What we talk about in this episode:
0:00 Intro with Michael Cirillo, Paul J Daly and Kyle Mountsier.
4:36 Don’t believe the headlines. The sky isn’t falling for the automotive industry, according to Matt. Large groups like West Herr are doing well and getting stronger.
9:25 West Herr currently has 10,000 sold orders waiting on delivery. Matt doesn’t think that the current inventory shortage is going to be the new normal. Instead, he believes eventually incentives and rebates will come back.
13:29 Paul and Matt spend some time chatting about EV chargers and all of the energy that they consume, potentially posing challenges as EV adoption becomes more widespread.
18:03 As West Herr grows, the way it markets itself changes. Matt says in some ways they’re operating more like a single rooftop and in others, thinking about how they can restructure and diversify.
⭐️ Love the podcast? Please leave us a review here — even one sentence helps! Consider including your LinkedIn or Instagram handle so we can thank you personally!
We have a daily email!
✉️ Sign up for our free and fun-to-read daily email for a quick shot of relevant news in automotive retail, media, and pop culture.
🎧 Like and follow the podcast:
Matt Lasher, Kyle Mountsier, Paul Daly, Michael Cirillo
Kyle Mountsier 00:00
Some people say that you have to post on LinkedIn every single day. Who are those people?
This is Auto Collabs.
Kyle Mountsier 00:14
Well, Matt Lasher is not one of those people. But when he does post on LinkedIn, I'm telling you, literally everybody and their brother listens. It's like a flock of seagulls flying in, like, in my mind, mind, mind mind, because you know, he's about to drop some serious wisdom on us. And not just that every vendor I think in the whole country wants to be on the West Herr roster. But what I love about Matt is he's not out here trying to just purport as someone that's trying to, you know, shake up things or anything like that he is dialed in and thoughtful and tactical about the conversations and the way he engages people. And the way that he even approaches industry dynamics, showroom relationships, retailing marketing, he's just thoughtful at every move.
Michael Cirillo 01:04
It's deeply ingrained in him. To your point, like, one time, we were doing a series of like, almost like client appreciation, webinars, like client only webinars, and we asked Matt to join us once. And he hit me up, and he was like, bro, I got my timing off. But I'm at the ski hill with my family. But it's all good. I'm just gonna find a quiet corner. And he straight up found a quiet corner. And I don't know many people like you. All of that to say like, you have to have this running this industry running so deeply through your veins, to be able to just find a corner at a ski resort and be able to rip out the amount of knowledge and by the way, to your point about LinkedIn, anytime I see someone's someone posted something to auto genius that's trending, it's always on that. Right?
Paul Daly 01:59
You know, I think Matt is like your story there about the ski, the ski, you know, the the ski trip where he found a little corner, in this interview that you're about to hear, Matt and I were driving in a car on a way to deliver it to Gary Vaynerchuk in New York City. And I handed him a microphone. I'm like, Oh, by the way, we're gonna record a podcast and he's like, okay, man. Cool. Alright, we're gonna talk about, right. So everything you hear is us. Just me just asking questions. And he's,he's the one that's actually driving if you're not watching the video, and the depth of understanding that he just has of what's going on in general, it's the least car guy thing you're going to hear. But I think it's incredibly practical. And just, I think he's just inherently human when he approaches things. And you know, he's got kind of he, somebody stole him out of Southern California, because he just fixed they SoCal once, once their guy back at some point, they'll come, you know, kidnap him and take him back to where he's from. He just doesn't realize it yet. So we hope that you have a good time as much fun as we did. I enjoyed this conversation with Matt last year. So Matt, you and I are in a brand new vehicle that we're on our way to VaynerMedia to deliver to Gary Vaynerchuk driver as his next vehicle. Let's
Matt Lasher 03:23
go. Let's go, Avi, we're ready. We're coming for you.
Paul Daly 03:26
I didn't expect our podcast to happen. But I was like, we're going to we're going to be together because it was gonna be virtual. It's like we're doing the sucker in person.
Matt Lasher 03:33
I'm excited to be here.
Paul Daly 03:34
I am to get your boys in the back if you can't see. We got we got dueling blue headphones. Beautiful young children.
Matt Lasher 03:42
It's a family affair here at West Herr heading to New York City. They've never been to New York City. And two days ago, my seven year old Brecken he. He said, Dad, can I come deliver the car with you? And I said, Of course you can. So we're making it happen. We're gonna show him Times Square. Do a little dinner tonight. Fly home to Buffalo tomorrow.
Paul Daly 04:00
I love it. Maybe a little Lego Store?
