Exclusive: CDG Dealer Outlook Survey (Q2) results are in

Hey, everyone — We just launched the CDG Dealer Outlook Survey (Q2 2025) and the insights were outstanding.

So now, we’re going to do this quarterly.

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—CDG

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Welcome to The Breakdown, an analysis of auto retail’s top trends, moves, and insights—in under 5 minutes.

Last week, we launched our first-ever CDG Dealer Outlook Survey for Q2 2025, asking over 10,000 dealers to weigh in on where they see the car market heading.

The response? Overwhelming.

However, after digging deeper into the results, I uncovered three critical signals that tell me one thing: dealers are building for an uncertain market—not an ideal one.

Signal #1: Kia stores are surging in desirability after a decade of brand evolution.

Kia is punching above its historical weight class. In our survey, the brand was the fourth most desirable option behind the usual suspects (Toyota, Lexus, and Honda), but it beat out the likes of Ford, Mercedes-Benz, and Porsche. Mercedes. And Porsche. That’s not a sentence I expected to write this year.

Here’s how the top brands mentioned stacked up against one another (desirability-wise)…

What’s wild is that this is the payoff from a decade-long rebrand. Kia brought in Peter Schreyer from Audi way back in 2006, kicked off the “Tiger Nose” era, and slowly chipped away at the “cheap car” image. The Stinger showed they could get aspirational. The Telluride made them mainstream. And the EV6 got them taken seriously on electrification.

But the real reason Kia’s rising now is because it fits the moment. Dealers are looking for franchises that check three boxes: affordability, product velocity, and margin. Kia’s the rare brand that does all three. In a market where 56.7% of dealers said affordability is their no. 1 concern, Kia shows up with a tech-forward, family-ready product that doesn’t scare off consumers with high monthly payments.

And tariffs? Sure, Kia’s exposed. But quite a few dealers don’t seem to care. I guess when a brand delivers consistent volume, margin, and demand—especially in this market—you don’t sit on the sidelines because of hypotheticals.

Meanwhile, something that traditionally drives growth is falling off dealers’ radars—mergers and acquisitions.

Signal #2: Dealership M&A is becoming a low-priority profit lever for some retailers.

Dealership buy/sell activity ranked dead last when it came to prioritizing profit growth at just 8.3%. That’s despite the fact that nearly half of respondents (48.3%) said they’re interested in acquiring stores.

Translation: interest is high, but execution is a different story.

That disconnect says everything you need to know about where the market is headed. For years, the playbook was scale—more rooftops, more leverage, more everything. 

Now, that playbook’s on hold for some, but not because the opportunities aren’t there. However, with margin compression, floorplan costs, and ongoing uncertainty around affordability and tariffs, many dealers are reconsidering expansion more carefully.

The silver lining? Even though 60% of dealers said they’re not planning a buy/sell move this year—that still leaves 40% who are.

However, many dealers are refocusing on what they can control: optimizing the stores they already own…

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Basically—if the past few years were about fighting for more stores, the next twelve months are also going to be about fighting for inventory—specifically, used.

Signal #3: The used inventory pipeline is being disrupted from all sides, and dealers are sounding the alarm. 

Used inventory sourcing might be the least sexy part of the business, but right now it’s where a lot of deals are getting won—or lost.

The reality: Trade-ins are slowing. Lease returns are drying up. And auction prices? “Through the roof,” as one dealer put it.

And dealers didn’t mince words in the written section of the survey. Here are just a few of the anecdotal responses:

• “Entire store depends on used department.”

• “Used vehicle acquisition will become the most difficult it has ever been.”

• “Massive used car scarcity.”

• “We are experiencing a mini-COVID at our stores right now.”

• “The used market on vehicles I need will get tighter and tighter.”

Just take a look at how often certain themes kept popping up…

Wow. As volume contracts, the entire system starts to feel less like a supply chain and more like a scavenger hunt.

On a recent episode of the CDG Podcast, Chase Channell, GM at Victory Honda, described how his team has built a workaround. They regularly start the month with 40 used cars and sell 50 or more. All of it comes from off-street sourcing. 

They avoid dealership branding, photograph vehicles in neighborhoods, and post listings that feel like personal ads—not corporate. When someone bites, they close in person—often with prior trade appraisals re-engaged using updated book values. It’s manual. It’s consistent. It’s working.

But it’s also not scalable for everyone. And while stores lean harder into sourcing, they’re also dealing with creeping costs. Multiple dealers flagged rising parts prices in service and reconditioning with some already attributing it to tariffs.

At the end of the day—dealers are done waiting for a return to “normal.” 

And the bets for the next 12 months are clear: leaner operations, tighter sourcing, fixed ops expansion, and a focus on fundamentals. There’s no single savior coming—not EVs, not OEMs, not macro recovery. This market will reward execution, not optimism. Period.

What did you think of these results? Hit Reply and let me know.

Industry Spotlight—Why tariffs could fuel a used car squeeze and how dealers are pivoting

Stream now on YouTube, Spotify, or Apple. And shout out to Copart for making this episode possible!

'GMs don’t get finance:' How this operator uses F&I to outrun the market

Stream now on YouTube, Spotify, or Apple. And shout out to DLRdmv and Copart for making this episode possible!

Industry Spotlight—Who killed the loaner car and why service customers don’t miss it

Stream now on YouTube, Spotify, or Apple. And shout out to Uber for Business for making this episode possible!

Three opportunities hitting the CDG Job Board right now:

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Looking to hire? Add your roles today—it’s 100% free.

Thanks for reading. See you on the next edition…

—Car Dealership Guy

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