Building is Booming, New NADA Chair, Auto Ventures Predictions, Text to shop

January 2, 2023
It’s ‘go time’ for 2023 as we talk about the all-time boom in factory builds and say hello to the new NADA Chair. We also review the Automotive Ventures top 10 predictions of 2022 and 2023, as well as talk about a newly launched text-to-shop feature from Walmart.
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Manufacturing Boom The USA industry has seen the biggest boom in auto-factory building in decades and is being driven by car makers' shift towards EVs, with $70 billion earmarked for such projects. 

  • Two-thirds of this investment is going towards sites in the US South (GA, TN, KY) moving away from the Great Lakes region
  • Avg of 2016-2020 was $5.52B
  • The global auto industry plans to spend a total of $526 billion on EVs by 2026.
  • “You have to invest now, or you’re going to be left behind in the transition,” said John Lawler, chief financial officer for Ford Motor Co. Goes on to say “The greater risk we see is that if you hold back, if you don’t make the investments,” he said. “We can’t put the future on pause.”

Geoffrey Pohanka, 65, who currently serves as NADA vice chairman, will succeed Mike Alford to be the 2023 NADA Chair. Pohanka is a third-generation dealer who serves as chairman of the Pohanka Automotive Group in Capitol Heights, Md.

  • “As someone who grew up in the car business and with my family’s involvement with NADA for generations, I am honored to take the reins as the next NADA chairman,” said Pohanka. “The auto industry is a rewarding and exciting business, and I’m fortunate to be a part of it. NADA has an amazing board and an amazing staff. Together, we can create a stronger environment for the industry, to help create a vibrant economy and stronger communities.”
  • Vice Chair: Gary Gilchrist, 69, who represents new-car dealers in Washington state and currently serves as chairman of NADA’s Dealership Operation Committee

Auto Ventures top 10 predictions 2022 and 2023

  • Last year included
  • Lithia becoming Largest, changes name to Driveway B-
  • Year of the connected car A
  • Year of EV charging infrastructure A
  • Dealers getting into vertical takeoff/landing & Widespread commercial autonomy F
  • This years list includes:
  • Tekion acquired by Salesforce
  • Carvana acquired by Amazon
  • Reset in both AutoTech and Dealer valuations
  • Major focus on cost reduction
  • Bryan DeBoer, President & CEO of Lithia & Driveway, recently said, "top 10% stores have around 43% SG&A as a percentage of compare and contrast… the smallest 10% of stores have about 75% SG&A as a
  • percentage of gross."
  • Bonus: It will be the year of the EV

After a year of beta testing, Walmart is launching a feature called "Text to Shop", which allows customers to add items to their online shopping basket via text message. 

  • Must be linked to the Walmart app
  • Customers can switch items, review their cart, check out and schedule pickups and deliveries using text or the Walmart app
  • WM applied learnings from a $50-per-month subscription service Walmart launched in 2018,Jetblack, a Text to Shop, that enabled shoppers to text message personal shoppers.
  • Dave Wendland, ViP, Strategic Relations,Hamacher Resource Group used the phrase “location, location, location” to define the importance of the new feature
  • Consumer comments from blog:
  • “I had gotten everything I needed but then I forgot two or three items, and I could get them with just a text. It’s almost as if you have your own personal shopper.”
  • “When different things pop into your mind you’re usually out and about running errands. I don’t have time to log into the app and add to the cart.”
  • “I love having Walmart messages pinned at the top of my message app. It’s easy to just add things.”

Paul Daly: 0:22It is the first show of 2023 of all the stuff we made last year and once I forgot to make this year, this is the first one. I don't know how many people are watching or listening today but the auto industry is. Yeah, it is driving into work this morning. I was like people out today retail and automakers that's it. And none of them were out when I came in, like whatever that is, like if automotive ever had a question like, are we retailers or are we automotives like now you're retailing you know why? Because your work today? That's right

Kyle Mountsier: 1:01

Well, and except for the service departments all them still hitting the snooze button. So you know that service isn't open today? Most of the time, most of the time. Certainly. Yes. Service gets like labor and memorial day off. They get all those extra little holidays they hang with the counting every person.

Paul Daly: 1:18

Wow. Seems like a good day to get your car serviced. If your consumers Charles Higgins, thank you for the comment. Happy New Year to you.

