Strong August for Automotive Industry, NAMAD Day 1 Takeaways

Paul J Daly: 0:00 Good morning. It is Wednesday, August 27 Yes, as you can see, we're not Kansas anymore. No, no. Errol and I are in sunny Las Vegas, State of the Union. Me and Aaron, first time co hosting the automotive State of the Erroll Bomar III: 0:17 Union show. I know in person, I've made it, mama, I've made it. He Paul J Daly: 0:21 made it. So we're here at the 25th annual, namad annual meeting in 35th 45th See, this is why Nathan is here right now. He's going 45 like, I'm like, five years old. He needs to give me the numbers to 45th annual. That's a couple more years in 20 couple couple of just a few. And I will say the reaction from a lot of the people who have been coming here for you for years are saying like, this is the biggest one ever, yes, and it's back in Las Vegas. It's been in Miami right for the last number of years. And people are their industry partners. I've never seen here here, yes, and dealers, I've never seen here here. And I think the secrets out that this is a conference where dealers show up to actually do business. Erroll Bomar III: 1:02 Absolutely, I couldn't agree with you more. I've actually had a couple conversations today with that exact same thing. Like, this was the third year I pitched to my company. I finally convinced them to make sure that we had a presence here. And so I was hearing that when I was kind of walking around the floor as well, is that there was a real intentionality about being here, but also there's like this palpable excitement, like people are revved up, pumped up, like all just got there the same day, and, you know, it was day one, and they were like, Oh no, we're still ready to go. We don't care, exciting. Paul J Daly: 1:33 We're going to be here bringing you as many of the insights as we can. We want to thank our friends and sponsors at connected dealer services for bringing this coverage to you, for making it possible. We have a little thing going on. So they have this device that help you track vehicles. Okay? And I've heard Nathan's back there smiling because he probably knows more about than I do, but I heard they set up a Paul tracker, and they're going to somehow attach their technology to me. Erroll Bomar III: 1:59 Wait, wait, wait, wait, there's so many questions I have me too. Yeah, that that's Yeah. Paul J Daly: 2:03 Okay. Me Tell me more that. Well, they're going to attach their technology to me somehow, and then they're live going to be able to see me bouncing around the venue here. Erroll Bomar III: 2:13 Okay, all the parts of the video. Or does it like, take a break? When you take a bio break, I just, I need to know. I need to be prepared. Paul J Daly: 2:21 Fair question. There's no video and audio. It is only just location track. I'm okay. People understand. I'm human, human. I do take bio breaks, as you so kindly put it Yes. Good way to put it right, like that. Let's talk about some of the insights we've seen. So we've we've already started talking to people, and one of the conversations that's come up, and we've seen it in almost every booth, it feels like is the two letters AI. Yes, people are talking about AI. They have AI solutions. They're AI companies, and one of the topics that came up is compliance around AI, right? Absolutely. Because AI is not only being like pushed by business business people to try to make their businesses more efficient, but consumers are asking for the technology and using the technology. So what do dealers do when they have their employees, maybe using some AI tools that may be sharing some information they shouldn't? Erroll Bomar III: 3:10 Yes, absolutely, and I think it's you're right, because it's identifying the strategy that you're going to approach the AI with, right, even just the difference between email engagement and text engagement, and text engagement that's right, and understanding the ramifications of how you can communicate in those platforms, and the differences of what you're responsible for doing on that platform, right? And if you you kind of roll this out and don't train on it properly, or don't inform properly, it can become a little bit of a gray area, real quick, Paul J Daly: 3:38 become a really big gray area. So we're gonna be bringing more that that's definitely one of the insights that came up top of mind. Also having some conversations. Jonathan smoke, chief economist with Cox automotive, is here to make sure we sit down and talk to him, but we think we'll maybe talk about a little bit of the news. A new report from JD Power says automotive retail is posting a strong August so far, driven by expiring EV incentives and a calendar twist that includes labor day as part of August, consumers are projected to spend a record 54 point 6 billion on new vehicles as electrified models reached peak share. Basically EV share hits they they're projecting a record of 12% of all purchases, or EV purchases, obviously driven by the incentive to pull forward EV purchases because of the incentive ending the end of September. Also, the average transaction price is up to$44,750 with consumer spending in August hitting a record. So they're saying people are opening their wallets, ready to spend on cars, and they're buying a lot of Erroll Bomar III: 4:38 EVs, yeah. And I think to what I've just my personal what I've seen is that there are a lot of OEMs factoring and focusing on the charging at home piece, right, and figuring out solutions for that, and kind of making consumers more comfortable about the where am I going to charge? Because I think the data point was, hey, if I don't know where I'm going to charge this vehicle, because really, I'm. Introducing this new fuel source, right? I know the car works. I know how to drive the car. I know I can get from point A to point B, but when it comes time to refuel it, what do I do? And so I've noticed that a lot of consumers, or