Phyron is seeing car retailers in the US moving beyond artificial intelligence (AI) experimentation and into targeted deployments that are proving return on investment (ROI).
With margins under pressure and lead costs continuing to rise, dealers are increasingly applying AI in narrow, well-defined areas rather than pursuing end-to-end automation.
Phyron said this approach is most visible in digital marketing, inventory presentation and content production, where scale, speed and consistency are critical.
As the industry gathers in Las Vegas for the upcoming National Automobile Dealers Association (NADA) Show (Feb 3-6), these kinds of examples are likely to feature heavily in conversations on the show floor.
Rather than broad promises about transformation, dealers are comparing notes on which AI deployments deliver tangible gains and which do not.
Phyron’s survey of 500 US dealers shows 57% expect AI to improve operational efficiency and 54% believe it can lower costs, with video production ranked among the top near-term use cases.
Video has become a priority as digital platforms increasingly favour dynamic formats, but producing video at inventory scale remains challenging for many dealer groups.
Watching the numbers like hawks
One US dealer group already seeing results is Ken Garff, which operates nearly 70 dealerships across nine states.
As paid social became a core acquisition channel, the group began to see rising cost per lead from standard automotive inventory ads.
It piloted AI-generated video across eight dealerships, using Phyron to produce video at scale for Meta Automotive Inventory Ads.
Jordyn Canady, social media manager at Ken Garff, said: “We use the Meta Ads all the time.
“If a store has a low budget, that’s the single campaign we recommend they start with. But when lead costs rise, that’s not a good use of our advertising dollars. We watch those numbers like hawks.”
Removing manual work
Across the pilot stores, the AI-generated video ads delivered a 32.2% increase in click-through rate and an average 4.7% reduction in cost per lead, despite lead costs increasing across the wider market.
Some stores recorded cost per lead reductions of up to 22.9%.
Canady added: “We could never have produced this volume of content manually. This is work that simply wasn’t previously possible for us to do.”
The results reflect a broader trend across the US retail market, with dealers applying AI where it replaces slow, repetitive or difficult-to-scale tasks rather than customer-facing decision making.
Mattias Kellquist, chief executive and co-founder at Phyron, said: “Dealers are becoming much more selective.
“They’re not asking what AI might do in five years. They’re asking where it already saves time or money today, without adding complexity.”
Automotive Management is hosting a webinar with Waylands, Infinity and Phyron next week on how dealers can improve marketing performance amid rising costs and tighter budgets.
The free AM webinar on January 27 at 14:00-14:45, held in association with Infinity and Phyron, will focus on how dealer marketing teams can improve performance amid rising media costs, tighter budgets and greater scrutiny of return on investment (ROI).
The session is aimed at dealer principals, marketing directors, and senior retail executives looking to maintain lead volumes and marketing effectiveness in an increasingly competitive, cost-conscious market.