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AI is A-OK with dealers, survey says

January 21, 2022
Hollywood can over-dramatize artificial intelligence. As proof, see 2015’s "Chappie," a movie about a police force of mechanized droids patrolling the streets.
In real life, AI is less ominous. Used in the business world, it can reduce stress and increase profits, according to CDK Global’s newly released "Artificial Intelligence in Automotive Retail Report."
Dealerships aren’t using AI to conquer the world. They are using it to increase sales, boost auto-technician efficiency and get to know customers better — particularly their individual buying behaviors.
The CDK survey highlights the use of AI tools in automotive retail today and gauges how dealers might benefit from such systems in the future.
"We don’t want to look at AI in the Hollywood way, but rather as to how it can (non-theatrically) help dealers become more productive," said Peter Kahn, the senior director of marketing research at CDK, an automotive information technology company.
Among the report’s findings:
• Most dealers are familiar with artificial intelligence (75%), with 40% feeling extremely or very familiar with it.
• Sixty-eight percent of polled dealerships are already using AI or at least plan to do so within the next three to five years.
• A majority of dealers (56%) who don’t use AI today, but plan to in the future, anticipate ultimately positive outcomes.
 
And although every survey pool has its outliers, only 2% of this one’s respondents say they don’t see their dealership using AI-based applications in the future.
 
"The results of our research are encouraging and tell us dealers are excited about the possibilities of AI and how it will help them meet their financial and customer satisfaction goals," said Mahesh Shah, CDK’s chief product and technology officer.
Kahn said he was rather surprised at dealers’ "high level of enthusiasm" about the topic.  
Conventional wisdom might suggest big dealership chains are the dominant users of AI systems. But the survey results indicate it’s not just the big dogs. Auto retailers interested in AI include "everyday dealers, middle-volume dealers located across America," Kahn said.
The CDK survey was based on a national sample of 243 dealership department heads and executives.
 
CDK sought to determine from the onset whether survey participants actually knew what AI is, Kahn said. "We asked if they were familiar with it, and then asked them to give examples of it." 
Essentially, AI is a branch of computer science focused on systems capable of learning and performing tasks that typically require human intelligence.
That doesn’t mean bots will replace humans in showrooms someday soon. But it does mean systems can lend a hand to people throughout a dealership.
Kahn said AI can help tackle current dealer challenges, including:
• Addressing employee and skills shortages by replacing resource-intensive tasks and augmenting employee skills.
• Attracting customers by looking at existing sales and service profiles and determining propensity to buy based on prior buying cycles and behavior.
• Retaining existing service department customers through proactive and personalized service and by better predicting potential vehicle service issues.
"AI," Kahn said, "can help both variable operations (sales) and fixed operations. It can help BDCs (business development centers focused on drumming up sales). It can help auto technician productivity. It can help a dealership to better know customers and their buying patterns."
And in doing so, AI systems "can learn and improve" as they accrue more and more data, he said.
In the service department such systems can take on something of a mentorship role by aiding rookie auto technicians in their work. "It can help the apprentice journey with diagnosis equipment that recommends things to do," Kahn said. Consequently, "young technicians understand their job better and do a better job."
 
 

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