OEMs me, are taking that stance to say, hey, we're going to help you in solving this point and making consumers more comfortable Yes, and now you don't have a reason to say no. So I think that could be part of why this data is now starting to increase, is because people are becoming more comfortable recognizing like, oh, I can charge at home, or there's a solution that will work for me and make it easier to make that transition. You Paul J Daly: 5:35 know, I'm really curious, because you spend a lot of time on, like, the front line, front line, because you do a lot of work with Ford, you spend time in a lot of car show. Lot of car shows as as a rep, answering people's questions, getting consumer questions before they're like, at a dealership to test drive a car. So I kind of feel like you get maybe some more honest questions, absolutely, what is the perception? What are people asking about EVs, and what do you what's your overall feel for what they want to Erroll Bomar III: 5:59 know? I think the biggest thing is, you know, they the the they want to know. Not only okay, what happens with the charger? What's going to happen with Max as an example, right? Because they're, we're in that transitionary period now, where we know that the charging ports are changing. They're going to become more standardized, and that's great. But what happens? Like, sometimes people are concerned, well, what happens if I buy now and it changes Paul J Daly: 6:20 later, right? Thinking about like, yeah, I bought an iPhone. It's got a lightning plug, and now it's got USB Erroll Bomar III: 6:25 C, exactly something like that, practical. But then also, people don't realize that even their local like electric companies or utility companies, they at one point, had a lot of solutions to help with that charging piece, right? I think what's happened is that the information was slow to roll out, and so now you're getting a lot of people that are like, I heard, well, yes, that was happening, and that has been happening, but now they're coming up with those questions that really have been solved maybe a year, two years ago, but it just wasn't the popular point of conversation, right? So for instance, in the Detroit era, I remember our electric company had a program where they would give you an incentive if you purchased an electric vehicle, and then if you installed a charger, you got an additional incentive. And when that program ended, that's when it got the biggest like insight of people wanting to know more about your program, because it so then that's why, that's why I noticed that, like you have major OEMs that come and say, hey, we'll give you, we'll do a standard installation of a charger. We'll do these things to help with that. So the biggest question that I see a lot of times is, you know, not only how am I going to charge it, but then what is the true cost of charging at home? I think when people can eliminate that out of their conversation of worrying about because we're so used to thinking about gallons of gas, right? That's the conversation we have. And so when you can quantify that to say, like, no, it's going to cost you approximately this to charge a home, and people can see the tangible savings, Paul J Daly: 7:55 it makes a big difference. Interesting to see how this rolls out once the incentive goes away. But obviously people buying EVs faster and at a higher percentage of overall purchases than ever before. Yeah. And then I guess we'll have to wait and see what happens after that. Incentive ends on September 30, and Erroll Bomar III: 8:10 I wonder if it's going to be like that Sunday furniture sale. You know what I mean, like Sunday, Sunday, Sunday. Paul J Daly: 8:17 Well, well, that, although the federal government is not going to extend the deadline. What they did come out and say yesterday is, or two days ago, that originally it was the vehicle has to you have to take delivery the vehicle by 30th and then they can say, No, you actually just have to have a contract. So the next question is, is like, well, what kind of contract exactly vehicle and if it's being manufactured. So we'll see what happens with that. But before we go to watch, one more really important thing happened yesterday that you may or may not have been aware of. You know, we were traveling yesterday in Detroit. Travel here. Did you know that yesterday, September 26 Yes, was Starbucks official launch of pumpkin spice flavor for the season? Unknown: 9:00 I wasn't ready. I wasn't Paul J Daly: 9:02 ready. What is this day? Are you a pumpkin Unknown: 9:08 spice? Guy, no, I'm not a pumpkin Paul J Daly: 9:10 but this is we joke about it. We talk about retail consumer Unknown: 9:14 latte guy, he's a chai guy, matcha, yeah, matcha, Chai, yeah. Okay, pumpkin. Paul J Daly: 9:19 It's gotta be cold out. Yes, it's just wrong, if it's not called out, yes, something like, it's coming. Well, you're in Detroit, I'm in Syracuse, so yeah, like next week, right, right? We're there. But I think this is, this is a part, you know, where we do pay attention to retail trends and Consumer News. I think that dealers can easily start to incorporate some of this in their show. Everyone's got coffee and flavored syrups. So as funny as it is, Starbucks is saying It's pumpkin spice season. So it is pumpkin spice season. Catch up. Time to catch up there. Yeah, listen, whatever is going on today. We hope you make sure you stay tuned to what we're doing here. We're going to bring you all the insights we can courtesy of our friends at connected dealer services. And wherever you are, there are people coming in and out of your stores there. Team members, asking questions, looking for mentorship. You can give it to them today. Why would you not do it? You can do it. We'll see you here tomorrow. We'll bring you everything we can in between, Erroll Bomar III: 10:08 absolutely, boom. I love it. I want to drop the mic. Unknown: 10:22 You