The first half of 2022 comes to a close, markets are down but not out
The FTC is coming for Dealer Add-Ons and Advertising in new proposed rules in a June 27th notice of proposed regulations which passed by a 4 to 1 vote
Upstate NY Dealer puts on high speed charity event
Kyle Mountsier, Paul Daly
Paul Daly 00:00
Well what is going on it is Thursday, June 29. If you didn't realize it's the 30th Actually, it's June 30. And it's the last day of the month and the quarter,
Kyle Mountsier 00:37
the quarter and a half year
Paul Daly 00:39
and a half year. What else is
Kyle Mountsier 00:43
m? Q two, h one. All of the things they're coming to a close
Paul Daly 00:48
today, all that to say, we got a couple of people scrambling around the dealership world. You've
Kyle Mountsier 00:54
got some fiscal year ends. We got some buddies in Australia that like our fiscal year end, things are crazy around
Paul Daly 01:01
why the fiscal year end for everyone is halfway through the year. It's the strangest thing. It is like let's just make it halfway through the year. But know without a doubt. The end of the quarter, the end of the month is always the hustle and bustle. The end of the quarter is a bigger hustle and bustle. And midway point through the year is really the benchmark moment when everyone says like, alright, is it going to be like, are we going to do the same thing in the second half? Are we going to do more? Obviously dealers are like we're going to do more, right?
Kyle Mountsier 01:26
Yeah, it's a checkpoint right? Actually, I saw I saw a post the other day, it was like, today's the day that you can basically remove zero on the number of books that you are going to read this year, right? You're not quite gonna get there just drop a zero. You know if it was 20 and you got to go to two to be okay.
Paul Daly 01:49
Man, that's crazy. Man. People set out to read 20 books. I don't even get that. I mean, I don't even know where you put the time. And well, well, look. I mean, I think people probably don't read nearly as much like news and articles as we do in general. Like if you add up all if you add up all the words even that we read by like 6:30am It's a lot. It's a lot. That's a lot of words. So we're gonna take a little trip this morning, do a mid year check in on a lot of things. And it ties into some of the stories we're going to talk about. Man, this six months has been insane for us odo like I started listing out the things like oh, let's do I'm not good at celebrating wins. I'm just not I just don't look back very often and even I should and stop from home but I don't this gave me a moment to stop and look back and this year alone the past six months, we could probably actually say in like the past four months. Okay, we formed a company asoto as an incorporation we brought on seven dealer investors we hired hold on did we even I can't remember if we knew by January 1 that we were not going to we did not I don't think we had that like dialed in yet at that point that that thought maybe existed like in concept for maybe but we didn't have serious discussions about it. So we're like, Hey, we're making this thing a company. We brought on seven dealer investors as a call it a pre seed round. We doubled our podcast listenership. We covered nada as press, we held a sold out event of one of the nights additional deal or family reunion remix, we participated in our first state ADA meeting, which was very eye opening, I guess we'll use that. And we have, like, we're just halfway through the year, we're just gone from
Kyle Mountsier 03:26
zero employees to six employees. That's right. I mean, like we've got, we've just got people that are team members that are diving in, day in and day out, you get to meet some of them online and on the interwebs. And honestly, like, we could not have gotten to this point, without, like, if it was just you, me and Danielle, there's no way we would be doing what we're doing on a daily basis today. So kudos to that team, because we couldn't pull off nada or daily email or va da or digital dealer without that team just go into work and going hard every single day.
Paul Daly 03:59
No kidding. And now we have plans for a lot more in the second half of the year. Actually, we're going to be talking about this more soon. But we're about to launch two new podcasts which we're super excited about little more long form, or going a little deeper. We'd like to keep our hands in the dirt of the industry. We get to spend a lot of time in dealerships and with people and we're going to bring a lot of that to you. And we think a really fun way. But let's be honest, the big talk of the second half of the year is going to be a soda con it already
Kyle Mountsier 04:24
is. It is it is it's going to be a really fun event. We've we had just more conversations yesterday and someone was like, well, not a lot of people know about this thing yet. And I'm like That's right, because we're about to turn on fire hose.
