EDITOR’S NOTE: This is the second of Automotive News Canada’s two-part look into artificial intelligence in the Canadian auto industry.
Even as automakers and dealers invest in their online sales platforms, the use of artificial intelligence (AI) in automotive retailing has appeared to be largely limited to targeted marketing initiatives.
But that could be changing.
“I think at some point that anything that can be handled by consumers that’s guided — so, the purchase of a vehicle, the purchase of extended [service contracts] and extended insurances — I think those things will change and will be driven by AI because it gives the customer more power,” said Rosa Hoffmann, CEO of Montreal-based DecisioningIT.
In April, the company launched a software platform called Lucy, which it says uses AI to match nonprime customers with a lender. Using the customer’s credit history and the histories of the lenders themselves, the platform determines within seconds which lenders a customer can be prequalified with and under what criteria.
Lucy has been rolled out at about 30 dealerships so far, Hoffmann said, with an additional 100 dealers “waiting to onboard.” DecisioningIT, a developer of AI-driven software, said the Lucy platform gets about 85 per cent of customers prequalified.
AI can help stores become more efficient and give consumers more confidence in the shopping process, Hoffman said.
“It’s just suggestive and still allows a dealer and an [automaker] to be profitable and make income,” she said. “But ultimately, it gives transparency and power back to the customer.”
AI HAS ITS LIMITS
As a marketing tool, AI is used to collect data on customers and prospects to anticipate what they need or want.
AI is “critical [in] getting information about your customers, not just your current customers but your prospects,” said Colin Richardson, principal at Toronto-based OmniChannel Automotive Solutions, which works with dealers to implement new retail processes.
“But as far as AI getting involved in the direct transaction once the prospect closes the deal, it’s really not relevant right now, I don’t believe. It’s more from a marketing and a merchandising standpoint, when you look at search engine optimization with Google and things like that.”
Still, those initiatives have grown more important in recent years as more customers start shopping by doing research on new vehicles online.
Automakers and dealers have invested in new digital tools to attract and retain customers. Mitsubishi Canada, for instance, this year launched an online sales portal that allows customers to conduct much of the shopping process online. It’s based on Toronto-based omnichannel software provider Motoinsight’s ClickShop platform and gives shoppers access to available inventory at each dealer location.
The feature allows customers to compare what’s available near them. Mitsubishi promises providing up-todate pricing on specific vehicles on the website. Customers can also save several vehicles to their profiles and pick up the shopping process again at their own pace — including at the dealership.
Mitsubishi also uses AI to attract customers to the portal and to its dealerships.
Steve Carter, Mitsubishi Canada’s marketing director, said in a statement to Automotive News Canada that machine learning is used to “efficiently discover and reach new audiences” and hit sales targets.
AI is bound to become more important to automakers, dealers and others in the industry in the coming years as customers demand quicker service and more transparency, said DecisioningIT’s Hoffmann.
“You can see as an industry that this is the way it’s heading.”