Toyota Calls Their Shot, What Is On Dealers’ Minds, Best And Worst Airlines

January 20, 2023
It’s Friday and we’re flying through the week as we prep to fly to Dallas for the NADA Show next week. Today we cover Toyota’s production predictions for 2022, a recent Dealer survey, as well as the WSJ list of Best and Worst Airlines in 2022
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  • When a company invents the manufacturing standard the world's manufacturers live by, you should always expect a fierce comeback. TPS, aka, Toyota Production System, aka Lean Manufacturing, aka six sigma, was first introduced by Toyota in the early 20th century. Now despite the challenges of the last few years, the company is poised to have is largest annual output…ever
  • What is  ‘just in time’ production?
  • Toyota produced 9.05 vehicles in 2019, 8.58 in 2020, 8.33 in 2022, now 9.6 to 10.66M in 2023
  • Strong demand, low days supply, currently 18.
  • 29-day supply at Honda, 24 at Mazda and 60 at Ford
  • The company has been the most transparent over the pandemic, as well as conservative. In Nov, they predicted 800k units and delivered 833k


  • Our friends at CARS recently released a survey that reveals the top three pain points dealers are anticipating in 2023
  • The survey of 121 dealers conducted between Jan 6-11th shows the top concerns to be:
  • Turn more used vehicle more profitably: 94% of dealers said acquiring used inventory and maximizing used-vehicle margins as the top concern
  • Invest in better marketing data more efficiently: 81% of dealers said investing in high-quality audience-targeting data to better leverage media and marketing was the second most significant challenge to address this year
  • Differentiate from competitors: 80% of dealers noted differentiating their dealership from competitors as a top concern
  • “Retailers face new challenges this year as new-car inventory returns, used-car supply shrinks and prices normalize. Dealers’ competitive advantages will come from efficient operations, marketing and customer experience,” CARS chief executive officer Alex Vetter said in a news release
  • The WSJ has released its annual list of  “Best and Worst Airlines” and I think we all can agree it’s been a bumpy ride in 2022
  • Delta hangs on to its #1 spot followed by Alaska, Southwest, United, Allegiant, American, Spirit, Frontier, with JetBlue taking last
  • Most improved goes to both United who jumped 4 spots from 7 to 4 and American who moved from 9th (last) to 6th
  • Basically, even the stats of #1 Delta dropped when it comes to delays and other metrics
  • Southwest would have had a worse showing on the list if it weren’t for its general lack of complaining customers, however, it is noted that baggage handling complaints from the last meltdown were not able to be figured into this report due to timing
  • Last place JetBlue said being based in NYC exposes them to more broad scale vulnerability to delays than an

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SPEAKERS

Kyle Mountsier, Paul Daly


Paul Daly  00:28

Oh man is Friday of all Fridays. I feel like we woke up ready to go. Today we're going to talk about so Yoda call in their shot, what's on dealer's minds? Best and Worst airlines and of course, a little bit of nada, show prep. The people really want to know, six days, Kyle, six days, six. That's it.


Kyle Mountsier  00:47

That's type of stuff. Unbelievable.


Paul Daly  00:50

Our team has released on our LinkedIn and probably Instagram to like a countdown from 10 days where they've just taken pictures from previous and they've overlaid like 10 days, but nine days in the countdown. Today is one of my favorite pictures. If you're not following us on LinkedIn, you got to check it out. It's a picture from us when we were scoping out the asoto con 2022 venue, and it just looks like a band photo. Like we're like walking up the stairs below.


Kyle Mountsier  01:15

Got like sunglass photos, like one of the most epic photos.


Paul Daly  01:18

That's how I feel like rolling into nada. We are going to be there in full effect. crew of 15 spread out a few across a few hotels. We're going to be everywhere. We had another our second like nada production meeting yesterday. Because the first one our meeting we got like halfway through Wednesday. We got through the rest of them yesterday. So I feel like we're really good. We're gonna be all over the place the day before. And so we're showing up Wednesday morning, you and I we're gonna do a few things on the ground. But starting on Thursday, you're going to find a solo team everywhere I'm going to be hosting are emceeing an event for auto Team America, which I haven't heard about but it's actually a really high powered event really gonna be there like all Walzer and Brian De Boer. It's going to be great. So if you don't have a ticket, it's sold out but still follow the content we're going to be posting it on social and I think a lot of great insights. Kyle is going to be overhanging with our friends at Automotive News and JD Power running ragged


Kyle Mountsier  02:08

for how many just all day locking it down well yeah JD Power in the morning automotive news in the afternoon, it's going to be a it's going to be a riot. We're going to write it all up, video it all up,