Paul Daly 04:37
Yes, it will be a fire hose. So Tuesday, we're launching tickets. So if you're a dealer, and you want to go try to get your tickets on Tuesday, because we don't know how long tickets are going to last we only have 600. You know, we think probably by between collaborators and things like that by the end of Tuesday, we're probably gonna have less than 300 industry partners if you're an industry partner and you're not a part of the event. You we only have 50 industry partner tickets at five zero industry partners tickets available period. So the only people that we even had a have a shot at getting a ticket to be live at a soda con will be on the pre registration list at a soda con.com. We're about to launch the site, we're about to about to talk about all the information announced our keynote speaker, our speakers and collaborators and we have 60 days a content plan leading up to it's going to be insane, it's gonna be the same,
Kyle Mountsier 05:27
it is going to be insane. I'm really excited about it. And yeah, we just hope that the community will join us because it's, it is a community effort to you know, I actually posted about this last night on LinkedIn, it's just, you know, the reason why we do this is to build community. It's literally like, the reason we wake up every single day is because we want to bring a big community together, that moves the industry forward together. Like we're not trying to, we're not trying to sell anything, we're not trying to, you know, push our beliefs on anyone. It's just, hey, look, there's a lot of people that are moving in the same direction, we do things differently. We move in that same direction. We know that franchise retail automotive stays viable to live and well,
Paul Daly 06:13
you know, the truth is that there are so many. There's so many opposing opinions within our community, which makes me so happy, right? You don't have to think the same way or agree on the same philosophy or business mentality or you do business one way like, that's cool. It's cool, because that's how we're all gonna get better. That is truly what the asoto community is about. And man, you said it, it truly is a community. That's what we're doing. We hope you join us in person and if not be part of the podcast, be part of the live stream be a part of the email below, hit the Reply button. When you get our email every day.
Kyle Mountsier 06:46
Please hit the Reply button,
Paul Daly 06:47
send us something sent us a little love. Funny, right? Like because we read them, we listened, we engage, we answer and sometimes we feature them on the show. Speaking of getting into the show. Segway
Kyle Mountsier 07:01
was so much more. I thought you I thought you had you're like just getting it out of the show.
Paul Daly 07:07
Because like we're still in the intro and we got it we got a show to do people got people got a month to close, man. Okay, so
Kyle Mountsier 07:16
speaking of closes
Paul Daly 07:20
that's how it's done. Okay, go ahead, bring in the story.
Kyle Mountsier 07:24
There's a lot of talk about just the fact that today being the clothes of the first half of the year is kind of that that flag in the sand or flag in the dirt for markets. And and a lot of people that pay attention to the stocks pay attention to what has happened in markets over the first half of the year, you know, there, there are multiple stock stock market exchanges that have entered bear markets kind of jumped right out of them jump back in, right that 20% down from the year start and end. So you know, not everything is lost. Because what what it what it looks like, historically, is that anytime a massive drop in in the stock market in the first half of the year happens, we see a large rising average. So the so the data is in every year, the s&p 500 dropped at least 15%. In the first two quarters, it rose an average of 24% in the second two quarters. So I mean, even even this morning, I was looking and the news as I'm running at the at the gym was gas prices are beginning to come down for the summer. And everyone was expecting that, you know, going into July that gas prices are gonna rise because of demand. And so I think the future is hopeful for me, especially for markets per se, it's
Paul Daly 08:40
always helpful for us. So be it being the kind of the worst start since 1970. The years Kyle's talking about his 1932 1939 1940 1962 and 1970. And all of those years, when the market dropped 15 It always went up 24 Kids say that past performance is an indicator of future performance. But we're just saying like, you know, although the markets affect all Americans, right, they affect our daily lives and all that. The truth is us in the automotive industry is a little group of people over here. We understand that dealership profits and profitability of our businesses overall, aren't actually reflected
Kyle Mountsier 09:19
markets. No, they're absolutely not because you're looking at, you know, large stakeholders, big Publix, software, all of that type of stuff. And you know, the the smaller businesses have the opportunity to be flexible and move within the market and approach customers where they're at. And so that flexibility of being a small business owner is really where you have the opportunity to win because you're not guided 100% by market indicators.
