Store Count Down-Throughput Up, AI Credit Misquotes, Cybertruck Sale Rebellion

Paul J Daly: 0:18

What is up everybody? It is a Tuesday. It's Tuesday, March 5, we have the one and only Jordan Cox in the studio today to join me on the show because cars flying around somewhere we're talking about store count AI credit and a cyber truck.

‍Jordan Cox: 0:31

There we go.

Paul J Daly: 0:33

Look at the cyber truck, not the cyber truck umbrella statement, but a specific cybertruck that we talked about last week. We have a little bit of a follow up. Georgia. Good morning.

Jordan Cox: 0:43

Good morning, the cybertruck Everybody's talking about right.

Paul J Daly: 0:45

It is it isn't and we're talking about it too. Yeah, get it in the things. There's there's a couple things going on right now. People are moving all over the country, which is one of the reasons I love this industry, because everybody's so mobile. I don't know, did you ever think you would travel? And like be in an industry that was mobile? When you were a kid like, Well, maybe you did? Because maybe you did? Because I know your parents?

Jordan Cox: 1:09

us like the one person that the answer is probably yes. Right. Like,

Paul J Daly: 1:12

I didn't know if there was any other options. What I did tell everybody what your parents did, like what did you grow up? Okay,

Jordan Cox: 1:18

so it's funny like every time we talked about this, it's it's my dad did catering for Christian music festivals and Christian artists in the 90s. So I kind of grew up in that industry. And he just had a lot of connections if you talk about anyone that was big in the 90s that was a Christian music artists. My dad probably knew them and maybe probably had their pager number.

Paul J Daly: 1:38

Oh my gosh, the pager number. Got to do a piece about pager numbers at some point. That's right. Yeah. And there's probably pictures of you all over the place with the with those folks. So Jordan is used to traveling around, work in live events, meeting people. So it's kind of like, you know, the glove fits like the handle when you're with the soda. That's right. Hey, speaking of like events where people come together, we have 70 days until a soda in Baltimore, south of Baltimore, North Annapolis, May 15 and 16th of the main two days of the reception on the 14th. You can still get early bird tickets, that window is about to close. We have over 50 speakers in there, no slouches on this list, just go to ASOTU con.com. And check out the list. It's growing. We're releasing new new ones every day. And so you'll see those speakers obviously, our main keynote is Wilga Dara, The New York Times bestselling author of unreasonable hospitality, had the best restaurant in the world. And now he's sharing those insights. The book is amazing. I'm seeing it all over LinkedIn now. people reading it, talking about it, commenting on it, I guarantee you, if you read like five pages of this book, you will immediately be hooked and we're gonna have will there so you should come meet him at a soda con. I mean, I don't know. I don't know what conversation is going to have. We're actually we're going to be in New York City with him in a few weeks from now, because we're going to do it. That's cool. Yeah, we're gonna do a little pre show podcast. We're going. I'm gonna try to get in remember, do you remember that Lexus, Toyota of Manhattan that we covered? I don't know. It was a while ago, they redeveloped the building. It's got retail space. It's got the dealerships in it. It's got a roof deck. It's right. I think it's in Hell's Kitchen. Actually. Do you remember that story?

Jordan Cox: 3:16

So it is in like, downtown New York City for what people think.

Paul J Daly: 3:19

Right? Oh, yeah. Oh, yeah. No, it's city city. Yeah, yeah, exactly.

Jordan Cox: 3:23

So development would be really cool. Just around that. Yeah.

Paul J Daly: 3:27

So I mean, I think positioning the podcast at that store, like we want to, like bring hospitality and automotive together. We're working on it. Hey, if you work at that store, you know somebody who does connect us up? All right, you can just do it via LinkedIn. Or you can email crew, CR ew at ASOTU.com. But we hope you join us at ASOTU CON because it is going to be a wild time of insights, learning, sharing secrets, sharing best practices. I think we're just locked that we're going to do a panel on mobile service. It's a question that a lot of people have. We're gonna have Jeremy Stephens from Bozar. At Roberts's team, who has has this sucker dialed in. So if you want to learn or you're not great at it right now you want to get better. That's one little thing that we're going to be talking about amongst a bunch of other things. There's some agenda items up you can go click on the agenda. We're posting those as we get scheduled lock. So yeah, get your tickets now, Early Bird save some money. We're also having a well can breakfast meet up on the 15th? Well, Ken is having a breakfast event before the show actually starts. So if you're a wolf can member, make sure you reach out to your people, get your tickets, get your discounts get there, you can have your event empty right into the bigger event, and then spend the next couple of days with people that that you really love very much. We're having a live podcast stage by effective. I mean, we're just going on and on this life podcast stage. We're going to be doing a solo con sessions, which are some of my favorite content to come out of asoto these 20 minute quick shot interviews and we're going to be actually doing it. This this podcast collaboration, you can sit there you can listen, you can listen to them later. It's just going to be a lot of fun. So I hope you enjoy that as well. All right, let's talk about some news. Oh, we have one more thing. There's a new episode of the wheelhouse dropping.