Matt Lasher 04:02
Maybe maybe something can afford that. I don't know if I can afford that.
Paul Daly 04:07
You get a couple of Legos. Just a couple of Legos. Your business is doing okay. You are always the wildcard in any conversation. We were just talking about this. You know, you have the industry standbys. And then when that shows up, it's usually like, what grenade is he going to lob in? He's got a full belt of grenades. I just don't know which one he's going to lob into the conversation. So let's just talk for a few minutes about what your perspective is on the velocity of change inside retail automotive currently.
Matt Lasher 04:35
Yeah, so I My observation is I think there's a lot of smart people, well intentioned people giving the vision of where the industry is going. You know, I don't know if you have your Amazon shirt on today or not. And you know, I think that there's a lot of credence and validity in a lot of these statements, reducing friction primarily working on improving the customer experience. But there's also a lot of noise in the system primarily from People that have the most to gain from this quote unquote, disruption. And one of the things that I'm most interested by is successful businesses and why or how they innovate. You have a lot of regionally strong dealer groups like West Herr who are getting stronger, they're well capitalized, they have good processes in place, more importantly, the good people in place, and they can leverage technology that's available to them. However, it's not this stark, you know, blow up the whole industry vibe that I often hear where dealers are being criticized for being archaic or out of touch, or old school. Right? I think that there's this consumer behavior situation where change happens slow. happens really slow over time. And so I think, I think some of the velocity maybe is overhyped by people that are trying to wedge their way into the industry.
Paul Daly 05:53
Gotcha. So you're saying that things are good right now. And especially for the larger groups, that change is actually happening much more incrementally than you know, if you were just to browse the headlines on LinkedIn, or kind of look at the news, which is saying like, the sky is falling, change or die. You're saying from the inside, it doesn't always feel that way. Or it doesn't feel that way,
Matt Lasher 06:16
when we have big companies, West Herr has 2700 employees, right. So how many rooftops over 30 now depends on how you count the rooftops. We say 35 in our marketing propaganda, in about, you know, 4000 used cars. And you so you think about all of these people within that system. They're not going anywhere. We're not going to blow up the system and replace them with kiosks overnight. Right? Right. That's just nor do consumers want
Paul Daly 06:43
that. So I was gonna say like, what do you see the actual demand because, you know, Scott, the Scott Beeler, the owner of West Herr is a very hands in the dirt owner. And like I've, I've rarely rarely seen, especially for group your size. And you spent a lot of time in the dirt as well. Very high touch leadership, many marketing directors are delivering a car today. That's what I'm talking about. By the way, I'm pretty sure I picked the very worst stretch of highway to start this class. It's gonna be a little more of a jarring experience. If you're watching and we're gonna try to chill it out, though. Yeah, exactly. Right. Like you're in touch. You're in touch with your managers, you're helping to put things together. So everybody says the consumer wants things one way. But in the showroom, sometimes it's an actual different perception of what you see happening. What do you feel like the consumer position really is when it comes to wanting to do things online or wanting to go EV? You know, if you read the headlines, you would think everyone, and I'm betting that's probably not the case in the showroom.
Matt Lasher 07:42
Listen, man, I mean, consumers say, I don't want to do negotiate until they get into the showroom floor, and then all of a sudden, they want to negotiate. So So you see a lot of negotiation. Well, it's so these days, obviously, with new car inventory and what it is, it's a little Yeah, the narrative is we don't have any you want to put your name on a list? Yeah. However, you know, West Herr is proud of the fact that we don't we do not sell new cars over MSRP Yep. Where there's many dealers across the country that are choosing to do that take that short term. You know, hiccup, it's a debate, it is alive, you know, and like, free market, do it, do what you want. But we made it, we made a commitment to the manufacturers, we represent that we would not do that. And so we're proud of that we're proud of we we don't do that. But it has led to some interesting conversations. We have people from out of out of the area out of state, calling us wanting the Chevy Tahoe that we're driving in New York City, because when you're doing national searches, all of a sudden, all of a sudden, right. And so we've actually had to decline some business that from people that are out of the out of our area, just because we want to have some product for Western New York, well,
Paul Daly 08:47
if you're limited Well, if you're limited a product to it, it just it starts to dilute the efficacy of your your customer retention dollars, like you can't service them. Right, you know, you know, they're never coming back.
