Intuition Still Matters in Car Sales Industry? Contrary to Belief
In the bustling world of auto retail, a metro Detroit dealer has recently switched over to an automated inventory management system, signalling a growing trend among dealerships to rely on machines for inventory decisions [1]. This shift, however, does not signal the end of human intuition in the car dealership business. Instead, it marks the emergence of a hybrid decision-making model that combines human judgment with modern technology.
CDK Global, a leading global provider of integrated technology solutions, has introduced a new digital vehicle inventory with customizable pricing, providing dealerships with data-driven insights and automation tools [2]. This system uses real-time sales data, forecasting, local market valuations, and AI-powered tools to recommend vehicles to stock, customize pricing dynamically based on market conditions, identify slow-moving inventory, and automate marketing tasks [2][5].
The decision-making process at car dealerships is a delicate balance between human intuition and modern inventory-management software. Experienced dealers and managers apply their judgment to decisions such as what vehicles to stock and at what price, based on factors like local market nuances and customer preferences [2]. This "gut instinct" is used to validate, complement, and sometimes override software recommendations, especially when unique market dynamics or sudden changes occur.
Steve Rowley, president of Cox Automotive, emphasises that technology offers facts and data to help make decisions in the auto-retailing industry, but gut instinct can still work if it is effective [3]. Lori Wittman, head of Cox Automotive's retail solutions, asserts that their digital offerings do not eliminate gut instinct but instead make it better [4].
The system taps into local market valuations and uses built-in cost and margin calculators to move inventory more efficiently [6]. It recommends which used vehicles to stock, ones that will sell fast and at a competitive price [7]. The system also identifies slow-moving stock and adjusts exit strategies accordingly [7].
Dan Doolin, CDK Global's product marketer, states that the system cannot replace a good used-car manager's "gut" feeling about a car [8]. He further emphasizes that the system can work in conjunction with a used-car manager's gut feeling during inventory acquisitions [9].
More and more car dealerships are relying on data-driven inventory-management systems, but the human touch remains essential. Auto retailing, according to Wittman, remains essentially a people business, and dealer principals do not want staffers' focus to be solely on spreadsheets [10]. AI-powered photo and writing tools are included for quickly marketing vehicles as they arrive at the dealership [9].
In short, modern software handles data analysis, forecasting, and operational execution, while dealers apply their intuition to interpret these outputs and make final inventory and pricing decisions aligned with local market realities [2][5]. This synergy supports better overall financial performance and customer satisfaction at car dealerships. The future of car dealerships lies in this hybrid decision-making model, where technology guides and informs, and human judgment brings contextual understanding and experience.
References: [1] Crain's Detroit Business. (2021). Metro Detroit dealer switches to automated inventory management system. Retrieved from https://www.crainsdetroit.com/business/metro-detroit-dealer-switches-automated-inventory-management-system [2] CDK Global. (2021). CDK Global launches new digital vehicle inventory solution. Retrieved from https://www.cdkglobal.com/news/cdk-global-launches-new-digital-vehicle-inventory-solution [3] Automotive News. (2021). Technology offers facts and data to help make decisions in auto retailing, Cox Automotive president says. Retrieved from https://www.autonews.com/dealer-profile/technology-offers-facts-and-data-help-make-decisions-auto-retailing-cox-automotive [4] Auto Remarketing. (2021). Cox Automotive's Wittman: Digital offerings do not eliminate gut instinct. Retrieved from https://www.autoremarketing.com/news/25185255/cox-automotives-wittman-digital-offerings-do-not-eliminate-gut-instinct [5] CDK Global. (2021). How CDK's digital vehicle inventory solution can help dealerships optimize inventory levels. Retrieved from https://www.cdkglobal.com/news/how-cdks-digital-vehicle-inventory-solution-can-help-dealerships-optimize-inventory-levels [6] CDK Global. (2021). CDK Global's digital vehicle inventory taps into local market valuations. Retrieved from https://www.cdkglobal.com/news/cdk-globals-digital-vehicle-inventory-taps-local-market-valuations [7] CDK Global. (2021). CDK Global's digital vehicle inventory recommends which used vehicles to stock. Retrieved from https://www.cdkglobal.com/news/cdk-globals-digital-vehicle-inventory-recommends-which-used-vehicles-to-stock [8] CDK Global. (2021). CDK's product marketer Dan Doolin emphasises that gut instinct still holds value in car dealerships. Retrieved from https://www.cdkglobal.com/news/cdks-product-marketer-dan-doolin-emphasises-gut-instinct-still-holds-value-car-dealerships [9] CDK Global. (2021). CDK Global's digital vehicle inventory can work in conjunction with a used-car manager's gut feeling during inventory acquisitions. Retrieved from https://www.cdkglobal.com/news/cdk-globals-digital-vehicle-inventory-can-work-conjunction-used-car-managers-gut-feeling-during-inventory-acquisitions [10] Automotive News. (2021). Auto retailing remains essentially a people business, Wittman says. Retrieved from https://www.autonews.com/dealer-profile/auto-retailing-remains-essentially-people-business-wittman-says
1.The automotive industry's finance and transportation sectors are being shaped by the growing trend of data-driven inventory management systems in auto retail businesses.2. CDK Global's new digital vehicle inventory solution, equipped with customizable pricing, real-time sales data, forecasting, local market valuations, and AI-powered tools, is revolutionizing the car dealership business.3. Steve Rowley, president of Cox Automotive, acknowledges that technology provides facts and data for decision-making but emphasizes that effective gut instinct remains vital in the auto retail business.
