Huge Tesla Recall, Dealer Valuation Dance, GM Declares CarPlay Unsafe

Paul J Daly: 0:27Is it third? No, it's Thursday, Thursday already Thursday the 14th. Oh, man, the world changed for me a little bit yesterday. We'll talk about that in a minute. But we're also talking about a big Tesla recall, dealer valuations. So people really want a statement by GM. And then another one that we're just gonna say, for the end. And before coming into the show, we're like, how do we talk about this in a way that, you know, kind of gives me in trouble trying to get in trouble. But you know, to speak the truth.

‍Kyle Mountsier: 0:57

We are the automotive troublemaker podcast but you know, there's like a, there's a fine line between trouble and in trouble, you know,

Paul J Daly: 1:04

making trouble being in trouble. I mean, the point is, we love everybody that is involved in the industry. We love our OEMs we love our dealers, we love our industry partners, we love even the new entrants that are disrupting the whole thing. Right? We love the test challenge our status. Pulse. Absolutely. Because it makes us all better. Alright, so the world changed for me yesterday. Because my and a lot of other people in Syracuse. Well, absolutely, because my son, Miles, who was also an editor for us and sort of got his driver's license passed, his first driver says, Nathan, we're going to start weird. Nathan come up on the screen and pull him into the frame. He doesn't even know what's happening. Because Myles is right next to you right now, isn't he? But that kid right there, that kid right there. Driver.

Kyle Mountsier: 1:57

wives stay off the roads. But I don't even know what we're gonna do with that. I come into Syracuse next week. And I'm afraid I'm already afraid.

Paul J Daly: 2:05

I'll tell you what, though. My weekends, my evenings maybe just freed up a little bit. But no one no one is more excited about his license than his 14 year old sister.

Kyle Mountsier: 2:16

Oh, oh, man. He's got plans. She's got plans. She's like, What? Go into the mall. I'm taking you to the coffee shop. Oh, she's got so many plans

Paul J Daly: 2:24

for him. And her friends aren't old enough for miles to want to hang around them. You know what I ate? Like, if she was a year older, he'd be all about it.

Kyle Mountsier: 2:33

Amazing. Oh, well, next week, every

Paul J Daly: 2:36

you're gonna be in Syracuse next week, Syracuse because they will have miles drive you around. He'll be the chauffeur? No, he's not doing that yet. But we're having our year end extravaganza, our third annual year end event where we, you know, give a little review on what happened. We have a little look ahead. We have a ton of guest special video content, special interviews, a whole lot of fun lined up with with a really fun segment. I don't know what it's called. Is it called? Who said it? Can we talk about this segment yet? And it's called who said it and basically we're gonna give a barrage of quotes. And you're gonna have to say who said the quote, either a historical you know, leadership figure or Shawn Fein, I'm fine. So of course, that's going to be a lot of fun. We

Kyle Mountsier: 3:17

hope you join us wrap the year with that. What would we be doing?

Paul J Daly: 3:21

No, maybe maybe we could get him on the show. I doubt that. But you never know. If you know him or the office, reach out haven't call us we'll get him on the show. It's the best way to be a part of the action is just go to a so to.com right at the top of the banner, it will link you right through to the LinkedIn live event. You can hit the attend button. Make sure you're there. We're also gonna stream to YouTube. But you need to be there next Wednesday and be in the comments.

Kyle Mountsier: 3:45

It's always a blast. Exactly.

Paul J Daly: 3:47

I have any other announcements All right. We got some news all is licensed talking about AI Okay, speaking of driving, oh yeah. Speaking of driving well or not. Tesla is initiating a recall huge recall 2 million vehicles amid concerns raised by the NHS TA that drivers may be misusing its autopilot system. The action comes as part of a two year extensive investigation into accidents linked to the driver assistance technology. So basically, the nice thing for Tesla is like oh too many car recalls, great send it the send button but their proposed software out there basically is going to make alerts and visual cues more prevalent when autopilot is activated, making sure that the driver is still paying attention. In one notable instance that has been under investigation. The autopilot system failed to recognize the stop emergency vehicle in a Tesla Texas crashed as shown in the Wall Street article that we linked up. You can look through and see the dashcam footage. There's another one where Tesla on autopilot crashed into a tractor trailer while traveling 70 miles an hour in a 45 mile an hour zone. I'm pretty sure that on autopilot the The user sets the speed, I think, I think you need to tell it how fast you want it to go. But either way, despite concerns, Tesla's still maintains they they're like, look, autopilot use is safer than manual driving. And they cited internal data that backup that claim, they're like, hey, there might be some accidents. But it's definitely safer.