Matt Lasher 08:56
Yeah. You know, it's a fascinating thing with the shortage of inventory. I think OEMs or many OEMs are taking a position where people are less important in the process. And I would say this is just a really short term blip because what's going to happen I think, is some OEM will produce a few cars and start getting a little bit of market share. And then the others will follow suit. We'll get a little over production like we had once we can catch up. Yep, once we can catch up and it's probably 12 to 18 months away. One thing I don't hear people talking about West Herr has 10,000 sold orders, pending delivery. We have new cars, so we have 10,000 people waiting for their new car to come off a truck. Okay, so you know we sell about 5000 cars a month total about 2500 new wow and you have 10 and we have 10,000 so waiting to deliver it if we stopped doing business today, we have four months of sale a full roster of just got to get the cars off the truck. So I think that's really going to be the indicator when used car used car market starts to normalize back to the mean And once those sold pending lists start to shrink, I think then you'll start to see wholesale the wholesale market behave in a more rational manner. And then you'll also see incentives come back.
Paul Daly 10:14
So what's what's your perspective on? What do you think's going to happen with rebates? day supply on the ground? I have my thoughts about it ever, you know, I've heard various opinions, some that I would consider wildly optimistic. And then some that I would consider like wildly cynical. Where do you fall?
Matt Lasher 10:36
Are you gonna share any of those opinions? Or you want to find out straight away so it's about you listen to my
Paul Daly 10:41
opinions. All right, share your show me everyday.
Matt Lasher 10:44
Yeah. Listen to some brands have done a good job with keeping day supply low Toyota, Subaru come to mind they've pre pandemic operated in a very lean environment. I think that some other manufacturers have legacy issues to deal with, with respect to workforces. And I think that there's pressure to over produce. Yep. Based on those systems. So I think we'll get back to an environment that has a higher day supply. And, you know, I mean, look, give the manufacturer some credit, predicting consumer demand three years out, or whatever it had. That's a hard thing, right? And easy thing, right? So you missed the mark, you produce too many base F 150s, or whatever, right? And you're gonna have to figure out how to sell Yeah,
Paul Daly 11:31
yeah. Okay. So it's, you're predicting a return to that level of, of market normalcy. But, you know, it's kind of more of a measured like, Well, we'll see, it's like, we're gonna ramp down, it's gonna be it's not gonna be a faucet. It's gonna be a, you know, like, an on ramp off ramp.
Matt Lasher 11:48
I mean, don't forget OEMs make money selling to dealers? Absolutely. Primarily, right. So like, do you want to sell cars to dealers? Absolutely. That's the business. And prior to the pandemic, or prior to this disruption in supply. Every OEM representative was primarily a salesperson selling to the dealer, right? Like it's right, this wholesale channel with a whole system in place to sell cars to dealers, right. And so I think there's going to be a lot of reasons why people go back to how it was. But the challenge for dealers in particular, in a rising interest rate environment. So floorplan costs will go up as inventories go higher. So there might be some reluctance with some dealers to carry as much inventory as they once did. Yeah. But you know, again, the well capitalized regional based groups like West Herr are going to take all the cars we can get,
Paul Daly 12:36
yeah, right. Because you know, you can find somebody to buy it, I agree with you, I think that we are going to get back and I think it only takes, it only takes one, right, and the second somebody can run a rebate or incentivize a purchase, there's going to be pressure on everybody else to do the same and pressure from their dealers to give them something to talk about as well. And, you know, cutting out floor planning costs almost completely on the new cart side anyway, for the first time ever, or at least since I've been in the business, seeing the new car department as an actual profit center on the P&L and not showing it as a loss I think that'll be a very healthy barrier to going too far. And you know, EVs coming back EVs being introduced to the market is a variable we haven't dealt with before so it's not apples to apples and like that whole thing is going to throw a throw a variable that we haven't seen but so EVs
Matt Lasher 13:30
I don't know how much conversation you've had with the other dealers I was listening to a single point dealer educating me on energy costs so he gave me the story that there dealership don't quote me on the exact numbers but 25 kilowatt, whatever you have, how kilowatt hours is what the dealership consumed, okay, put in one level two charger for to service their EV clientele that consumed 50.
Paul Daly 13:54
And the level two charger, so if you're not familiar, the Tesla superchargers that you've heard about that, you know, just pump a bunch of energy into the car really quickly can charge up to like 300 miles and like, I don't know, it's like 30 minutes left, like two hours, I think, right? For two hours. So it's not as much amperage flowing at the same time. So this dealership put in a level two charger is that this is a convenient charger that people can just plug into. That's right.
Matt Lasher 14:18
And I think they maybe had to have it just with
Paul Daly 14:21
requirement or whatsoever. Yeah, it was free to the consumer, right? Pull up plug in.
Matt Lasher 14:26
So So you put you have a 300% increase in energy consumption or whatever that is right or 200% increase.
