AutoNation Buys A Chunk of TrueCar, First Release Luxury Data

‍SPEAKERS

Kyle Mountsier, Paul Daly

Paul Daly  00:30

Well, it's Wednesday, November 16. MRC is wrapped wrapped in this is what we do in MRCs. Rap, we sit in this spot, right

Kyle Mountsier  00:39

sit and chill backwards. Like it's been a few days. I know I put mine back because I was like,

Paul Daly  00:47

flipping the switch. But today we have some interesting things to talk about. Because yesterday AutoNation announced that they bought 6.1% of TrueCar. Wow, yeah, they did. They did. They bought that. And we're out whatever. Oh, and we're also going to give you a few insights that have not been released

Kyle Mountsier  01:03

have not been released anywhere. They're in a slide deck that only we've seen. Maybe three other people have seen, including the people that made it

Paul Daly  01:11

a great luxury, brand loyalty. What Tesla's included and what Tesla isn't included, it's gonna be a whole lot of fun. Yeah. All right. I don't know what to do. Because we don't have the music without music. It's okay. Yeah. So yeah, we have we got our cameraman over there. As long as I'm in the Larry's doing the thing. But we're excited to be with you this morning. I mean, we just got done spending three days with the industry in the dirt.

Kyle Mountsier  01:32

In the dirt we did, we recorded a lot of podcasts. So we'll be releasing those over the next week and a half in the dirt with a soda if you're not following it, grab it on your podcast platforms, we got to have a lot of conversations with people that they literally have never been on a podcast before or on stage. And I can say that zero of them bombed it. I know, they were impressed. What's the marketers there the market created where there were some, you know, some owners, some operators and what is what's not lost on me is that there are so many people in automotive, doing these unique, creative, dynamic things in their communities that just the stories have to like get get out some way. And we're excited that we get the opportunity to share those because even in even in a conference where the majority of the stuff is around analytics, we're talking CDP's we got acronyms being thrown everywhere. A couple there is so much happening in communities and with people and dealers are doing the things that we believe impact our communities and are the reason why the franchise retail network is an important network in our like, economic ecosystem. And hear saw that over the last few days.

Paul Daly  02:46

There's nothing like hearing somebody say, and we do this, and we do this in the community. And we do this with our people. And we're like, there's someone actually practicing or moments, somebody would just sit back and we'd be like, it actually exists. It's like a unicorn, I just saw the Sasquatch, we talked about and we wrote books about him. And there he is, yeah, or she is a Sasquatch, Borago. You and I were sitting at a table when a notification came up on one of our phones. And it was a LinkedIn post by Steve Greenfield. And it said AutoNation acquires 6.1%, one or two 6.11 6.1% of TrueCar. And we just looked at each other like, and then the framer Brach, Bryan Kramer was sitting at the table. And we showed him and he looked up and he stopped chewing. This was his face. And I watched his eyes like, just like a processing button. And it's very rare that Brian Kramer doesn't have something to say I know. And I think that was kind of like some of the posts you know, like you, I think you commented on the post. I'm just going to leave that right here. Yeah, just okay. And I said, it's all awkward. Silence fills the room. Yeah. Because I don't know that the industry has any idea what to do with that?

Kyle Mountsier  03:54

Well, and here's what's interesting. And we know a lot of people at auto nation, we actually got to hang out with them this week. To me, that's a that's an interesting play, especially for them to say, hey, look, we're looking at this as emerging technology. And I don't think like the dealer, press release, said writerly. I don't want to Camilla networks test that. Now. We also know a bunch of people at TrueCar. And we know that they are pressing the boundaries in some ways. So I'm interested to see like, what a large organization like that sees in something that has lost a lot of stock value knows publicly traded company, what's the emergent tech that leverages that they can leverage to serve customers, because I'm sure there's some tech in there, that they're able to

Paul Daly  04:37

auto auto nation is moving the needle from a retail standpoint, right thinking like a consumer. I see auto nation as a well known brand. I see TrueCar as a well known brand, right? Because I think from the consumers perspective, it's a lot different for TrueCar than what the dealer's perspective is. So I think when the press release comes out, publicly traded company, they're actually making the pressure least for the public for the

Kyle Mountsier  05:01

public, not for us. Not all of you did.

Paul Daly  05:05

So when they see that I think the general public consumption of that information, what that's going to process is Oh, good to brands that I know and trust working together to make things better. I think that's the public perception. From the Saturday perspective. I think everyone's got the skirt. Yeah. Like, what does that mean? TrueCar has been doing a lot in the last year just to try to get back into being in front of dealers to being at events, you know, doing just a lot of public relations things and letting dealers know, like, Hey, we're here. We're not asking for anything. Right. We're here to serve you. So there's got to be something under the hood that we don't know about.