Kyle Mountsier: 5:21

This is anytime anytime you have new technology, it's just going to come under the highest level of scrutiny. So every incident becomes highlighted. And so like, if you look across the broad scale of incidents, it it, I can see how they're and some of the data can still show the safety rating, based on the total number of vehicles, total number of drives, all of that type of stuff. I think, you know, this is still just a broader part of the big debate on who takes the onus in an autopilot situation. But it's what I think it's cool is that now you just get the ability to again, hit the easy button, say, here's the software update, boom, down, update our systems connected to the right hardware, the right software, so we just get better over time. And this is the beauty of connected auto systems. Now. Here's the other part that I think is extremely important for dealers and dealer personnel today is as I went through out my afternoon, yesterday afternoon, and this kind of came out I just did a cursory overview of like, how many people are talking about this about what about this particular the the story every article, every news page every morning news station, every newsletter email front headline top of the fold, yes, top of the full like top fold before you scroll, anything like that. So the consumer base is going to be hyper aware of this situation. So making sure that your team is hyper aware of the situation understanding how to communicate about it whether or not you have autopilot or a form of it in your vehicles or when are competing with with Tesla's this is important for the people on the ground to know that is happening today. Because everybody's talking and thinking about it.

Paul J Daly: 7:09

Oh, man, that's great. Speaking of things that everyone's talking you're thinking about if you're a dealership owner, caveat there. Oh, Alan Hague's cuter It's been too long since we've had Alan Haig on the show that and read my own headline. Alan Higgs two three q3 2023 Hegge report reveals a significant shift in auto retail. Basically, dealer profits are declining, yet, demand for dealerships remains robust. So here, this report is awesome. We link to it at the LinkedIn version of it in the article here, but basically takes us on a little bit of a walk down memory memory lane, so basically follow me prior to 2019 dealership profits steadily rose every year, right we can see the profits going up in 2019. They were an average of 1.9 million per store. On March 11th 2020, the World Health Organization declared a pandemic in March, two days later, President declared an emergency two days later states started shutting down. So everybody remembers that we got home from NADA, within two weeks. Some of us were like at home. So which actually is when a soldier started, basically, that happened. Now, in 2020. That same year, profits went from 1.9 million on average, to 2.9 million on average. Oh my goodness. Yeah. So that, that is that increased 50%. One year by 2022. Average profits are now over 6.5 billion. Hit the button, hit the button. Alright, so we've gone from 1.9 million in 2019 to 6.5 million in 2022. And now we've seen a drop in 2023 what they're predicting is the average is going to be 5.4 million. So if you're good at math that bad, that's still like, more than double and a half facts. Yeah, two and a half X but everyone's feeling a little grumpy lately right about profitability, but the short memory so basically 2023 Hegge says most active year, third most active year and by cells with you know 2021 and 2022 being the first to saying buyers are showing a marked preference for top franchises and sawed off after markets right to try to get the gems negotiations between buyer and sellers are getting more challenging because everybody's opinion of what the store is worth. Right? It ain't 2022 anymore. It's 2023 So there's some conflict there and he said one fact that buyers and sellers can agree on is that life remains pretty sweet and auto retail

Kyle Mountsier: 9:36

that's that's just that a warm your heart right before Christmas. You

Paul J Daly: 9:40

know, hey, like that sometimes with some dealers I've talked to it feels kind of Yeah,

