AppleCar Sendoff, BYD Ditches US Market, Market Pricing

Paul J Daly: 0:16

Hey, it's Tuesday. Tomorrow's our bonus day today. Well, what about last Wednesday? Today's Wednesday. There's so much great things to talk to so many great things. I'm all messed up mama stuff.‍

Kyle Mountsier: 0:28

Okay, I was just excited fam.

Paul J Daly: 0:31

Like this to talk about every single day,

Unknown: 0:34

like every day would feel like whatever Christmas,

Paul J Daly: 0:38

I was talking. I was talking to my son miles who was driving in to work with me this morning. And we were just talking about being around long enough to see some cycles. Right, right. Yeah,

Kyle Mountsier: 0:51

to see like announcements and changes and all of that type of stuff. It's cool.

Paul J Daly: 0:55

All the dreams and hopes that work and don't work and all the panic that is like, raised up and all the conversations that happens and like you, I guess it's one thing as as people get older, right, they start to learn this. I just started thinking about through all the the cycles that have gone in the auto industry since I've been paying attention, right? Like even things like autonomous driving, which is kind of recent history. That's a word. And

Kyle Mountsier: 1:20

we haven't said that. Yeah, like, well, we're no longer this thing. Remember this thing? The Metaverse where does that get? Wait? He's Oh, crypto

Paul J Daly: 1:31

Kryptos. A thing if you've done a crypto currency is probably gonna still be a thing. But NF T's right? We don't call them that anymore. Because it's like a dirty word. We call them digital collectibles now, if you even care, but yeah, autonomous driving, no one's going to own a car anymore. Because everyone's just going to share these cars in this utopic world where people don't care about germs or dirt.

Kyle Mountsier: 1:51

Road 2019 NADA, that was the jam. All

Paul J Daly: 1:55

that was talked about. Hey, good morning to everyone that joins in the live stream, Adrian hits the first comment Brian are taken with a close second. I will say if you're just listening to the show, know that we do live stream video version every single morning on LinkedIn, Facebook, Twitter, or x.

Kyle Mountsier: 2:08

If you and YouTube, you want to make fun of our faces, you can

Paul J Daly: 2:12

join the Club. Hey, speaking of joining the club, we want you all to be at a soda Con this year. Let's just say we'll just give it to you straight. May 15 and 16th. welcome reception on the 14th a little bit of extra thing on the 17th but primarily 1516. We're going to be in Baltimore with the asoto community, hundreds of us together. Well Ken is doing a special event. The Maryland auto dealers association is having their annual meeting. You all can't go to that unless you're in the Maryland auto dealer Association, by the way. But we're going to have a soda con we have 50 plus speakers. We're working through session titles and content. Now industry partners are lining up and getting their plans ready. We have we'll get Dara New York Times bestselling author of unreasonable hospitality who's really hitting hitting the heat seeking charts. Now he was on Jimmy Fallon

Kyle Mountsier: 2:58

last week everybody is talking about we'll get there right now. We're so excited.

Paul J Daly: 3:03

Yeah, we're going to actually be going to New York City, probably within the next month to do a little live podcasting with will. But I'll always say go to ASOTU con.com. To start looking at the speaker lineup we have we're going to be posting sessions and topics very soon. We've really want you to be there and it's still early bird pricing. Well, what else can we tell you? I know it's auto industry. It's

Kyle Mountsier: 3:22

tough on it. Here's here's a segue for you ready?

