KPI – October 2025: State of Business – Automotive Industry

• KPI – October 2025: The Brief
• KPI – October 2025: State of Manufacturing
• KPI – October 2025: Consumer Trends
• KPI – October 2025: State of the Economy
• KPI – October 2025: Recent Vehicle Recalls

Global Light Vehicle Sales

In September, the Global Light Vehicle (LV) selling rate remained “broadly in line” with the two prior months—holding at 94 million units per year. The market grew 7% year-over-year, as sales reached 8.1 million units globally. Approximately 67 million vehicles were sold year-to-date, up 5% from the same period in 2024.

Strategic markets like the U.S., Western Europe and China all experienced growth driven by various factors, according to GlobalData. A stateside surge was largely attributed to advanced EV purchases before the tax credit deadline, though non-EVs also performed well as manufacturers absorbed tariff costs—thus mitigating price increases. In Western Europe, countries like the UK, Spain and Germany posted year-over-year growth despite a tough year throughout the region. Likewise, ongoing government support and the lasting effects of the price war continued to drive strong EV sales in China.

“October global sales are expected to decrease 2.3% year-over-year. Although many regions are likely to see stable volumes or slight increases in year-over-year terms, declines in North America and the Commonwealth of Independent States (CIS) are expected to result in a modest global year-over-year decrease. Pressures on auto financing are constraining sales in Russia. The global selling rate is expected to reach 91.3 million units in October, down from a rate of 93.8 million units in October 2024,” according to David Oakley, manager of Americas vehicle sales forecasts at GlobalData.

U.S. New Vehicle Market

Total new vehicle sales for September 2025, including retail and non-retail transactions, are projected to reach 1,232,200 — a 0.1% year-over-year increase, according to a joint forecast from J.D. Power and GlobalData.

“In aggregate, September sales results point to another month of strong demand for new vehicles. However, as has been the case for the past few months, assessing the health of the industry requires a closer look at the underlying market dynamics,” says Thomas King, president of the data and analytics division at J.D. Power.

He says temporary-inflated demand for electric vehicles is the biggest driver of strong sales in September. The federal EV tax credit expires at the end of the month, which is causing many shoppers to accelerate their purchase. As a result, the EV share of retail sales is expected to reach a record 12.2% this month — up 2.6% from a year ago. On a volume basis, King says it equates to a 27.5% year-over-year increase in EV sales (selling-day adjusted). Conversely, “demand for non-EVs is muted,” with non-EV sales down 2.5% this month from a year ago.

“The second key driver is affordability,” King says. “Although, again, the EV dynamic means aggregate results need careful evaluation. In totality, average vehicle prices continue to rise, discounts remain low and monthly finance payments are at record highs — all of which affects the overall sales pace.”

Key Takeaways, Courtesy of J.D. Power:

• Retail buyers are on pace to spend $45 billion on new vehicles, up $3.5 billion year-over-year.
• Internal combustion engine (ICE) vehicles are projected to be 71.7% of new vehicle retail sales, a decrease of 4.9% from a year ago. Plug-in hybrid vehicles (PHEV), electric vehicles (EVs) and hybrid electric vehicles are expected to account for 2.6%, 12.2% and 12.4%, respectively, in new vehicle retail sales.
• Trucks/SUVs are predicted to be 82.1% of new vehicle retail sales, up 1.6% year-over-year.
• Leasing is expected to account for 23.9% of sales this month, up 0.6% from a year ago.
• The average new vehicle retail transaction price should reach $45,795, up $1,310 from last year.
• Average incentive spending per unit on trucks/SUVs is approximately $3,244, down $54 from a year ago, while the average spending on cars is expected to be $2,492, up $167 from a year ago.
• Average monthly finance payments are on pace to hit $756, up $21 year-over-year. The average interest rate for new-vehicle loans is expected to be 6.51%, down 0.25% from a year ago.
• Total retailer profit per unit, which includes vehicle gross plus finance and insurance income, is estimated to be $2,240, up $12 year-over-year and up $79 from the year prior. Total aggregate retailer profit from new-vehicle sales is projected to hit $2.2 billion, up 6% year-over-year.
• Fleet sales are on pace to total 200,819 units in September, down 1.5% year-over-year. Fleet volume is expected to account for 16.3% of total light-vehicle sales, down 0.3% from a year ago.

“Looking to October, the EV dynamic will continue to heavily influence results, but the effect on sales will shift from positive to negative. A very significant decline in EV sales is expected for October, reflecting both the effect of the federal EV tax credit expiring and the start of payback from all the EV purchases that were accelerated into the summer. The net effect will be heavily influenced by the extent to which manufacturers attempt to offset the loss of the federal EV tax credit, if at all,” King explains.

“October sales will also be affected by manufacturers’ pricing and incentive decisions on non-EVs. The current low level of non-EV discounting provides plenty of potential for manufacturers to escalate incentives to bolster demand. However, tariff-related cost pressure remains significant, meaning the current pricing and incentive environment is likely to persist for much of Q4,” he continues.

U.S. Used Market

Wholesale used-vehicle prices (on a mix-, mileage- and seasonally-adjusted basis) decreased from September during the first 15 days of October. The mid-month Manheim Used Vehicle Value Index fell to 203.6, posting a gain of 0.4% from the full month of October 2024.

“Wholesale values started to show weakness in late September and that has carried over into the first half of October, as price depreciation trends start to get back to normal levels,” says Jeremy Robb, deputy chief economist at Cox Automotive. “Declining retail sales in late September typically signal that we could see softer wholesale demand, a pattern holding at Manheim. While October typically shows the year’s strongest depreciation, current weekly declines are running higher than normal for this month, giving back some of the unusual price strength we maintained through most of 2025. The seasonal adjustment was smaller than typical for October, which amplified the month-over-month index decline.”

Segment results were mixed as it relates to seasonally adjusted, year-over-year prices. The luxury sector performed best, up 2.9%, followed by SUVs at 0.3%. The truck segment, midsize and compact cars declined 1.6%, 3.3% and 5%, respectively. Electric vehicles (EVs) showed the strongest year-over-year gains at 3.5%, while the non-EV segment increased by 0.3%.

On the contrary, the overall seasonally-adjusted prices fell 1.6% during the first 15 days of October compared to the full month of September. The compact car segment outperformed the overall market, up by 1.6%. Meanwhile, trucks, luxury, SUVs and midsize cars fell 1.2%, 1.4%, 1.9% and 2.3%, respectively. EVs “fell notably” month-over-month at 3.4%, while non-EVs were lower by 1.9% during the first half of the month.