The Automotive Troublemaker w/ Paul J Daly and Kyle Mountsier

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Today on the show, Chris, Paul and Kyle invite Jordan Cox onto the show to grill him about his trip to the US Capitol.

This week was the NADA Washington Conference, where dealers from around the nation come to DC to meet with their congressman and senators to talk about the importance of the auto industry.

Hosts: Paul J Daly and Kyle Mountsier

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It’s Friday again, and it feels like the first time in forever that we’re back in our normal seats. Today, we’re covering Cars Commerce’s latest Industry Insights Report, GM finally getting Supercharger access for its EVs and how home improvement is making a recovery because of the interest rate cut.

Show Notes with links:

• Yesterday, CARS Commerce released their latest Industry Insights Report including a peek inside their 1st party data. Here are some highlights:
  • Used-car supply is also more stable than its been -- up 2.3% YOY. However, the quality of the used-car inventory still leans older, and average odometer mileage increased 1.5% year over year as fewer late-model vehicles land on dealer lots. 
  • Trade-in values continue to slide, with August 2024 figures dropping below August 2022 numbers.
  • Dealers are holding inventory longer — 53 days on average — as consumers wait for better pricing. 
  • 40% increase in new-car demand YOY, but that is not necessarily translating into a more robust market as we have seen a 38% increase in new-car days live.
  • The common thread running through the market’s most affordable vehicles is alternative propulsion: Each of these models is either a full electric vehicle or offers a PHEV version : Ford Mustang Mach-E, Volkswagen ID.4, Mazda CX-90, Lincoln Corsair, Hyundai Ioniq 5
    
    
    
• GM’s latest move allows their EV drivers to access Tesla’s robust Supercharger network, a game-changer for those driving Chevy, Cadillac, or GMC models. However, GM customers will need to invest in an adapter to tap into these benefits.
  • GM EV drivers now have access to 17,800 Tesla Superchargers using a GM-approved Tesla adapter which costs $225, unlocking Supercharger compatibility
  • Ford and Rivian offered adapters for free temporarily, creating some friction for GM buyers
  • GM also focuses on flexibility, partnering with various suppliers to avoid reliance on Tesla.
  • Wade Sheffer, VP of GM Energy, said, “Enabling access to even more publicly available fast chargers represents yet another way GM is focused on further improving the customer experience.”

• Home Depot and Lowe’s are already benefiting from the Fed’s recent rate cut, signaling a potential recovery in the home improvement sector as borrowing becomes more affordable for consumers.
  • Home Depot and Lowe's shares rose following the Fed's half-point rate cut.
  • The housing market is expected to "unfreeze" as borrowing costs drop, boosting sales.
  • Analysts predict a "phased recovery" in home improvement spending, starting small and growing as rates fall.
  • Lowe’s CEO Marvin Ellison emphasized readiness: "Whenever the macro inflection occurs, we just want to be ready to take advantage of it."

Hosts: Paul J Daly and Kyle Mountsier

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Finally An Interest Rate Cut, Ford Karaoke, AI Goes Hollywood

Description:

Dealers across the country breathed a sigh of relief this morning at news of the Fed’s interest rate cut. We’ll be talking about that, plus how Ford is adding karaoke to vehicles and a partnership between a big Hollywood studio and an AI video generator.

Announcement

• Upcoming ASOTU Edge Webinar on Wed September 25 at 2PM - Don’t Miss The Signals! How Unresolved Complaints Turn Into Compliance Nightmares with the Association of Finance and Insurance Professionals and DealerResolve
• Vincue Unleashed Sept 23-25 - ATAE Comms Nov

Show Notes with links:

