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Insights The “Golden Window” is Closing: Why Dealerships Are Losing Service Visits (And How AI Can Fix It) Read More

By: Mark Hollmer

Promises that artificial intelligence would transform the automotive industry in 2025 gained new converts.

Automakers adopted AI to help dealerships stock new vehicles more efficiently and address maintenance issues, manufacture vehicles with more precision and increase quality control in the factory. Dealerships deployed AI to answer phones, schedule service appointments, boost back-office efficiency and enhance customer service.

Prospective car buyers gained an AI tool that negotiates for them. Even industry analysts are exploring its use to broaden the scope of their research.

But AI still has plenty to prove, said Inga Maurer, senior partner with the analyst firm McKinsey & Co.

“I would say it’s a huge promise that’s in the first quarter of kind of being realized,” Maurer told Automotive News.

The auto industry hasn’t maximized AI’s potential despite advances in the back office and with analytics. Data is the key to making further gains, Maurer said.

“The reality is that both within the dealer and the OEM, and then also in between the dealer and the OEM, there are a lot of data gaps,” she said.

AI continues to advance, however, regardless of its imperfections. Roughly 97 percent of AI users said the technology would impact their car purchase decisions, according to a new Cars.com national consumer survey.

Auto manufacturer AI initiatives

General Motors began using AI in February to help dealerships stock the fastest-turning new vehicles for their market. This followed moves to incorporate the technology to spot software glitches during testing, predict equipment failures and enhance other parts of its operations.

GM announced more AI initiatives in October. It is developing a platform that would enable its vehicles to interact with custom AI to address a maintenance issue, find a restaurant or allow drivers to safely take their eyes off the road while driving.

Ford is using in-house AI systems to help it spot vehicle defects. One of them, known as AiTriz, was at 90 manufacturing stations around the globe, including 35 in North America, as of July.

Manufacturers including Audi, BMW and Mercedes-Benz expanded their use of AI this year to improve vehicle production efficiency, quality control and overall factory operations.

How auto retail added AI

Agentic AI is a more customized, sophisticated use of AI and other technologies to automate specific tasks with little to no human intervention. It invaded automotive retail in 2025 with the promise it can help dealerships simplify sales, finance and insurance, and service center processes. CDK Global, Tekion, Cox Automotive, service-focused startup Numa and vehicle listings company CarGurus are among companies that launched agentic AI tools in 2025 or are exploring how to use them.

Reynolds and Reynolds Co. also got into the game, launching its Spark AI “unified data layer” that enables its AI tools to execute processes and provide recommendations with accuracy and without duplication. That, in turn, led to launches such as Rey, Reynolds’ AI agent, which is designed to help with a variety of functions.

The startup CarEdge debuted its AI Negotiator in July with a $40 monthly fee, giving consumers their own auto shopping negotiating tool. It’s designed to reach out on behalf of a customer and negotiate to a target vehicle price set by the customer. More than 2,000 consumers used the tool as of September.

AI also is helping more dealerships automate incoming and outgoing calls, and the field is getting crowded. Two raised venture capital money in the fall — Flai pulled in $4 million in October for its AI-backed platform, and Pam raised money for a related system in September. They join a crowded field including competitors such as Toma, Numa, Stella, ScaleVoice, Impel and DMS stalwarts such as CDK Global and Reynolds and Reynolds.

More AI disruption is coming

“Vibe coding” is one AI trend that could enable even greater changes in the auto industry. The idea is that an AI-driven vibe coding tool can be told what kind of software you want and then create it. Industry insiders view it as a tool that could allow dealerships and others to build their own software without needing a developer, something that could complement or eventually replace CRM or dealership management system platforms.

Auto industry consulting firm Pied Piper found a way in 2025 to use AI on a grand scale. Its new Dealership Facility Consistency Study leveraged AI to analyze more than 540,000 satellite and street-view images of 18,662 U.S. auto dealerships. CEO Fran O’Hagan told Automotive News in November the study took about a month to finish, a fraction of the time typically required for a study of its size.

While the auto industry is increasingly embracing AI, it is also becoming clear the technology will lead to job cuts in the dealership back office.

One executive offered a way for employees to cope.

“Your job may or may not be replaced by AI, but it is, for sure, going to be replaced by someone using AI,” Marianne Johnson, chief product officer at Cox Automotive, said during a panel discussion at the Presidio Group’s Auto Technology Summit in Denver on Oct. 21.

She recommended anxious employees take on technology pilots and training to gain vital skills designed to keep them viable, even if their current job goes away.

“I have 7,000 folks on my team. I have 5,000 engineers. I don’t know out of those 5,000 how many I will need a year from now or two years from now,” Johnson said. “My personal commitment to them, and this is an authentic comment, is that if you will lean in with me over the next year [on AI training and adoption] you will be the most sought-after talent in future years.”