July US Light Vehicle sales down 11%, Toyota down 21%, Honda down 47%, Mazda down 29%
Experian reports inaccurate credit scores delivered for millions of customers affecting rates
Mark Begor, Equifax’s chief executive, publicly acknowledged the flub at a June investor conference, calling it a coding issue that affected “legacy applications that resulted in some scores going out that had incorrect data” “The impact is going to be quite small,” Mr. Begor said, “not something that’s meaningful to Equifax.
Kyle Mountsier, Paul Daly
Paul Daly 00:23
Kyle and I feel like a couple of podcasts athletes these days we'll tell you why. We're gonna talk about OEMs struggling in sales experience giving the wrong credit scores and the metaverse jobs disappearing into the metaverse. People really want to know where's my Metaverse job? They stopped. They go. It only exists in the metaverse
Kyle Mountsier 00:45
and the building around it hasn't been built. So you actually can't get there, which is the whole weird thing. You know,
Paul Daly 00:50
it's a job without a building, I guess. Oh my gosh. So yesterday, we woke up, and we came into the office and then we did. Oh, it was, it was I went to bed last night. And I was like, it feels like tomorrow should be Friday. Like, I feel like we've gotten that much done. This week. We woke up. We prep the show in the morning in the wee hours of the morning. Then we were on the inside auto podcast before the day started because it was you know, hosted by auto lead star in Israel. And then we did this show. And then we recorded an otter collabs podcast with Jason rice and then a live interview with Todd Caputo. And then
Kyle Mountsier 01:37
with Dane Seville que oh that was next right? And then we finished the day with Danny's as
Paul Daly 01:43
Lawsky. See, I can say his last name as offski Zaslofsky. I can say it I'll say it say three times fast. With Vin Q, who is telling us about this amazing VR experience. They're bringing to a soda con, they literally filmed it, and created it because we asked them said if you want to be a collaborator at this event, you need to come with something fresh. And so they literally got this 11k technology orb with all these 11k cameras and they went through they're building out this whole dealership experience, it's going to be amazing. And you can check it out at a soda con with the through the VR. He's like it's not hokey. And if we know them, they don't make hokey things. So that was yesterday. And that was it was like six, six, we generated like four hours of content. I feel like a professional podcaster. Kyle,
Kyle Mountsier 02:28
I know I think we can I think we are living we think about doing that.
Paul Daly 02:35
We're so glad that so many of you jump in with us in the morning. It really does energize us, right, we got to the end of the day, and we were like, I feel energized by these conversations with the nature of collaboration going on inside the automotive industry is next level, and we kind of see it inside these conversations, and we can't wait to share them with you because man, people be collaborating.
Kyle Mountsier 02:59
Everybody is pushing the boundaries of what it looks like to work with each other, whether that be industry partners, or dealers or industry partners working together to to make solutions, or I mean, it's just it's all over the place. And I am just I'm thrilled by it. I think this has always been the heart of auto but we're starting to see it on a whole new scale recognizing that if we don't do things like this, then we will just run out of steam. And it's just you know, I wrote it last night. It's like this is the energy that I feel like we need in this cultural moment of autism moment.
Paul Daly 03:36
You're so right. All that stuff that we're talking about. You can go to auto collabs.com or just search it on your favorite podcast platform and subscribe because all these interviews we're talking about are about to start dropping even more this week. We have some in the queue already. Damon Lester's dropping. Jim McKelvey is dropping founders co founders square, it's going to be nuts and all these people are going to be at a soda con ticket sales are picking up if you're a dealer or industry partner and you want to jam with us for just 48 hours in Philly please go to a SOTU con.com and get your tickets we're releasing more scheduled sessions but it is going to be just look at the list of speakers and be like oh, this is gonna be thing.