Kyle Mountsier: 9:44

it feels grumpy. And I would I would challenge people just pay attention to this. The fact that like we as an industry seem to forget very quickly what the past look like. This is the other piece. And this was like a little market and And it's in our notes here that the attraction for buyers is not on dealers in failing markets or small domestic franchises in powerful high volume high profitability stores. Yeah, you look at just yesterday or Tuesday, as Barry completed the transaction for Coons, Coons, a top, top 10 in revenue, it was a $1.2 billion transaction, including real estate and and all the IP, like. That's, that's not going after some side market. That's a DC market with high volume dealers

Paul J Daly: 10:40

and sound operational structure, good tech, right. Like they're trying to integrate the best operators into their ecosystems to make to be even stronger. So thanks again for putting these together these great reports that walked down memory lane brought a lot of perspective and is actually going to help me in a lot of conversations because again, absolutely, like nobody likes to go backwards. Right. But the general realization is like, actually look how far we've went ahead. In a time when most other businesses went backwards, right, automotive went forward. How about that? Speaking of moving things forward? How about a speaker? How about that guy that's trying to get in too much trouble on this.

Kyle Mountsier: 11:22

So we have chronicled the the decision by GM, because we're just continued the support for Apple CarPlay and Android Auto and their vehicles. And it's not just faced our criticism, but broadcasters criticism in media, despite obvious business motivations behind this move, recent remarks by Tim Babbitt GMs head of infotainment product, in an interview with Motor Trend have only intensify the conversation. So here's a couple of the anecdotes, they're the problems are particularly pronounced with Android Auto due to the challenge of validating the wide variety of Android devices and their updates, making system compatibility and performance inconsistent. So that's like, I feel like that's just like a general knowledge thing on well, actually,

Paul J Daly: 12:07

you know, what I just realized that in, we didn't include a really important piece in the show notes. And it's what he said, basically, what he said, was that we're going to discontinue those because they are way less safe, they are unsafe to use, and they cause distracted driving, and GMs infotainment system is easier to use and easier to use. Right. Like that's the premise of the story. Yeah.

Kyle Mountsier: 12:36

Which is, yeah, it's like, hey, our thing. We know, we're not software people. But our software is way easier to use and causes a lot less distracted driving. Here's, after this Motor Trend article was released, GM issued here's this clarifying statement after they said, it's way more risky to have these technologies have we wanted to reach out to clarify the comments about Jim's position on phone projection were misrepresented in previous articles and to reinforce our valued partnerships with Apple and Google. And each company's commitment to driver safety. GMs embedded infotainment strategy is driven by the benefits of having a system that allows for greater integration with the larger GM ecosystem and vehicles, i e, we want subscription revenue,

Paul J Daly: 13:23

I know what happened, that red phone under the little cake topper in the PR department just started blowing up. And there we go, yo, we need a statement. Now. Here's the bottom line, like, granted, you gotta be passionate about your product. The reality is there's been a lot of pushback, because people love using Apple CarPlay it's one of the first things people consider when they buy a car. How does the apple carplay or Android auto interact with the car, I plug it in? It's right there.

Kyle Mountsier: 13:50

It's familiar. The icons are familiar, the functionality is familiar. And so to come out and say like, yeah, you know what that causes distracted driving, the one that we're making, or that we made is like, is better than that, that is a that's a you're never going to come back. You're never going to be able to defend that you're never going to be able to defend that. And it's all still on a screen. It's it's it's more about like, well, and here's my thing is how many clicks, how many button presses how many what else is in the web, right to get in the way of me accomplishing what I need to to keep focusing on driving. So a lot of questions to be had around that on infotainment systems. And there's a couple players that are doing it really well with these two technologies. So we'll see what GM comes up to after all this up.

Paul J Daly: 14:32

I know we love you Tim Babbitt WE LOVE YOU GM. We hope you make the best infotainment system ever and on the planet and that we hope it's better than Apple and Android. We just have our doubts right now. We don't have any doubts in our the men and women that are on the front lines serving customers today, getting the vehicles fixing vehicles, go do some of that and we'll keep our confidence high