2025 Auto Market Wrap-Up: Rates, Sales & What’s Ahead

As the auto industry closes the book on 2025, interest rates ease, consumer signals stay mixed, and automakers reveal who gained ground, and who didn’t. Cox Automotive Executive Analyst Erin Keating, joined by Interim Chief Economist Jeremy Robb, unpacks sales momentum, credit trends, CES 2026 takeaways, and what it all means for navigating a more uncertain 2026.

In this episode:

• Where interest rates, APRs, and consumer credit ended 2025, and why it matters for buyers
• New-vehicle sales, pricing, incentives, and fleet trends shaping the market
• Job growth, wages, and consumer sentiment signals to watch
• Automakers that finished strong, from Toyota and GM to Hyundai and Kia
• CES 2026 highlights, including AI, software-defined vehicles, and emerging global competition

The Auto Market Brief delivers timely data, clear context, and practical insight to help industry leaders make smarter decisions—what’s happening now, and what’s coming next.

The Auto Market Brief is powered by Cox Automotive. For more industry insights and expert perspectives, visit our Insights Hub at https://www.coxautoinc.com/insights

Creators and Guests

Host

Erin Keating

Erin Keating is an Executive Analyst and Senior Director of Economic and Industry Insights at Cox Automotive. She brings 30 years of professional experience, including 14 years in the automotive industry, providing analysis on market conditions, automaker performance, and consumer demand shaping the economics of the new-vehicle market. Erin spent 10 years with Audi of America, including leading Audi Motorsport North America, informing her perspective on both commercial strategy and competitive dynamics.

Guest

Jeremy Robb

As chief economist at Cox Automotive, Jeremy Robb oversees the enterprise-level economic outlook, monthly forecasts, client advisory, media briefings and the strategic integration of data from the company’s extensive retail and wholesale platforms. Jeremy leads Cox Automotive's Economic and Industry Insights team, working directly with clients and executive leaders in sales, strategy and finance. He draws on his background helping companies consume data and insights to make better business decisions. He has been focused on finance and strategy for large corporations in the financial services and automotive industry for the past 20 years. Jeremy joined Cox Automotive in 2018 after spending 6 years at Nissan where he led functions in finance and remarketing.

What is The Auto Market Brief?

The Auto Market Brief, powered by Cox Automotive, breaks down the latest trends and forecasts shaping the automotive industry. The show is hosted by Cox Automotive Executive Analyst Erin Keating, coupling years of experience translating data and trends with the data and industry insights of the largest automotive services and technology provider.

Joined by other Cox Automotive experts and outside guests, you’ll get data-driven insights and industry outlooks from some of the industry’s leading voices.​

Erin Keating: 00:03

Welcome to the auto market brief from Cox Automotive. Each episode, our experts and special guests break down the latest trends, insights, and news shaping the automotive market. We'll give you the information that truly matters so you can make smarter decisions and drive your business forward.

Erin Keating: 00:25

Welcome back to the auto market brief. I'm your host, Erin Keating. And today, we're kicking off the new year with a look at how the auto market wrapped up for 2025. We're gonna cover interest rates, where they landed, what's happening in the job market, and which automakers finish strong, which ones struggled. We're gonna dig into some consumer credit trends, some shifting sentiment, and what all of this means for the industry.

Erin Keating: 00:47

Plus, we've got some highlights from CES 2026 and a peek at what's next for automotive innovation. It's a lot to unpack, so let's get started. It all sets the stage for what happens ahead in 2026, and I'd like to welcome back Jeremy Robb, Cox Automotive's interim chief economist to break down the state of the market. Jeremy, welcome back, And tell me, what stood out to you as we closed out 2025?

Jeremy Robb: 01:10

Thanks, Erin, Happy New Year to you. It's, man, there's a lot to talk about as, we close out the year and go into 2026. But I like to start off one of the most, you know, impactful things for the market and and for the auto market is interest rates, and where those, went. And so, we saw a decline in interest rates through December, giving some relief to consumers out there.

