Inventory Is…UP!, Mobile Service Coming In Hot, Outta’ Paper, ChatGPT

December 13, 2022
Welcome to Tuesday as we talk about some good news with new car inventory, mobile service in the rise, the lack of the paper to print titles on, and give you the scoop on this ChatGPT thing.
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  • Cox Automotive data shows new inventory has increased by another 150K vehicles as presented in their Monthly Industry Update, produced by the Cox Automotive Economic and Industry Insights team
  • A stream of increases from June to now has 2022 sitting 78% higher than 2021 at the same point, although inventory is still significantly below that of 2019/2020.
  • November ended with 1.61M vehicles in dealer inventory, with some variation between brands based on day’s supply strategies.
  • Let’s remember - A return to 2019 inventory levels does not equal a return to 2019 dealership strategies.

  • AutoNation, the largest US new-vehicle retailer, has agreed to acquire Los Angeles based RepairSmith for $190m to expand its on site service offering for $190M
  • Technicians visit customers' homes or workplaces to service individual cars, as well as dealerships and fleets
  • The acquisition is part of AutoNation's ongoing expansion into the after-sales service market
  • RepairSmith's investors include Mercedes-Benz and Porsche's venture capital arm, Porsche Ventures.

  • As if we needed one more inconvenience at the Dealership, the specialized paper used to print vehicle titles has become scarce, causing delays and confusion for car dealers and owners.
  • An increase in cardboard production is partly to blame
  • Some states are prioritizing titles that are requiring immediate attention while Dealers are using power of attorney agreements to close deals
  • Digital titles anyone?

  • What’s the deal with this ‘ChatGPT’ thing?
  • ChatGPT is a large language model trained by OpenAI that can generate human-like text on a wide range of topics based on the input provided by a user.
  • OpenAI is an artificial intelligence research laboratory focusing on developing and promoting friendly AI, looking to benefit humanity as a whole
  • Is an offline model that was trained in 2001 and yes, it can write your paper for you

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Kyle Mountsier, Paul Daly

Paul Daly  00:20

welcome to another Tuesday in the beautiful retail auto industry. We are one week away from the year end extravaganza. But today we'll tell you about inventory is up mobile service out of out of title paper and chat GBT. You heard about that. haven't talked about it. So I figured we need to talk about it at the end of the show. We have to we have to talk as if we start with it. We'll talk about it for the whole show. Possible. One week from today, Kyle. Do you know what's going on a week from today?

Kyle Mountsier  00:54

Sheva kids. That. That's the new thing right there. That's the new that's the new line for it.

Paul Daly  00:59

I'll take that's a good one. It's a good one. Yeah, at this at this time next week, we will be setting up floating in cameras, producers, lights band, it's all going to be happening and getting ready for our live stream which is from two to 4pm. Eastern Standard Time. And we're going to have a full Jimmy Fallon style Tonight Show with a band Michael Cirillo is going to be on the mic. You and I are going to be interviewing people, we have a game show built in to them,

Kyle Mountsier  01:29

which is just super fun. Like we're just gonna break up, break up the noise get a little get a little crazy right in the middle of it. So you're gonna get a whole bunch of deals competitive, and oh, my goodness,

Paul Daly  01:40

I might be a fight on stage.

Kyle Mountsier  01:43

I'm just telling you right now, it will get sideways. It's gonna be great.

Paul Daly  01:46

Yeah, so but we're also you know, it's not all fun and games we're gonna have getting tonight show format. We're going to talk about the year and review talking about what some of the SAVVIS dealers and industry partners are thinking about the year ahead. And it's meant to be an entertaining two hours where you learn a little something, you smile a lot. And you just say, You know what I love the industry that I'm in, if you don't walk away from the year and extravaganza like that, then we have completely completely failed.