• After a long period of hesitation due to high prices and financing costs, the Federal Reserve’s September 18 interest rate cut of 0.5% could help revive consumer demand for vehicles. Dealers are optimistic that this move will spur more buyers into the market.
  • Cox Automotive found that 67% of dealers viewed high rates as their top issue, while Edmunds said that 62% of consumers planning to buy a car within 12 months delayed purchases due to high rates.
  • In August, new car loan interest rates averaged 7.1%, while used car loans hit 11.3%.
  •  TransUnion projects consumer demand may not fully recover until late 2024 or 2025 as interest rates and vehicle prices stabilize.
  • Jessica Caldwell, head of insights at Edmunds believes the cut may push hesitant buyers back into showrooms, especially with year-end promotions, saying “While the rate cut alone may not flood showrooms, it creates a more favorable environment for buyers.”
• Ford is adding a new karaoke feature to some of its vehicles, enhancing road trip entertainment. A software update for the 2024 F-150 Lightning will introduce the Stingray Karaoke app, allowing passengers to sing along during drives.
  • The app uses sensors to detect if a passenger is present, allowing them to control the experience via a QR code and smartphone.
  • Initially available on the F-150 Lightning, the feature will expand to the Mustang Mach-E and select gas-powered Ford and Lincoln vehicles.
  • The touchscreen will display lyrics only when the vehicle is parked, promoting safe driving habits.
  • The Stingray app offers a wide variety of songs and lyrics in 38 languages.
  • "Our goal at Ford is to continue to improve the ownership experience for customers by delivering experiences like Stingray Karaoke that ultimately bring joy," said Chet Dhruna, Ford's connect and engage general manager.

• Lionsgate, the studio behind the John Wick and Hunger Games franchises, has signed a deal with AI startup Runway to develop a custom video generation model, tapping into its vast library of films and shows. This partnership aims to help filmmakers enhance their production p

Hosts: Paul J Daly and Kyle Mountsier

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Happy hump day! Today, we’re covering how Ram is set to enter the EV truck fray, how Tesla is prepping to move inventory with a new round of incentives and how Home Depot allegedly changed prices on consumers between the aisle and the register.

Announcement

• Upcoming ASOTU Edge Webinar on Wed September 25 at 2PM - Don’t Miss The Signals! How Unresolved Complaints Turn Into Compliance Nightmares with the Association of Finance and Insurance Professionals and DealerResolve
• Vincue Unleashed Sept 23-25 - ATAE Comms Nov

Show Notes with links:

• Ram is preparing to make a strong entrance into the electric vehicle (EV) market. With the 1500 REV set to arrive in 2025, followed by the range-extended 1500 Ramcharger, Ram aims to blend innovation with practicality.
  • The 1500 REV, Ram's first fully electric pickup, offers a standard 168 kWh battery with up to 350 miles of range and an optional 229 kWh battery pack targeting 500 miles.
  • The 1500 Ramcharger, set for 2025, is an electrified model with a range-extending 3.6L V-6 engine and a generator. The vehicle promises 663 horsepower and over 615 lb-ft of torque, with a towing capacity of 14,000 lbs.
  • Ram is looking ahead to the future of heavy-duty pickups, with next-gen 2500 and 3500 models expected around 2030.
  • Bob Broderdorf, former Ram global operations officer, now Jeep North America head, said, "Everybody can throw down a big range, etc. OK, do it while towing with payload. That is what we're trying to drive home.”

• Known for its end-of-quarter discounts, Tesla has rolled out significant financing incentives to ramp up sales and clear inventory with new offers across its lineup.
  • Tesla is offering 0% down payment and a low 2.49% APR on Model 3 and Model Y, with rates dropping to 1.99% with a small down payment.
  • The promotion runs until September 30, coinciding with the end-of-quarter sales push.
  • Tesla has also reintroduced a referral program offering a $1,000 discount on new vehicles.
  • Every Tesla model has some sort of incentive attached to it, except the Cybertruck
  • Analysts expect these promotions to boost U.S. sales, though demand in China and Europe remains sluggish.

• Home Depot is settling a lawsuit for almost $2 million after being accused of overcharging customers due to "scanner violations" in California, where ​​advertised shelf prices were not the same when scanned at the register.
  • The retailer denies wrongdoing but negotiated a settlement of $1.7 million in fines and $277,251 in restitutions.
  • Home Depot must implement a price accuracy program to ensure shelf prices match those at the register, with a ban on increasing prices during weekends. They will also provide employee training and more internal audits.
  • District Attorney George Gascón stated: “When companies engage in deceptive practices, they not only cheat consumers bu

Hosts: Paul J Daly and Kyle Mountsier

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We’re brimming with energy on this Tuesday morning, as we discuss VW’s decision to originate its US auto loans through Wells Fargo. Plus we talk about the growing gap between car buying expectations and car buying reality and how auto debt just continues to grow.