Jeremy Robb: 01:32

The Fed funds rate fell on average 16 basis points from November because we had another Fed cut out there. That kept the ten year treasury was pretty flat for the month, but we did see some improvement in auto financing rates. New vehicle APR rates declined by about 13 basis points over the month, they're down to roughly 8.9% at the December, and used rates fell about 25 basis points, down to about 13 and a half percent. That sounds a little bit high to a lot of people, but that really, you know, when you look at it, you're looking at across all credit tier customers, and over the past year, we've actually seen a little bit of an increase in subprime customers in both the new and used loan market, and that's kept rates from declining quite as much as you might have seen otherwise. So that's kind of where interest rates are headed right now.

Erin Keating: 02:21

Good news for sure for the industry. We know that that's been a real burden to monthly payments, so glad to hear that.

Jeremy Robb: 02:27

Yeah. So then I guess the next thing we could think about, just the new vehicle sales overall rose in December, but are still lower year over year. So light vehicle sales, think about for The US economy overall, 13.8% higher in December against November, appear to finish the month on a little bit of a stronger note, but showed a decline of 2.3% against the 2024. Year to date, we saw the sales remain positive against last year. They're up about 2.4%, but the rate of growth decelerated from about 5% at the end of the third quarter to only about positive 3% at the end of the fourth quarter.

Jeremy Robb: 03:06

The SAAR rate for December went up to 16,000,000, overall 16.0 million. That was up 1.9% from 15,700,000 in November. That's about 5% lower year over year, but last year, you know, we ended December last year on a really strong note. So that comp is a little bit different there. We did see some pretty strong fleet numbers in December that helped the overall number higher.

Jeremy Robb: 03:32

According to Bobbit, where we get a lot of our fleet data from, we saw that total fleet sales were up about 15% in the month, still driven by higher rental segments in there, but we saw gains in commercial and in government too, and the government one, it's been negative most of the year, and it's still lower on a year to date basis. So that's kind of important there. And then our team has just finished putting the bow on our overall data, and we saw the transaction prices for December move about a percent in the month, move to about $50,000 to end the year, even as we saw a little bit more discounting, that's a little bit shy of a percent move higher year over year. We saw that incentives were up for the month in December, up to 7.5 of the average transaction price, and that's the highest level we've seen throughout all of 2025, although it's actually still lower than what we saw last year. So a lot going on with new vehicle sales too.

Erin Keating: 04:27

So I'm curious, though. We know that everyone kept saying each month could have been forecast off by 20% either direction, but yet we still ended up where we should have been by the end of the year. So would you attribute some of that December softness to the fact that we saw a couple peaks of pull aheads, purchasing throughout the year, some unevenness in the data throughout the year?

Jeremy Robb: 04:47

Yeah. I I think there's two factors. I think the the what you just said is certainly true. That pull ahead mattered a lot. I'm sorry my voice is a little bit raspy today, but, you know, fighting this this cold.

Jeremy Robb: 04:57

But the the pull aheads mattered a lot. We saw that especially in q two, q three some as well, then slow down into q four. You know, you factor in what happened with EVs, that pull ahead too, that kind of set those SAAR rates. And if you look at the SAAR rate, you know, even though it was higher against where it was in November, and it's higher year to date, it's showing a deceleration, right, in sales pace. So that matters.

Jeremy Robb: 05:23

But the other thing, and now we're not touching on it so much today, we saw consumer spending, big part of the GDP growth and all, over the last six weeks was negative year over year for five weeks in a row. So that, you think about consumer spending, big ticket purchases, you know, that has to affect automotive sales rates too. And I think that may have been a little bit more of what maybe maybe impacted December a little bit more than what we had seen in previous months.

Erin Keating: 05:50

Sure. Yeah. That makes a lot of sense. I know you're gonna cover off some other topics that might also help us, see what the picture is shaping up to be.

Jeremy Robb: 05:58

Yeah. Yeah. We got some really good information this morning on job growth and unemployment. It was the first time we got the report on time since September, you know, which may not sound like a lot, but obviously the government shutdown, you know, really impacted a lot of different parts of how things get reported out there. The US economy added 50,000 jobs in December.

