Leveraging recent advances in generative AI, multi-agent systems are increasingly being developed to enhance the functionality and efficiency of smart city applications. This paper explores the transformative potential of large language models (LLMs) and emerging Retrieval-Augmented Generation (RAG) technologies in Intelligent Transportation Systems (ITS), paving the way for innovative solutions to address critical challenges in urban mobility. We begin by providing a comprehensive overview of the current state-of-the-art in mobility data, ITS, and Connected Vehicles (CV) applications. Building on this review, we discuss the rationale behind RAG and examine the opportunities for integrating these Generative AI (GenAI) technologies into the smart mobility sector. We propose a conceptual framework aimed at developing multi-agent systems capable of intelligently and conversationally delivering smart mobility services to urban commuters, transportation operators, and decision-makers. Our approach seeks to foster an autonomous and intelligent approach that (a) promotes science-based advisory to reduce traffic congestion, accidents, and carbon emissions at multiple scales, (b) facilitates public education and engagement in participatory mobility management, and (c) automates specialized transportation management tasks and the development of critical ITS platforms, such as data analytics and interpretation, knowledge representation, and traffic simulations. By integrating LLM and RAG, our approach seeks to overcome the limitations of traditional rule-based multi-agent systems, which rely on fixed knowledge bases and limited reasoning capabilities. This integration paves the way for a more scalable, intuitive, and automated multi-agent paradigm, driving advancements in ITS and urban mobility.