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We are rounding down a week of east coast travel here on the last day of the NAMAD Annual Membership Meeting. Today we are looking at Ford’s recently announced change in their EV plans and how EVs may not be slowing down as much as some sources may say.

Show Notes with links:

• Ford is adjusting its electrification plans, canceling its long-planned three-row electric crossovers and delaying the next-generation full-size electric pickup by 18 months. The automaker will now focus on a family of hybrid three-row crossovers.
  • Ford's changes could result in up to $1.9 billion in costs, including a $400 million noncash charge related to the cancellation of the crossover.
  • CFO John Lawler: "We looked where the segment was evolving, the amount of competition, the customer needs, and then, the size of the battery that needs to go in a pure EV, the cost structure, the pricing, We could not put together a vehicle that met our requirements to be profitable in the first 12 months of launch."
  • The next-gen full-size electric pickup's launch has been pushed to late 2027.
  • Moving forward, Lawler said EVs would represent roughly 30 percent of Ford’s capital expenditure, down from a planned 40 percent.

• Despite talks of an EV slowdown, the U.S. market saw record-breaking sales in Q2 2024, with 18 electric models surpassing 5,000 units sold. Tesla, Ford, and Hyundai lead, but newcomers are gaining ground.
  • EV sales hit a record 320,463 units in Q2, up 11% from last year and 23% from Q1.
  • The 18 models that sold 5K units: Tesla Model Y, Model 3, Model X and Cybertruck; Ford Mustang Mach-E and F-150 Lightning; Hyundai IONIQ 5; Toyota bZ4X; Rivian R1S; Cadillac Lyriq; BMW i4; Kia EV6, EV9, and Niro; Chevrolet Blazer EV; Volkswagen ID.4; Mercedes EQE; and Nissan Ariya.
  • As we previously reported, Tesla's market share dipped below 50% for the first time, now at 49.7%, and Hyundai Motor Group (including Kia and Genesis) claimed 10% of the U.S. EV market, outperforming Ford (7.4%) and GM (6.3%)
  • Stephanie Valdez Streaty, Cox Automotive Industry Insights Director said: “Automakers that deliver the right product at the right price and offer an excellent consumer experience will lead the way in EV adoption.”

• Chick-Fil-A is stepping into the entertainment arena with plans to launch its own streaming service, focusing on family-friendly content. The fast-food giant is partnering with top production companies to create original shows, marking a bold move into the media landscape.
• Chick-Fil-A is developing original content for a new streaming platform.
• The focus will be on family-friendly shows, particularly in the unscripted genre.
• Collaborations include production companies behind popular series like NBC’s The Wall and Netflix’s 13 Rea

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Welcome to Miami as we’re coming to you Live from the 2024 NAMAD Annual Meeting in Miami Florida where hundreds of Dealers, OEMs, and Industry Partners are talking about the current and future state of the industry. We’re also talking about the Rivian VP who is now spen to Detroit as well as Salesforce’s bet on the future of personalized vehicles. 

We want to thank our friends at TrueCar+ for making our coverage of the 2024 NAMAD Annual Meeting possible!

Show Notes with links:

• Tim Fallon, Rivian's former VP of manufacturing, has been appointed Stellantis' new head of North American manufacturing, bringing critical EV expertise to the automaker.
  • Fallon served as Rivian's manufacturing VP for two years and spent 16 years at Nissan.
  • His arrival comes as Stellantis prepares to launch several key EVs, including the Jeep Wagoneer S, Ram 1500 REV, and Dodge Charger EV
  • Stellantis has been facing manufacturing challenges, particularly with quality control at its U.S. plants.
  • Carlos Zarlenga, Stellantis' North America COO, expressed confidence in Fallon, saying, "Tim's passion and collaborative spirit will lead the team to deliver the highest quality vehicles for our customers.”

• Salesforce has unveiled a powerful new application that lets automakers harness telematics data, offering a personalized driver experience while managing vehicle performance remotely.
  • The app allows service teams to remotely monitor vehicle performance, lock doors, and control cabin temperature during service appointments and integrates with infotainment systems to support in-vehicle payments, service reminders and more.
  • Automakers like Mercedes-Benz and Toyota are already using Salesforce's Automotive Cloud.
  • The application promises to make in-vehicle purchases a reality, potentially creating a new revenue stream for automakers.
  • In-car subscription services is currently about a $6 billion dollar industry, but projected to hit $200B by 2030
  • "Personalization leads to people saying, 'There's value here, and this is why I'm willing to pay for it,'" said Achyut Jajoo, Salesforce's senior vice president of manufacturing and automotive.

