Automakers’ sales expectations for 2025 are lower than the previous year’s, according to a survey conducted by dealership advisory firm Kerrigan Advisors.

The Kerrigan OEM Survey 2025, which queried 100 OEM executives from December 2024 to March 2025, showed a significant jump in the number of respondents expecting new-vehicle sales to drop this year.

While 36% said they believe sales will increase, that’s down eight percentage points from the 2024 survey. Meanwhile, the percentage who anticipate a decrease in sales rose from 8% last year to 18% in 2025.

The OEMs are also thinking their dealers’ inventory will be sitting on the lot for awhile, with 63% projecting 60 to 90 days’ supply in the next 12 months and 10% expecting more than 90 days’ supply.

But when it comes to profits, the view was much different. OEM sentiment completely flipped from negative to positive, with 66% projecting dealership earnings to remain stable or increase — a huge leap from the 46% who felt that way a year earlier — and just 34% forecasting a decrease, a corresponding 20-point drop from 2024.

The survey found 52% expect gross margin to “normalize” well above pre-pandemic levels, with 10% of those saying it will end up more than 25% over the norm from before COVID.

OEM executives’ view of franchise blue-sky values were also up year-over-year, with 78% expecting them to stay the same or rise, a 10 percentage-point increase.

The Kerrigan report said the “mixed sentiment” is likely the result a growing divide between the haves and have-nots when it comes to brands, while the lower sales expectations “may also be an indication of the OEMs’ larger expected burden when tariffs settle out.”

In other findings, a significant one-third of the OEMs surveyed are looking to have fewer dealers in their network in the next five years while just 14% are expecting their network to grow in that span. And 28% said they anticipate using their right of first refusal on more than 25% of their brand’s dealership buy-sell transactions.

The report said that “desire for increased control over their dealer networks” also shows up in OEM facility requirements, with 25% projecting an increase in those requirements and 67% saying they’ll remain the same, while a mere 8% expect to lower those requirements, down from 22% in the 2024 survey.

Kerrigan Advisors said the rising number of dealers deciding to sell in 2025 “is in part due to the costs of OEM-required facility upgrades, which often require a long investment horizon to justify.”

But the OEMs did concede that dealers will be managing their customer relationships and data during the next five years. More than 90% said that will be owned by either the dealers along (18%) or a collaboration between dealers and the OEM (74%), while 8% said the OEM will be the exclusive owner of the customer relationship in the future, an 11-percentage point decline from last year’s survey.

OEMs see the electric vehicle market growing, though not as quickly as they originally thought, with 80% saying the market’s transition to EVs is going slower than they had planned. But 10% disagreed, saying it’s gone faster than expected — up from 4% in 2024. And 60% expect the EV market share to surpass 10% by the end of 2025 and 14% project it to be greater than 20%.

The Kerrigan survey also asked OEM executives about the looming presence of China in the automotive market, noting that China currently owns more than 40% of the global automotive production capacity, compared to 10% for the U.S. The result showed 70% of the respondents said they’re concerned about the financial implications of Chinese OEM’s rising global market share, and 76% believe Chinese OEMs will enter the U.S. market in the future.