The transformative role of AI in dealerships and the broader automotive industry

Welcome back to the latest episode of The Future of Automotive, with Steve Greenfield, Founder and CEO of Automotive Ventures, where we put recent automotive and mobility news into the context of the broader themes impacting the industry.

Investment firm Coatue just released its investment thesis on artificial intelligence, which sheds light on the dramatic impact AI may have on organizational structures in the future.

It’s worth reading through this document with an eye to how technology may transform the car dealer’s operations and cost structure.

If 2022 was the year of the artificial intelligence (AI) explosion, 2023 has been the year in which the AI wave has begun to take shape and gain momentum, impacting the venture capital ecosystem and the broader economy.

Just as the internet sparked a knowledge revolution and mobile created the on-demand economy, we believe AI is the next technology super cycle that has the potential to meaningfully improve our world. Unlike anything we have seen before, AI adoption is already moving faster and beginning to transform our world, from data centers to consumer apps.

However widespread AI adoption within the dealership automotive technology space is still pretty limited. But I believe that’s about to change, as there is tremendous opportunity.

In a Boston Consulting Group study, the quality of knowledge work supported by AI improved by 40%. A survey of ~600 enterprise executives and their awareness of AI capabilities further proves that the opportunity for large-scale AI adoption is on the horizon, with 60% of executives confirming that they plan to adopt AI in both new and existing products.

In our lifetime, we expect AI to become more accessible, scalable, and useful so that anyone can leverage its power. The power of AI has the potential to move from every person’s mobile phone, giving everyone the ability to become an AI user.

Training AI with private automotive data sets could unlock new capabilities for retail automotive.

At Automotive Ventures, one of our big investment theses is to find automotive technology startups that automate processes and workflows on behalf of dealers.

A great example of this is our portfolio company WarrCloud, which has gained tremendous traction and dealer adoption, as a result of its compelling value proposition for dealers. WarrCloud has been a standout investment for Automotive Ventures.

Where are we focused on finding the next wave of innovators to benefit car dealers?

First up, we’re big fans of process automation. This is the technology-enabled automation of complex business processes to accomplish defined organizational goals. It can streamline a business for simplicity, achieve digital transformation, increase service quality, improve service delivery, or help contain costs. Whether it’s in variable ops, fixed operations, or across multiple back-office functions, we’re looking to invest in solutions that help dealers automate processes.

A second area of keen interest is robotics in vehicle Service and Repair. Robots are now commonplace on the vehicle production line, and we expect more of the maintenance and repair of the vehicle to be automated, including services like tire replacement and ADAS calibration. As a result, we made investments in both RoboTire and Kinetic Automation.

In addition, we believe that service technician knowledge will be augmented with enhanced data availability to speed decision-making with fewer errors, thus dramatically improving productivity.

At Automotive Ventures, we believe that we’re on the cusp of a new age of AI that will impact all areas of business. Mobility will benefit from dramatic improvements in efficiency and augmentation of the work humans can do. AI will continue to allow us to collect, process, and analyze vast amounts of data, drawing insights at a faster rate than ever before. 

We are on the lookout for entrepreneurs who are leveraging AI to automate processes for dealers. If this is an area you’re focused on, please let me know. I’d welcome the opportunity to connect.

Companies to watch

Every week we highlight interesting companies in the automotive technology space to keep an eye on. If you read my weekly Intel Report, delivered to your email inbox at 7:00 AM on Mondays, I showcase a couple of companies to watch, and we take the opportunity here on this segment to share those companies with you.

ZETI

ZETI is Revolutionizing transportation finance. They help fleets convert to EVs by making it as simple, easy, and transparent as paying for a utility with their patent-pending pay-per-mile financial technology.

For lenders, ZETI is generating attractive, risk-adjusted returns in a new clean asset class comparable to an investment in renewable energy.

Zeti acts as a platform for institutional lenders to invest in clean, connected vehicle fleets through a pay-per-mile (or kWh) model; managing automated invoicing and payment collection; and real-time financial and sustainability reporting for lenders via their digital platform.

For automakers, ZETI Introducing an innovative new financing tool to accelerate sales.

ZETI acts as a sales enablement tool to boost zero-emission vehicle sales by allowing fleet customers the option of paying per mile for vehicle finance, rather than having a fixed monthly cost. ZETI’s software can also be used to deploy in-house finance, enabling an automaker to offer its own pay-per-mile solution. 

If you’d like to learn more about ZETI, you can check out their website at www.zeti.group.

Future of Mobility

If you’re an AutoTech entrepreneur working on a solution that helps car dealerships, we want to hear from you. We are actively investing out of our new DealerFund.

If you’re interested in joining our Investment Club to make direct investments into AutoTech and Mobility startups, please join. There is no obligation to start seeing our deal flow, and we continue to have attractive investment deals available to our members.

Don’t forget to check out my book, “The Future of Automotive Retail,” which is available on Amazon.com. And keep an eye out for my new book, “The Future of Mobility”, which will be out at the end of the year.

Thanks (as always) for your ongoing support, and we look forward to working closely together with you to create the future of this industry.

Thank you for tuning into CBT News for this week’s Future of Automotive segment, and we’ll see you next week!

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