What Works for U.S. Dealers and What They Are Getting Wrong
You’ve seen how dealerships operate in Dubai and now in the U.S. Who do you think is more innovative and open in terms of the willingness to experiment with the latest trends and technologies?
It’s a tricky comparison because the markets are so different. Dealerships in smaller markets like Dubai or Denmark may have different operating models that result in different relationships with manufacturers and potentially more control over the full customer experience. That makes it easier for them to experiment with new technologies or processes.
The U.S. market is on a whole other scale. It is massive and highly fragmented. Different states, local regulations, franchise laws, and consumer protection rules make experimenting riskier and more complex. Launching something new takes more effort, and the learning curve is steep.
That said, the potential payoff is huge. While smaller markets may be “riper” for experimentation because changes can be implemented quickly and seen across the market, a successful innovation in the U.S. can scale massively.
What’s one outdated assumption U.S. dealers still make about the car-buying journey?
In the past, dealerships had complete control over the car buying process and critical information. They were the only source for pricing, financing models, and services, and their guidance was the main way to build trust.
But that’s changing. Buyers now have easy access to this information and much more online. The idea that “the dealer knows best” is losing relevance.
Dealerships still play an extremely important role. It’s not that people don’t want to see the car—they do—but the rest of the buying process has been overly complicated. Historically, that complexity pushed buyers to rely on dealers.
In markets like Europe or Asia, the process is much simpler and more transparent. The pandemic accelerated this shift, with digital buying platforms and services like Carvana showing that buyers can handle much of the process themselves.
Dealers who don’t adapt risk clinging to a model that no longer reflects how people shop for cars.
What’s something dealerships in the U.S. think they’re doing well, but the rest of the world does better?
The U.S. could learn a lot from other regions when it comes to the buying experience. In many Asian markets, the process is smooth, clear, and enjoyable. Showrooms are part of the experience, but the purchase and post-purchase steps are well-organized and transparent.
In the U.S., the buying journey can feel unnecessarily long and complicated. Buyers spend hours negotiating prices, financing, and add-ons for a car that already has a set MSRP.
Other markets make it clear upfront what the cost will be and minimize the time buyers spend at the dealership.
What major trends from the past few years are still gaining momentum today?
Direct-to-consumer brands like Tesla and Lucid are changing customer expectations fast. People are starting to question why traditional brands can’t offer the same experience.
The challenge often comes down to legacy systems, dealership networks, and franchise laws.
Consumers are becoming less tolerant of ambiguity and unnecessary complexity. In industries like retail, travel, and banking, most interactions are already digital, and intermediaries are less critical. Car buyers are beginning to expect the same.
AI is also playing a major role. Buyers can now research cars, compare prices, and get trade-in valuations online without relying on a single source of truth.
The knowledge buyers bring into the process is growing rapidly, and dealerships will need to keep up.
Do you think the fear of AI replacing jobs is louder in the U.S. than in other markets?
Not just in the U.S.—it depends more on the type of job.
Roles that involve repetitive tasks or follow strict processes, like call centers or data processing, are already being augmented or replaced by AI. These systems can process information faster and more efficiently.
But AI is still a tool. Humans are needed to make decisions, take responsibility, and manage processes.
We’re still at the beginning of the AI shift. The real impact will likely be in efficiency gains rather than mass job loss.
AI can provide insights, but it can’t replace the depth of experience that comes from people who understand the industry.
If you could buy a dealership right now, what AI tools would you implement immediately?
The first focus would be on areas where AI can immediately improve efficiency.
AI-powered call centers, website chat, and business development tools can handle large volumes of inquiries more effectively than humans alone. They provide consistent answers, respond instantly, and free up staff to focus on more complex, high-value interactions.
Humans remain essential for judgment and decision-making, but AI enhances productivity.
For example, a used car procurement manager can use AI to analyze auctions, compare market prices, and make faster, more informed decisions. AI processes data at a scale and speed that humans simply can’t match.
The key to success is data quality. AI is only as effective as the data it relies on. Clean, structured, and accessible data is essential.
Once that foundation is in place, the potential for efficiency, scalability, and smarter decision-making is enormous.
Hot Takes
1. Could new tariffs shake up the auto industry in unexpected ways?
Jad’s Take:
Tariffs are already having an impact. Costs are increasing, which aligns with the goal of encouraging local production. However, there are unintended consequences. Smaller businesses that rely on international sourcing are being affected, even if their design and intellectual property are domestic. The U.S. is strong at innovation, but restricting global production may have mixed economic effects.
David’s Take:
We’re still early in seeing the full impact. Right now, manufacturers are absorbing some of the costs, so consumers haven’t fully felt it yet. The bigger question is whether production will shift back to the U.S., and how that will affect pricing, operations, and the broader industry.
2. Is the auto industry keeping up with how fast technology is evolving?
David’s Take:
Not really. The complexity of the market, especially in the U.S., makes it difficult to scale technology solutions. With different regulations across states, it’s not like rolling out a single platform nationwide, as companies like Amazon do.
Companies like Tesla, Carvana, and Lucid move faster because they don’t carry legacy constraints. They control the entire customer journey and can implement changes quickly.
Jad’s Take:
This isn’t just a U.S. issue. The auto industry globally moves slower than other sectors. Vehicles are complex products with a lot of data, often spread across multiple systems. That complexity slows down innovation and adoption.
3. With direct-to-consumer models growing, is the dealership franchise model still relevant?
David’s Take:
Yes, especially in the U.S. The market is too large and complex for OEMs to handle everything alone—inventory, delivery, service, financing. Dealerships still play a critical role in infrastructure.
David’s Counter:
Dealerships are evolving. Many are improving their data systems across DMS, ERP, and CRM platforms to become more efficient and future-ready.
Jad’s Take:
Franchise dealers still have strong advantages like geographic reach and customer relationships. However, without better tools and flexibility from OEMs, they may struggle against direct-to-consumer models. Their future depends on how well they adapt.