Kyle Mountsier: 1:24

The new year. Let's go. It's good to see man,

Paul Daly: 1:26

we have so much stuff to talk about this year. Like I mean, well, we'll give you a little summary today. But I will snip into a little, little little peer into the future of asoto and autoworld. Here we go. Try to remember what we were talking about at the very like giant we should go back and look like what are we talking about the first show of 2022 That would have been fun to share with you today. But you know, we didn't do that. So I can't remember.

Kyle Mountsier: 1:50

Totally. I mean, at that point, we I think we're probably like,

Paul Daly: 1:54

coming back, Everybody get ready to load your lats. Right. It's the same thing we're all saying.

Kyle Mountsier: 1:59

Yes, exactly. Yeah. I mean, we had no clue. We're doing a conference last year this time. So yeah, that's a good point.

Paul Daly: 2:07

That's a good one. Thank you to all the people in the livestream this morning. Daniel Charles Peter Fung. Brian. What holiday services open here. Oh, there you go. Brian. There you go. Let's go. And nobody hitting the snooze button. All right, here. We got we got live hot notes coming in today, Eric. Good morning. Good morning. We got a lot of things here.

Kyle Mountsier: 2:25

Oh, look at that. Our producer Nathan. They said that the first time we ever live stream was the first show of last year.

Paul Daly: 2:32

Get out of that. Yeah. So we're one when you're watching live

Kyle Mountsier: 2:35

streaming, man. And all these people just come in to say hi, this morning, we got Eric and Peter and Brian and Daniel and Charles all up and all up and

Paul Daly: 2:43

we're working. We're working today we're going to speak in a work and we're gonna be doing a lot of work this January, you and I are gonna be traveling around the country a bit. With not much of a break or a delay. We're gonna be in Phoenix, for the cane marketing landscape for automotive 20 group that's like in a week is that next week, next Monday. Next Monday, we're gonna be on our way to the West Coast.

Kyle Mountsier: 3:03

And the next week, we're gonna be on the East Coast. We're gonna be hanging out in drumroll, please. And we like is this a drumroll moment. We're gonna hang on top two more, which is where a soda con is going to be we're going to be scoping out the site for it. So we should have announcements like in the next 30 days about a certain con tickets, the whole nine yards it's coming. It's going to be in Baltimore, it's going to be in September, you can put the dates on the calendar, I think it's the 27th 2627 28 or something like that of September.

Paul Daly: 3:36

We're pumped for that. two full days amazing venue, it's going to be something else. Of course, we got to level it up. There you go. Got to level up with somebody like again, like in true to form. It's like five minutes from the airport, trying to make it easy for you to get in and out. Also, of course, we're going to be at NAB, da rollin, super, super heavy, more on that come as well. And, you know, just shaping that this is January, just for a couple of weeks. Just warming up just locked up. We got it. Let's talk about a little news today. We have a few things to talk about. We're gonna give you a little survey of a few things. And we're gonna get Mr. Steve Greenfield on the show to talk about his 2023 predictions. We'll talk about those in a second. But there is a manufacturing boom. If you haven't noticed the US manufacturing industry has seen the biggest boom in auto factory building in decades. It's being driven obviously by car market shifts to EVs. Seven D billion 700 comma 00 comma 000 comma 000. That's a lot of zeros. Two thirds of that investment is going towards cause excited about this. sites in the US South. That's Georgia, Tennessee, Kentucky, primarily moving away from what is it?

Kyle Mountsier: 4:44

I don't know if you knew this. While we got a lot of flatland out here. You're in the South. They're like put that big play out there on the flatland the

Paul Daly: 4:54

network, right it's already flat. So ready to start going up. Used to be the Great Lakes region up easily, you know, Detroit, upstate. You know, Syracuse actually had a GM manufacturing plant at one point, you know, so here's I did the math, this wasn't in the Wall Street Journal article that we linked up, but I did the math, the average, I can do a little bit of math, the average of the years 2016 through 2020. So those five years, the average per year investment was 5.5 2 billion.