Kyle Mountsier  05:40

Yeah, I'm sure definitely. Well, speaking of things under the hood that nobody knows about, stop. Oh, this is a great time. Yeah. So one of the things that happened I when we were it was actually Tuesday that we were walking in

Paul Daly  05:53

I tell the story. Yeah, please tell the story. Okay. So we're sitting there in a panel. And you know, what a panel is Brian Pash. Who else was on the panel. It was seemed Greenfield, Brian Pash. And Rusty was right markets for market scan. And they're talking about luxury loyalty. They're talking about Tesla they're talking about the differences between like what what Tessa actually is and worth and they talked about loyalty. And Kyle is next to me

Kyle Mountsier  06:19

was funny because more know the earlier part of the story is Oh, my goodness from cue valet Gino, Gino, Gino Walsh pipes up and says, Hey, I haven't been able to get a straight answer from anyone. Like what's the actual retention? Right? It was a question to the panel from for Tesla, because that's something that we should be looking at as an issue. Like, once people buy one, are they going back? Because we're talking about it like the Holy Grail. Right? Exactly. And nobody kind of knew the answer in the room. There are a couple of people that piped

Paul Daly  06:50

out his phone. He starts texting, like, I'm texting Amber. And he texts ever Daniel from pulk. And s&p global, global Yes, the whole thing together now. Big logo. That's how I remember it. Yeah, big logo. I had to lay it into the thing. It's hard to fit just so you know, this little were to. And so she comes flying

Kyle Mountsier  07:08

in and I was like, give me five minutes. I actually just got some slides. So she comes flying in

Paul Daly  07:12

the room. Five minutes. Literally, Brian Pasha is up there closing out the panel. And Amber's like, give me a second clicking through analyzing the slides. It's like the first time she says she's seen him, Kyle stands out, he's like, I think I have some information might be relevant, we have the loyalty metrics on Tesla versus non Tesla. So I need to set up you can you can talk about what

Kyle Mountsier  07:31

to measure look like this is, is what they've found is they just, they've just done this luxury luxury segment loyalty look. And the luxury segment sees a 45% loyalty, which is much higher than the rest, including Tesla. So everything got in there. What's interesting is so there's a couple interesting facts here is when you remove Tesla from the equation, it's only goes to 43%. So what that means is, is that well, the kicker here is that Tesla's loyalty is 86%.

Paul Daly  08:09

So very high, extremely high, hedged a little she was like about

Kyle Mountsier  08:14

80. But what she said she was like whispering, she was like, it's 86% 86. Right? So what that tells me is that even though you have, like, what's interesting is this massive loyalty to a brand, it's still only a very small subset of consumers that are purchasing that vehicle. Because if it's 86%, you would expect it to swing it a lot more how much attention is being put on that brand, but it only sways at two points. So two points, still a strong you know, the luxury brands are doing a better job at loyalty then your non luxury brands because non luxury is down in the 30s. And so definitely a positive thing there. But shoot, if, if an OEM or a dealership is looking for 5055 60% as a growth metric for loyalty, you're catching up to a brand that right now is sitting at 86%. So they've done a whole lot of things way past just like we have EVs

Paul Daly  09:06

and you think of luxury loyalty. And you think of the average Tesla owner where it's like a third car, or more. We talked about this and the accessibility of EVs as they come out, and what is going to be acceptable or not. What drives low and Tesla, how can you have loyalty to a brand or a vehicle where if it breaks, you could be without it for 60 days if you get in a car x so you could be out without it for three months? Well, what do you do? Well, the average Tesla drivers is like, well, I just drive the Mercedes. Right? Yeah, just drive the Mercedes for a few months. So it's not no, that's crazy. I

Kyle Mountsier  09:37

wonder I would be interested to see the crossover in Tesla owners and alternate luxury owners, right. And like what they do with their alternate luxury as as opposed to that's that's a really interesting point. Those questions we will and our loyal audience will find

Paul Daly  09:54

just for you, just for you. So those conversations were surrounding Tesla and like for everyone that looks at it. As like we progress through this more and more thoughtfulness more and more data as allowing us to kind of dissect that and see what the real brand value is, what the real loyalty is, what the real value proposition is, you know, whether it's like a sexy brand like Tesla, or if it's the Eevee segment, and the rest of the world, right, so we're pulling that apart. So we wanted to share some of those insights with you because they're fresh hot off the press. They've probably never even been written down anywhere yet. Yeah, I have a feeling they're going to be soon, absolutely being talked about right now. And so we're gonna be bringing you more of those interviews that we had, we probably have 15 we got from people that are in the dirt. And, man, it's just going to be the wind down a process. We're going

Kyle Mountsier  10:41

to code for both of us. We are there we're gonna be alright Sarah 30. And it's not this what's really 30 nationals is crazy. So okay, we're going back to it. But hey, thanks for hanging out with us. While we've been here all week, we can't wait to share with you the conversations and our encouragement to you is get in find that find what's working, be in your community and share that out shift the perception of Otto with us we need to tell a better story. We hope you'll join us in telling

‍

‍