Jeremy Robb: 06:19

That was below expectations of about 66,000. So another month of subdued job growth, and we saw prior months see downward revisions. November was revised down by about 8,000 jobs, but October was revised down by 68,000 to show a loss of a 173,000 jobs. So you take the three month moving average, that's kinda what we look at a lot. We've got a negative 22,000 number going right now for three months in a row.

Jeremy Robb: 06:48

Definitely looking at volatility that we've seen there, some negative moves down. On the other hand, the unemployment rate was reported this morning. It has been moving around a little bit too, but we saw it decline by a tenth of a point down to 4.4% in December, down from a revised four and a half percent in November. And that's the first decline that we've seen in unemployment since June, although it is higher year over year. So that's a good factor.

Jeremy Robb: 07:15

You know, we've got one thing that's maybe moving one way, one, the unemployment rate's moving a little bit better, and then we got the last data point this morning that's I think notable, is our average hourly earnings came out, up again in December. They're 3.8% higher year over year. Why does that matter? Well, it's higher than the rate of inflation is growing. Right?

Jeremy Robb: 07:34

So if you get people earning more money, outpacing the rate of inflation, that's good positive real income growth there.

Erin Keating: 07:41

Yeah. I think that's a really good point. And we talk about that. I know that when we were both on our our quarterly call in December just about especially in the automotive industry, how we've gained so many more purchasers in that, like, 150,000 and above household, but it's duly noted that wages have also been increasing. So not all of that is just because we got more cars coming from those households, but we had more people migrating into those households as well over the time.

Erin Keating: 08:05

So that's a really interesting fact.

Jeremy Robb: 08:07

Yeah. Very, very important point. And and key to follow, you know, the the wage and income growth stuff is really impactful when we look at it. So, you know, we had a lot this month, I'm gonna keep going a little bit, you know, since we're starting off the year. We got updates on consumer credit, and it was up in November.

Jeremy Robb: 08:24

That report gets delayed a little bit, so we're still reporting on November's numbers right now. So it was up, but it was lower than expected. Overall consumer credit in The US economy increased by 4,200,000,000 in November, that's following a revised increase of 9,000,000,000 in October, so a slower rate of growth overall. Revolving credit was down, that's generally credit cards, things like that you think about. But non revolving credit, that includes automotive loans and student loans increased by $6,300,000,000 and that accelerated from an increase of $3,800,000,000 in October.

Jeremy Robb: 09:01

So seeing more growth there and really led by student loan growth. It's a big topic out there when we think about repayments and all of that and how it affects consumers overall. So, then the last thing we saw this morning too, another thing to talk about here that I think matters a lot, is consumer sentiment. And we're getting mixed reads on that, you know? We look at consumer sentiment readings from the University of Michigan.

Jeremy Robb: 09:28

Those were updated this morning, and then we also look at the morning consults in in, like, consumer sentiment reading that we can see on a daily basis. And those are moving in a little bit different direction as we look at the reporting in early January. The University of Michigan sentiment index was up 2.1% early January. It hit 54. That's up from December, but still well below last year's level.

Jeremy Robb: 09:54

Noted improvements among lower income consumers, so that's that's important, but offset by some declining sentiment among higher income groups, and overall worries about tariffs appear to be easing, that that report cited. So interesting there. Consumer inflation expectations, that report gives you readings on what consumers expect from inflation impact over the next year or five years. The one year expectation of inflation held steady at 4.2%, but the five year rose a little bit to 3.4%. So, you know, mixed reading in that among itself too.

Jeremy Robb: 10:28

But in contrast, Morning Consult's Daily Sentiment Index has fallen 3.2% since late December, and now it's down 6%. So those two things are moving moving a little bit different.

Erin Keating: 10:41

Well, and if I remember correctly, Morning Consult, they do this on a daily basis. Right? So Yeah. On some level, they're also able to really track in real time kind of almost like a news cycle reaction and what's happening out there. The higher income individuals, that's interesting to me that they would be on more of a downward slope than the low income, which is interesting.

