It's the end of the year, and time to look back at our 2024 predictions and grade ourselves. How did we do? Not bad, other than not anticipating the steep tariffs on Chinese auto imports, and we expected Amazon to have made more progress with their automotive initiative.
Here are our 2024 predictions and our grades
Prediction 1: EV Pain Just Beginning
Demand for battery electric vehicles (BEVs) stalled in 2024, despite the $7,500 consumer-facing tax incentives. Surprisingly, consumers gravitated strongly towards non-plug-in Hybrids. If Trump revokes consumer tax incentives, is there any natural demand for EVs?
Prediction 2: UAW = a Pyrrhic Victory?
The United Auto Workers (UAW)’s huge wins in 2023 meant significant pushback in 2024. And the UAW’s efforts to unionize legacy OEM plants seem to have run out of steam. Automakers are in crisis mode and are dramatically cutting costs to prepare for battle with the Chinese.
Prediction 3: Chinese Enter the U.S. Market
One of the few things that Biden and Trump could agree on were 100% tariffs on Chinese vehicles. As a result, the Chinese have looked to other global markets for expansion. For now…
Prediction 4: No More Agency Model
When’s the last time we heard about OEMs wanting to sell directly to consumers? Once new vehicle inventories started to swell, which automaker wants to take that inventory risk?
Prediction 5: Dealer Margins Heading Downward
We’ve definitely come off the sugar-high of huge front- and back-end gross margins caused by Covid-fueled new and used vehicle inventory shortages. But dealer margins are only drifting downward and may take another 18 months before back to pre-Covid norms.
Prediction 6: Automakers Continue to Feel Pain
Not sure what else there is to say here. None of the OEMs anticipated such softness in consumer EV demand. The Chinese are squeezing them in international markets. And the worst may be yet to come…
Prediction 7: A Return to Focus on Costs
Because dealer profit margins haven’t been squeezed excessively (see #5 above), there’s been less pressure to aggressive root out costs. But we may have just been a year early with this prediction.
Prediction 8: Enter: Artificial Intelligence (AI)
If there has been any buzz-worthy technology trend in 2024, it must be AI. We’re already fatigued. While we’ve seen a small amount of progress, we’d like to see a lot more within dealer-facing automotive technologies.
Prediction 9: The Amazon Factor
Amazon did have plans to expand to additional OEMs on the program (beyond just Hyundai) by the end of 2024. Instead, we got a late year announcement that they’re now in 50 states, but only with the Hyundai brand. Who said automotive retail is easy?