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It’s a travel Tuesday as we head to Virginia for the Reynolds Retail Summit and then Florida for the NAMAD Conference. Today we’re talking about the buzz our friends at Rohrman Toyota are making with creative marketing campaigns, why car insurance premiums keep going up and check in at Amplify 2024 with Kyle Mountsier and Reynolds CMO Greg Uland.

Announcement

• New Auto Collabs episode - Changing the Culture Through An Employee Stock Ownership Plan with Bethany Sobczak, Corporate HR Director at Fitzgerald Auto Mall
• Automotive Amplifiers Aug- NAMAD Aug - VeeCon -  Vincue Unleashed Sept - ATAE Comms Nov

Show Notes with links:

• Bob Rohrman Toyota in Lafayette, Indiana, is shaking up car sales with creative and fun promotions that attract customers and boost employee morale.
  • Zac Kinch, Rohrman Toyota’s GM, has created marketing campaigns for customers to engage in fun activities like dunk tanks, mechanical bull rides, and Plinko games for discounts and prizes.
  • These events, like offering a $99 Corolla during Black Friday, lead to significant sales increases, with one event selling 34 vehicles in a day.
  • The engaging atmosphere has created higher employee retention, doubling the average tenure of sales staff from 3.1 years to 6.6 years.
  • Event videos are widely shared on social media, with some videos reaching over a million views
  • “Buying a car shouldn’t have to be miserable," says Kinch, emphasizing the positive impact on both staff and customers.

• Auto insurance rates have risen 15% in the first half of 2024 to average annual premium of $2,329, with predictions indicating a 22% total increase by year-end.
  • Maryland holds the highest average rate at $3,400 annually, while New Hampshire is the lowest at $1,000. States like California, Missouri, and Minnesota could see increases this year exceeding 50%.
  • Repair costs, particularly for ADAS-equipped vehicles, are a major driver, with repairs costing up to 38% more over the past five years.
  • The rising rates are due to a combination of significant underwriting losses, increasing vehicle repair costs, and the growing impact of severe weather events. Additional factors like aging vehicles, legislative changes, higher theft rates, and economic pressures are further driving up premiums.
  • "As we experience tornadoes, hail, and flooding in places where they weren't necessarily a major threat before, the increased frequency and severity of these events will need to be considered in pricing," said Betsy Stella, VP of Carrier Management at Insurify.

• Kyle is already at Reynolds and Reynolds Amplify 2024 and is live with Reynolds CMO Greg Uland.

Join Paul J Daly and Kyle Mountsier every morning for the Automotive State of the Union podcast as they connect the dots across car dealerships, retail trends, emerging tech like AI, and cultural shifts—bringing clarity, speed, and people-first insight to automotive leaders navigating a rapidly changing industry.

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It’s a busy week around the ASOTU-verse as we’ve got people traveling in all different directions. Today, we’re talking about a new study showing a significant drop in dealership profitability, look at how Carter Myers is ahead of the curve on employee healthcare, and look inside a casket that feels like a Cybertruck.

Show Notes with links:

• U.S. franchised dealerships experienced a significant 33.4% drop in average pretax profit during the first half of 2024, reflecting a broader trend of shrinking profitability in retail auto.
  • According to a year over year dealership performance benchmark report from Presidio Group and NCM Associates that looked at 3900 franchised dealers, the average U.S. dealership sold 410 new vehicles (down 1.4%) and 364 used vehicles (flat from last year) in the first half of 2024.
  • Front end gross profit per new vehicle dropped 32.9% to $2,408, used vehicle profit fell 22.9% to $1,404, with total revenue per store down 3.4% to $40 million.
  • This marks a 50% reduction from peak profitability in 2021.
  • Variable gross profit has fallen 32% since 2022, while personnel expenses only dropped 6%.
  • Overall dealer sentiment is positive with over half of the survey dealers expecting profits to rise in the next 12 months.
  • "We're surprised that the typical dealership hasn't adjusted its spending and variable costs as quickly and appropriately as it should have given the decline in profitability over the last two years," George Karolis, president of Presidio Group, said in a statement. "This is a time when dealers must be nimble and adjust quickly to the industry's changing circumstances, and many of them have not."

