Big changes are taking place in 2025, though many could be positive for dealers.

Within the current automotive retail landscape, there are still a lot of challenges that dealers are having to contend with. Some of those include an ongoing need to attract skilled technicians, the fight against auto theft and the threat of tariffs against Canadian goods and services from the new Trump Administration in the U.S.

Stabilizing inventory

While these add to the volatility we’ve seen in the market since the beginning of the COVID era, there are some signs that things are improving. One factor that’s encouraging is that new vehicle inventory levels have been stabilizing, and with the Bank of Canada currently in a rate cutting cycle, we’re seeing financial burdens start to ease on dealers as well as the return of OEM programs such as buying down interest rates on new cars and trucks.

For consumers, this lower interest rate environment is likely to make the idea of a new vehicle purchase more enticing. With more payment options now on the table, plus with a very probable change in Federal Government coming in 2025, there could also be more relief in the shape of tax changes, including elimination of the federal carbon tax.

We’re also hoping that a new government will also revisit the existing EV mandates, which in their current form were built around an all-or-nothing approach and are simply unworkable with our current infrastructure. We’ve also seen that demand for EVs has plateaued, with early adopter demand satisfied and many mainstream consumers currently demonstrating that they aren’t particularly excited about these vehicles. Plus, with government incentives disappearing, it is probable that EVs will struggle to find much more market share, as consumers look to conventional and hybrid models that are in many ways, still more practical choices.

Addressing skill shortages

Another ongoing challenge facing the industry is a shortage of skilled technicians. A study we conducted with MNP revealed that in Ontario, dealerships are still short by more than 3,000 licensed technicians. MVRO continues to work with industry to help combat this problem, including our skilled worker program in recruiting technicians from The Philippines. This program has been successful for Ontario and we’re now working with other English-speaking provinces to assist our dealers who transcend Provincial borders.

Nevertheless, we are faced with challenges, including the federal government’s reversal on immigration in which it now plans to restrict the flow of newcomers into this country. MVRO believes in a targeted immigration approach that permits the much-needed entry of highly skilled workers to fill vacant positions, not a blanket approach that restricts entry across the board. The Conservative Party of Canada has said it promotes targeted common-sense immigration, and if elected, this will be a welcome and positive change. At the provincial level, the Government of Ontario has been working to promote skilled trades and we’re expecting this approach to continue as well as combating the high level of auto theft which has proved detrimental to both consumers and dealers.

While at the time this article was written, it was still unknown what will happen regarding potential tariffs between Canada and the U.S., we have seen leadership at the provincial level, working with our neighbours south of the border to reach an agreement. Hopefully, we will see a situation develop that helps both countries, particularly if we have more business-oriented federal governments on each side of the border.

Growing events

On a final note, we’ve seen some great momentum with both the Canadian International AutoShow (CIAS) and the Automotive Conference and Expo (ACE). As Canada’s largest consumer show, CIAS continues to be a must attend event as well as an industry powerhouse. The health and success of the show and industry can be measured not only by high consumer attendance but also the return of many notable automotive brands that have skipped other shows globally. Toronto is held in high esteem and its timing in February, represents the ideal platform for dealers to kick off the spring selling season.

Additionally, ACE, which takes place each fall, continues to provide value. The event witnessed record attendance in 2024, and its combination of up-to-the-minute content and high-profile speakers, combined with an onsite trade show has proved to be a winning combination for dealers, vendors and other key industry stakeholders.

Despite ongoing challenges and uncertainties, there is reason to be optimistic in 2025, and at MVRO, we will continue to monitor the economic and automotive sector closely, focusing our efforts on providing value and opportunities for both our members and the industry.