Next Gen Auto Tech School, Liza’s Tips For Pricing Aged Inventory, Swiss Ban On EV Driving?

December 5, 2022
Welcome to another great week in Retail Auto as we talk about the newest auto tech school on the west coast and why it’s significant. We also share Liza Borches’ tips and strategies for moving aged inventory, as well as the truth on a rumored Swiss EV ban.
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An new, $22.3M advanced automotive tech school in a northern LA auburn is now open at Pierce college, thanks to a $3.5B California bond measure to invest in facilities that better prepare students for jobs

  • New requirements for being an Auto Tech are rapidly changing and now require a growing number of computer, technology, and programming skills
  • Alex Villalta, associate professor of automotive service technology and a graduate of the Pierce program, says “The students are coming in with laptops instead of toolboxes.”
  • “Northridge Toyota in California hires Pierce graduates,” said shop manager Edward Lujan, who is in charge of everything from recruiting service technicians to ensuring they pass all the certification exams needed to advance. He has been in the service industry for 35 years, all of them with Toyota and Lexus.

The California New Car Dealers Association awarded $413,000 over the last 5  years to 334 California students to help cover training costs

We got into the details of pricing aged inventory with CMA owner Liza Borches on Friday’s All Things Used Cars room on Clubhouse with David Long. Here are key takeaways from Liza:

  • Expect diversity. Every store, every team, and every market is going to require a nuanced strategy. However, no matter the nuances, some fundamentals exist.
  • The right end user exists for every car. Moving inventory between your group's stores or out of your network could be vital to selling inventory while retaining more value.
  • Repricing with wisdom. Before changing the price, call every relevant lead to gauge interest. You may be able to sell it with a smaller price drop.
  • "You were right. We have adjusted the price and wanted to give you dibs."
  • 30-day supply. Buying and selling within the same market will allow for greater control (and profits) as the market shifts.

Posts about Switzerland proposing a ban on using EV’s to stave off an energy shortage gained some steam on LinkedIn and elsewhere, but it’s not as seismic as it seems. As it turns out, there really needs to be an emergency

  • The basis for the reports is the ‘Ordinance on Restrictions and Prohibitions on the Use of Electric Energy’ and notes that ‘level 3’ could include limiting driving to essential travel only such as going to work, doctors, to get food etc.


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SPEAKERS

Kyle Mountsier, Paul Daly


Paul Daly  00:23

I hope you all had a good weekend. Sorry about your soccer team Kyle. Well, our soccer team our got all kinds of good things to talk about this week. Next Gen tech schools, Liza borscht has given prices aging inventory. advice to people really got a Swiss ban on Evie driving, they start to get to the bottom of that one. We'll get the bottom of that before this episode is over.


Kyle Mountsier  00:43

Well, we'll ruin your LinkedIn post day. By the end of the episode. Yeah, well, hopefully


Paul Daly  00:49

we preempt it. So that by the time you see it'll be a non issue now,


Kyle Mountsier  00:55

this morning that people can schedule LinkedIn posts. It was posted. I saw that that was a feature last week, but I didn't have it. Do you have it? I have it I haven't updated so I do not have it. Well, maybe I do have it. I just thought but companies can't which is really backwards.


Paul Daly  01:15

LinkedIn, audio events, audio events. We're out here trying to serve some people. Actually more people than a lot of personal profiles with some audio events LinkedIn and we can't do it. But we're trying really hard. Helpless. Help you quitter spaces is doing the thing right now. Like I don't want to move don't make us move into Twitter spaces. Don't make us we want to have it on LinkedIn. If you'd


Kyle Mountsier  01:39

be fair, Twitter spaces doesn't have like rooms or anything like that either. It's all based off of people so


Paul Daly  01:45

well. So our automotive stay the union Twitter account couldn't do it. I don't think so. I don't know. We weren't this world wasn't made for us, Kyle. I can tell you why we're hosting our own event on December 28. In Nashville. You're an extravaganza Look, I know we've been talking about it. But in Nashville on December 28th. It's a Tuesday Christmas week we're having a live tonight show style extravaganza. We're gonna be in suits. There's gonna be a live band. We're doing full all out our producer produces like the Emmys in New York Fashion Week for a network. So we're given the whole thing we're gonna have live guests literally at


Kyle Mountsier  02:21

Choice Awards right now, y'all.