Kyle Mountsier  02:09

There you go. There you go, Hey, we're gonna do it, though. It'd be it'd be fun,

Paul Daly  02:12

I think we talked about before we talk about the news,

Kyle Mountsier  02:15

we got two things, and you don't even know about one of them. So one of them is that we are we're just sharing out that true car is doing there, I need a true cars, sweepstakes. If you go to the link in the show notes, you're going to find the I need a true car piece. And it'll tell you all about how to get your customers entered in utilizing reels or tic TOCs to to get a potential $5,000 of cash that they could potentially use to order a car, maybe that's great.

Paul Daly  02:45

I don't, I can't think of a dealer out there that doesn't want $5,000 of true cars money to go into one of their deals. There you go. I can't think of all of them. The second thing I don't know is

Kyle Mountsier  02:58

yesterday, we're on the phone and I couldn't I cannot get this out of my head. We were on the phone with someone and we were talking about some financial stuff and business planning and all that. And there was this phrase that came up. And it was it just has to be practical, not necessarily right. And now the context was a little bit different. But this phrase, I think actually relates to a lot of things in business and analytics and understanding data. And I was running around in my head, especially like when we look at website analytics or Google Analytics, or the data associated with digital spend or anything like that. And there's always these questions around like, what's your cost per click? Pete? What should you know? What should the time on site be? What's your bounce rate? How many? How many lead conversions? Are you getting all of all of this, like data on the website data in the ecosystem of digital spend? What's your cost per car sold? And I think that what I've come to realize over the years is like, there are so many different opinions. But the reality is, is that based on your business based on your ecosystem, your community, the way you sell cars, your margins, all of that is that it might not necessarily be like there's a right answer to that there's an out and out just true, like final answer everybody gets to agree to but as long as it's practical for your business makes sense to the bottom line, that you can pull levers based on what impacts the bottom line. Hey, that's practical enough. And so just thinking like as people are planning into 2023 and trying to go like what's the silver bullet for my marketing, my digital my, my showroom, you know, traffic, all that type of stuff. It don't like only look at your 20 group or, you know, other competitors across the street. Like look at your business, the practical levers that you have to move to be successful and 2023 and pull on those levers, not someone else's Speaking of

Paul Daly  04:49

things that are gonna make us successful in 2023 Oh, Cox automotive data shows that new inventory has increased? Yes, you heard that right, it has gone up by another 150,000 vehicles as presented in their monthly industry update. Their whole economic and Industry Insights Team gives out a presentation, we linked it up in the show notes. So basically saying a stream of increases from June to now has 2022 sitting 78% higher than we were at in 2021. At the same point, why although inventory notes still below 2019 levels, no crap, like we got that. February, November ended with 1.6 1 million vehicles and dealio inventory with some variation between brands based on you know, their strategies. But let's remember, this is great. This is actually a line from our daily email. By the way, if you don't get it, you need to get it because our lead writer Chris has some great little stingers at the end. So here's what he put at the end of this that showed up in the inbox today. He says, let's remember, though, a return to 2019 inventory levels does not equal a return to 2019 dealerships strategy know

Kyle Mountsier  05:59

what's nuts, Chris wasn't even in the auto business in 2019. And he knows barely had

Paul Daly  06:05

a car. Yeah, it's just a great reminder, right, like inventory levels as they come back, let's not revert to the things that were bad about, you know, the bad things that came from with the excess inventory, right, all of the floor planning and all of the incentive mongering and all of the the tactics that built distrust, and the consumer mindset, but it's good to see inventory coming back

Kyle Mountsier  06:29

up. It is it is and that's different, depending on the manufacturer, you know, you look at some manufacturers and they have, you know, they're they're getting close to that 90 day supply on ground and you got other manufacturers that are still sitting at a five day supply, you know, that are still waiting on on vehicles. So it's still a dynamic in the in the depending on the OEM, but to see a wider supply of vehicles on lots I think is actually we're in a healthy place right now. My fear is that it could go to unhealthy. So will 2023.

Paul Daly  07:02

I'll pretend that I don't think it's going to go to unhealthy just for this segment

Kyle Mountsier  07:09

just for this segment. Your your voice doesn't tell the story at all.

