Despite ongoing tariff concerns and economic uncertainty, the retail automotive industry remains resilient, according to Steve Greenfield, CEO of Automotive Ventures. On today’s episode of Inside Automotive, Greenfield explains that while dealer profits have declined from post-pandemic highs, they remain significantly stronger than before 2020. He adds that automakers, not retailers, have absorbed most of the financial impact from tariffs, shielding dealers from direct disruption.
Profitability holds steady
Greenfield observed that the industry’s focus has shifted away from sheer sales volume toward a more deliberate pursuit of profitability and operational efficiency. He noted that even with a lower seasonally adjusted annual rate (SAAR), total revenue has remained robust because of historically high vehicle prices, with new cars averaging around $50,000.
One of the most transformative forces shaping the industry, Greenfield said, is artificial intelligence. While AI continues to dominate industry discussions, he cautions that its value depends on meaningful implementation rather than hype. Many vendors, he explained, overstate the capabilities of their AI systems, making it essential for dealers to prioritize practical applications that improve measurable outcomes.
AI with measurable impact
He cited examples of effective AI use, including automated systems that prevent missed sales or service leads and CRM tools that predict customer needs. Greenfield also pointed to emerging technology capable of analyzing and replicating the behavior of top-performing employees, allowing entire teams to operate more efficiently.
"AI should be able to uniquely replicate those algorithms, whatever those activities are in the heads of the best salespeople, fixed ops directors, technicians, and F&I managers, and distill that down to their essence."
As the industry looks ahead to NADA 2026, Greenfield advises dealers to evaluate new technologies based on clarity and measurable return on investment. He urges retailers to align their technology adoption with specific business objectives and to be cautious about committing to long-term contracts with unproven solutions. Instead, he recommends opting for short-term agreements until they can validate performance.
Addressing growing competition, Greenfield recommends that dealers study digital-first brands such as Carvana and Tesla to better understand evolving consumer expectations. By examining these companies’ online buying processes, he said, dealers can identify both best practices to adopt and operational gaps to avoid.
He also discusses innovations within fixed operations, citing an example from Automotive Ventures’ portfolio company WarrCloud. The platform uses AI to automate OEM warranty claim processing, improving reimbursement accuracy and efficiency while reducing manual administrative work. Greenfield described this as a clear example of AI being applied to solve real, measurable challenges in dealership operations.
Ultimately, Greenfield believes AI has the potential to standardize best practices across departments, enhance productivity, and improve profitability across the retail automotive landscape. He emphasized that dealers who approach AI strategically, focusing on real outcomes rather than trends, will strengthen their long-term business value.