Erin Keating: 11:02

And the tariff, which I think probably speaks mostly to consumer goods because I think we we believe that a lot of that impact did come into the economy in 2025. Whereas for the automotive industry, we really saw somewhat of a holdback on passing that on to the consumers. We expect that to show up a little bit more in 2026. So Yeah. But, you know, everyone's not always thinking about buying a new car, so perhaps that's not, like, the daily in their face tariff consideration that they have.

Erin Keating: 11:28

But, yeah, it's always interesting to watch the sentiment. And I I like to say sometimes that I look at it more as like a mood indicator, not necessarily as indicative of buying behavior as much as at least as it used to be tied, I think, to buying behavior. So that's great.

Jeremy Robb: 11:43

Yeah. I think the consumer sentiment, I I totally agree with you, is it's definitely a feeling. You know, measuring what actually happens, more important than how people feel. Tariff things that they cited in the report, I was listening to another podcast or reading a report earlier this week, And kinda interesting, someone cited that they thought about half of the impact of tariffs had come through so And a lot of it because they were like, well, goods that you know, when goods are on a ship, they're not Well, you listen to the same words. Yeah.

Jeremy Robb: 12:16

So there you go. I And was like, well, that's interesting. Know? So maybe there probably is more coming through.

Erin Keating: 12:22

But at

Jeremy Robb: 12:22

the same time, like, if we can spread out the impact, then it's it is it does affect you a little bit differently.

Erin Keating: 12:30

So Goods on the water. Yeah.

Jeremy Robb: 12:31

Goods on the water. Yeah.

Erin Keating: 12:32

Yeah. Yeah.

Jeremy Robb: 12:33

I But that's all I have on the economy kinda overall, Erin. I'll I'll turn it back over to you to dig into how the year wrapped up for automakers, who came ahead, who fell short, and really what segments stood out. And I know, I think you've got some highlights from CES to share with us too.

Erin Keating: 12:48

Yeah. Thanks. Well, I mean, following on what you've said, you recapped a lot of December, and it was interesting to look at, most of the auto reports because, of course, they they report on their full year as well as December. And it was interesting to see which companies really focused on their December sales or at least their fourth quarter sales versus their full year. So as an example, Stellantis really pumped up how they did towards the end of the year.

Erin Keating: 13:12

But overall, they actually lost, year over year sales. They were down year over year sales. And part of that is because we know that once Antonio Fallosa came into play, they, rejiggered a lot of their executive team, and they finally started to try to undo some of the damage that they had done over the Carlos Tavares years where they had really started to price themselves out of their market, their typical consumers. So we did see Stellantis start to pick up, which, you know, we both know in 2024, it was like the story of Stellantis every month. You just didn't really have a positive thing to say about what was going on there with day supply and pricing dynamics.

Erin Keating: 13:46

So, you know, I think that they're probably setting themselves up for a better 2026, getting much more aggressive with their product lineup and their pricing. But, really, it was a solid story for every brand for the most part, especially the domestics across the board for the year, you know, for the total year. Again, quarter four was a little bit difficult, and we spoke a little bit about that of why, a lot of people saw that pull ahead in September and so saw softer, you know, October, November, December. But for sure, Toyota came out swinging, you know, 8% year over year increase. General Motors was up.

Erin Keating: 14:19

Ford was up. All three of them are cross portfolio brands. They appeal to consumers from the low end of that K -shape to the high end of that k shape that we continue to reference. And so any brand that really has the capability to meet the consumers where they are with different products really showed some signs of generally going up in sales. And that goes for Hyundai and Kia as well.

Erin Keating: 14:42

I Hyundai, you know, Randy Parker's very big on the five for five. He's now going six for six, and that's really it's the consecutive streak. He wanted five years of consecutive retail sales improvement, which he got, and now they're gonna go for six and twenty six. So we'll see how how they do. And and we know that Hyundai and Kia specifically are very heavily weighted towards EVs, and they are one of the few brands that's gonna stay in EVs, you know, obviously pull back a little bit on their production, but, you know, keep trying to hold the EV line.

