What is Natural Language Processing?

Natural language processing, or NLP, is the branch of artificial intelligence that enables computers to understand, interpret, and generate human language. It underpins tools dealerships increasingly rely on, from chatbots and AI phone assistants to systems that read and categorize incoming leads or summarize customer conversations. NLP breaks language into meaning, recognizing intent, sentiment, entities like vehicle models, and context, so software can respond appropriately rather than matching rigid keywords. For a dealership, NLP is what lets an AI assistant understand a text like looking for a used SUV under thirty grand and route it correctly. It also powers analysis of call transcripts and reviews to surface trends. As NLP improves, dealerships can automate more routine communication while keeping it natural, freeing staff to focus on the human parts of the sale that technology cannot replace.