Overview
Franchised car dealers expect used-vehicle sales to outpace new-car volumes in the first quarter as manufacturer incentives prioritize electric vehicles, prompting retailers to lean on forecourts and aftersales to drive performance, according to JudgeService’s latest Dealer Confidence Barometer.
Key figures
- Franchised dealers (used): 50% expect higher sales vs. a year ago; 35% similar; 15% lower.
- Franchised dealers (new): 38% expect higher sales; 32% flat; 30% lower.
- Independents (used): 19% expect an increase; 52% flat; 29% decline, against strong year-ago comps.
- Aftersales (franchised): 44% expect growth; 39% similar; 17% decline.
- Network expansion: 73% of franchised dealers are looking to add marques, with strong interest in Chinese brands.
What’s driving the shift
- OEM campaigns are “inevitably” concentrating on retail EV incentives, which remain harder to convert, often needing more education, test time, and deal support, extending the sales cycle.
- Used vehicles offer greater control over stock mix and pricing, enabling quicker matches to immediate demand and broader affordability.
- Aftersales provides steadier margins as workshops underpin revenue during softer new-car demand.
- Independents are calibrating expectations against a standout prior year, when Q1 2025 saw over 2 million used cars change hands.
Implications for retailers
- Prioritize used inventory turn and pricing agility while pursuing OEM EV targets.
- Strengthen EV retail readiness (customer education, test drives, finance support) to improve conversion.
- Leverage aftersales throughput (service, maintenance, repair) to stabilize margins.
- Evaluate new-brand franchises—particularly Chinese entrants—to diversify product, secure supply, and attract showroom traffic.
- Independents: manage to a flatter outlook given tough year-ago comparisons.
Outlook
The quarter is set up with a split: cautious new-car prospects versus more upbeat used-vehicle expectations, supported by resilient aftersales. Execution will hinge on balancing EV-driven OEM targets with used-car forecourt performance, while monitoring new-car order banks and the impact of factory-led EV offers.
