The automotive retail sector has been going through digitisation for years, yet many of the same challenges remain. Retailers face rising costs, thinner margins, and customers who expect the same digital convenience they find elsewhere.
Against this backdrop, many are exploring how AI can help. As the industry moves from experimenting with prompts in ChatGPT to transforming operations with agentic AI, the opportunity is clear.
The question for retailers is where to start in a sea of opportunities.
With so much potential, it is vital to identify key problems, see the bigger picture and being prepared to adapt. As a dealer principal, I saw my sales team waste hours chasing poor-quality web leads. Around 75% of enquiries went nowhere.
Despite big marketing investment and a talented team, I still had poor web conversion and knew I wasn’t delivering the experience my buyers wanted.
My lightbulb moment came when I realised my best salesperson couldn’t respond to enquiries 24/7, but AI could.
We all know that car buying doesn’t just happen during convenient business hours. Today's consumers research, compare, and make purchasing decisions in the moments between their daily lives.
The lead problem I mentioned above actually starts with a consumer problem. They want answers to their questions when it suits them.
Industry research suggests that 60% of car buyers abandon their purchase journey due to slow response times. By the time we call them back the next morning, they've often moved on to competitors who were somehow available when we weren't.
We've invested millions in digital marketing to drive traffic to our websites, only to lose those business because we can't engage with buyers on their terms.
As well as real time responses, we need our AI to be able to understand and act on consumer intent. Some visitors are just beginning their research journey, others are ready to book a test drive, and many fall somewhere in between. Our current approach forces all of these different types of customers through the same narrow funnel: fill out a form or talk to a generic live chat, wait for a callback, hope someone's available to help. This creates a poor conversion rate and wastes valuable marketing budget.
What's needed is a more sophisticated experience that can listen to what the buyer wants, advise and guide through the full sales journey at the right moment in time.
Like anything in life, you get out what you put in. In the case of AI that’s data and process. Whilst some people may have concerns over AI’s ability to do a good job, we’ve proven that with the right data inputs and the right training, AI can delight customers.
What’s also important is the data you get out, so you know what the AI is doing and can feed analytics back to other systems, whether that’s sales people seeing a full chat transcript, or the marketing team getting detailed event tags for attribution and optimisation.
Lessons from other industries
Looking beyond automotive, other industries have already solved similar challenges. Banking moved beyond traditional branch hours with ATMs and online services. Hospitality embraced booking platforms that work around the clock. Even healthcare has adopted digital appointments and AI powered triage.
What these industries understood is that availability isn't just about convenience – it's about capturing intent at the moment it occurs. A customer researching cars at 10 PM isn't necessarily less qualified than one calling at 2 PM; they just operate on a different scheduleIt’s time to take action
So it’s time to embrace AI, to enhance our people with technology. We need AI tools that understand the automotive process, have the data to give customers what they need and integrate this seamlessly into existing technology or processes.
In the example of web conversion, this means moving beyond simple lead capture to genuine customer engagement. It means understanding that a conversation at midnight about fuel efficiency might be just as valuable as a showroom appointment at noon.
The retailers who recognise this shift will be the ones who thrive in the next decade. The question isn't whether the industry will adapt to always-on consumer expectations.
It’s who will move first and who will be left behind.
I have already seen firsthand the benefits AI can bring to a dealership operation and I’m excited to be able to drive real change across the automotive industry.
Author: Gerard Thatcher, chief executive of MotorTech.AI and managing director of independent used car dealer TMC in Hampshire