Paul Daly  07:13

Not even close. Not even close. Oh, well. Let's just move it to stop there too. So we can stop talking. Next story. Auto nation this one's near and dear to my heart. I relate to this story so much AutoNation I'll tell you why. The largest US new vehicle retailer, as you know is agreed to acquire Los Angeles based repair Smith, one word for $190 million to expand its on site service offering for 109 You know 490 million bucks, basically, you get it there's a van, the tech goes to the customer fixes their car on site, whether that's on site for dealership services or on site for retail customers, you know, it's part of their expansion to get into the after sales service market. I love it. Honestly,

Kyle Mountsier  07:56

it's it's absolutely genius. And I think that there's well one it's a customer experience thing. It takes the onus of anything service and repairs on the dealership and less on the customer. The opportunity for buying vehicles off the street because the customer is just kind of Oh place. Massive in my opinion.

Paul Daly  08:17

I don't even think of that. Yeah. Everybody gets a price while you're there, you can do a condition report, the the little OBD II to Brian Kramer is gonna pop out of the trunk and stick that OBD two thing in there and show people how easy it is.

Kyle Mountsier  08:29

Yeah, and I also think that, that the benefit here is you don't have to, you know, there's been a lot of talk kind of about building over the last 10 years and a few manufacturers have tried it, but about building like service centers throughout the city just because like we don't have the number of service centers of Firestone or of Abilene or anything like this, this reduces the need for that. And AutoNation sees themselves as a partner to OEMs and the ability to serve as vehicles in a radius is really really important as OEMs are trying to figure out the service ability in you know, a tightening like dealership network so automation is just hedging their bets on like changing lots of tires and driveways you know,

Paul Daly  09:14

well I don't actually I don't think they change tire so rotate tires. I know a lot about this type of business because my first business image auto right vans, equipment and vans showing up doing service digital system, go to repair I peruse the site this morning, they have a really nice sight little nice video on what it's like to be a repair Smith technician. And like look, you know, like you have like the Tesla's in the mobile service, bringing the service there. The truth is, it's like it's very feasible, you need less and less major equipment to do it right even we're talking about the serviceable items on an Eevee even put all those in a sprinter van, you know, typically speaking, the three year cars and newer are the majority of the cars that they service according to the article. So, hey, takes a while to figure out how to do this on your own. So they just said you We got 100 and it

Kyle Mountsier  10:01

just there it is. So smart, so smart.

Paul Daly  10:06

Oh, there's nothing for segways today. I'm hurting for say guys. Yeah, we're just gonna stop we just hit the stop button just hit the stop button when we do that Tuesday

Kyle Mountsier  10:16

drag on segways is that's tough we're

Paul Daly  10:19

gonna we're gonna we'll rename this well the first one was so strong right from from your like insight into the first story I think it just I think we just spent all our all the Segway energy right there. All right well listen speaking of sucking all the energy out of things to that as if we needed one more inconvenience at a dealership the specialized paper crazy that you use to print titles on if you ever look at that paper, it's pretty complicated, right? It's become scarce. There's a shortage of title printing paper causing delays, infusions of car dealers and owners. Basically the blame is increased, what would they say? Because we've been making so much cardboard that we're having a hard time getting the title paper, I don't buy it, because we've been making a lot of cardboard for like the last few years.