Kyle Mountsier: 5:22

That's great. Now, because of the tax incentives to have us marketing or US manufacturing apologize. So there's going to be a lot of investment because of that tax incentive. And because of new Evie adoption, so it's very, it's gonna be very hard to retool out of the plants. So people are moving into plants. But that, I mean, we're also going to see the manufacturing down, down the production line all the way down the supply chain. So you get not just the manufacturers, but all the way down the supply chain, you know, when batteries and different electric parts are needed and to supply these vehicles. So it's going to be a wild manufacturing blitz over the next four to five years if people plan for EVs.

Paul Daly: 6:00

Interesting, hey, if this start early gen Lawler, Chief Financial Officer for Ford says you have to invest now or you're going to be left behind in the transition and goes on to say, the greater risk we see is that if you hold back and you don't make investments, that's the bigger risk not investing because people say well, it's risky. You don't know what's gonna happen. He was like, No, the bigger risk is not investing now, because you can't put the future on pause. So

Kyle Mountsier: 6:23

speaking of the future segue that was that was a clean first segway of the new year,

Paul Daly: 6:32

right, very clean, very clean way to start off. Hey,

Kyle Mountsier: 6:35

Jeffrey Pohanka of the punk Auto Group 60, age 65, who now is the current nada vice chairman will succeed Mike offered to be the 2023 na da chair prank as a third generation dealer who serves as chairman of the Pohanka Automotive Group in the Capitol Heights, Maryland.

Paul Daly: 6:53

Oh, he got him to a Soto con.

Kyle Mountsier: 6:57

Right there. And right there in the old backyard. You know, I've actually I've watched just the bank Auto Group. I think it's been on my radar for quite some time. Great, great group. You know, Jeffrey Pohanka, has been a little bit in the public eye, especially this year, being the vice chairman, very just resolved. And so quote here as someone who grew up in the car business and with my family's involvement with nada for generations, I'm honored to take the reins as the next Nada. Nada chairman. He said, the auto industry is a rewarding and exciting business and unfortunate to be a part of it. And ADA has an amazing board and an amazing staff. Together we can create a stronger environment for the industry to help create a vibrant economy and stronger communities. Now that's a man after our own heart right there. They

Paul Daly: 7:42

got a lot of nodding a lot of nodding heads on that one. Yeah. Yeah. For Capitol Heights actually is from because he's like

Kyle Mountsier: 7:54

hey, if you know Jeffrey, we don't know him personally, if you do know him, we'd love to chat with him. Nada. Well, you know, maybe we can get an introduction there. If not, we'll be all over the LinkedIn and yeah, just shoot me an email,

Paul Daly: 8:06

shoot him an email, make a little introduction, we'd love to meet them. Also worth mentioning the Vice Chair Gary killed Chris 69 years old, who represents New Car Dealers in Washington State serves as the chairman of NACDs dealer operations committee is now going to be the vice chair of nada so hey, how that kind of how that moving everybody? Oh, good. Our producer says it's a 48 minute drive no excuse. If we don't get him to a soda con it is

Kyle Mountsier: 8:33

out doing it wrong. That's speaking of doing it, right. A

Paul Daly: 8:42

close friend of asoto Steve Greenfield, his company automotive ventures made 10 predictions in 2022 made another 10 for 2023 And let me just say Kyle after read through last year's again and read reading through this year's gonna get very clear that he's not an economist because economists make no a prediction

Kyle Mountsier: 9:04

the Cox automotive ones and it was like Safe, safe, safe, safe.

Paul Daly: 9:09

There's going to be more know but these predictions are so much fun. In his automotive ventures, a monthly Intel report, you have to get it it's linked up in the comments at automotive So last year, we're gonna get him on the show this week to kind of like dive into some of these. But last year some of the predictions These are fun to look at. And you can also check out his LinkedIn he made a post for these Lithia he said he's going to become the largest auto group and change their name to driveway and basically he gave himself a b minus on that he said Lithia is probably going to wash out they could be number one we don't know yet. But they have not changed their name to driveway yet. He also says it's gonna be a year of connected car he predicted and he gave him something a for that said this is going to be the year of Eevee charging charging infrastructure. I think the inflation Reduction Act in the past is like,

Kyle Mountsier: 9:57

hey, but I don't know if it's like It's like the, the perspective of I'm gonna give him an A minus on that one.