Paul Daly 14:33
You know what state this was in?
Matt Lasher 14:34
I think Pennsylvania. Okay. So I don't Yeah, I don't know if there's nuances by state in terms of even credits and other things, then I
Paul Daly 14:41
don't know. I think energy is just going up everywhere. So
Matt Lasher 14:44
it's less than that. How do we buy some of that stock?
Paul Daly 14:47
Well, first of all, how do you buy that stock? That's probably pretty easy. But did the market buy too much? First is the question. So their energy costs doubled? Right? From one charger
Matt Lasher 15:00
So So you think about the infrastructure constraints, I think about Southern California and brownouts and like not having air conditioning and being able to have to turn off the streetlights at 9pm. And some of these interesting,
Paul Daly 15:11
temperatures have been an issue right now, because they don't have enough. They have a lot of wind turbines. And they've built a portion of their grid. And we saw what happened over the winter when the wind turbines froze, and people didn't have power. And there's a massive grid failure. And now the wind wasn't hasn't been blowing enough in the middle of this heat spell. So they're also having shutdowns. And yeah, the infrastructure concern majorly, it's like,
Matt Lasher 15:34
and that's and we're operating at, I don't know, three to 5%, EVs, something like that, right? Like, I mean, yeah, it's a small percentage,
Paul Daly 15:41
and that's sold, I don't think that's actually cars on the road. Okay, that's just a car sold, like three to 5%. So you got to think cars on the road, it's got to be just a fraction of that number.
Matt Lasher 15:51
It's to me, it feels like we all move to an environment where every gas car will be a hybrid of some sort. Yep. Right. And
Paul Daly 15:57
Toyota's actually leaning in on that strategy, you're gonna make a hybrid of every model, because that's, I mean, count lean on Toyota to be conservative and measured in their approach. Pop culture, I think is driving the conversation right now. No pun intended. And we'll see. I mean, obviously, you have some outspoken friends like Brian Benstock, who even talks about the environmental impact? Are we going to be able to keep up having the strip mine an acre of land to even produce one lithium battery, then what do we do with the batteries when they're spent right. And on and on and on, I spoke with my brother in law who lives in an area of upstate that we're familiar with. And it just has, you know, hundreds of windmills. And a friend of his is part of the maintenance crew. And each wind turbine takes 300 gallons of oil, to lubricate it. And we know that change, they don't ever change it once a month. Incredible. So so they're they're also like deep, deep rooted issues of can we provide the energy? are we actually doing anything, but adoption is going to be driven by infrastructure? And, like, how fast is that going to be? And what is that going to do back to our conversation, and incentives and rebates and inventory? How we're going to support it? I think there's just
Matt Lasher 17:03
and there still be there will be dealers sell it like so, you know, West Herr, as the market shifts, we will sell more and more electric vehicles in proportion to what consumers want. Yep. But those systemic like, big changes, maybe commercial trucking, some of those other areas. You know, that's probably where most of the EV activity happens first, I would guess.
Paul Daly 17:23
So, just want to use our last few minutes here to talk about marketing, because that's yours. I consider you a savvy operational force inside the dealership because you know how to get things done. But really your your claim to fame in the automotive world is as a marketer, and you come from it from the perspective of being inside a large group. And we see groups getting larger and larger and trying to figure out what to do with their marketing departments. Because often, especially when acquisitions are involved, there's fragmented vendors, there's fragmented staff, there's the struggle to centralize perhaps, where are you right now? And where are you putting your focus for the next, you know, year two?
Matt Lasher 18:01
Yeah, well, we've recently in the last year, West Herr has added about 10 stores to our network. So we're going through our own growth phase internally of how do we structure that historically, we have been a really centralized marketing team. But we haven't grown our team proportionate to how we've grown our dealerships. So there's this maybe environment where we're not able to get to as many dealerships as we'd like to or provide that store level support as often as we'd like. The one bonus, I guess you'd call it during the pandemic, most of our efforts have shifted to a higher level branding thing that's more group oriented in nature, our team West Herr stuff, or Josh Allen, Steve Tasker, Deon, Dawkins kind of content. So we're operating almost like a single rooftop, from how we're supporting our company as a whole. But as we shift back to the mean, I think there's gonna be more and more desire for the tactical things, the offer things, the direct mail initiatives, the emails, the newspaper ads, the you know, all the all the levers that we pull in an effort to try to gain incremental sales. So we're thinking about how do we restructure ourselves? How do we optimize our internal staff with the appropriate incentive structure to seek out additional work? So there's there's interesting, ebbs and flows there. I think every group has to go through that. But I guess I would just say this one thing. You gotta have empathy between marketing and sales, and I talked about that a fair bit. You know, salespeople, salespeople, sales, alphas are short term thinkers often, and marketers often think a little bit longer term because
Paul Daly 19:39
they're both incentivized to be at least the sales staff is typically incentivized to be shorter term,
Matt Lasher 19:43
right? You got month to month, right? You got sales to hit right. You got sales objective. So So I think I think you got to deploy empathy on both sides and understand that there's always going to be a little bit of healthy friction between the two teams. Yeah, because of that difference. Yeah, right. And marketers we need to challenge ourselves to be a little more short term, a little more tactical, a little more in the dirt as it were to quote Clouds and Dirt. Gary Vee, I love it. But But I think, I think that's the that's the struggle, right just to deploy enough empathy.