Paul Daly 09:50
That's right, man. I mean, like I see, we look all over the industry, both dealers and industry partners, and I see a whole lot of thriving, a lot of thriving and why Because like you said, dealers are seasoned entrepreneurs, if you're attached to retail auto, you are seat like, hitting up, you know, tension. And, you know, uncertainty. It's like your morning breakfast cereal. If you're in this business, we can take it, we can handle it actually, it's better for us, right was that we market
Kyle Mountsier 10:18
forces for breakfast.
Paul Daly 10:20
Horses for breakfast slipped
Kyle Mountsier 10:22
out on a t shirt. Sell it.
Paul Daly 10:26
Speaking of market forces,
Kyle Mountsier 10:30
okay, okay. lean in
Paul Daly 10:33
for a second because this is gonna seem a little bit bad before it seems better. We haven't covered the story yet. It's been it's been kind of circulating around this week. But the FTC is coming for dealer add ons and advertising and some proposed new rules and a June 27 Notice of regulations with past they're commissioned by a four to one vote and now goes into a period of consumer feedback a six day period. So these new regulations would significantly change the way dealers can present an offer and sell their f&i products and also talk about them online. New regulations would ban add ons as they determine that they determined add no value to the consumer. So basically, you're looking at things anything that would be on a bumper sticker, anything that would be on an addendum, right? Whether it's GAP insurance, or nitrogen, air and tires, or paint sealant, or a whole bunch of other things, the FCC is now saying like, actually, they're going to be the ones to determine whether or not it adds value to the consumer, which is very, very interesting and very tricky.
Kyle Mountsier 11:38
We may or may not have been talking about this type of stuff.
Paul Daly 11:42
I'm just throwing it out there. I was gonna say I told you so but right, it's like I told you so.
Kyle Mountsier 11:47
S o. So what you're saying is the people that make the rules, four to one. And now what's the next step? consumer review. consumer feedback, consumer feedback,
Paul Daly 12:01
well, I don't predict there's going to be a line of consumers standing up for the dealers,
Kyle Mountsier 12:07
right? It's like, no, no, no, they should definitely be selling us stuff that we don't need those gloves. Second, stop that, you know, whatever they're doing, I'm
Paul Daly 12:15
sure it's wrong, right. Ya know, and which is why we talked about solving the the consumer perception of auto dealers and we're gonna flip the script a little bit here in just a second. So a little bit more from this. So, you know, GAP Insurance, extended warranties that overlap the manufacturers were warranties. Here's a quote from set director Samuel Levine. He says as auto prices surged, the commission is taking comprehensive action to prohibit junk fees, bait and switch advertising and other practices that hit consumers pocketbooks. Our proposed rule would save consumers time, money and help ensure a level playing field for honest dealers. Now, I want to just add, there are some dishonest dealers without it up, right.
Kyle Mountsier 12:57
And in every business, and it's not the right dealers. I don't care what's
Paul Daly 13:01
true red Yeah.
Kyle Mountsier 13:04
Like the corner store franchise, you like,
Paul Daly 13:08
don't just fill in the blank, then fill in the blank. Your date? Yeah, I mean, there's nowhere where there aren't it just gets amplified and magnified. And granted, there's some deceptive practices going on. Right. And so that just gets magnified and amplified throughout the industry. There was one dissenting opinion, you know, four to one. They said, look, the market is changing so fast. There are different sales models being presented and approved, like the Tesla's direct to consumer, and the dissenting voices. Like, even if we come up with rules and regulations, they're not going to be homogenous, and they'll be outdated before we can even enact them without that app, you know, so they're advertising rules that go along with this. And that would be requiring dealers to post all possible add ons and options and their prices online. So consumers know, everything that could be presented in the f&i office, and they have to be posted online. There are some also things about misleading prices, you know, on advertisements, you know, you have to see the disclosure of the cash price without any options, right. So you can see that price, and you don't like some look, some of the stuff is good. Some of the stuff is really healthy. Some of the stuff is like consumer thinking first, which is what we believe
Kyle Mountsier 14:22
data overloaded. So that's not all good for the cut. It's not
Paul Daly 14:26