Erin Keating: 15:14

But every one of those brands touted their electrified mix. So I think it was Toyota that was up 19% this year over year in electrified. So not just pure electric, but electrified, meaning hybrid, to hit 49% of all of their vehicles sold are

Jeremy Robb: 15:29

They're changing the nomenclature a little bit, right, about it. That totally makes sense.

Erin Keating: 15:33

Yeah. Exactly. And they're they're the leaders for sure there. And, you know, a couple of the cars, they actually switched over to being hybrid only, and that really has worked out for them. And they continue to be aggressive in stating that their portfolio of powertrains has been their smart decision.

Erin Keating: 15:47

And, honestly, I don't think the industry can deny that. And they are actually coming out with two additional EVs this year, which is unusual as everybody else dials back. But, again, I I don't know. I kinda trust those guys over at Toyota that they know what they're doing. So and and the interesting thing with them is they had their best every year for Corolla and Camry hybrids.

Erin Keating: 16:04

And so it just again shows that while the D three has really pulled back on any kind of cars, the Japanese and Korean, they continue to bring cars to the market. And when consumers needed to find a more affordable option, they went there. And and every brand showed that they did well. Those that had cars did well in those segments. So I thought those were quite interesting pickups, you know, still full size pickups at least had a great year as well, surprisingly.

Erin Keating: 16:30

And I mean, pickups always do well, but still, it's they are so expensive if you think about it. You know, I think the average price for a pickup is $69,000. It's not really working class, you know, payment there that you think of. So the idea that more and more people are buying them for utility as opposed to what we traditionally think of. GM really touted that they sold over 700,000 units under $30,000.

Erin Keating: 16:51

We know that that's you know, ATP, as you and I discussed a lot, has been a a big thing out there, the $50,000 mark, and it's just, you know, a good reminder. It's that there's still a lot of vehicles on the market that are available under that $50,000, which is why we call it an average, of course. Right? So yeah. So it was it was good.

Erin Keating: 17:07

Yeah. Kia had their highest year ever. They hit over 800,000 sales. So overall, I think the brands all felt confident about how they ended the year. As we said earlier in the in the podcast, it was a year where everyone was off their forecast every month, but ended up, you know, where they wanted to be.

Erin Keating: 17:23

But I think everyone has clearly stated they're expecting headwinds in in 2026, and that goes along with our forecast as well. Right?

Jeremy Robb: 17:30

Yeah. Definitely. Yeah. Yeah. We're down a little bit too.

Jeremy Robb: 17:33

So what, I mean, just a lot of uncertainty out there, you know? There is though, and we didn't talk about it today, and I know you know this too, first half of the year could be a little bit better. These tax refunds are expected to be, you know, pretty strong this year for consumers. And that typically drives quite a bit of of vehicle activity.

Erin Keating: 17:52

Absolutely. And we do know also that a lot of reports around people who have held off on maintenance and repair, and, you know, so many people haven't gone in to get any recalls. And so even if the tax refunds bring someone into the showroom to get some repairs, like, we know how much dealers really value that equity mining in the service lane. And so it could bring more traffic into them regardless, you know, even if it doesn't necessarily mean that someone's coming in the door for a new car. They might leave with one if they're using that tax refund to get caught up on maintenance and repair.

Erin Keating: 18:20

So I think that's something smart for our dealer audiences to continue to think think through. So just switching over to, you know, we we're coming up on NADA, which, of course, is our big prom, if you will. But before that, the big news of the industry is typically CES. This is a the consumer electronic show, you know, probably over a decade ago. It became this big place where automotive sort of switched over from the Detroit Auto Show over to CES, and became very well known as sort of the zeitgeist of what to hear from every automaker and what are they doing, where are they innovating.

Erin Keating: 18:51

And it's a little different now. The automotive industry still does pay a lot of attention to the CES show or CES, but it's not as automaker heavy anymore. Been a lot of questions from media about why that is. And I think it's mostly because a Shanghai has certainly started to really shine as an international show that, you know, you can bring the quote unquote hardware to the actual vehicles and show them off. But the technology a lot of these day a lot these days is really sitting within the middleware and within the suppliers.