Kyle Mountsier 04:16
Hi no every time we've said this before, but every time I look at the list of speakers I'm like, we I know I do I have to be locked in one room. One time
Paul Daly 04:25
Ah right. Impossible to see all this session I have otherwise. It is it is it is but we have the automotive universe is still turning and still ticking. And we have a few stories today that we found interesting. We hope you find interesting too, because that's our goal on the show. Right? We can't talk about all the news. But this is almost we this kind of came out yesterday in one of our interviews. What we do on the automotive troublemaker in the morning, whether it's this or the audio version, if you watch it, download the pod the audio podcasts, have it there in your ear if you need it. You can listen to it on 1.5 speed because we don't talk that fast. It's, it's basically we consider it an approach angle, right? We want we want to try to orient the auto industry to approach retail automotive, from a retail, pop culture, you know, an economic perspective and an angle that kind of considers all the things and comes in through that lens. There are a lot of ways to approach it. We don't want our heads down, we want them up. So what we try to do in the show, is to give you that approach angle. So let's get to our first story. This one from automotive news this morning, July us light vehicle sales down 11%. Toyota was down 21% Honda. Dang. Well, they were down 47% Mazda 29%. And this marks one year of consistent down months for Toyota and Honda, Hyundai and Kia. It's their fifth month down. And they say a Toyota is down to a 16 day supply. Wow. So I will one let's get worse. It's not all bad news. We're going to contextualize
Kyle Mountsier 05:59
bad news because obviously we have there's a downturn in sales. But I wouldn't attribute that to demand particularly we're still seeing issues with availability. So when you think about 14,000 vehicles for Toyota in stock at dealers, I think they are, aren't they like, somewhere in like the 1700 dealers in their network. They're larger, they're a larger portion. We'll look that up. But we'll find out and maybe let you know, tomorrow, but they've got a lot of dealers. So when you start to break that down, that's I mean, that's like 10 cars a store on the ground on average. That ain't normal. That That ain't normal, folks. Right. So just availability, I think is playing a lot bigger a factor in in sales volume.
Paul Daly 06:48
Well, 100 Toyota dealers 1200 Got it 1200 Toyota dealers in the US.
Kyle Mountsier 06:52
Yeah, so quick math is like 14 cars per, you know, not even 14, you know, 12 and a half cars per, per rooftop. So, you know, you're that's, that's not anything to write home about. And availability is still stifling the ability for purchasers to enter the market right now. Yeah. And, and purchase. So I think that that's a that's a that's a differentiator for sure. So, you know, I mean, I like personally, I just purchased a new car and had to wait two weeks for the next round stock tour to arrive. So and that's from a dealer that I know like, it wasn't like
Paul Daly 07:30
that. Was the mouse here favor call directly to the top. Yeah, exactly.
Kyle Mountsier 07:35
Yeah. So you know, I so here's just interestingly enough, Charlie Chesbro, who will be at a sudo con what what
Paul Daly 07:44
may or may not be ya included? This quote is a senior economist at Cox
Kyle Mountsier 07:49
right? Yes, at Cox, automotive and and works alongside Jonathan smoke and a lot of other economists. And his quote, is there plenty of headwinds pushing against the newer notable recovery in sales volumes, rising interest rates and low customer consumer sentiment are keeping many potential buyers out of the market. At the same time, higher prices for both gasoline and vehicles are making affordability an even greater challenge. tight supply, however, continues to be the biggest obstacle over the near term, and there's little evidence of supply returning to normal. So what's what that means is there are still people a lot of people out of market that normally would be in market, we talked about the story yesterday where vehicle age is is is growing, and which means that more people are staying out of market for new vehicle purchases. So you know, as things like gas prices, and interest rates potentially come back down to a normalized level, we will probably see another uptick, which is crazy because we're gonna see another supply crunch. At that point if the demand isn't met in the meantime,
Paul Daly 08:55
little brightspot hybrid and plug in hybrid sales rose 12% at 186%. At Kia, so a little indicator there that people are leaning in those as you get them right as they're available. People are buying them also a little notable fact, the average interest rate in June or July was five and a half percent and the average loan term this one got me a little bit 71 months is the average loan term. Wow.
Kyle Mountsier 09:21
Oh wow, look at this. So Brian Ortega. Toyota dealership just just noted that they have no cameras or Karolos which are the highest sellers in those in those may be outside of the rav4 right because of the small crossovers but that's that's a pretty stark reality for a Toyota dealership. But yeah, sorry to interrupt that they do it they do it now.
