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We have three days left to make the most of July as we talk about CDK’s offer to compensate Dealers from last month’s outage. We also talk about significant progress for OEM EV partnerships, as well as the entrance of SearchGPT

Show Notes with links

• In the latest update to the CDK saga, many dealers are now frustrated by the DMS provider after it offered a one-month rebate on software fees that dealers argue doesn't cover the full extent of their incurred expenses.
  •  Dealers had to rely on overtime pay for staff, slower pen-and-paper workarounds, and temporary third-party software solutions to maintain operations during the shutdown.
  • The outage resulted in lost vehicle sales and reduced service revenue, further compounding the financial impact.
  • Scott Herbers, CDK's chief revenue officer, said in a statement to Automotive News, "We appreciate and value our dealership partners [and] recognize the resilience they showed by continuing to conduct business throughout the outage. My team and I have personally spoken to the dealerships, and most have been very grateful and appreciative of the compensation."
  • However, dealers signaled dissatisfaction with Damon Lester, owner of Nissan of Bowie saying, “The amount of manpower and losses that we all incurred from the expense of having to still pay people is definitely greater than one month's invoice,"”
  •  "I would say three months would probably be closer to making up for what's happened," said Judy Farcus Serra, COO of Headquarter Automotive, echoing Rita Case’s sentiments expressed several weeks ago.
• Product planning in automotive has become increasingly complex. There are promised transitions to EVS,  the potential upheaval of emissions regulations, upcoming US elections. Toyota, Subaru, and Mazda are leveraging their cooperative agreements to navigate these challenges together.
  • Toyota and Subaru will launch three-row EV crossovers next year, assembled in Kentucky with batteries from Toyota's North Carolina plant, qualifying for consumer tax credits of up to $7,500.
  • Subaru is enhancing its crossover lineup with Toyota’s hybrid technology, including the new Forester hybrid.
  • Mazda and Toyota jointly operate a plant in Alabama, producing the Toyota Corolla Cross and Mazda CX-50. Mazda plans to add a hybrid variant of the CX-50 using Toyota’s system.
  • The three automakers are also collaborating on advanced combustion engines, potentially delaying their full transition to EVs. Mazda has announced it will not fully launch EVs until 2028.
• OpenAI is testing SearchGPT, a new search function integrating AI capabilities with real-time web search to deliver quick, relevant answers with sourced hyperlinks. 
  • Currently, this new feature is available to a limited group for testing and feedback.
  • The integration focuses heavily on high-quality content with management options for users.

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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