• Carter Myers Automotive in Virginia, widely known for their ESOP, has found a novel way to manage escalating health care costs by adopting a self-funded insurance plan, with potential premium holidays if year-end surpluses are achieved.
  • Employees are encouraged to make cost-effective health care choices, with any savings going back to offset future premiums.
  • CMA experienced no premium increases for the first two years and provided two premium holidays, each lasting about 3 months, an average savings of $900/household
  • Focus groups and surveys helped shape the plan, ensuring buy-in from employees.
  • Liza Borches, CEO of CMA shared, “The benefit of an ESOP is that you share the responsibility. As we were looking at some of our benefit plans, we said, 'How do we apply the same philosophy to other areas of our business?' "

• Titan Casket borrows from Tesla’s playbook by creating a bulletproof casket complete with vegan leather, with a design that looks oddly similar to Tesla’s Cybertruck.
  • The HyperCasket is available for $9,999 on pre-order with delivery starting in Q4 of this year.
  • To keep design affiliation clear, their website states “Titan’s Hypercasket

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Today on the show, Paul, Chris and Nathan talk about dealers giving back.

First we have a story about how Fiesta Subaru came alongside one of their community members after a wildfire damaged her van.

Then, Mercy Education Project in Detroit, a nonprofit dedicated to helping women and children, had its van stolen. When Lithia and Driveway found out, they stepped up to donate a new van back to the project.

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It’s finally Friday as we cover how European plug-in hybrid technology may guide US regulations, BMW is at it again charging monthly for physical hardware, we cover the data breach affecting BILLIONS, and how Gen Z feels more detached than ever.

Show Notes with links:

• European regulations are driving the development of plug-in hybrids with significantly longer electric ranges, offering a glimpse of what might be coming to the U.S.
  • Some European plug-in hybrids now offer electric ranges of up to 84 miles, more than double what’s currently available in the U.S.
  • In comparison, U.S. plug-in hybrids like the Toyota Prius Prime max out at 45 miles of electric range, with most models offering between 25-35 miles.
  • California's regulation changes will drive similar advancements in the U.S., requiring plug-in hybrids to achieve a minimum range of 43 miles by 2028 and 70 miles after that.
• BMW is once again sparking debate with its decision to charge U.S. customers to unlock features that are already physically installed in their vehicles.
  • BMW is requiring payments to activate Adaptive Suspension on vehicles where it wasn’t selected at purchase, despite the hardware being pre-installed.
  • Customers can either subscribe monthly or yearly or pay a one-time $500 fee to activate the feature.
• A shocking data breach has exposed the personal information of billions, with serious implications for those affected.
  • Over 2.9 billion records, including Social Security numbers, were allegedly stolen from National Public Data (NPD), a Florida-based background-check company.
  • The breach is attributed to the USDod group, which claims to have stolen the data and is offering it for sale on the dark web for $3.5 million.
  • While NPD has not officially confirmed the breach, it has acknowledged receiving inquiries and is investigating the claims.
  • Multiple class-action lawsuits have been filed against NPD for failing to protect personal data, and individuals affected are encouraged to seek legal advice.
• Employee disengagement is on the rise, and experts are warning of a looming "Great Detachment," particularly among Gen Z workers.
  • Gen Z is on track to outnumber boomers in the workforce this year and are expected to make up 27% of it by 2025.
  • The American Staffing Association warns that disengaged employees could cost the global economy over $8 trillions.
  • Since 2020, employees feel less committed to their roles, partly due to their companies' perceived lack of commitment.
  • The CEO of Applied, Khyati Sund

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It’s a busy Thursday as we dig into Cox Auto’s data from July, talk about Holman buying a stake in FM Capital, discuss Polestar producing vehicles on US soil and relax while watching Waymos trying to get out of a parking lot set to lofi beats.