Paul Daly  02:23

Oh, that's right, he's producing.


Kyle Mountsier  02:25

We're gonna have some fun, it's gonna get crazy. Yeah, we are. So go


Paul Daly  02:27

to go to asotu.com. It's right below the top of the page, click on that. It'll take you up to the LinkedIn event, Facebook event and all that stuff. We want you to be there. If you can in person, maybe you can get there in person, we have limited seating for the live studio audience. But you definitely can get there for the live stream. And whether you know you're working in the service lane, have it on second screen, or you can focus on it for a while. We hope that you can join us for a good time of looking back in this year. And looking ahead to next year with some of the people that you know and love and get seem a little more candid environment and got a couple of prizes and giveaways and there's a PS five sitting in my office right now that we will be giving away. So make sure that you join sign up for the LinkedIn event of


Kyle Mountsier  03:06

giving even over here.


Paul Daly  03:09

I think so good. That's so good. I got a few things to talk about today, a few stories and a few wrap ups. But this first one is about this is a next generation of auto techs. We haven't talked about this in a while, but we've talked about EVs quite a bit. You know, the landscape is changing and a new $22.3 million automotive tech school in northern in the northern la suburb is now open its Pierce College, thanks to a $3.5 billion California bond measure that was actually passed back in 2008. To invest in facilities that better prepare students for jobs. That's not just an automotive that's across the board. And $22.3 million of it ended up in an automotive tech school which is so needed. And so like basically some of the things from the automotive news article that you know, new requirements for being an auto tech rapidly changing, obviously now require computers and technology and programming even Alex Villa Ville Villalta, Associate Professor of automotive service tech and a graduate of the Pierce program says the students are coming in now with laptops instead of toolboxes. Yeah pretty cool.


Kyle Mountsier  04:16

It is pretty wild and I think you know the E v x Acceleration is gonna make this even more a necessity to almost like you might need some level of programming skills Yeah,


Paul Daly  04:26

that's the word that kind of triggered me


Kyle Mountsier  04:28

I was like oh yeah, it's not just that it a little bit you have to like connect to the OEM computer to like let it solve something or call a master tech up at the top of the shop like you might actually have to fix a couple lines of code or you know get in and diagnose the computer the actual computer I think it'd be really funny if like every tech Bay had like the tech you know, the the programming technician over here and then like the lube technician over here and like they're both working on the same car,


Paul Daly  04:58

 like in like a like in a spy movie where you have the guy in the chair, right? The guy the chairs like channel he's got,


Kyle Mountsier  05:07

like you just like as the carpools in, it just gets plugged in some guy in another room is diagnosing the car, seeing what's happened, looked looked over the past, uploading some stuff, you know, like I'm


Paul Daly  05:18

picturing schematics in an augmented reality glasses being overlaid. This is going to be good, we should make a visual representation of what we're talking about. Yes, exactly. But I would just I would start, it's actually not that far off on No, it's not that far off.


Kyle Mountsier  05:32

I mean, I think everyone should be thinking about what their shops would look like, with more like pressing, pressing into technology and what technology you should be investing in today. And, or just like accruing for the right type of computers, right? Think about it. Paul, when you go in the shop, what's sitting around, typically the old sales guy computer, right? It's like, ah, put that back in the Tech Shop, who will be good with that one back there, you know, right. It's still like dial up somehow. Right? It should,


Paul Daly  06:04

right? It should be the newest stuff. It should be the newest should be new, newest, most portable, most powerful. This is a great part of the story. Northridge Toyota, who's in the area in California, they hire Pierce graduates to shop manager Edward Edward Luhan, who is in charge of everything from recruiting service techs, to ensuring that you know, they pass their certifications. He's been in the service industry for 35 years, all of them with Toyota and Lexus. And he notes, the vehicles he started working with had six computers. Wow, new ones have like 50. So it's a big deal. And it's cool to see the California New Car Dealer Association, giving scholarship money out and pretty big amounts. I mean, they awarded almost half a million dollars over the last five years to over 300 California students to help cover training costs. I think this is definitely something that dealers we see all across the country in spurts right, like engaged in training, the next level of technician, but the opportunity for that, especially with the shortage, those who seem to lean in on these recruitment programs, and you know,


Kyle Mountsier  07:09

you know, training, recruitment, scholarships, all of that, I think those are going to be the ones that when especially when it's tough to find technicians, it's going to be even tougher to find technology driven technicians. Now we're getting into evey spaces like getting in at the ground level in high school and college or, you know, trade, trade school type stuff. Absolutely necessary for car dealers, especially like mid to large sized groups, no brainer.