Show Notes with links:

• Volkswagen is ceasing to originate U.S. auto loans for Audi and VW through its in-house finance division, Volkswagen Financial Services (VWFS). Starting in April, Wells Fargo will take over this responsibility.
  • Wells Fargo will be responsible for processing all loan applications, underwriting, and servicing loans for VW and Audi customers.
  • VWFS will shift its focus to consumer leasing, usage-based products, and new mobility solutions, aligning with Volkswagen Group’s broader growth strategy in the U.S. market.
  • The transition is part of a "multi-year co-branded agreement" aimed at offering improved retail financial solutions for VW, Audi, and Ducati.
  • VWFS will continue managing current loans on its books after the April transition.
  • Ernst Jan van Eijkelenburg, CEO of VW Credit: “This is a union of great strengths... supporting our brands, dealers, and customers.”

• A new report from Edmunds highlights the growing disconnect between what car shoppers want to pay and the prices they’re encountering in the market today.
  • According to Edmunds, the average trade-in age for new vehicles is six years, meaning many shoppers returning in 2023 last bought in 2018.
  • 64% of used car buyers aim to spend under $20,000, and 50% target $15,000 or less, but only 5% of transactions were below $10,000, with the average used car costing $26,936. Similarly, 48% of new car buyers want to spend $35,000 or less, but the average new car price in July was $47,716, with almost no vehicles under $20,000.
  • Over 73% of respondents have delayed buying a vehicle due to high prices, 62% due to high interest rates, and more than half are cutting other expenses or working extra hours to afford one.
  • Jessica Caldwell, Edmunds' head of insights: "Consumers are likely being forced into trade-offs, selecting different brands, older vehicles, or even postponing purchases.”

• A new report from the Financial Times highlights the growing burden of auto loan debt, which now accounts for 9% of household debt, second only to mortgages and surpassing student loans.
  • Auto loan delinquencies are nearing record-high levels set during the 2009 financial crisis, as many struggle to keep up with large payments.
  • Buyers who purchased vehicles during the COVID-19 pandemic at inflated prices now face significant negative equity, owing more than their cars are worth as values decline.
  • While fewer prime borrowers are losing their vehicles compared to 2009, auto debt continues to swell, with total automotive debt reaching $1.6 trillion as of September 2023.

Hosts: Paul J Daly and Kyle Mountsier

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It’s a brand new week and we’re heading to Will Guidara’s Welcome Conference in NYC. Before we get there, we need to talk about how Volvo is giving up on car subscriptions, more places you can take an autonomous rideshare, and more ways to buy physical items in Roblox.

Show Notes with links:

• Volvo has officially ended its vehicle subscription program, Care by Volvo, which launched in 2017. The service offered a bundle of vehicle use, maintenance, and other benefits under a single monthly payment of $600-$800/month across more than 40 states.
  • Volvo announced on September 12 that the program is suspended "for the foreseeable future."
  • Volvo had previously marketed the program as a way to attract younger, first-time Volvo customers, with 80% of subscribers being new to the brand.
  • Existing subscribers can complete their terms and receive a credit toward a new Volvo purchase or lease.
  • The decision allows Volvo to focus on its core offerings and future product introductions.
  • Spokesperson Russell Datz stated, “This allows for concentrated focus on our core customer offers and the coming introduction of new products.”

• Uber and Waymo are taking their autonomous ride-hailing partnership to new cities, Austin and Atlanta, with a rollout expected early next year. This marks an expansion of their driverless car services beyond Phoenix.
  • Uber will dispatch Waymo's all-electric Jaguar I-PACE vehicles in the new cities with the fleet set to grow to "hundreds" of vehicles over time.
  • Shares of Uber rose 5%, and Alphabet's stock increased by 2% following the news.
  • This comes amid increased regulatory scrutiny of self-driving technology after several crashes.
  • "The expansion reflects Uber's ongoing commitment to EVs and autonomous tech partnerships,” Uber shared in the release.