Paul J Daly: 3:24

I gotta prep you for I got the button ready to go thinking of the Big Apple that is too good for the first segue. All right, well, CarPlay may be the best thing I phone users can hope for in their car as Apple is officially shutting down. Its Evie program, Project Titan. They're going to be reallocating resources to developing. I know it's a big one. That's a big one. Well, first of all for this, I really want. They're going to be allocating resources develop big surprise here. general AI capabilities. Oh, well, yeah, Project Titan is winding down. As you know, they're moving some software people in the AI some hardware people, we're probably going to be facing some layoffs. But I mean, they've invested billions in this. And they acknowledged the complex challenges of the automotive sector. And this could be an I told you so moment for all the people who make cars and like I don't think it's as easy as you think it is. Here's a quote from Dan Morgan from Synovus trust. He says Apple canceling this project is a sigh of relief for us talking about like the burden it was putting on the company's performance and the likelihood of it making Jeff Schuester global vice president of automotive research consulting global data said they Apple certainly have the most downside had the most downside. Tesla benefits big time from being a status vehicle and Apple definitely would be a status vehicle and what so you know, Tesla obviously, benefiting this Elon Musk and typical Elon Musk form on Tuesday sent a post on x with a saluting emoji and a cigarette. It was it

Kyle Mountsier: 5:06

was sublime I think we have it right here. I don't know if Nathan Do we have the post sitting look at look at that. It's just just a little retweet just a little salute and a cigarette saying, hey, well smoke one for you see a buy? Yeah. understands. He understands the challenges that it takes to but I think that's a respectful salute, right? It's like, hey, kudos to you for trying we know that it's hard. You know, and and I wonder because I'm sure from a technology standpoint, they had they had it like on a on a roadmap, right? Oh, yeah. And when you think about the complexities of shipment delivery, it's a lot different than shipping little boxes this big or this big in massive containers. It's like how do we how do we do the logistics of being an automaker, which is a business in itself, not just a small project within a larger business. So I'm hopeful that they not only develop more of the AI capabilities within their own suite of products, but also like in connected services like car play with some of these manufacturers. That's Yes, I see them as similar to like, hey, what Nvidia has has been able to do in basically having themselves tethered to everything, right, Apple making a really big play now I watch for it make making a really big play for a lot of integration with legacy and net new OEMs. Like, there's no doubt in my mind that they still want to be in the car because the car has so much data about where you go what you do, man I really

Paul J Daly: 6:46

have there in the Gosh, I've you know, they've developed so much tech, like so much and that they can't just fall to the wayside right sharing that and plus people being laid off like there's a ton of talent on the street all of a sudden, so like, you know what, who's gonna pick that was me for me Kia, certainly all of them. And I felt compelled to pull these two books off my shelf. Oh, I got an Elan. Oh,

Kyle Mountsier: 7:10

right next to each other. I know Walter Isaacson Perry, a

Paul J Daly: 7:14

couple pages and these things do pages but the reality is like you and I huge Apple fans want to see him when I wanted to see an Apple car coming to market but I think it's indicative also of the fact that like, hey, when only you know eight to 10% of the market is even driving EVs like the upside gets slimmer and slimmer and slimmer as reality starts to set in speaking reality setting in segway.

Kyle Mountsier: 7:37

I've been hammered on

Paul J Daly: 7:39

an asterix on this one but Chinese Evie maker BYD has decided against launching its Evie in the EVs in the US, citing the markets, complexity, and political entanglements as major deterrence as the company focus turns to strengthening its presence in Mexico as they build a new facility in Mexico. Stella li BYD America CEO highlights the markets intricate landscape. And why it's deterring the Chinese automakers attempted entry. It follows speculation that the Mexican facility is a gateway into the US obviously the auto industry. We've had a lot of conversation about that in the last week. And Lee Lee went on to criticize the US is slower electrification pace, and the confusing political climate contrasting sharply with Chinese robust Evie adoption and clear policies. Here's the quote, If you're not investing for electric cars, you are out you will die. You have no future. Yo, let's not mince words here. Yes, shots fired no people for us least emphasizing the stark difference in the Eevee market dynamics between the US and China. Well,

Kyle Mountsier: 8:45

here's what's interesting is like the confusing political climate being a reason for an automaker to or not to enter the US. That's a wild statement for for them to make. And it's clear, they're not slowing down anywhere else. Right. I don't