Paul Daly  07:37

I wonder if there's like this. I mean, there's a brand thing right on turning wrenches, right it's a dirty job. It's like hey, well there's not going to be any more oil. Right like a lot of the dirty jobs. A lot of the dirty jobs in auto tech are going to be transitioning out or at least reducing and kind of like a level of being able to like work on a car it feels a little more fast and furious to me right like the computer do is like oh let me like program the ECM and make the thing happen. You know, so we'll see I mean, there's probably a group of people that never considered it that will consider it now. And I guess time will tell you know, it's one of the one of the dealers is doing a really great job of it. We had a little bit of a front row seat for as Carter Myers automotive, and, you know, with their technician training, awarding scholarships, bringing people into their service bays. And speaking of Carter Myers, automotive segway, really good.


Kyle Mountsier  08:30

So, yep, yep, yep, yep, yep, yep. Yep.


Paul Daly  08:33

So on Fridays Every Friday we have room on clubhouse called all things use cars concepted and hosted by the one and only David Long has a topic and on use cars that you know, we kind of branch around last week it was specifically on how we're going to deal with in price aged inventory and Liza Borgess from Carter Marsh automotive, she shared some of her tips you know, I thought maybe like getting a little practical on a Monday might be helpful with an issue that everybody's dealing with.


Kyle Mountsier  09:01

Well, the reality is, is that going into the end of the year, especially when people are consistently writing down cars to you know, get out of the year and a good financial state and be ahead of their inventory. Think I'm thinking about this and thinking about it throughout the month of December on what you're going to do with aged inventory is a real key. I think that for me and we'll go through kind of her practical stuff. But yes, you need to deal with the age inventory more dealers are coming up on age inventory. Honestly, it's kind of interesting, because aged inventory just wasn't even as much of an issue so many dealers were okay with aging inventory, because it was appreciating and so it's not like we


Paul Daly  09:42

does make a difference, doesn't it? Right? I don't know if I hold it, it might be worth next


Kyle Mountsier  09:47

exactly that we haven't had it. It's just that now we have to do something about it because it is depreciating. Again, we're seeing depreciation in like 20% ranges again, which is similar to what it was pre pre Three inventory shortage. So, but the biggest reality that I don't think was mentioned in, in lies this talk, but that was mentioned in the room and that I'm constantly on is that all of your money, all of your turn, all of your intention is made in the buy and recon process. And so, you know, if you're a dealer out there, and you're thinking, What do I do with my agent inventory, is you go back and train us car managers and service managers on what they miss 60 days ago, not what they're missing today in their agent inventory, because like Tommy Gibbs always says, a car doesn't age on day to day 60. It ages on day one. So that's a great, that's what I have to lean into. So I mean, it's like when did Liza stuff though? It's less of a mitigation strategy, right? Like how to get rid of aged inventory when you have it is mitigation? Yes, right. It's not prevention. So like Liza gives her points on like how her and her team approach age inventory.


Paul Daly  10:53

There's five points here, we'll go through quickly, the first, expect inventory diversity, that means every store, every team in every market is going to require a nuanced strategy. Right? No matter the nuances, there's still some fundamentals. So she's like, no two situations are the same. So like, let's understand that even if you're the same group, with stores in different markets, like like Hearst, her group does exist. So she says the right end user exists for every car. So moving inventory between the group stores, or out of your network could be vital to selling the aged inventory while retaining retaining more value. We've seen a lot of dealers do this just by pulling inventory on their website, right? That's just available. But sometimes moving around physically, could make a difference as well. Especially if you have a team that is really engaged with like doing their videos in the morning, or letting their customers know what vehicles they have on their lap when they do their lat walks. Um, that could really make a big difference. I like this one repricing with wisdom you would take someone like Liza to use the word wisdom when it comes so good. She says before changing the price call every relevant lead to gauge interest, you may be able to sell it with a smaller price trap. Yeah, like


Kyle Mountsier  12:02

that. Yeah, that's a big, you know, Jason rice, owner of Lot Pop is a big he's like the majority of your car sales are right there in your lead. You're just not paying attention to him. You're trying to you're using price over over the people to kind of move vehicles and the opportunity is a lot of times in your people.