Show Notes with links:

• The U.S. auto market in July 2024 saw a decline in average transaction prices (ATP) for new vehicles, down to $48,401, with inventory levels increasing 52% YoY to 2.91 million vehicles, in data from Cox Automotive.
  • Average incentives reached 7.0% of ATP ($3,383), the highest in over three years.
  • The top 2 best-selling vehicles in July were the Ford F-series and the Chevrolet Silverado, with full size trucks accounting for 14% of July Sales. Compact and Subcompact SUVs represented 25% of July's sales. 
  • Fun fact: Cox Automotive shouted out Mohawk Chevrolet in their report, saying “the Chevrolet Rado will possibly replace [the Silverado] in model year 2026.​​”
  • EVs experienced price adjustments with a unique twist, particularly for Tesla. Overall EV Prices decreased by 1.5% year-over-year to $56,520.
  • Tesla bucked the trend with an 11% ATP increase, reaching $59,593, driven by the Cybertruck's high price of over $100,000.
• 
  
• Holman, a global leader in automotive services, has acquired a minority interest in FM Capital, a venture capital firm focused on early-to-mid stage technology companies in the automotive and transportation industries.
  • This is the first time an integrated automotive services organization has acquired a general partner interest in an automotive VC.
  • FM Capital specializes in transportation technologies, including dealership operations, autonomy, and electrification.
  • Holman's venture capital arm strategically invests in early-stage businesses to stay ahead of industry trends.
• Polestar is gearing up for significant growth in the U.S., expanding its retail network to support a broader lineup that will triple in size this year.
  • The EV brand plans to add 20 stores to its current 27-store network by the end of 2025.
  • New models include the Polestar 3 and Polestar 4, with two more nameplates planned within the next two years.
• Residents near a Waymo robotaxi depot in San Francisco are being woken up by the cars honking at each other during the night, even though no one is inside them.
  • The self-driving cars often get in each other's way when in this parking lot, triggering their honking systems to avoid low-speed collisions.
  • Neighbors, who once welcomed the idea of quieter streets, are now frustrated by the noise that happens at all hours of the night, with some feeling there's no one to address the issue with.

Join Paul J Daly and Kyle Mountsier every morning for the Automotive State of the Union podcast as they connect the dots across car dealerships, retail trends, emerging tech like AI, and cultural shifts—bringing clarity, speed, and people-first insight to automotive leaders navigating a rapidly changing industry.

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Welcome to Wednesday as we are talking about the return of the Fain to the headlines in response to the Trump-Musk live conversation on X. We also talk about the tightening of the auto credit belt, as well as a shifting consumer sentiment to the use of ‘AI’ in products. 

• ​​The UAW has filed federal labor charges against former President Donald Trump and Tesla CEO Elon Musk, accusing them of implied threatening actions against striking workers.
  • Trump suggested that employers could handle striking workers by simply firing them all. He described a scenario where, in response to a strike, the employer would tell the workers, "That’s OK, you’re all gone," implying that all striking workers would be dismissed.
  • Musk, while not directly quoted in the charges, has a history of anti-union sentiments, further fueling the union's concerns.
  • Under federal law, employees conducting lawful strikes for economic reasons, such as higher wages, can’t be discharged by their employers.
  • The charges aim to highlight the UAW’s stance that Trump and Musk oppose workers' rights, and are unlikely to have any practical impact.
  • UAW President Shawn Fain stated, "When we say Trump stands against everything our union stands for, this is what we mean."

• We love our daily email and today it highlighted some recent Cox Auto Data: Auto credit availability has been tightening for four consecutive months, creating challenges for dealers as customers find it increasingly difficult to secure loans, especially for used vehicles.
  • The Dealertrack Credit Availability Index dropped to 92.9 in July, down 1.0% from June and 1.5% year-over-year, and used car loans through franchised dealers are seeing the most significant tightening.
  • Banks are leading the way in tightening credit, marking the fifth consecutive month of stricter lending.
  • The spread between these auto loan interest rates and other investments has widened, making loans less appealing to customers. Additionally, more buyers are dealing with negative equity, adding further risk for lenders.

• A recent study reveals that the term "artificial intelligence" in marketing is increasingly a red flag for consumers, suggesting a growing skepticism towards AI-powered products.
  • The study surveyed 1,000 U.S. adults, finding that AI mentions lowered product appeal.
  • Emotional trust drops significantly when AI is referenced, reducing purchase intentions.
  • AI in high-risk purchases like electronics or medical devices exacerbates safety concerns.
  • Forrester’s December 2023 survey shows a split in consumer sentiment, with only 29% trusting GenAI and 73% demanding transparency when companies use AI.
  • “When AI is mentioned, it t

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It’s a great Tuesday to sell some cars as we talk about LA’s announcement of a car-less Olympics (oh the irony). We also talk about the effectiveness of Kia’s fix for rampant thefts, as well as the large group of workers feeling stuck. 

