The NADA Show offers a useful glimpse into where automotive retail is heading next.
Not because the US market is identical to ours, it is not, but because many of the pressures shaping American dealers tend to arrive in the UK a few years later, often in a more compressed form.
This year’s event in Las Vegas is a reminder that, on both sides of the Atlantic, retailers are wrestling with many of the same fundamentals.
Margin pressure, changing consumer behaviour, slower-than-expected EV demand, rapid advances in digital retail, and the steady march of consolidation all featured heavily in the conversations coming out of NADA.
For UK dealers, the lesson is not to copy and paste US practices, but to recognise the direction of travel and prepare accordingly.
The first and loudest theme was profit pressure. In the US, new car margins have thinned sharply as supply has normalised and incentives have crept back in.
Add elevated floor-plan costs and stretched consumer affordability, and front-end profits are no longer carrying the business as they did just two years ago.
That sounds very familiar to UK operators. The response in the US has been a renewed focus on the areas dealers can still control.
Aftersales, parts and service are once again being treated as core profit engines, not supporting acts.
Consumers are holding on to vehicles for longer, which supports workshop demand, even if the rise of EVs complicates the long-term outlook.
Finance and insurance were another constant refrain. As vehicle margins soften, the overall profitability of the deal increasingly depends on how well F& I is structured, presented and delivered. That is as true in a UK showroom as it is in a US one.
Having spoken to dealers, suppliers, founders and advisors recently, the prevailing feeling is that no one really thinks they have cracked AI yet, even in the US.
There is plenty of experimentation and no shortage of pilots, but relatively few people claiming genuinely scaled, repeatable outcomes. In that sense, the conversations coming out of Las Vegas were as much about realism as innovation.
What was striking, however, was how the narrative around AI has matured. Few dealers talked about AI as a strategy in its own right.
Instead, it was positioned as a practical response to margin pressure and rising complexity. The focus is firmly on protecting productivity, particularly in lead management, administrative work, inbound call handling and service workflows.
More thoughtful retailers are starting with processes and people rather than platforms. There is growing acceptance that automating broken workflows simply scales inefficiency.
Where AI is working best, it is being applied narrowly and deliberately to remove friction, reduce noise and support staff rather than replace them.
AI is increasingly seen as a way of protecting human capital. Filtering out low-quality leads, handling routine questions, and booking appointments frees experienced people to focus on higher-value customer interactions. Under sustained cost pressure, that matters far more than headline technology claims.
The point is not that technology replaces people. The stronger message was that it protects them. By filtering out low-quality leads, booking appointments, and handling routine questions, AI enables human staff to focus on customers who are genuinely ready to engage. For dealers under cost pressure, that matters.
On the investment and supplier side, enthusiasm for “AI as a moat” has cooled. As software becomes easier to build and copy, defensibility is no longer found in the model itself but in data ownership, workflow integration and long-term usefulness to the dealer.
US retailers are also further down the road on true omnichannel retail. Customers move fluidly between online browsing, finance applications and in-store conversations, without having to start again each time. NADA has shown what this process looks like when it is taken seriously and at scale.
Electric vehicles were still very much on the agenda, but the tone was notably more cautious.
Dealer sentiment around EV sales in the US has cooled, driven by the roll-off of incentives, patchy infrastructure and simple affordability challenges. Many dealers still believe EV penetration will grow over time, but there is far less confidence about near-term volumes and profits.
That tension will resonate in the UK. There is regulatory pressure to push EV volumes, but dealers are rightly wary of thinner margins and reduced aftersales income compared with ICE vehicles.
One of the more pragmatic lessons from NADA was the importance of pushing OEMs to offer better-priced, well-specified EVs and of investing selectively in EV service capabilities.
Another strong theme was consolidation. In the US, dealer groups continue to grow through acquisition, driven by rising capital requirements, digital complexity and the cost of EV readiness. Larger groups are centralising functions such as reconditioning, business offices, and digital marketing to drive scale benefits.
The UK market is smaller, but the logic is the same. Scale brings resilience, access to capital and the ability to invest in systems and skills that smaller operators struggle to justify. For independents and smaller groups, the question is not whether consolidation will continue, but how to position themselves in that environment.
NADA also highlighted how marketing is changing. Video content, from walkarounds to test-drive explainers, is now a major influence on purchase decisions.
Dealers are investing in better data environments to build a single customer view and to drive lifetime value through smarter retention and service messaging.
At the same time, sustainability and EV narratives are being woven into marketing, even as short-term sentiment softens. The smarter operators are balancing today’s realities with tomorrow’s positioning.
For UK dealers, the message is clear. Focus on controllable profit pools, invest in technology that genuinely improves efficiency, stay realistic about EV economics and think carefully about long-term scale and structure. The US market is not a crystal ball, but it is a useful early warning system. Ignoring those signals would be a mistake.
Mike Allen is the managing director of Cambria Private Capital.