Paul Daly  12:21

So yeah, it's this next this next one is like a little a little quip that they use. And it sounds like this. You were right. We've adjusted the price and wanted to give you dibs or first crack at it. I like it the customer didn't buy it and they go back to it. You know what Mr. Mrs. Customer, you were right. price was too high. We went looked at it readjusted it, since you were looking at it, we want to give you first crack at it with the adjusted price, which is pretty cool. You know, the final point, and we talked about this, Dale Pollack talked about this when he was on the other the other week, buying and selling on a 30 day supply within the same market will just be greater control. You know, and this goes back right to your point at the beginning, Kyle, that buying it right, and knowing what your plan is over the neck to flip it in, in and out within 30 days is always what's going to insulate you


Kyle Mountsier  13:07

against a 12 turns a year inventory, especially right now is extremely important. So knowing that you're on that 30 day supply, making that turn happened quickly, you know, making you're making your money in the by having a having a quality exit strategy. And then and then ensuring that your recon process is tight so that you don't have aged inventory on day five, still still waiting to hit the market is absolutely crucial, especially going into the year like every single car should be fully merchandised by about the 18th of this month. Because if you're waiting until the 24th 25th to merchandise your vehicles, you're behind the


Paul Daly  13:42

doesn't even exist pretty much doesn't even exist, hey, let's pull out for a second because a lot of people new listeners to the podcast might not have a full idea of what we're talking about. Here's the bottom line. It's like think of your used car inventory. All those cars sitting out there on the lot that are not new are used. Think of that like a perishing piece of fruit, the longer you have it, the worse it's going to get just because values go down over time. It costs money for your dealer to buy that car and they pay interest on the loan, they have to pay to insure it while it's on the line. So every day that's getting more and more rotten while it's sitting there. So anything you can do to help get those cars off the lot will make your GM and your used car manager and your dealer principal, very, very happy. Whether that means getting it through the shop faster, maybe making sure it is clean, making sure customers are pointed in the right direction. You if you're in the store or you're affiliated with the store, you can actually have an impact on that if you know what's going on, which is what we're trying to do trying to bring you there. All right. Last Story. Speaking of things trying to bring you somewhere and stuff.


Kyle Mountsier  14:46

Look, you got to segue in


Paul Daly  14:47

proud of you. Okay, proud of you. It's Monday. Okay, so I saw this post on LinkedIn and I was like I got all excited about it. So posts on Switzerland, proposing a ban on using EVs to stave off an energy show Just gains gave a little bit of traction, I saw the posts in a couple of places, I was like, oh, here comes the other shoe, it's about to drop. But before we're gonna give you just something off LinkedIn randomly, yeah, we're gonna do a little research. So we did a little research. And the truth is, it's not quite as fantastic as it seemed in the beginning. So all the all the people looking for like a reasonably at now turns out the basis for those reports is the ordinance on restrictions and prohibitions on the use of electric energy, which is a proposal going forward to the Swiss government. And banning or reducing the use of EVs is like, level three, which is like a high level of like, we're in trouble in the power grid here. And it could include limiting driving to basic travel, like going to work getting food, you know, going to the doctors, etc. So it really like,


Kyle Mountsier  15:47

do you mean like if we, if we ran out of gas? I mean, exactly. Okay. Sounds good. So we've been through this, but


Paul Daly  15:55

if we're running out of gas, guess what we would be like you use little less? What do you do when you run out of water? Use a little less right. And so but you know, this just shut that down right now.


Kyle Mountsier  16:08

Yeah. It's a it's a big deal. I would say don't get too fantastic about it understand that. It's just like a move. It's a concept that customers and politicians and local government, you know, everybody is going to just have to deal with how do we operate in this type of ecosystem, right? It's just a new thing. It's not It's or it's a new iteration on the same thing. So just don't I would say with everything, Evie, don't get to fantastic about it. There's still a ton of moves and shifts and understanding and understanding the market or electricity or grids or anything like that. There's a lot of questions still to be had. We've been working with gas engines for like over 100 years, people. We just know what to expect. We don't know what to expect. Just wait on it. It'll come. It's okay.


Paul Daly  16:58

It's okay. I think that's the way you should walk away. It's Oh, okay. We can do things today that influence though the positive movement of our businesses and our communities. Let's focus on those things as we get into this week.

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