Kentucky and Cars, Volume Over Profit, One Upping in China, Emotional Ads Win

April 20, 2023
Thursday is coming in hot as we’re talking about Dealer sentiment, Tesla’s volume over profit strategy, and China’s flood release of EV tech. We also talk about the most effective ad content of 2022.
Listen On
Apple Podcasts IconSpotify IconGoogle Podcasts Icon

Takeaways from day with Kain and Co.
Jamie Butters keynote regarding what he sees as potential roadblocks from Detroit


Yesterday, Tesla CEO Elon Musk announced the company's strategy to prioritize higher volume production, even at the expense of short-term profits. The decision follows missed first-quarter expectations for total gross margin, but Musk still believes that Tesla's vehicles will generate significant profit through autonomy in the long run.
Reiterated that it expected to deliver of around 1.8 million vehicles this year, 500k more than they did in 2022
Musk also announced a late Q3 ‘handover event’ for the much anticipated Cybertruck as production will begin soon, with first deliveries scheduled for September 2023.  Updated specs and pricing will be revealed, as well as a new Quad-motor variant


The Shanghai Auto Show has automakers one-upping one another as they showcase a wide array of futuristic vehicle features. From in-car karaoke systems to crystal ball gear selectors, the exhibition is highlighting the innovation and creativity of both domestic and international brands.
Zeekr, a premium EV brand owned by Zhejiang Geely Holding Group, showcased the X model SUV, which boasts massage seats to enhance passenger comfort.
Unity, a popular video game engine company, is partnering with Li Auto to transform dashboard displays into 3D game-like interfaces, offering a glimpse of the cockpit of the future.
Patrick Koller, CEO of French auto parts supplier Faurecia, noted that Chinese automakers have done away with buttons in favor of voice and movement activation, stating, "The electronics in China is more of a consumer-driven electronics, this means you are looking for a 'Wow!' effect."
Amidst the multitude of new brands like Polestar and Li, there are also lots of familiar brands who released or displayed new models or concepts like VW, Nissan, Mini, and Honda.
Ford put a gas powered Ranger on display and announced they would be producing and selling the model in the Chinese market to join the F150 and Bronco


Following a 10-year decline, humor is back in advertising, as Kantar's Creative Effectiveness Awards highlights campaigns from KFC, Cadbury, and Starbucks as the most effective in 2022.
Emotion, nostalgia, and storytelling played key roles in engaging consumers, while the use of humor experienced a resurgence in advertising.
The pandemic and war in Ukraine are cited as reasons consumers are enjoying a little more escapism and good feelings in their ads
The most effective campaign in this section was discovered to be the Canadian version, a TV campaign for Cadbury Dairy Milk which ran online in a 30-second edit.

Get the Daily Push Back email at https://www.asotu.com/

JOIN the conversation on LinkedIn at: https://www.linkedin.com/company/asotu/

Read our most recent email at: https://www.asotu.com/media/push-back-email

ASOTU Instagram: https://www.instagram.com/automotivestateoftheunion

SPEAKERS

Kyle Mountsier, Paul Daly


Paul Daly  00:32

It is some kind of Thursday morning today. It's just gonna put that right there. You were in Atlanta I was in Kentucky we're talking about Kentucky and cars volume over profit. One upping EVs in China and emotional advertising.


Kyle Mountsier  00:46

really cared for this. Promotional advertising?


Paul Daly  00:52

I don't remember. Yeah. Oh, man. It's like 630 This morning my flight got in at like 1230 Last night I was in bed probably like 1:30am 630 this morning. I'm going through stuff and like buildings show and stuff. And I play this ad and I'm like, someone's gonna walk down and see me crying at the kitchen table and think I just had a rough day


Kyle Mountsier  01:11

allergies, allergies, allergies, making up to allergies. Oh, look, for the for people that don't get the like 32nd countdown intro. If you've never watched the pod live, you gotta go check that out. Because I don't know what it does. For me it like puts me in this thing. I'm like, okay,


Paul Daly  01:29

like, there's a countdown. Absolutely, absolutely. Man. I guess all I can say is the auto industry is so alive and well. So good. And there's so many. I mean, there's so much change. And there's all this talk about AI and pop culture and technology and what's going to happen and this and that. But I gotta say, spending time with dealers and industry partners on the ground. Like it's just business as usual.


