Weekly Circles Briefing · Dec 27, 2025 - Jan 2, 2026
Insights pulled from 1,000+ dealer-only conversations across franchise and independent rooftops. You’re receiving this as a CDG Circles member.
Big picture: The automotive industry is closing out 2025 with mixed results, characterized by strong fixed operations and some domestic brands, while used car markets and certain import brands face challenges. Dealerships are keenly focused on leveraging technology, particularly AI for customer interaction and data analysis, to drive efficiency and acquisitions. Strategic shifts in inventory management and a renewed emphasis on internal training are prevalent, with cautious optimism for 2026 despite ongoing OEM product and support inconsistencies.
1) AI & Technology Adoption
Service Drive AI: Skaivision and AutoHub are being utilized for service drive acquisition, with Skaivision averaging 1-1.5% conversion rates. Matador AI is being implemented for inbound service and sales calls, integrating with Xtime or CDK.
AI Training & Tools: CallRevu offers an AI-powered phone training "Test Track" with customizable scenarios, requiring teams to complete 3 challenges per week. RockED provides daily micro-training sessions (under 3 minutes) with gamified incentives.
DMS & Reporting: Dealers are using various DMS systems (Reynolds, CDK, PBS). Reynolds' Reverse Risk and NCM's Axcessa are highly valued for their intuitive dashboards and reporting capabilities, with Reverse Risk owned by Reynolds offering seamless data integration. Time.ai offers fixed ops data at 1/3 the cost of Reverse Risk.
Video MPI Software: Ford will require video MPI in 2026. Xtime, TrueVideo, MyKaarma, and Text2Drive/DealerLogix are common solutions. Techs are compensated with extra pay (e.g., 0.1 added hours for video, 0.2 for regular MPI, 0.5 for video) for video inspections.
2) Acquisition & Used Car Strategy
Service Lane Acquisitions: Dealers aim for 2-3% conversion from the service lane, acquiring 30+ cars per lane. A process involving salespeople taking 10 pictures and parking trades on the service drive facilitates same-day or next-day recon completion.
Sourcing & Turn: Off-street purchases, KBB store, Signal, and AutoHub (service drive) generate 10-15 units monthly for some Toyota dealers. Canadian dealers are targeting a 1:1 used:new ratio for 2026, up from current 0.7-0.87.
Reconditioning Efficiency: Dedicated pre-inspection technicians and streamlined processes (e.g., ordering parts immediately after inspection) are crucial. Some are implementing tiered labor rates for recon based on "time to line" targets.
3) OEM & Brand-Specific Updates
Stellantis Outlook: Strong optimism for 2026 with new leadership, revamped products (e.g., return of Cherokee), increased fixed ops staffing (targeting 10:1 store- to-rep ratio), and marketing efforts. Dealers note improvements since Tavares took over.
Ford Portfolio Changes: Concerns raised over Ford's decision to cancel the Escape, an entry in the industry's largest segment, and the F-150 Lightning.
Kia Performance: One Kia dealer reported an increase from 20 combined units to nearly President's Club status within a year, closing 17-20% of internet leads. Top lead sources include Autotrader (25.71%), Website coupon (27.45%), Capone (20%), and Cargurus (12.5%).
Volvo & Costco: The Costco program generates mixed opinions, with some fearing it degrades the brand while others appreciate the associated leads and brand exposure. Volvo is reportedly discussing ending the partnership in the Northeast.
4) Marketing & Loyalty
Digital Ad Agencies: Click Here Digital is credited with dramatically increasing new Honda unit sales from 310 to 700 in 25 months with a $350-$400/car budget, primarily digital (90%). In-house SEM management is favored by some over vendor templates.
Carfax Listings: Delivering strong results for used cars, outperforming Autotrader and Cars.com in lead quality and sales; it is 100% coopable through GM programs.
Service Lane Retention: Effective outbound BDC efforts for declined services, missed appointments, and open recalls are crucial for service retention. Follow-up emails for declined services include Sunbit financing options.
Top Actions for Next Week
Evaluate AI Tools: Research Matador AI for phone handling and explore QoreAI's recommended resources for AI integration in 2026.
Optimize Recon Process: Implement a dedicated pre-inspection technician and assess tiered labor rate structures based on "time to line" for internal recon.
Review OEM Support: For Stellantis dealers, monitor progress on fixed ops staffing and new product rollout. Ford dealers should analyze the impact of recent model cancellations.
Enhance BDC Strategy: Implement a multi-channel outbound BDC approach for service (calls, texts, emails for recalls, missed appointments, declined services).
Assess Digital Marketing ROI: Examine SEM vendor performance, consider in- house management, and explore Carfax listings for used car lead generation.
— CDG