Paul Daly 20:13
So if you could change. Last question, if you could change one thing, snap your fingers and change one thing in the automotive marketing ecosystem, what would you change and why?
Matt Lasher 20:24
I would change our technology mandates. So I think the free market has been disrupted. And I think that there's some intermediaries that are stifling the ability of some groups to quote unquote, innovate in the direction that we're hearing we should. So that's what I would change. I would change the co op mandates and technology mandates, because there's scale challenges with that, and it kind of brings everybody down to the lower average
Paul Daly 20:55
scale challenges. Matt, thanks so much time for. Thank you so much for taking some time with us today.
Matt Lasher 21:01
Thanks for making this happen. Paul. Thanks. Let's go.
Michael Cirillo 21:09
Okay, so we're talking pre show about just the depth of knowledge that Matt has, you now convey to us heading into the interview that this all happens while not you are driving but but that he's driving through the streets of New York just nonchalantly talking about the hype in the industry in this shortage lives and just whatever called the
Paul Daly 21:28
streets of New York, it would be more like the highways on the way to New York, but your story definitely elicits more drama in my mind.
Michael Cirillo 21:35
Okay. Well, I think it's just because you grew up in that neck of the woods. And but if I would be white knuckling it. He said something that I think is really interesting, a statement that can only be made when you're looking at a sub surface layer of this industry. He said that change happens slow, until it doesn't. That's basically the sentiment that he shares like, yeah. And then he can confidently say, I think all of these these conversations were having having about how quickly things are changing is overhyped. What was your sense as you were sitting next to him having this conversation?
Paul Daly 22:13
His his attitude, and his posture was like, it's a foregone conclusion, right? It's just like, it's just gonna happen. Like, it's already in his mind, it's already happened, you know, and he's like, and at some point, everybody else will kind of catch up and realize it, but until then, we'll just keep doing what we're doing. You know, it's so yeah, he knew it was a truth to him.
Kyle Mountsier 22:35
You know, I, one of the things that he constantly communicates, and he communicated in through this interview, as well is that, that people are, are, are really not understanding the level of complexity that, that you that you have, that you actually add, by removing people from the equation and whether that be in digital retailing, or direct to consumer and all of the things about pre sold vehicles and the way that you know, salespeople are communicating to consumers and to people that aren't have waited to pick up this and that the people element of being in business is and these are my words, but I think you would agree that that's the unique selling proposition to retail automotive, and that if people can understand that what we're really doing with things like technology or online purchasing, or the way that we manage inventory or anything is freeing up people to be more human in their interaction in the sales relationship that even like you know, they have streamlined West Herr created that it what they see that as is freeing people up to better serve customers in credit it like challenge credits situation so I just I love his level headed approach to the to that conversation in that don't lose sight of, of the people part of this business. And not just the the car businesses, the people business, but that it's not it's not just that it is it necessitates people being an integral part to every process that we have across the industry.
Paul Daly 24:13
To truth, he's not somebody to buy into the hype. And that's one of the things I love most about him is he'll take it. They'll take it measured and say, well, let's see if that's actually true. Everyone seems really excited right now. So we hope you enjoyed that little get to know you drive with Matt Lasher. I hope you get to meet him and talk with him a little bit at ASOTU CON or you can just look where the seagulls are gathering on LinkedIn and realizing Matt is just dropping wisdom in his latest LinkedIn posts. So on behalf of Michael Cirillo, Kyle Mountsier, myself, thanks for joining us on Auto Collabs
sign up for our free and fun to read daily email for free shot of relevant news in automotive, retail media and pop culture. You can get it now asotu.com That's ASOTU.com If you love this podcast, please leave us a review and share it with a friend. Thanks again for listening. We'll see you next time