Erin Keating: 19:22

And so we're seeing a lot this year. Obviously, AI is dominating nearly every conversation. We had our own Maryann Johnson there speaking on AI. We heard a lot of software defined vehicle pushes. We know BMW, Mercedes, Ford all were rolling out intelligent assistance and talking about more autonomous features in their vehicles.

Erin Keating: 19:41

But the one thing I really wanna highlight that I heard coming out of there that I think we're really gonna keep an eye on this year is that Geely, who is one of the primary, shareholders in Volvo and is a Chinese company, piped up and said that they plan to enter The US market in a more robust way within eighteen to twenty four months, which I think has everyone's ears perked up going, wait a minute. Chinese vehicles are highly tariffed, and there's some legislation and regulatory barriers to them because we don't allow certain hardware and software to come in from Chinese manufacturers. So that one really got put on the map as sort of a shot across the bow of what does this mean? You know? And and I think senator Bernie Moreno even referred to it as the Trojan horse.

Erin Keating: 20:23

You know? They have Volvo. They could produce at the Volvo plant, but is that the Trojan horse coming over? And so, I think we're gonna pay a lot of attention to does that start to disrupt our thinking on what would happen with Chinese, manufacturers. But that was, you know, I think that the the standard that everyone expected out of CES would would have been AI and autonomy.

Erin Keating: 20:41

But, unusually, we'd actually heard some gold hardware Geely, you know, automotive updates coming out of there. So I think that's the the big header as we go into next week, which is the Detroit Auto Show where, you know, I think they're trying to claim back some space in the mind share of consumers on on actual hardware, you know, as what I'd like to refer to the metal that we're trying to push. So that's what we'll be talking about. I think next time was probably what covered at the Toyota show. But, yeah, that's about it for me.

Erin Keating: 21:08

Yeah. So just to wrap up today, I mean, I think what we're hearing is that 2026 should be a really interesting year. The economic indicators, as you said, you know, they're they're kinda mixed here and there with sentiment a little bit mixed, labor looking a little bit better, interest rates looking a little bit better, tax refund season, you know, hopefully gonna be good. So despite the fact that we're down in in our forecast for 2026, things look okay. I think you called it a wind chill economy, you know, even though the the indicators sound good, you can still feel the temperature cold, you know, if that's

Jeremy Robb: 21:39

that's way we run. Half. Yeah.

Erin Keating: 21:41

Yeah. And then we're hitting the first half. Yeah. And so I I think what you know, what's ahead is that we're all gonna be taking a look at, you know, organic EV demand. I know you've covered a lot on used EVs.

Erin Keating: 21:52

How does that start to shape up in the used market? And we'll keep an eye on what the Fed does and how that moves forward because obviously a lot of people are very curious about how they're gonna balance their mandate between inflation and and labor as you've remarked. Right? I mean, think when's their next Fed fund rate call?

Jeremy Robb: 22:08

Well, they'll have another meeting at the end of of January, but there's no the the Fed funds futures market, which is the betting market on

Erin Keating: 22:16

Right.

Jeremy Robb: 22:16

When rates are going to change, does not they're not betting that rates get lowered until June.

Erin Keating: 22:23

Oh, okay.

Jeremy Robb: 22:24

And we're gonna get a new Fed chief.

Erin Keating: 22:26

I was just gonna say, yep. Exactly right. Yep. That's that's the bigger news in between when we find out whether we're gonna get a a rate job or not. Well, I think that wraps us for this week's show.

Erin Keating: 22:35

Again, Jeremy, thanks for joining me today. Always bring really great insights and love combining it with what we're seeing with the consumers and the automakers and and dealer performance and so forth. Everyone out there, you know, be sure that you visit our insights hub at coxautoinc.com/insights to stay up to date with all the latest news and perspectives from our team of experts. And I'll catch you next time on the auto market brief. Thanks, Jeremy.

Erin Keating: 23:01

Thanks for joining us on this episode of the auto market brief. To stay up to date with all the latest news and perspectives from our team of experts, be sure to visit our insights hub at coxautoinc.com.