Kyle Mountsier  01:54

Yeah. Look, here's its business as businesses like, not just usual, I think it's really good. This is crazy. Last night, I told you this show last night, I'm in the Atlanta airport, hanging out in the non TSA PreCheck line, because for some reason Atlanta shuts that down at night.


Paul Daly  02:10

Contestants. Oh, and they do that's right. And we always get there. Right.


Kyle Mountsier  02:15

Let me tell you about customer service TSA. Okay, but the people were right in front of me, you know, they were TSA PreCheck. Would they you know, there was this little like, everybody's kind of under their breath? I don't think so. So they so we're, we have a little thing going on. And they that this, this couple or two business partners, basically, were like, Hey, so what do you do? What industry are you in? And said automotive and they were like, oh, man, it's been crazy the last few years, huh? And I was like, yeah, they're like wild industry. I was like, yeah, let me tell you about it. And even then, they kind of sense this, like, they knew what's up in the auto industry. They were two I can't remember the but they were totally not even close to auto. But they there's enough knowledge out there in pop culture where they kind of knew like, oh, the inventory shortages have made it really profitable. It seems like been a fun industry to like, those are some of the comments. So, you know, if like, someone totally random at the airport is given those type of comments, you know, inside the industry, it's like, full on Go. No doubt,


Paul Daly  03:21

no doubt. Well, you know, we're gonna be with a bunch of people just get this out of the way Tampa two weeks from yesterday, or two days ago. So less than two weeks. We are premiering our TV Docu series pilot show, called more than cars. Last couple of years at Tampa, we've had the family reunion, which has been amazing and packed and full of energy. We're moving that to the Tampa theater this year. So we're gonna have full theater vibes. People are gonna dress up we're gonna have the red carpet. We're gonna have the movie screen we're gonna have the concessions open. So some swag. So we hope you can join us you can go to what was it? Pop it back on the screen? What is it? It was a Soto x.com. So do x.com and get what do you do when you're there? Once you're on that site, click you just hit Get tickets right there at the top. Oh, it's at the next screen has Tampa and let's go. Beautiful, beautiful selfies. So yesterday, I got to spend the day with the kids at the cane friends, family and friends digital success workshop. And it's a three day event. I was only able to go in for the one day. But let me tell you, this industry is so big that it's funny when I walk in a room and I'm like, Oh, I recognize every industry partner. What's up ladder, high fives fist bumps. And then I don't recognize like, hardly anyone else. I'm like, this is different. And they're all dealers. I'm like, I'm assuming everyone. And like, as I meet people, like there are just so many more amazing dealers out there that I've never even heard of. And it always blows my mind.


Kyle Mountsier  04:45

It's unbelievable. Back to the people last night. They were like, you know, auto industry is tough because it gets a bad rap. And I was like yeah, but I had let me tell you about some of the people that I know and they're like, Wow, that's the in the room. I'm just full of them right Just incredible people


Paul Daly  05:02

come on yeah, we're gonna actually release a few episodes of our in the dirt podcast featuring some of these dealers, that one kind of like best idea where and two of the three were like very culture focused and just got me all excited yesterday. And so one interesting thing that I wanted to bring up in the show, so, Jimmy Butler is the editor of Automotive News gave a little keynote, we got to spend some time together, which was fantastic. We interviewed him as well. But he was like, hey, here are the things that from my view, like from Detroit, that I think are gonna be a thing that dealer certain dealers should pay attention to. And he mentioned a few things like EVs and things like you know, more than generic stuff, but then he was like, the UAW strike that could happen in the fall, he says, I think is a more serious situation than it's actually getting talked about. And he said, if you're a domestic right if you're a domestic franchise, he goes as hard as this is to say or think about, you might want to think about stocking up your inventory overstocking on inventory, so that you have an I was like, store. You go.


Kyle Mountsier  06:04

That's unbelievable. So like these domestics who right now honestly domestics have the highest days, days and days and stuff like that supply? Sorry, not based in stock they supply. But they they can be back at like Ground Zero, potentially if the strike happened


Paul Daly  06:24

right now because of parts and not because of pandemic just because stuff doesn't get worked out. Yeah, he said he basically he kind of laid out how like the way the UAW elections went, like it was just a complete, complete mess. And now they got somebody in seat just in time for this bargain thing. There's a lot of pressure on them to actually strike, right, because of all the way the dynamics, a lot of employees are up in arms over it. Like it's, it's a whole thing. And he was just like, you know, if the inventory is there, you might want to, you know, he's like, not telling anybody what to do. He's like, I see trouble. And he's got a pretty decent perspective from we're sitting right there right in the seat. He's in all the meetings and all the editorial meetings, and he lives in Detroit, and he's just dialed in. So bringing that to you today. Yeah, just little little piece of little insider information. David came but want to thank David for inviting us, and just letting us be there.