• Roblox has teamed up with Shopify to allow physical products to be sold in its metaverse, marking Roblox's first major e-commerce integration.
  • The partnership enables developers and brands on Shopify to sell physical items directly within Roblox games.
  • The pilot program starts this year, with a full launch expected by early 2025.
  • The collaboration builds on Roblox’s past shopping experiments with brands like E.l.f. Cosmetics and Walmart.
  • Shopify highlighted the importance of this integration for Gen Z entrepreneurs, stating, Commerce happens everywhere.
  • Roblox aims to capture 10% of global gaming content revenue, with plans for future e-commerce integrations across various platforms.

Hosts: Paul J Daly and Kyle Mountsier

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Today, Nathan, Chris and Jordan take over the show to talk about how a Cumming, Georgia dealership honored their first responders on 9/11 by feeding them lunch and giving the community an opportunity to get involved!

Hosts: Paul J Daly and Kyle Mountsier

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Is it already the end of another week? We’re looking back this morning as we look at buy/sell activity from the first half of the year, reflect on the legacy of Ford Pro CEO Ted Cannis, and dig into how discretionary spending is on the rise.

• The first half of 2024 has shattered records in the dealership buy/sell market. With 204 dealership transactions completed and 381 franchises sold, this is nearly double pre-pandemic levels. So, what’s fueling this surge?
  • Blue sky values are up 74% from pre-pandemic, driving sellers to cash out.
  • Despite a 35% drop in average earnings, consolidation continues strong as multi-dealership sales (55 transactions) account for 27% of the market.
  • Public dealer groups have $7.4B in capital, driving the frenzy.
  • Shout out to all of our friends at Lithia & Driveway, Morgan Auto Group, Ciocca Automotive, Ourisman Automotive Group, Nucar Family of Dealerships, Hudson Automotive Group, Premier Truck Group, just to name a few of the many auto groups who have gained new partners this year.
  • A Kerrigan Advisors report reveals, "This unprecedented market activity highlights the industry's ongoing transformation."

• Ted Cannis, CEO of Ford Pro and key architect of Ford's commercial vehicle division's success, is set to retire at the end of September. His leadership helped Ford Pro become a $70 billion business within just a few years.
  • Cannis led development of the Mustang Mach-E and had key roles in Ford's overseas operations.
  • Ford Blue President Andrew Frick will serve as interim Ford Pro CEO while a replacement is sought.
  • Ford Pro’s earnings forecast was raised by $1 billion, expected to reach $9-$10 billion for 2024.
  • CEO Jim Farley praised Cannis’ role in driving Ford Pro’s success and technological growth.
  • Cannis emphasized Ford Pro’s unmatched scale, service, and dealer network, saying "Leading Ford Pro has been the most thrilling chapter of my career, and I’m excited to see its continued growth."
• Despite continued economic uncertainty and consumer caution, discretionary spending is beginning to show signs of recovery in certain sectors. While overall non-discretionary spending remains strong, discretionary categories like apparel, home goods, and electronics are seeing early signs of a rebound.
  • A Deloitte survey found that discretionary spending was down 18.6% from 2021, while non-discretionary spending rose by 3.3%.
  • Discounters like Dollar General and Ross Stores report that their customers remain focused on necessities, with discretionary spending still soft.
  • However, some categories, including apparel and home improvement, are seeing renewed consumer interest ahead of the holiday season.
  • Target reported a 9% jump in beauty sales during Q2, and Best Buy saw a 6% year-over-year increase in computer and tablet sales.
  • KPMG’s Duleep Rodrigo highlighted positive spending trends in areas like tr

Hosts: Paul J Daly and Kyle Mountsier

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As we’ve passed the halfway point of the week, we’ve got Michael Cirillo in the studio to discuss GM and Hyundai’s new partnership, how Stellantis and its dealers are in a little bit of a tiff, and a new study that says consumers know exactly what they’re doing when they accept website tracking cookies.