Paul Daly 09:45
Hey, real time real time input from a dealer let's put it on the screen but on the screen let's go. So you know I mean, like our takeaway from this is kind of keep calm and carry on like, Okay, this is News. This is it's good to keep your head up. Good. understand what's going on. Not that it should really change much of what you're doing. Just make sure your operations are tight. Make sure your service is running tight. Make sure that you're taking really great care of the people doing right by them, what their trades and what you're selling the car for. And, you know, it's a long game. Everybody's
Kyle Mountsier 10:15
stuck in my head from clubhouse last week is choose not to participate. choose not to participate in the mayhem in the recession. And the resurrection is not to present something in
Paul Daly 10:25
the towel and like push. Let's go. I mean, so yeah, I mean, you did mess up my segway, though, because I was talking about interest rates. And then I would like speaking of interest rates. This is the first time I put two articles together thinking specifically of the segue you pre plan to say that's impressive. I you know, it's just now that the other the other mechanics are becoming a little bit normal, right, I can start to get a little fancy and pre planned segue So Kyle can throw a monkey wrench so interesting. Wall Street Journal article, Experian reported that they delivered inaccurate credit scores to millions of customers affecting rates. So say millions of customers seeking loans during a three week period period earlier this year just came out. Bank bank executives and some other familiar with the situation said between March and April, erroneous scores on people applying for auto loans, mortgages and credit cards to banks and non bank lenders, big and small, including banks like JP Morgan, Wells Fargo and our automotive friend, Ally, financial rates, average 20 point difference either way, higher or lower. And so get this. So the the CEO of Equifax, he acknowledged it and he said, you know, it was a coding error, like is a coding error, the impact he said, but the impact is going to be quite small. It's not something this one got me. This next slide. I mean, this is a shareholder line. This is the CEO delivering a wide to the shareholder, but he may have forgotten that like the public might actually hear that he says it's not something that's meaningful to Equifax. So it's not something that's meaningful to Equifax show, but like, yeah, people's credit, the rate that they got could have been affected by it. And they said, in some instances, it was very small amount. He's like, Yeah, it's not, it's not meaningful to Equifax. And then they kind of like in the article, they dive into some more data. And they did say like, in some cases, people with zero credit score, actually got graded as like a 700.
Kyle Mountsier 12:37
Yeah. Wow. So this is where this is where like, why credit? All the credit unions out there like see? Absolutely. They have people read the credit report and look into their history and actually read the credit app. And all of the like, pass through banks are like skirt.
Paul Daly 12:59
I mean, like luxury proposition
Kyle Mountsier 13:00
I do. I am guessing like, overall scope of lending. Most of these people probably still got approved, maybe there was a little rate difference. It might have affected like some local lenders, or dealers or, or smaller mortgage lenders that couldn't go find and book that that somewhere else if for some reason it was lower, so the overall impact. But you still got to think like that a coding error could disrupt could potentially disrupt the lending industry for three weeks.
Paul Daly 13:32
They didn't realize, well, they didn't realize until now. It's nuts. You know, I think I mean, you think of someone with no credit score, getting graded at a 700 and being really happy. But the reality is that credit scores exist for a reason. And some of those people who got loans probably can't afford them. Right. And you know, that could put them in hardship. I mean, that's a whole other conversation about personal responsibility that we're not going to get into here. Exactly. But at the same time, you know, again, just to be aware that this is going on and to just pay attention and to know it, what's up. Sure, Equifax we just find. But yeah, like your point, like things, things can affect this industry that we don't even realize, which just highlights the importance of being a good, solid, holistic player. Oh, and
Kyle Mountsier 14:19
I think I think this is just another lesson in educating your people to educate your customers, just making sure that no matter what time it is, that there's an understanding around credit, like a solid understanding, not just about credit scores, but about, you know, what's in credit, how credit is how credit is, you know, grown or, or where credit issues come into play, where it's not just like, oh, that's bad credit, or, Oh, that's good credit. And, you know, that kind of used to be reserved just for the finance manager. It was something that was kind of held sacred. And I think that just this is a case in point on, the more you can educate your people across the dealership, the more they're going Be able to practice empathy with customers, no matter what you're telling them. And so just just a reminder there to give your people the capacity for empathy by educating them on what credit really is both for them personally and for their customers.