Paul Daly: 10:05

Here, just take it down. Because the charges aren't actually there. The plans are in place, gave himself an F in a couple of areas. One was dealers getting open points for vertical takeoff and landing. If you read the description in his F, it says fail period, because this has not been mentioned in the news one not even. The other thing he gave himself an F on was the widespread commercial adoption of autonomous driving, it just hasn't happened. And we'll see what happened. So talking about what's on this year's list.

Kyle Mountsier: 10:37

This year, we got Tachyon, acquiring Salesforce, we'll come back to that Carvana acquiring and acquired by sales by Salesforce, sorry, taking on Carvana acquired by Amazon. Interesting. And so there's been a few people predicting that one reset in both auto tech and dealer valuations. I definitely see that coming. I think there's just going to be kind of leveling off of that. And then a major focus on cost reduction, he talks a lot about this actually talked about that at year end extravaganza. Combat back to that one it just second. And then the bonus, it will be the year of the Eevee. I just think like, yeah, it's just gonna put that

Paul Daly: 11:12

is a bonus, because he was like,

Kyle Mountsier: 11:14

I'm not gonna put that in my time. Yeah, not in the top 10. But it is going to happen, it's just going to be all over the place without of that. Okay, so I want to focus on the two Tachyon acquired by Salesforce. I just don't see it happening. And here's why. Because I think that Tachyon has gone after such a wide market that Salesforce actually like would be better served to build out their own thing, as opposed to acquiring Tachyon. And I don't think Tachyon has the market penetration that Salesforce needs to be able to enter the market at the rate that they would want to and the speed at which they would want to. That's just my personal opinion.

Paul Daly: 11:53

I love anything on what you think they could enter faster if they build their own on their own

Kyle Mountsier: 11:57

without a doubt. Yeah, just because it'd be broader, broader applicability. Yeah. And they're gonna they're gonna be more focused on CRM before DMS and Tachyon is much more DMS. And I just don't see Salesforce, leaning into that when they enter verticals that much. So I think they'll get there. But yeah,

Paul Daly: 12:15

you know, Carvana of being acquired by Amazon, this is something that was like, I remember having this conversation like back in 2020 2019, where you're like, Hey, everyone, I had that shirt made up that said, Because Amazon, right? And we were talking about that we're like, hey, Amazon could be in the car business like that. Why? Because they can afford Carvanha. And that was Carvanha was on the upswing. Now, they'd have to get a heck of a deal. Because like,

Kyle Mountsier: 12:37

I guess it already kind of is a heck of a

Paul Daly: 12:39

deal. Just buy all the stock. But you think about Amazon, like getting into the minutiae of the used car business in such a volatile time. It's like, Man, I really have to be able to convince them that they can play the game with

Kyle Mountsier: 12:52

Amazon would need some serious operators because it's not just selling CPGs. You know, it's not consumer packaged goods. It's not reselling other people's goods that your housing in a warehouse like it is a whole different strands. Carvana has proven that that's tough when you do it on a on a national scale.

Paul Daly: 13:11

So think of Amazon broadscale. Right, Amazon will probably eventually get into insurance and a lot of the other things so like you think of like the total opportunity for Amazon like and speed to deploy. I mean, when I think of

Kyle Mountsier: 13:25

them doing more things like getting, you know, like what they've done with Hyundai and the Hyundai marketplace on Amazon, the shopper portal, kind of like new model landing pages, things like that. I just think that's probably the quicker way to have Amazon really deeply tied into auto. So yeah, we'll see.

Paul Daly: 13:42

Charles Higgins puts in the comments about this is back about Salesforce and Tachyon. There's the little delay on comments in the live stream. He says, I don't know he says he can see he said there's been talk of Salesforce making more of a focus in automotive. So a DMS makes sense. I love it. I love that there's like back and forth perspectives on this. Only time will tell. We'll know, we'll know in 12 months whether or not it happened. The last the last point I think go back to that really quick. predicting a major, major focus on production. He calls Brian de Bourgh, who we will be with at nada at the auto Team America. It's kind of like a dealer only event with you know, mainly accountants and lawyers. He's going to be there as a guest. But he said, you know, the top 10% of stores have around a 43% SGA, which is basically, you know, general expenses versus gross revenue. So basically operating at 43% of gross revenue, and the smallest 10% of stores that their expenses are all the way up to 75%.