Jordan Cox: 5:07

Ooh wheelhouse love it.

Paul J Daly: 5:08

So we'll wheelhouse is kind of around the horn has hosted by Daniel go ver who is one of my favorite hosts to listen to because he is so funny. And he's quick witted. And he gets through the hard questions. You know, Jordan,

Jordan Cox: 5:23

he dives in deep on those doesn't he? He does. He

Paul J Daly: 5:26

goes really deep. And we always have a panel of experts and just kind of kicking kicking topics around. It's so much fun to watch because there's timers involved there's buzzard, Bob, there's sarcasm involved. And you'll learn a lot while you're watching it as well. So that's going to be live streaming today at one o'clock, our LinkedIn page, YouTube and all the places. So hey, let's get into some news. Hey, let's do it. I know Kyle's out. And I'm like going on and on today. So 2023, we saw a slight decrease in new car dealerships the number went down but a notable rise in sales per franchise, underscoring the difference between efficiency and high demand. Note just for the sake of this article, the count of vehicles sold and dealerships and all those things excludes brands like bright drop Fisker Karma, lucid, rivian, Tesla, and vinfast. So none of those numbers are in what we're talking about new car used. The US new car dealership count dropped to 18,133 and 2023, while the average sales per store franchise rate rose 14%. So it was up to 483 vehicles down from up from 425, GM and Ford led the charge and reducing the number of franchise stores contributing to an overall 3.6% Decrease in stores. Notably, Buick nearly have their number of stores so cut it in half from 1958, all the way down to 1052. But they doubled their throughput to 111. Cut the stores in half, and doubled the throughput per store that math kind of adds up. So the summary of that is their sale selling the same amount of cars was half the dealerships, Lincoln cut 100 of its US franchises, we know some of those bringing the total count of 535 and has plans to cut another 100 stores this year, Hyundai and Genesis are expanding their franchise stores. And you know, here's a quote from a Hyundai spokesperson saying we are well on our way to 75% plus of our network upgrading their facilities by 2025. Meaning people less stores more intentionality is what it sounds like to me, Jordan.

Jordan Cox: 7:28

Oh, for sure. It's gonna be interesting to see where Genesis takes things. So I've got a friend that has the only one of the first standalone Genesis stores in Connecticut. Okay, and does that New England there? That is New England just had that we've

Paul J Daly: 7:42

just had this big debate what's doing and what's not, I'm saying? So your friend had one of the first Genesis standalone stores and she's

Jordan Cox: 7:49

that one of the first and they they're really putting this effort behind elevating that brand as a whole. In fact, so Jen Suzuki even said this on the the wheelhouse episode recently was that no one really talks about a Genesis and says like, I drive a Genesis or I drive one or I want to drive one like that. But I think there's gonna be a rebirth of that brain as a whole once they go through and establish that and then they're the kind of sticks out to me is the Buick dealerships that went from about 2009 to 1000. That's because that there were 1000 that were bought back by GM because the operators didn't want to invest in Eevee because Buick is gonna go all in by 2030. For evey, it's so it's gonna be really interesting to see those few brands that you pointed out to see where they go in the future.

Paul J Daly: 8:31

It will especially when you overlay the context of what's happening with Evie demand. That's right and we're seeing so many people discuss the merit of actual demand versus false demand and these brands that have committed all in on EVs like you're looking at a brand like Volvo who has done that but they're a different niche smaller brand you look at Buick them committing to all Evie you see what happens they're very very interesting will be to see what happens there. Yeah, so I guess we'll just have to wait and see but you know, more efficiency is good. In my opinion, right it it doesn't get do away with competition. I think it increases intentionality.

Jordan Cox: 9:12

That's right. Efficiency is a very big thing, isn't it? It is speaking of

Paul J Daly: 9:15

efficiency. I saw you bumped at that one. He looked at me I looked at him. He bumped the volleyball right over the net. It was like this one's for you, Paul, staggering 90% of dealers and lenders reporting frustrations with AI in digital lending solutions claiming it often results in inaccurate online payment quotes. A poll by eland solution has revealed a majority feel that AI is approach to evaluating consumer credit worthiness doesn't align with the reality of customer negotiations. And what happens is it's leading to mismatch payment terms. We all know that's not good. Here's a quote from Elan CEO Pete McKee mechanist into automotive news. He said lenders aren't Even pricing to those tears any longer. Some are but most of your major ones have a dynamic pricing model tied to the unique customer and their vehicle choice. So despite AI sophistication 76% of initial digital retail close, reportedly failed to match final lender decisions, highlighting this disconnection the sentiments backed by the concern that AI decisioning models, while they're advanced, lack the nuance of human judgment, leading to customer dissatisfaction, and potentially harm the buying experience. one more quote, this is from Richard Herod, managing partner of white bear, Mitsubishi and White Bear Lake Minnesota, underscoring the challenge of relying on customer provided data, he says, in a self identification world, rarely, people are correct. So basically, what's the saying to us, Jordan?