Paul Daly 15:17
It's really good. I'm trying to hard. Thank you. Thank you. It's like it's like when somebody's like, I love you and the other person's like, Thank you. Thank you. Oh,
Kyle Mountsier 15:35
man, thinking of the things that everybody was loving in the spring. Earlier this year, our good friend Zack will call him our good friend. I don't know if you know, we're not really
Paul Daly 15:51
I think you're probably Facebook friends was Chuck Bevere. Back when you log on, he was the first one that was just first friends.
Kyle Mountsier 15:59
That's true. Friends, man really can only have 5000. So I might have been in there because I was, you know, but all right. So, you know, they announced that they were moving to their name to be this global brand called meta and all of the sudden, like within a 30 day period. It was like everybody in their brother was talking about the metaverse. 18 billion job openings around building in the metaverse, kanji, officially metaverse. All of that happens and like it's this massive, actually, I was funny. I was listening to a comedian last night and he was like, an eight seconds later on social media. Someone came along with a cute bunny video, right and forget about it. And that's kind of what this feels like. So Metaverse, job openings across job boards are down 81% between April and June. A report from Bloomberg highlighted Rovio labs, highlighting Revealer labs study showed that postings for jobs related to the metaverse dropped during that time and it's really interesting to see like this stark difference and people going we're all in. I don't know about
Paul Daly 17:10
you, but I got this other thing I got to deal with first. All right, you know, and we were just talking about this in one of our podcasts interviews who were talking about with Brian Kramer developing. Yeah, basically Brian Kramer goes and does a transaction in the metaverse and then goes and tells all of us like we weren't even ready for it yeah, like Yeah, we made we made it happen as part of stretching out and seeing what is possible but then realizing like we're not ready for this. Apparently the meta versus meta realizes the meta versus and ready for all the people. You know, the meta CEO Zacks said fierce headwinds are one of the reasons we're pulling back so substantially on the hiring for Metaverse development. Apple CEO Tim Cook said the company is taking a more deliberate approach to hiring as opposed to their not deliberate approach previously. Were being so just random with our hive and now we're gonna be deliberate now. Either way, really in the metaverse, the bottom line is there's no money to be made yet.
Kyle Mountsier 18:08
There just isn't there. There isn't mass adoption, right? There's some there's not massive that money goes where other people go. It doesn't the people go there to the metaverse yet. And so the revenue opportunities are down. And so again, like we've said in the past three things, pay attention. Listen, watch, understand as much as you can, but take measured approaches to both innovation and change. Not that you shouldn't stretch yourself like Brian Kramer did by doing the transaction in the metaverse, you should stretch, you should push the boundaries, especially every once in a while because it allows your brain to think outside the box. But utilizing what we have right now, to serve customers right now is just as important as looking out over their eyes and understanding what might be possible in whether it'd be six months, one year, five years, 10 years, because they both measured measured approaches and important to the way business moves and breeze over over a timeline.
Paul Daly 19:05
You know, there's another thought and that is that dealers, automotive industry, you are not the tech industry. So you are not struggling for profit. You are not right I looking so bleak. And it's easy to look at that like well, we need to pull back, you know, exploration innovation always take a backseat to survival. And so that's what we're seeing in the tech industry revenues down taking a hit in the stock market, right valuations are low, we need to pull back auto dealers, you are not in that same place automotive, we are not in that same place to recall that is now is the time to actually keep leaning in on exploration and collaboration. And you know, investing in your infrastructure not just your physical infrastructure but your brand infrastructure, your operational infrastructure, because you haven't to do right now back to benstock fix the roof when the sun is shining. Right so going back to the all the way back to the beginning of this episode, the approach angle let's not read all these stories and read the news and be like, hey, here are three stories that could be taken as like, oh, things aren't going so good look at your p&l. You and we as an industry are not them. So there you go. We hope that's a little calibration for your birthday. Is
Kyle Mountsier 20:15
it Wednesday, Wednesday.
Paul Daly 20:19
We got podcasts of a concert to make collaborations to bring together so that we can bring them all to you and you can bring your thoughts to them and that's how that goes.