The Robots Are Coming

Don’t expect a robot wired with artificial intelligence (AI) to work showroom floors at car dealerships.

But many dealers are hoping that AI – a widespread topic in these times – can help them in various ways, from abating employment challenges to drawing in more customers.

So says a study, “What Automotive Dealers Think About Artificial Intelligence,” which automotive technology-services provider CDK Global conducted this year, with 230 respondents consisting of department heads and executive leaders. It’s a follow-up to a 2021 survey.

The report, based on a survey of dealers, focuses on practical applications of AI, not on sci-fi fancies of, say, robots selling and fixing cars.   

“I’d like to take a step back,” CDK’s Data and Intelligence Product Marketer Emily Hernandez tells Wards. “AI is not meant to replace roles. There’s always going to be human connectivity.”

Andrew DiFeo, dealer principal at Hyundai and Genesis of St. Augustine, FL, doesn’t foresee AI as conquering the dealership world, but he’s interested enough in how it can help.

“It’s the shiniest object we’ve seen in a long time,” he says. “But we don’t want to use AI for the sake of using AI.”

DiFeo (pictured below, left) envisions, for example, using it in advanced automated responses and conversations involving sales lead inquiries “with the system learning the most common questions and responses.

Andrew DiFeo

“It is still early in the life cycle. We want to make sure what it presents to our guests is relative and accurate information.”

Dealers already are using forms of AI in different ways including the predictive analysis of identifying and scoring which customers are most likely to buy at a particular time.

But the developing new generation of artificial intelligence has many people, auto dealers included, talking about how heightened automation may change the world as we know it.      

“There is a general lack of understanding about it; we’re not going to be living in ‘Meet the Robinsons,’ says Hernandez, referring to a futuristic sci-fi film. “We want to eliminate the thought that we’ll be in a world of robots.”

The latest survey indicates dealerships already are capitalizing on the benefits of current-generation AI, with 67% utilizing it to help identify and target qualified lead opportunities. That’s up from 56% in 2021.

According to the 2023 survey, dealers see AI assisting them in various ways, including:

• Resolving employment challenges. Nearly 60% of dealers cited employee skill shortages and staff burnout as top concerns. AI is seen as optimizing employee skillsets and automating tasks.

• Acquiring and managing inventory levels, assisting in forecasting inventory demand and calculating market needs and demands.

• Attracting and retaining customers. Building on what software of today does, AI can identify customers with a higher propensity to buy and suggest specific in-stock cars based on consumer profiles.

Hernandez also points to the benefits of so-called natural language processing used in automated conversations with customers.

“NLP can tell whether a customer is happy or frustrated, and respond accordingly,” she says.

DiFeo’s business currently uses so-called large-language chat models for automated communications with customers. “Even then, the information isn’t the most accurate,” he says. “I definitely see AI use cases in making our operations more efficient.”

The likes of machine learning and natural language processing “can positively impact dealerships as the auto retailer business model continues to evolve,” Hernandez says.

But she doesn’t see it causing massive dealership staff reductions. Nor does DiFeo.

“It could lead to a reduced head count in certain areas,” he says. “But that could result in an increased head count in other areas; maybe staff up in areas where we didn’t excel at. I see artificial intelligence as a net positive, but it’s also early.”

A Midwest dealer acknowledges he’s not exactly sure what advanced AI is. “I haven’t seen anything yet that makes me say ‘wow,’” says the dealer, who asked not to be identified.

CDK is going for the “wow” factor with the launch of CDK Dealership Xperience. The company touts it as allowing dealers to operate their entire business on one platform while increasing control over the consumer’s retail journey digitally from start to finish.

Features include a dealership management system paired with digital retailing, e-signing and a desking solution intended to shorten the deal process.

It also includes enhanced, integrated customer-oriented software for the sales and service departments.

CDK Chief Marketing Officer Barb Edson says the new product allows “one-stop shopping” for dealers investing in the latest technology. “Dealers want unbroken workflows.”

There once was talk that the internet would put dealers out of business because vehicles could be sold online rather than at dealerships. Might highly developed AI make dealers anachronistic?

No way, declares Edson. “That’s a myth. Dealers aren’t going anywhere.”