Jordan Cox: 10:47

It's saying it's the wild west for lending payments, all that can you imagine when lenders actually start using AI to look at credit profiles, I think that's where it's going. And even if you look deeper in the article, like that's really what they're talking about is as one caveat of it. But anyone who spent more than two days in finance knows there's anti discrimination laws, and it's gonna be really interesting when something goes wrong. And then all of a sudden, a dealer or lender is on the hook, because of a like a mismatch for credit profile, which What's your take on it?

Paul J Daly: 11:17

I fully agree with you. And like, when when the second quote we there was talking about, customers are rarely correct, when they give information like the AI is generating a profile based on customer supplied answers, and AI is making its calculations. And you know, what happens, everyone's gonna see the best. Like, it happens with trade, too, right? Everyone's like, my car is in excellent condition. I know only 3% of all cars of this type are in excellent condition, but mine is one of them. Same thing goes true for when it comes to credit score, everyone's naturally going to be optimistic on that. And if AI, you have this confidence that these terms are going to be produced, and the customer is going to have an idea of what their payment is. And then you get to the store or human gets involved and the payment goes up, it is just going to continue to perpetuate the stigma that people have about this industry, that it's full of bait and switch that everyone's trying to rip you off. And this is definitely something that is going to need to be reeled in. And I think it will be right but it

Jordan Cox: 12:17

will be but in the meantime, it is not anything's happening. Yeah. And that it shows you to what people think of the reliability of it. Because the the stats that we're using this article, it's qualitative data, it's asking someone their sentiment of it like, hey, dealer, what do you think of this? Are you is this reliable information? Same thing with consumers is this reliable? So right now, everybody is so weary of that it's, again, it's the Wild West, it's gotta get dialed in, it's got to get figured out. And then you know, lenders right now, they used to give you a rate sheet, when they were rate changes, there are less lenders doing that, because they're moving more towards a dynamic pricing model for interest rates, credit profiles, all that. So it's gonna be really interesting where things like finalize, sure, as

Paul J Daly: 12:58

well speaking of the Wild West talking about a cyber truck, I have a feeling that if I ever owned a drove in a cyber truck, it'd be really awesome to do it in a cowboy hat. But the Porsche dealer that turned heads last week by acquiring that cyber truck for$244,000 at a Mannheim auction, now less than a week later, has it listed for 289 999. That is the price folks. So Porsche of South Orlando acquired this truck for 244 from the seller give me the VIN, a lot of people know who that is. And now has it listed for $50,000. More this defying obviously Tesla's resale restrictions, which threatened a$50,000 penalty for early resales. I don't know if that applies to the original owner or not. But this is obviously the first time or the third time, this cyber truck is for sale, the original owner sold it to give me the VIN sold it to Porsche Orlando, the cyber truck only has it has under 100 miles on the odometer. And basically, John Clay Wolf, CEO of give me the VIN said Tesla's threat may actually have helped inflate the price of the trucks.

Jordan Cox: 14:10

Interesting.

Paul J Daly: 14:11

I mean, maybe, I mean, there's a very clear statement that's running through my head on this. What's that? It was gonna do with dealers are gonna do Yeah, right. And it's, and I mean, you know, like, you have a rare vehicle, of course, you're gonna mark it up, especially when it's getting this much attention. Yeah.

Jordan Cox: 14:28

And consumer sentiment to like, if you have one, if you if you own one, of course, you're going to look at and say, Okay, how much can you resell it for? Or worst case, maybe there really was a situation where they wanted to resell it. That was somewhat reasonable instead of a crazy one. So that's kind of what goes through my head too. Even on like the the cybertruck. So it's a $50,000 penalty for early resales. Yeah, but how do they how do they get that back?

Paul J Daly: 14:52

It's very hard to enforce. That's what I thought I feel. And I also feel like the only one that entered into that contract, if it is terms and conditions on the sale contract is the original buyer. Yeah, right like no one else is liable for that no one else signed that contract. They bought it at Manheim auction. So it'll be interesting to see when this thing sells what it sells for I think you could end up selling really fast. I mean, it's Orlando, obviously. It's right. There's some folks in Orlando who who are into a little showmanship, you know, so just a little just a tad I'm actually going to be in Orlando soon. I'm gonna DM the dealership to see if I can go it'd be great to do like an on site. Follow up again. If you have a connection to Porsche Orlando, just DM me on LinkedIn, Paul J. Daly and like, connect the dots because I promise I will bring a microphone and we will we will show you this actual Porsche Orlando. Oh, that's great. Jordan. Thanks for sitting in today. It's always good. You always have me smiling before I leave. Oh man, Zoom calls with you. I hope everyone else was smiling here. Whatever you're doing go care about some people. Go sell some cars, maybe even buy a cyber truck.

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