• Los Angeles, a city synonymous with car culture, is casting it’s vision for the 2028 Olympic Games to be a "no-car Games." Mayor Karen Bass has announced plans to rely on public transportation instead of private vehicles, challenging the city's deeply ingrained car dependency.
  • The city is advancing "Twenty-eight by '28," aiming to complete 28 transit projects by 2028, funded by voter-approved sales taxes.
  • Bass is urging local businesses to adopt remote work and flexible hours during the Games to help reduce traffic.
  • The plan includes bringing in 3,000 buses from around the country to bolster the city’s public transportation system.
  • Mayor Bass stated, "We’re already working to create jobs by expanding our public transportation system in order for us to have a no-car games."
    
    
• A recent study by the Highway Loss Data Institute revealed that the anti-theft software upgrade developed by Kia and Hyundai has been highly effective, reducing theft claim rates by 53% for eligible vehicles. This comes after a surge in thefts following viral videos showing how to hotwire certain models lacking immobilizers.
  • Kia and Hyundai vehicles from 2011-22 were targeted after a viral video exposed a security flaw.
  • The software upgrade, offered in February 2023, extends the alarm duration and requires the key to be in the ignition to start the vehicle.
  • Vehicles that received the upgrade showed a 64% drop in whole vehicle theft.
  • Both companies have distributed over a million upgrades and provided steering wheel locks for ineligible vehicles.
  • A $200 million settlement was reached for affected owners, though it has yet to be approved by the judge.
  • "We're encouraged that theft rates in key cities have fallen significantly as more vehicle owners and lessees receive the free software upgrade," said a Kia spokesperson.
    
    
• American workers are increasingly feeling "stuck" in their jobs as fears of a potential recession loom. This has led to a significant drop in the rate at which employees are quitting, despite widespread job dissatisfaction.
  • The quit rate in July 2024 fell to just 2.1%, the lowest since the pandemic began.
  • Google searches for "quitting job" are down 11% in the past year, while searches for "stuck at work" have risen 9%.
  • Online communities like the subreddit r/hatemyjob have seen membership double, reflecting growing frustration among workers.
  • Recession fears are rising, wit

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It’s a new week in the retail auto industry, and that means its time to love some people more than cars. Today we’re discussing a survey that suggests dealers are not excited about selling EVs, the new Dodge Charger exhaust sound system, and how ChargePoint is combining all the charging connectors into one.

• Steve Greenfield made a post about the new Dodge Charger’s fake exhaust sounds and it sparked quite the debate. Dodge's new electric Charger Daytona is all about maintaining the classic muscle car vibes that its customers love. Even with an electric engine, Dodge wants to ensure the car sounds like it has a roaring V8 under the hood, and they've introduced the Fratzonic Chambered Exhaust system to make it happen.
  • Steve Greenfield’s post: “I literally don't know how to feel about this. Part of me wants to be really excited, and part of me wants to be repugnated. But maybe that's the goal?”
  • The system is designed to mimic the sound of a traditional V8 engine, even though the car is fully electric.
  • It uses a combination of high-tech transducers, passive radiators, and amplifiers to create its signature sound.
  • The sound adjusts with driving conditions, getting louder with throttle input and varying based on the car's driving mode.
• As EV sales show inconsistency across brands, a new study reveals that dealer enthusiasm may be a key factor. A survey of 250 dealership leaders across the U.S. shows a surprising lack of excitement among sales teams, which may be influencing EV adoption rates.
  • 49% of surveyed dealers say their sales teams are "not excited at all" about selling EVs with enthusiasm highest in the Pacific region, including California, but even there, few are "very excited."
  • Dealers in rural areas and colder climates cite charging infrastructure and winter range issues as major concerns.
  • Areas with better EV training show higher enthusiasm, suggesting that education could boost sales interest.
  • The study highlights the industry's struggle to adapt its traditional sales models to the demands of the EV market.
• ChargePoint is tackling one of the biggest headaches for EV drivers with its new Omni Port, an innovative solution that combines multiple connector types into one EV charging unit, making charging simpler and more accessible to all makes and models.
  • Omni Port combines common connector types, eliminating the need for adapters with support for current an

Join Paul J Daly and Kyle Mountsier every morning for the Automotive State of the Union podcast as they connect the dots across car dealerships, retail trends, emerging tech like AI, and cultural shifts—bringing clarity, speed, and people-first insight to automotive leaders navigating a rapidly changing industry.

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