Kyle Mountsier  07:13

And just being I couldn't be there. But the good the best host ever. He's just the best host ever. He is full on host. That's it is host is the word


Paul Daly  07:22

for sure. And there's the whole event reflects usually the personality of the host. So very laid back hospitable kind, it was just like, I'd be very proud if the outside world had a peek inside that event. I'd be very proud of proud of the industry I work in. Speaking of the industry we work, okay. It's a cheap segue, but


Kyle Mountsier  07:43

we can miss the opportunity on the volume on why you're there. And then, you know,


Paul Daly  07:50

didn't miss that one. Yesterday, Tesla CEO Elon Musk announced the company's strategy to prioritize higher volume production, even at the expense of short term profits. The decision follows their myths first quarter expectations for total gross margin, but must still believes Tesla's vehicle will generate significant profit through their commitment to autonomy in the long run. So he's like, we want to get the cars out there. Because when the when we figure out the autonomy piece, it's going to like be a scaling mechanism. So okay, he reiterated they are still respected, expected to deliver their target vehicle amount of 1.8 million vehicles this year, which is 500,000, more than last year when they did 1.3. So it's still a big step forward. He also announced that the much anticipated cybertruck event is going to be late in q3. They're calling it a handover event. They've had these before where like, you know, the first owners are there, and they're like, flipping their keys and you're like, look at these cats just getting their cybertruck Don't try to not break the window. Like the first one. I think they're gonna skip that part. And he also said, you know, they're gonna update specs and pricing and introduce a for moto Cybertrust. As opposed to the three moto one that was already like,


Kyle Mountsier  09:04

I need someone and maybe we'll do this, we should put this together like the timeline of cybertruck announcement. Yes,


Paul Daly  09:11

a law mov van. Line movie B,


Kyle Mountsier  09:14

you know, like, you just timeline it into this thing, you know, because it's just continually pushed out continually pushed out. Feels like they're getting closer. I think they need to because the legacy OEMs are really pushing the boundaries with trucks, especially with the F 150. The cybertruck is kind of truck ish, right? And so there's going to be a lot of energy around it for sure. But you know, we'll see how that kind of impacts their q3 q4 profitability and volume. You know, this is this is the play. This is like, OEM 101. Okay, do we go higher margins, lower lower volume, higher volume, lower margins, and he's having to figure that out. Now I think the first time ever because competitive matrix is getting a lot stronger. By In the US and in Asia,


Paul Daly  10:02

speaking of competitive matrix in Asia we talked about this last year at the Shanghai Auto Show getting started but now it's in full swing automakers are literally one upping one another, as they, you know, showcase their wide variety of futuristic vehicle features. It's pretty crazy. Listen to this in car karaoke, that's such an awesome idea, by the way, systems to like a crystal ball gear shifter selector thing. It's like, this stuff is next level. First of all, I don't know why they could have done any of this when it was a combustion engine. But they just they just didn't. This is like an excuse and it's opened the minds of the creativity technology. So you know, all these international brands are very focused on this like creativity. A bunch of new brands I've never heard of one is called zeker ZK are a premium Evie brand owned by Gilly they showcase the X model SUV, which has massage seats I mean, I know that exists in some cars already like the Lincoln Navigator you can get that unity a popular video game engine company. So here's the combination of like consumer tech and automotive coming together as partnering with Li Li Li auto to transform dashboard displays into 3d game like interfaces, giving a glimpse of the cockpit of the future. And one one French auto parts supplier. Oh, man, I'm gonna get this name right. Well, Patrick color. It's furusiyya F. We'll call it that FAU R E for Russia there. Russia. Yeah, exactly what I thought I would do with it. noted, noted that Chinese automakers have done away with buttons in favor of voice and movement activation that frightens me. But he does say the electronics in China is now more of a consumer driven electronics means they're just looking for the wow effect. So a lot of familiar brands there. Right? So new new entrants like Li and polo star review, but VW Nissan mini Honda plan for Ford actually had a combustion, Ford Ranger. They're


Kyle Mountsier  12:04

like, they were like, watch us. You know, Evie market is strong. We're going back to gas boom.