helpful. No, right. It's not helpful. So I mean, lo ok, even even if this passes, right, it's definitely going to cause pain. It's going to force us I think, to be more consumer centric, and more consumer minded and to communicate better to present products in a more holistic way. And look, if there is something that you're presenting that doesn't add value to the customer. Well, let's get that out of the way. Maybe it's been a groundball for you in the past, but let's get that out of the way. And let's think okay, like the consumers are still willing to spend money like let's put something in there and find a way that we can actually bring them some substantial value from it. So Because I mean, you know, like everything, right? These these types of things come in. And it's going to be this jockeying of wetlands and how we respond, we can't really control where it lands, we can try to influence it speak up, have consumers advocate for us, which is why we need consumers to feel like dealers and know what dealers are doing because then they will advocate for us. But um, you know, that's that's kind of the bad news in a good way. I don't know if it's that reeking of
Kyle Mountsier 15:25
dealers that are working to fix the perception. I got you, I knew that. That one was coming from like, minute one in the podcast. We built
Paul Daly 15:36
the show this morning. And we're like, you know, if we're gonna talk about this FTC thing, we gotta like, talk about something awesome that's going on and they happen all the time. So
Kyle Mountsier 15:45
go for it. Yeah. Okay. You know that you know, as dealer right, so you have some some older relationships. So
Paul Daly 15:50
in our in our search to find, hey, let's let's find something unique to talk about this morning, on the flip side, found a story about an upstate New York dealer group, putting on this really creative high speed charity event, gult, Toyota, which is part of the Gult Automotive Group, which is only about 15 minutes for me, my, my previous company in the genre that I built, we used to service this dealer group, and they were awesome, awesome people. Well, they went on a four hour blitz for their annual golf gifts campaign, making 23 stops and giving out $50,000 to community organizations. Here's the coolest thing about this. They've been doing golf give since 2017. They were like how can we how can we like, really think about how we can best help these because some of them don't need the money, they actually need more awareness. So they were like, we're going to do this Blitz, and we're going to go to 23 stops and give them money in person just so we can get media attention, some earn media, we can, you know, talk about the different stops more instead of just sitting in one place where like we gave over $50,000 to charity. So GM Allen eagles, he's the son in law, the owners bomb and kind of golf. He says, We did it to bring awareness to these nonprofits, a lot of people don't know they exist. And they all do wonderful things. A lot of them need help, but they need volunteer help. They don't even need the money. So we're bringing awareness to what they do. And that's the goal. And I was like, send that to your local FTC. Rep. Well, yeah,
Kyle Mountsier 17:11
well, and the think about that, if that's the reality in Johnson City, New York, that wasn't very big. By the way, would that these places need volunteers over money? What can we do continue, I mean, especially a regionalised dealer group that maybe has the employee staff to go support these people outside of just the monetary funds that we bring to them, you that is a massive opportunity to be in and amongst the community, not just push money, and not just push dollars on the community, it's get involved at a local level, like go serve, go be at these places, encourage you know, like, the the national organization that I was with, gave volunteer days off once per quarter, they gave eight hours a quarter, so that you can go volunteer at any nonprofit in the city, or go on a mission trip. So we do things like that, that get your people integrated into the community, not just your dollars because honestly, that's, that's it's it's also a big piece of retention. Because the millennial and Gen Z want to actually be involved in the community just talked about this last week, right? That's actually a piece of them being sticky at your at your organization.
Paul Daly 18:25
Yeah, and feeling like you're fulfilling, you're being a holistic component to their overall, you know, happiness and fulfillment in life, and being able to serve them being freed up to serve while not worrying about their pay for that day. Really, just man we could we literally could talk about stories like this all day. And your dealers, you know, if you're an industry partner, you're around dealers all day, you know, you see all the charitable involvement. You see the people being mobilized, right, you're not seeing, you know, Tesla employees are Carvana input, right? You're not seeing them in your local community because we're part of the fabric of the community, right? Like you start pulling out the threads that are auto dealers, you realize the fabric gets pretty bare, and it doesn't really do much
Kyle Mountsier 19:07
Paul Daly 19:09
Well, there you go. halfway through the year. We've been a little busy. We got halfway to go. So thanks for being on the journey with us. Step up, step in don't worry about what gets thrown at you because you know what it is with automotive industry. We got this