally, the government is consulting the industry on what needs to change to boost EV demand. It’s seen the damage the ill-thought out concept has caused with car manufacturers forced into unsustainable discounting of electric cars to stimulate demand. If I were a betting man I’d wager on the government relaxing the percentage targets for the number of EVs each car brand has to sell over the coming years.
…and we’ll get some incentives to go electric
Along with the ZEV rethink I think we’ll finally see the government put its hand in its pocket to incentivise the public into going electric. Consumers need a carrot to make the switch and we’ve seen in used market where there is price parity, car buyers are willing to give EV a go. We need some decent incentives to do that in the new car market too. What would I do? I’d generate demand with a scrappage scheme of the worst polluting older ICE cars if buyers went electric and reinstate the plug-in car grant. I’m sure the additional VAT receipts alone would pay for it.
Used car prices will remain pretty static
There’s no doubt used car prices are still pretty high, but I can’t see that changing any time soon. We’re slap bang in the middle of the fall out of those fewer cars sold during the Covid years, which means there are less used models swilling around in the system. Demand is pretty static too as most used car buyers purchase out of need rather than desire, so I’m sure all this will result in used car prices remaining fairly static. Expect another year or tiny percentage falls in line with the normal seasonal trends.