Show Notes with links:

• General Motors and Hyundai Motor Co. have announced a partnership aimed at exploring collaboration in a variety of technological and production areas. With the increasing demand for efficiency and innovation in the automotive industry, both companies are looking to scale up operations and reduce costs.
  • The collaboration includes vehicle development and clean-energy technologies, such as electric and hydrogen powertrains.
  • Both companies will explore co-development opportunities in passenger and commercial vehicles, as well as internal combustion engines.
  • They will also review joint sourcing opportunities in battery materials, steel, and more to reduce costs and improve efficiencies.
  • GM and Hyundai’s combined sales of over 10 million vehicles annually could rival giants like Toyota and Volkswagen in scale.
  • Hyundai Executive Chair Euisun Chung emphasized the potential to enhance competitiveness: “This partnership will enable Hyundai Motor and GM to evaluate opportunities to enhance competitiveness... through our combined expertise and innovative technologies.”
• Stellantis announced a 21% increase in August sales and dealer inventory falling by 10% over the last 2 months. Despite these gains, the automaker's U.S. dealers have expressed dissatisfaction with CEO Carlos Tavares.
  • The Stellantis National Dealer Council claimed Tavares' "short-term decision making" hurt brands like Jeep, Ram, and Chrysler and urged Stellantis to spend more on clearing outdated inventory, citing declines in U.S. sales.
  • They stated in a letter, “For over two years now, the US Stellantis National Dealer Council has been sounding this alarm to your US executive team, warning them that the course you had set for Stellantis was going to be a disaster… and now that disaster has arrived.”
  • Stellantis responded to the letter: “We don’t believe personal attacks are the most effective way to solve problems.”
• A new survey shows that American consumers are becoming more aware of online data collection practices, pushing retailers to reconsider how they handle privacy.
  • Over 50% of U.S. shoppers know what it means to “accept cookies” online.
  • The vast majority of consumers typically accept cookies, with younger shoppers (18-34) more likely at 79%.
  • The survey shows that online shoppers often accept cookies for enhanced user experiences, full website features with session tracking, and site personalization.
  • “The results highlight growing aw

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Today, we pause and reflect on the events of 9/11/2001. No crisis can win.

It’s Wednesday and DG is back for round two. We’re talking about how Ally Financial is dealing with consumer credit challenges, how GM is drawing a line in the sand for its salaried employees and busting the EV slowdown myth.

Show Notes with links:

• Ally Financial is grappling with growing credit challenges as high inflation impacts borrowers, resulting in increased delinquencies. Shares plummeted 17.62% on Sept. 10, signaling the pressure the lender faces
  • Delinquencies in Ally’s retail auto sector increased by 20 basis points in July and August compared to Ally’s expectations, and net charge-offs (unrecoverable debts) increased by 10 basis points during the same period.
  • Borrowers are also cutting back on loans amidst high interest rates.
  • Ally has sold its lending business to Synchrony Financial to address its credit issue.
  • CFO Russell Hutchinson specifically mentioned that the number of borrowers in the 61+ day delinquency category has become a point of concern, with more underperformance expected in this bucket

• General Motors is intensifying its push toward an all-electric future, making it clear that salaried employees must align with its EV vision or move on. A series of organizational changes this year underscores GM’s dedication to selling only electric vehicles by 2035.
  • GM is downsizing its global headquarters to streamline operations and create cost efficiencies.
  • As we covered early this year, the automaker revised how it evaluates employee performance, with a stronger focus on productivity and innovation.
  • New bonus metrics now align more closely with the company's EV goals, emphasizing those who contribute to the transition.
  • Remote work privileges have been reduced for some employees to promote better in-office collaboration and push productivity.
  • The goal is to become more agile and tech-focused, modeled after top-performing companies in the technology sector.
• Despite misleading headlines claiming otherwise, EV sales continue to rise globally, though growth percentages have naturally slowed as the market expands. Media reports about an EV sales “slump” overlook key data points.
  • Misinformation has led some to believe EV sales are dropping, but the reality shows the opposite: gas-powered car sales are actually declining.
  • Despite declines from major automakers like GM, VW, and Tesla, overall EV sales in the U.S. still increased by 7% in Q1, reflecting continued growth in the market.
  • EV sales growth rates have slowed as expected but remain positive globally, rising about 10% in advanced economies,
  • From the Electrek article, “Each journalist who has spent the last year perpetuating the myth of an EV sales slowdown could have read any one of our articles, or googled a single number showing year-over-year EV sales in any region or for most countries and most brands, and found that they are still goin

Hosts: Paul J Daly and Kyle Mountsier

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