Written by Simon Verona.

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Unless you've been completely disconnected in recent years, you've undoubtedly noticed the significant advancements in Artificial Intelligence, particularly with the emergence of powerful generative AI and large language models.

These technologies hold the potential to fundamentally transform car dealerships, offering extensive benefits to dealers, their staff, and consumers alike.

In this article, I will highlight seven key areas where AI is poised to make an impact :-

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If you prefer to watch rather than read - click play on the video at the top of the page! 

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AI-Driven Customer Insights and Personalisation

Artificial Intelligence has the capability to transform customer relations in dealershipsl

It can predict – from analysing vast quantities of dealership data – which customers in your customer database are likely to be buying a car in the coming months. This allows you to focus your marketing on these customers.

Furthermore, by reviewing customer data and previous interactions, AI algorithms can tailor recommendations, offering vehicles that fit with customer preferences and budget.

For dealers, this technology enhances sales effectiveness and helps in building long-lasting relationships with customers through targeted marketing.

Customers benefit from a more customised shopping experience, where the suggestions they receive are adjusted to their specific needs and desires, making the process both efficient and satisfying.

The end result is lower costs of marketing, and a much higher retention rate of customers – leading to higher sales and profits

Virtual Assistants and Chatbots

The implementation of AI-powered chatbots and virtual assistants can revolutionise customer service within car dealerships.

 These digital assistants provide round-the-clock service, handling enquiries, delivering instant informative replies to customer queries, qualifying prospects and doggedly following up with the aim of scheduling appointments or hand over a saleable lead to a sales executive,

This not only reduces the workload on dealership staff but also ensures continuous customer engagement.From a consumer’s perspective, the availability of immediate assistance without wait times significantly enhances the convenience and accessibility of dealership services.

The massive improvement in Generative AI systems (such as ChatGPT) means that these AI systems can be so human-like that a prospect is not aware they aren’t talking to a computer.  

Stock Management

Effective  stock management is crucial for car dealerships, and AI brings a high degree of efficiency to this.

AI can help predict which cars should be stocked based not only on stock availability  but also using the data from your customer database to match cars that your customer base may be buying with the stock that you need to have.  

So, you can magically have that Red 5 door automatic hatchback at the age and  price your customer wants in stock just when they are looking to buy!  Almost like you had a crystal ball!

Predictive Maintenance

AI will play a critical role in vehicle maintenance by predicting potential failures before they occur.

Using data analytics,dealerships can proactively schedule maintenance for vehicles, optimising service operations and extending the lifespan of each vehicle.

This proactive approach not only improves the profitability of service departments but also enhances vehicle reliability for the consumer, preventing inconvenient and potentially costly breakdowns.

AI Workshop Diagnosis

AI can work in two areas in the Service Department to improve diagnostic and repair times.

It can interact with the customer before they arrive to intelligently pre-diagnose a problem that the customer has reported.  

Taking a “I have a rattle” to “There is a problem in the suspension system which means I hear a rattle from the nearside front when I go over rough surfaces” by intelligently questioning the customer without human interaction.

Furthermore, it can take this further and suggest the operation that the technician will need to do, include the tests needed to replicate the issue and the potential repair that is needed.

This will vastly improve first time fix of issues, and reduce technician and service advisor time in the process – leading to increased levels of customer satisfaction and additional profitability.  

Automated Financing Decisions

In the finance area AI accelerates the loan approval process by analysing data  to assess creditworthiness.

This allows dealers to calculate finance quotations based on the deal that a finance company will approve rather than having to return to a customer with bad news that they have been rejected at the rate you quoted.

This allows dealerships to process  applications with greater accuracy, improving first time approval of applications.

For consumers, this means faster service, less paperwork, and potentially more favorable loan terms, all facilitated by AI.

Digital Showrooms and AR/VR Experiences

Augmented Reality (AR) and Virtual Reality (VR) technologies are reshaping how consumers explore and interact with potential vehicle purchases.

Digital showrooms and immersive AR/VR experiences allow customers to virtually explore vehicles without physically visiting a dealership.

This not only attracts tech-savvy buyers but also reduces the need for dealers to maintain all their stock on the premises. For the consumer, it means a modern, engaging way to shop for cars that brings the showroom into their living room.

Price Optimisation

Finally, AI contributes to pricing strategies by checking market conditions, demand trends, and competitor prices to suggest the most effective pricing points.

This helps dealers maintain competitive yet profitable pricing.

Consumers benefit from transparent and fair pricing models that accurately reflect the current market situation, ensuring they get the best possible deal.

The above is just a small selection of areas that AI is already starting to provide benefits in – at Navigator we already provide some of the above functionality and these are being both expanded and improved all the time!

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