Paul J Daly: 9:00

I don't think it's confusing. I think that was the word that was used. I think it was actually very clear and that the US values the health and stability of its major economic producers. Yep. Therefore will effort to, you know, make sure we have a level playing field, especially when currency manipulation is happening. And like, they're just say, hey, like we need we need fair trade, not just free trade. And so confusing is a great word. I mean, this is a great I think it's a great play by BYD to just say, No, we're not coming to the US. But we need to set up this really big factory in Mexico while we work. I think they understand that the sentiment right now is against

Kyle Mountsier: 9:39

them. Yeah. And I don't I think like you said, you started off with let's put an asterix on the story because I think this thing is still yet to unfold. There's probably some political there's some maneuvering going on here because it's clear like people are going to want these cars as they see them across the world. And there's going to be a demand pent up for them in some way. My guess is, so we'll see what that Mexican facility really, really is meant for. Because, you know, that's whatever, that's where everybody puts factories when they want their cars to go to the US. You know what I'm

Paul J Daly: 10:15

speaking of? I don't know. I'm just gonna say this is like kind of the trifecta. We usually do like a retail store. But this was we had to put this through hat and go with this. So Kyle just roll us in.

Kyle Mountsier: 10:25

Yeah, so in the first of possibly many about faces by OEMs Jaguar Land Rover is completely abandoning its agency model plans in the UK, which as an ops to maintain its traditional franchise sales model amidst retail partner consultation. So they're backing away from not just the agency model, but also fixed price, no haggle haggle sales strategy, opting instead to stick with the current dealership model. Rather than moving to direct sales. They initially planned to basically go all through JL ours direct control, both online and in the showroom. But now they're aiming to go back and adopt that traditional model. Darren Edwards, CEO of CIT sytner group in the UK says the franchise model is tried is a tried and trusted model was and he was applauding the fact that JLR was willing to be flexible and change their path. And and I think that the the, the trigger point for here for me here was that just was JLR. Basically saying, hey, look, we recognize that the franchise model is actually client centric, in a retail experience, and can be even more, even while maintaining that franchise, franchise or franchisee relationship. We can get the experience out of it that we think we need. So,

Paul J Daly: 11:48

okay, this one, this is third, right? The first one apple is going to make a car, it's going to be big trouble. Okay. For Frederick. Well, no. BYD is going to flood the market with cheap Chinese EVs, and everyone is going to be in trouble. Nope. The agency model is going to eat our lunch takeover. And we all need to find something else to do. Nope. Right. Just think about all the things dealers are the most resilient entrepreneurs I've ever seen in my life, no doubt. And I think the the discourse, right because they're, you know, there's a there's a counter, like a counterpoint discourse that happens in public what say, Well, you don't limit our choices. You know, we want to be able to buy it we ever, ever we want to buy when we want to buy it. We agree with that. However, like the more you get into it, the more we see on the ground level, what actually happens in the impact that the franchise dealership model has, like Jaguar Land Rover understands it now, like as a business in a business sense. We can not deliver the product serve customers the way they need to be served, if we try to control everything from the top.

Kyle Mountsier: 12:47

Yeah, and my guess is, is this is like, a lot of it gets talked about from the sales model side of things. But my guess is that if you wreck the sales model, you start to realize how important the after sales model is at the franchise level. Yeah, and if you don't give the franchise the opportunity to, to curate both experiences in line with each other, the after sales model actually takes the bigger hit long term for you as a brand. And I think that's probably what some of these OEMs are starting to recognize is Hey, Master sales, staying close to the customer on a, you know, monthly weekly daily basis is actually a lot harder than just like maybe doing an online transaction, good

Paul J Daly: 13:33

insight, good insight. So whatever it is, if you are in the retail auto industry, which you most likely are if you're watching this, Today's a day where I think all of these things should motivate us to double down on our efforts to serve people double down on our efforts to give the customer what they want. And guess what, everybody will stand up and fight for you. If you do that. Get out there and fight we got today and a bonus day tomorrow. So we'll see you tomorrow.

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