Paul Daly  12:12

Right? So so they had a range of their they're gonna now they did announce the Ranger is going to be manufactured and sold in China alongside the F 150. And the bronco. So like, you got to see go check out some of the pictures in the link in the article. There's just so much going on. I don't know how much of it is hype? You know what I mean? Like, Well, I kind of feel like the NFT craze a little bit?


Kyle Mountsier  12:30

Well, there's been Yeah, oh, it and it looks like the NFT craze. But it's true, you know, there's been plenty of people that have said we're gonna see 120 550 New OEMs attempt to hit the market with a lot of PE and VC money. And then then we're gonna see like a massive shrinking over the next five years to like, you know, 10 to 12 that make it and so there's just going to be a lot of experimentation, a lot of kind of, like things that are out of the box, I think about it, like the fashion show, right? It's, it's even more futuristic and more concept than what we typically get with auto shows, because there's just so much experimentation that happens when you have to start from the ground up, right? When you're, when you're completely replac forming your car, you get the opportunity to go, everything from the ground up, now has the opportunity to change you're no longer designing around an engine and a transmission and, and wire wiring systems that are good points. You're not designing around that. Yeah, you're designing around, the creature comforts a lot more you're designing around the body shape, because the battery in the transmission is on the ground. And so you just got you just get like there's wide open space for designers and coming right off the NFT crazy, like you just said, Everybody's kind of like playing in design world. I mean, right? It's


Paul Daly  13:51

actually going to have value what's not going to have value. Actually, you gotta you gotta put out there. Yeah, it does feel like you know, ces more than it does an auto show. It's a fun time. It really is like a fun time this is going to be looked back in you know, history is gonna look back at this era and be like, well, that's where this everyone kind of like, took some shackles off and started thinking in a different way about about the driving experience, which is fun, but thinking about experience. Segway three, three and one, the three of wands showing. This is this is cool, because people ask us kind of so much about marketing, they asked us so much about creative. And so we're talking about this story about what ads and what creative is working in the general consumer market. So following a 10 year decline. Humor is back in advertising, as Cantor's creative effectiveness awards highlights campaigns from KFC, Cadbury and Starbucks as the most effective in 2022. And they're saying emotion, nostalgia, and storytelling are all key roles in engaging customers while the use of humor experienced a total resurgence this year. You know things like the pen endemic the war in Ukraine all the reasons that we have to feel like down the advertisers creatives coming to the rescue that go we want we want it we have to tell you about a product but we can still contribute to your life in some way. This this campaign from Cadbury's voted the most effective campaign and this is the one that had me tearing up we're gonna roll it for you right now. So if you're just listening to the podcast the scene hold on hold on hold on one second I gotta I gotta make sure the podcast audio only people understand what's going on the scene is a gas station and a man steps up to a glass window you know where the tellers behind the window. And you know, and we'll tell you what happened at the end but that's the scene so it's walking in nighttime, and the man is walking into the store with probably like a 22 year old girl behind the glass Go Isaac row number six one of those please


16:10

love you dad. Oh


Paul Daly  16:17

I got Jerry I look at his wife and I have to I have to so if you're just on the podcast, oh walks up and the girl behind the glass looks like she's having a rough day and he says number six, come number six. And he said I have one of those two. And he points at like one of the Cadbury chocolate bars behind and she picks it up and while she's picking it up, he turns and walks away and she knocks on the glass and says Wait You forgot this and it looks at her and he smiles and then he turns and keeps walking to his car and then she grabs the mic and she goes I love you dad ah got up all the way who wants to buy a Cadbury chocolate


Kyle Mountsier  16:52

I'm gonna buy one for every teller just you know just like maybe maybe you're having daddy issues and


Paul Daly  17:02

we haven't had a lot of sleep because Kyle and I both teary eyed this morning struggling he was out with a baby last night by flight got it after whatever whatever. But look, this is the point. The automotive industry is more heart than anything else. You will always be more heart and more about people than it is about cars. So remember that as you walk into your showrooms and the serve other dealers today. You can do it too.

Get the daily email that makes reading the news actually enjoyable. Stay informed and entertained, for free.