ARTIFICIAL Intelligence has the potential to transform car retailing because it has the ability to provide solutions to problems which, for lack of resources, have plagued dealerships for years.

Delegates at this year’s AADA Convention and Expo heard that there are very significant amounts of revenue in additional sales and service dollars that go uncollected for lack of affordable resources to process them.

But AI, always-at-work and capable of unimaginable processing feats in mere seconds, is now or soon will be, available to all human employees in the dealership as a kind of personal collaborator.

Using AI is now a tsunami spreading through all the business activities of the dealership.  

Well-known dealer, Wade von Bibra, moderator of the panel, said retailers were constantly subject to a stream of bold predictions that are “still a long way off, or more likely will never happen at all”.

Wade von Bibra – Dealer and panel moderator 

“The latest hype is AI. And the question presents itself, is AI in automotive just the latest buzz word, or is it the engine of the next great shift? 

“When you begin to scratch the surface of what AI can do, it does feel different this time around,” he said. 

“When you talk with dealers and tech companies, you very quickly realize that AI has solutions across all facets of our organizations that are solving problems we have long battled with,” Mr Von Bibra said. 

In terms of why suddenly now, Michelle Low executive GM, technology & data at Carsales told delegates that AI-type functions have been available for some time. But they always required writing specific expert code to access the answers; thus excluding the majority of workers from timely access to the stored knowledge. 

What has changed, she said, is that everyone can now access that knowledge by talking to their devices.

Michelle Low – Executive GM, technology & data at Carsales

“You no longer need math to work with these models. English works just fine. And so the step-change we’re seeing is in accessibility of these technologies to everyone in the marketplace.” 

She said that buyers researching to understand things like vehicle pricing or to understand financing options typically involves “time-consuming and onerous tasks that are now made a whole lot easier by these AI technologies”.

She said the case is similar with dealers and that these technologies can help fast track activities “across every corner of the business, from sourcing, to inventory management to marketing, you name it”.

“This is a transformative type of event. The change accelerates as we build these tools and integrate them into our workflows and our decision processes. 

“And I think the best part about it is seeing the capacity that the use of these solutions have for elevating the most human parts of our experience, for everyone on all sides of the buying and selling experience.”

MD of Impel, Ben Cooper, told the panel: “Fast forward two or three years and I think AI in its various formats will be a core part of the operating system of every dealership. The front office functions, the back office functions, and also how dealerships work with their manufacturer partners.

Ben Cooper – MD of Impel

“Probably one of the biggest gaps, and therefore the biggest opportunities for dealers, is to really think about how they’re communicating with their customers and, if you think about that, both in terms of the sales side of the business and the service side of the business, there are so many opportunities for AI to support what our teams are doing within the dealership today. 

“It’s interesting, when we start working with dealerships, we often find that for every 100 leads that may be coming into a dealership, there might be 15 appointments that are being booked. 

“Said differently, that’s 85 hand raisers that are submitting a lead that are not being appointed in your business. And that just sounds crazy. 

“So you ask why is that? And it comes down to some of the things that humans are not necessarily the best at; speed of response, quality and consistency of response, and duration of response. 

“And so these are all things that are perfect applications of AI to support the teams and help them move forward. 

“We see similar things within the service departments where there is just not enough human manpower and hours in the day to be reaching out to all of our customers to get them to come in. And all of these things represent either missed revenue or more opportunities to win revenue. “So I think the communications part is really fundamental, and just something that AI is naturally very, very good at.”

Mr Cooper said that it was not that long ago that dealers who were embedding AI within their sales workflows and their service workflows were seen as at the cutting edge and having a competitive advantage. 

“But it has now become a competitive necessity, because companies that are using these technologies will be able to operate with much more leverage within their businesses and be much more efficient in terms of how they service customers. 

“So for the people who are not doing those things, it starts to become more and more challenging for them to compete.” 

Mr Cooper said that like the mobile phone, AI is a generational shift in technology,

“I think AI is just going to be embedded within the dealership operating system. And that’s not just about communications, it is about finance, it is about all the different tool sets in the value chain that dealerships rely on. The dealers who lean into and really engage with this technology will ultimately be the ones who win.”

Eric Rea – CEO & co-founder of Podium

CEO & co-founder of Podium, Eric Rea, told the panel: “The big change that has occurred in AI is that these models can now reason. 

“This has completely changed everything. You can give them an assignment and it will actually reflect and reason and come to the best conclusion or the best outcome that it can. That has completely changed the game and I think the models are going to keep getting better. 

“While most businesses are using AI as a really great copilot for their employees, I think it will move to the point where AI will be orchestrating everything; because it never sleeps, it rarely gets things wrong and never needs to take a break. 

“It knows the inventory inside and out. It can have access to every piece of information that your dealership has. 

“So I think over time it’s going to move into a place where it’s orchestrating everything, while the humans will really be doing what they’re great at; which is human relationships, in-person communication – all of the things that we know dealers need to do to be a successful business.”

Brooke Ebbett – Pentana Solutions

Pentana Solutions’ Brooke Ebbett told the panel: “I think this technology is a great enabler and will level the playing field, especially for the smaller dealers out in the network. AI has the ability to directly reduce labour costs and increase efficiency across all dealership departments.

“In our world at Pentana Solutions, as a service, we make more than 30,000 calls a month on behalf of dealers around Australia. We are now right in the wheelhouse of using AI to do that, whether that’s CSI calls, service retention or lapsed service calls. We are automating that for the industry; so that can just be happening in the background. 

Mr Ebbett said AI presented “so much opportunity because, at best, there is only 20 per cent of dealerships nationwide that are across and utilising the technology.

Mr Ebbett warned about the need for oversight of AI in dealerships and suggested developing an AI playbook in your dealership or group.

“We’re big employers of people in this industry and a lot of staff are using this technology themselves. We need to control it as an industry. Dealerships are a rich source of data. You need to know where that’s going, where it is being put. While the upside is huge, we need to guide our businesses and our staff and our employees how to use this technology.”

Read more:

Read Part Two – Will AI run dealerships?