Kyle Mountsier  11:08

Right? I don't know. It's just, it's like the one thing about paper. You know what I get like, and not just that, but this is one of this. What's scary to me is like the titling process, the registration process is one of the biggest customer complaint areas in the dealership because it's all of that like post sale stuff that customers are always like, what's going on? What's happening? What's next? Is this getting done? Is that getting done? Because the communication has a gap between like salesperson to accounting the customer, and how does that flow at that point. And when already, like DMVs are struggling with staffing over the last couple of years. And now you see like if they have the staff, they can't even get the titles out. It you know, like you put it in the show notes, but digital title,

Paul Daly  12:03

maybe some states, I think they have a list of states that are like moving forward. And I think Massachusetts, maybe California, maybe Texas, maybe. But digital titles makes sense. I can't wait to get my driver's license on my phone right now. Like I almost don't need my wallet. I almost don't need it. I mean, not like I need like and if you can actually let's see if I wonder how much this title paper is worth. I actually have one right here. There you go. So you can read that up. Every cyclist like, look at it. And it's got like, it's got like a watermark of the Statue of Liberty. It's got all kinds of special security features in it. I don't know. I don't know. But they are holding valuable thing in my hand. Right? Yeah, so we'll see. But regardless, dealers are always creative to find a way to get things done anyway. But so the old power of attorney, right, good old fashioned, it's

Kyle Mountsier  12:55

just a good calm printer paper. Let your people know so they can let their customers know that hey, title work, maybe maybe taking a little bit longer time just because they're

Paul Daly  13:03

this podcast with that or you go look here in these two drones with beards and hats know that there's a title shortage title. And if we can't find the words, we'll just have a computer, give them to you speaking of computers giving us words. Maybe we should just have chat GPT wait segways for us. Before the show, you've probably heard about it around if not, you're about to chat. GPT is a large language model trained by a company or company, right open AI that generates human like texts and a wide range of topics based on input by a user. It's an AI reach search lab focusing on developing and promoting friendly AI looking to benefit humanity as a whole. And everything I just read to you was written by Chet GPT. There you go. I said I said explained jet GVT. And it gave sense. And it

Kyle Mountsier  14:01

gave you some bullet points. There you go. So interestingly enough, if you haven't heard of GPT, or GPT three, which is the most recent version, chap, GPT is actually on chat is actually on GPT 3.5. And three, and four is coming up soon. But GPT three has been utilized by a bunch of different AI services, things like copied to to leverage it in like copywriting in particular and and prose writing. But what the changes now is that you can actually start to ask it questions like it has a native learning that can also engage with someone and so you know, the the copy side of things has been done and is actually available via via an API that a lot of different services are plugged into and there have been businesses using it but chat GPT has kind of like open sourced it given the accessibility so that it can learn quicker, too. a bunch of different people. And the craziest thing about it is it's not actually hooked up to an inner hook to the internet. It's 100 gigabyte file. Think about that, like, it can literally fit on a phone.

Paul Daly  15:12

Yep. On when you search it, it was trained in what 2001? Yeah, is the last information that it has about the world, right? So it doesn't have anything current, it doesn't scour the internet for answers. You can try it out yourself by going to chat dot open Set up a little account and just start blowing your own mind. I had last night I was home. So we had the story a couple of weeks ago, or no, maybe I just sent you a text message or it was I don't know what my life is. But it was about an app that you could the kids could use. They're using the scan word problems, right? They just take a picture of it. And it solves the word problem for you. And we're like, here we go with this. Well, last night, my son Myles has like a dual enrollment class with you know, it's like high school college thing, right? And he asked to write a paper like a 1500 word paper, and he typed his thesis sentence into it. And it says write me 1500 words, it gave him a beautifully written article with two of the three ideas that he hadn't even considered yet. He's like, Oh, I never considered that. Oh, I never considered that. So I don't know, I'm still trying to decide. Is that bad for him to do? Or should he spend his time on other things? It does.

Kyle Mountsier  16:19

I think with all technology, the relationship with it is, is utilize it when it makes absolutely the most sense but lean into the actual communication, actual thought leadership, actual opinion based and, and, and, and research based understanding of your brain, and then leverage technology to make things more efficient. And I think that there's plenty of business uses for this, especially when scale is involved. So I'm excited to just see how people how people utilize it and and execute off of it.

Paul Daly  16:51

I don't think we have a choice at this point. It's coming. It's here. One thing it will never replace ever, ever, ever. And that is to humans having a relationship in community which is what we have. So take that Chechi

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