Kyle Mountsier: 14:41

Right because they're using the same partners, the same vendors to structure the same type of dealership experience that's necessary. And so that's where like groups have a have an advantage and larger stores have an advantage because they operate on the same tech and tools that the smaller stores are operating on to provide a new customer Are experiences necessary. So that's where groups and things like that are going to win when they can focus on cost reduction and at scale.

Paul Daly: 15:06

Speaking of group efficiency, segue said one more thing in there, that I was gonna say that I forgot it. Oh, new customer experience, speaking of an experience that we'll do that we'll get to, that's what I meant to say, after a year of beta testing, this is cool. Walmart is launching a feature called Text to shop. It is what you think it is, which allows customers to add items to their online shopping basket via text message. So it's gotta be linked to the Walmart app. So you have to have the Walmart app. But then basically, you can just text Walmart, right? Add ice cream, and it'll know what your usual thing is, or add dog treats. Or you know what I mean, toilet paper, bottled water, love, take that out of the cart. So you can do all this stuff, you can even you know, schedule, your pickup time, I'll be there to pick it up at at, you know, 830. And it'll do it. And this is just a great way for customers to interact with the Walmart shopping app in a way that's in your natural flow. You don't even have to open an app. Basically, this thing is so good. They listen to this, though. I never heard of this. They had a $50 per month subscription service called jet black, which is a text to shop app. And they couldn't make it profitable. But they basically took all the learnings from that. And they've just overlaid it into this, Charles Hagen said I've done tech shopping and it works well. Well, here's the thing. Like,

Kyle Mountsier: 16:29

you know, Amazon, and a bunch of different providers have tried like voice to shop, right? Like, hey, add blank to my shopping list and verbal, that the number of times that I would be in a place where that's possible is very, very few. But oh, man, I need this blah, blah, blah. Oh, you mean because other people around? So you're like, other people are around? Or like it has to be in your home or in your office or whatever, like, but you're

Paul Daly: 16:55

not gonna be all like, Yeah, well, Alexa, add Preparation H to my show. Good.

Kyle Mountsier: 17:01

You had to go there, you got into 17 minute a podcast

Paul Daly: 17:05

was 44 Steps less offensive than what I originally thought.

Kyle Mountsier: 17:11

But I mean, I shoot like, I would pin I like Amazon, if you know, we shop Amazon and target a ton. Like I would pin the heck out of that thing right up to the top of the list and start just shopping. And especially if there was like a combined list my wife and I could both add things. And then once we get to a certain, you know, we get a few days in boom, order that thing that'd

Paul Daly: 17:28

be great. There was one of the comments on this retail wire article that we linked up. David Wendland, VP of strategic relations and Hamakua resource group, he used the phrase, location, location location, to talk about its relevance. And usually you hear that in real estate. But actually think about it. That's pretty brilliant way to position it because the text message app is open probably more than any other app on most people's phone. To have that be the location you can actually shop is legit. They there are a number of customers on the blog where they release this that had weighed in. And they said I few comments here I gotten everything I needed, but then forgot two or three items, I could just text them. It's almost as if you have your own personal shopper. Another customer comment when different things pop in your mind, you're usually out and running errands. I don't have time. Listen to this, I don't have time to log into the app and add to the cart. Even though that only takes about four seconds these days. Like with a modern phone. They're like I don't have time for Ain't nobody got time for that.

Kyle Mountsier: 18:24

Student You said that I was like, go get a card or your shopping cart and that auto dealer website?

Paul Daly: 18:30

Yeah. Yeah. Obviously, obviously, this isn't a one to one. But it's to get us thinking progressively about the shopping experience and to understand and have an awareness of what's happening in retail, so that we can take cues from it. And we can actually implement things as much as possible. We're thinking in that direction and trajectory, as we're trying to, you know, contextualize the automotive buying experience or service experience actually is probably more relevant to the service experience than buying experience. Yep. That's, that's the first show of the

Kyle Mountsier: 18:59

year. That's our gift to you this year. That's what we're gonna continue to do every single day is, is tie down like a little bit of auto, a little bit of retail and make sure that we're being the best retailers we possibly can. And 20.

Paul Daly: 19:11

Absolutely. Hey, if you're not on our email list, it's a great year to be on it. Just go to a show. Sign up. Have you something awesome in your email inbox every morning, make you smile a little bit, learn a little something. We'll see you tomorrow because we know you're working

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