Artificial intelligence in automotive retail

The automotive retail industry is undergoing a profound transformation, fueled by the rapid advancement of artificial intelligence (AI). Once considered a futuristic concept, artificial intelligence in automotive retail is now a practical tool reshaping how dealerships operate, engage with customers and drive profitability. From streamlining operations to enhancing customer experiences, AI is no longer luxury – its becoming a necessity.

In this month’s episode of Up to Speed, Mike Mader, principal with Baker Tilly’s dealership advisory service team, discusses the future role AI will play in the dealership industry alongside CEO of QoreAI, Todd Smith.

Turning data into gold

At the heart of AI’s potential in automotive retail lies data. Dealerships are sitting on vast reservoirs of transactional data: sales records, service histories, CRM entries and more. However, this data is often siloed, unstructured and underutilized. The key to unlocking its value is not just collecting it but refining it into actionable insights.

Think of dealership data as crude oil. It’s valuable, but only after it’s extracted, cleaned and refined. AI excels at this process. By aggregating data from disparate systems and applying machine learning algorithms, dealerships can identify patterns that would otherwise go unnoticed. For example, AI can detect when a loyal service customer hasn’t returned in months, flagging them for outreach before they defect to a competitor. It can also predict which customers are most likely to be in-market for a new vehicle, enabling targeted marketing that’s both efficient and effective.

Automating the mundane

One of AI’s most immediate benefits is its ability to automate repetitive, time-consuming tasks. In dealerships, this includes everything from lead follow-up to payroll processing. For instance, calculating commissions for variable pay plans – often a complex and error-prone task – can be streamlined with AI. Once trained, AI systems can execute these tasks with perfect consistency, freeing up staff to focus on higher-value activities.