Can carmakers steer towards a successful 2026?

17 December 2025

What has defined 2025 for carmakers? Will these trends continue into 2026? Enterprise sales director Thomas Luxenburger considers the upsides and downsides with Autovista24 editor Tom Geggus.

What do you think the big trends have been for OEMs in 2025?

We need to distinguish between the established OEMs and the newer players, including those trying to strengthen their position. Established carmakers are struggling with declining margins as they lose market share, particularly in former emerging markets.

In China, there is fierce competition between importers and domestic brands, which means lots of pressure on margins. Established brands have been losing local market share, resulting in smaller margins.

This means these companies have less money to invest back into development. The timing could not be worse, as these brands need to put money into the electric vehicle (EV) transition.

Carmakers are also at the forefront of more protectionist politics and policies, such as tariffs. There has also been increased supply chain tension this year, impacting chips and rare earth metals.

To remain competitive, companies are looking to balance the books elsewhere. This can include experimenting with direct sales models or monetising software and services. They have also looked to cut staffing and production costs, with manufacturing moved to more affordable locations.

Carmaker competition

So, new-car markets have seen increased competition this year. How has this impacted pricing, operational strategies and future products?

In terms of development, established players have historically needed up to seven years to bring a new model to market. Meanwhile, new players can develop their cars much faster. Software-defined vehicles take far less time to launch and often cost less. This is pushing established OEMs to accelerate their development process and bring more affordable vehicles to the market.

Think just about earlier generations of battery-electric vehicles (BEVs), established brands offered these at a higher price point. These models have now entered the used-car market and have changed hands once or even twice. But their residual values (RVs) are under pressure from a higher cost-new price.

But now, established brands are under more pressure to increase new-car sales volumes, which means investing in more affordable cars. This means a lower list price between €20,000 and €30,000.

Direct sales model hype?

You mentioned direct sales models earlier. What have carmakers learnt about these systems in 2025?

Following the COVID-19 pandemic, there was a lot of hype for carmakers to do everything by themselves. Some set up a flagship store in a big city and thought brand awareness would secure the business. But now perspectives on that approach have changed.

Previously, I was surprised that a country like Germany did not see larger dealer groups investing in the market from abroad. However, nowadays there is a very different landscape with much larger groups acquiring medium-sized dealers. Additionally, dealers are quite open to new logos and Chinese brands.

This is a totally different situation with larger dealer groups becoming increasingly important and having even greater influence. Meanwhile, new brands are battling each other to acquire their interest.

In this landscape with margins under pressure, direct sales are being considered as an opportunity for OEMs. Premium brands could run direct sales models, but mass market ones might struggle more.

For these carmakers, having dealer groups in the field and closer to the customer is more advantageous. This is because the risk is carried by the dealer, not the carmaker. If the current socioeconomic situation were more stable, the direct sales model would probably be more advanced.

Affordable all-electric cars

Carmakers have been looking to affordable BEVs to stay competitive. Do you think this trend will continue?

The benefit of my job is getting to see cars at an early stage, so we know what is coming down the pipe. There is obviously an appetite to bring more affordable cars into the market. Also, battery chemistries and technologies are advancing, making it possible to reach target groups at a lower price point.

In the coming years, we will see more affordable cars for commuting in urban areas. Even so, carmakers still need to earn money to justify the investment in affordable models, and only volume will cover this.

To reach optimum volumes, there must be marketing, with advertising to reveal this new generation of cars. The price point for mobility is the key. Consumers will need to ask themselves what they really need in the day to day. Is a 500km BEV necessary for urban commuting, or would a solar panel and a home charger make more sense?

But the used-car market is going to play an important role in the future. In the future, internal-combustion engine cars and affordable BEVs will compete in this space in terms of price attractiveness.

I think OEMs need to think about a second or a third used cycle. This means supporting dealerships with the likes of a subscription model for used BEVs. Away from the new car market, this would be a new approach for the powertrain. This would certainly help while registrations continue to recover from a turbulent few years.

Commercial vehicle connection

What about the light-commercial vehicle (LCV) sector, where the electric transition seems far slower. Could 2026 be the year this changes?

I would hope so. You know me, I am LCV addicted. I spoke with some of our colleagues to get their electric LCV adoption forecast, and it will take time. We will not see a significant move in 2026. Change will maybe start in 2027 until the end of the decade.

I think it will take much more time beyond 2030 for potential customers to become fully aware of the powertrain. But I do know OEMs that have not previously offered electric LCVs and are now investigating the technology.

Elsewhere, the hydrogen discussion has become a bit stuck for LCVs. For heavy trucks, it could be a solution in the future, but I would not expect that personally.

I think OEMs will invest in electric LCVs. With the legislation and regulations in the EU, I think this technology will be the way forward. It will take a bit of time, but it will become more important, particularly for the total cost of ownership.

Carmakers and supply chains

You mentioned advancing automotive technology several times. The need for more advanced parts, like chips, has increased accordingly. But how can OEMs protect themselves when supply chains for these parts become disrupted?

It will remain a real challenge. I think OEMs have responded by increasing inventory buffers. We saw this with the disruption of Nexperia chips, where many carmakers tried to fast-track alternatives. It also depends on the contracts and the supply in general.

But OEMs are now seeing more reason to spread their risk. Just counting on one supplier can result in quite a mess. Companies may invest in long-term contracts to ensure supply, as well as buffers and alternatives.

Some carmakers may even look to get rid of some technology. I think development will now emphasise reducing the number of control units a car needs. Less technology means less reliance on these supply chains.

These countermeasures may help OEMs ride the waves of supply chain disruption, but they cannot stop the geopolitical storm. International tensions have a huge impact on the automotive industry, and that is unlikely to change in the short term.

The opportunities and challenges

With all that in mind, what are the biggest challenges and the greatest opportunities for OEMs in 2026?

We can start with opportunities. It is generally hard to say, because I do not have a crystal ball here on my desk. However, I believe that the key lies in the used-car business. This can help support decreasing new-car sales margins.

With the right pricing, taking care of RV development could be a pillar for securing the business or covering decreasing margins. A well-established, certified pre-owned programme could also help.

It is about developing, coaching, and teaching in the established dealer landscape and taking care of these programmes. They could support a stable value of the cars in the market.

Yet, I think the greatest opportunity is to make faster development cycles. The market requires that we move faster technologically. However, this must be done purposefully, not randomly or sporadically. A well-thought-out transition to a new technology will take time.

I think 2026 will be another year of transition. Established brands will need to reduce costs, optimise their workflows and strengthen their value chains. Newcomers wanting to make an impact in Europe will look to acquire dealer groups and bring volume into the market.

This increased competition will likely be reflected in pricing strategies. New brands will be able to quickly gain ground by utilising customer trust in known dealer groups. So, I am not sure whether all OEMs will survive to the end of the decade. There may be another wave of consolidation on the horizon.