Demystifying AI

October 3, 2023

I encourage you to read the column on artificial intelligence on page 34 by Dee Murphy-Brown in this issue.

As I was editing her column, I was struck by the line:

“Over the next half-decade, early adopters will likely start reaping the benefits of AI tools. Another five years down the line, we might find it challenging to find a dealership where AI isn’t an integral part of the F&I process.”

The reason the quote stood out to me, particularly the line “we might find it challenging to find a dealership where AI isn’t an integral part of the F&I process” is how matter of fact it is about the arrival, adoption and acceptance of AI.

She writes as though it’s a foregone conclusion that AI is not only coming to dealerships, it’s here, chugging along, and before we know it will be “old news” and just the way things are done.

I think she’s entirely right.

And it won’t just be in the business office, where the sheer power of machine learning and number crunching consumer behaviours will lead to more accurate credit approval decisions.

AI and machine learning in particular will be used in applications through all aspects of a dealership’s operations from how they respond to digital and phone leads, predict customer demand for new and used vehicles, manage their service operations and actual service work, run their physical facilities, and a host of ways we can’t even yet imagine.

There’s a famous observation called Amara’s law that suggests we tend to “overestimate the impact of technology in the short-term and underestimate the effect in the long run.”

This phenomenon helps explain why there is often such hype for new technologies, and why people tend to downplay or resist the hype when the next great thing comes along.

Consider, for example, how much hype there was about autonomous vehicles only a few years ago, and how aggressive the timelines were for the adoption of this technology that is still many years away from being even close to mainstream and in wide usage.

So, I get the skepticism.

But as a July 2023 study from CDK Global, “What Automotive Dealers Think About Artificial Intelligence” discovered, dealers are already buying into the promise of AI. 76 per cent of dealers surveyed say they are already seeing the benefits of AI and 60 per cent of dealers who plan on using AI are expecting positive outcomes.

Some of the most productive areas for AI among dealers surveyed included: improving sales and marketing efforts, helping with pricing decisions, targeting customers through propensity to buy, making product recommendations, forecasting inventory and predicting service failures.

Interestingly, only 10 per cent of dealers in the survey say they are “not at all familiar” with AI.

I’m hoping that if you find yourself in that 10 per cent, you’ll read Dee’s column, track down the CDK Global study and start mapping out ways AI can help your dealership.

If you don’t, and I know this sounds alarmist, there’s no doubt the dealerships you compete with are already hard at work trying to figure it out.

About Todd Phillips

Todd Phillips is the editorial director of Universus Media Group Inc. and the editor of Canadian auto dealer magazine. Todd can be reached at

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