Paul Daly  02:17

get all the interviews, gonna be a cosmetic call is gonna pack all the hard hitting, he's gonna be like straight up red carpet like Gascon Casey crane. So who are you wearing? Right? And who are you wearing, I should start with who are you wearing, that'll be perfect. Be Fit. And then on the floor, we'll probably release the schedule at some point because we have quite a few of booths that we're going to be doing live podcasting through throughout the event, we're going to be moving around quite a bit. So we'll get that out. So you can see it. Probably the best place to find it, you're going to be by being on our email list, which you can get for free. And it's a whole lot of fun to read every day at a soda.com or just follow us on social media, follow us on LinkedIn, probably the best place to be just searches. So to follow it up. And we'll let you know where we're going to be because hey, maybe we can get you out. And we'd love to talk to you meet you in person. Especially if you're someone who has this podcast in your ears on a regular basis. You're a people that's good PR people What else we got. She's probably just getting some news because next get in we're going right into clubhouse room all things use cars with David Long's all things used cars room, going to talk about getting back to basics in a time when like we need to get back to basics. So just go and clubhouse if you don't know how to do it, just search clubhouse app on and then just search all things use cars. And you'll get to us and we'll have a great conversation. Speaking of great conversations, segue clear. So when a company invents a manufacturing process that becomes the standard for all manufacturers across the world all for over 100 years, right? You should always expect a fierce comeback from a supply shortage, don't you think? Absolutely. So TPS, otherwise known as Toyota Production System, otherwise known as lean manufacturing, and Six Sigma and all that stuff actually started with a carmaker because it should start with a carmaker. It was first introduced by Toyota in the early 20th century. And now despite the challenges of the last few years, the company is poised to have its largest annual output ever. So this is Toyota, obviously we're talking about and they they're doing the old Babe Ruth Kyle, they're like, Yeah, we hit the ball right over that fence right there. So they're called a shot 2022. They invented this just in time production, which is basically companies manufacturers used to have a warehouse full of parts, and then they would put those parts together. And then as the where the supply would drop down, they would order another big warehouse full of parts. Well, they were like that. So an efficient, we're going to make a system so that basically in the most ideal situation, the part we need to put in shows up at our facility exactly when it needs to be installed in the car, right just in time. So


Kyle Mountsier  04:50

super efficient, which is efficient and scary all at the same time.


Paul Daly  04:54

We found out why it's I mean, I'm sure they have some flexibility in there but no one had COVID level flex it actually puts you in a more vulnerable position, but they're back, right? They produced nine. So back in 2019, before COVID, they produced 9.0 5 million vehicles. And then in 2020, that dropped to 8.58. In 2020, it dropped or in 2012 2021, it dropped even more to 8.33. And now they're saying, Well, 2023 is going to be our year. So 2022 I'm sorry, it was 8.33. They're saying 10.6 6 million


Kyle Mountsier  05:27

this year. And I don't I don't doubt them. And but the the interesting thing is like they have a ton of demand, right? Every Toyota dealer that we know, obviously, the day supply is super low. Toyota is day supply is 18. If you've looked at any of the day supply numbers, na da has put them out Cox's put them out. It's it's always at the bottom right at like, get Salanter got everything. And Toyota still has nothing right. Yep. You know, kind of close to them are both also Honda Mazda at 29 and 24, respectively. But yeah, your your domestic manufacturer is up at like 60 days supply. Now you see the average day supply of the industry sitting in the 50s. Or actually, I think it just dropped under 50 Earlier this week, so you know, tons of demand. So I think they're going to be able to hang in there. But you gotta think that the day supply is definitely going up, which I don't think Toyota dealers would be so mad at having a little ground stock might actually help.


Paul Daly  06:26

Yeah, I mean, especially if the demand is still there. But yeah, and you know, Toyota has been, and we know, we know, a lot of Toyota dealers, right. And throughout the whole pandemic, as you know, different manufacturer meetings. We know a lot of dealers actually. So a lot of dealers are telling us what kind of like, well, this is what they're telling us we should look forward to and our make meetings and things like that. And they're, they were typically disappointed. Well, they said, We're gonna have this, but actually, we only had this, they said, We're gonna have this, but only we have this, but to a person. Toyota has always been like, they're just the dealership and saying they're super transparent. They're telling us, they're setting our expectations properly, and they're delivering on the expectations they set. You know, so the company, you know, in November, they said, We're going to do 800,000 vehicles globally. And they actually delivered 133. So it's a little lesson in under promise over deliver to There you go once he builds a little thing called trust, trust, God, trust and the whole thing, business relationships, all built on trust. So that's the that's the story with Toyota and it'll be fun to watch how they actually come back. And I mean, I'm not I'm never betting against Toyota manufacturing ever, ever, ever, ever. I don't know how to segue into this next spot. Just keep rolling. Oh, we're just gonna keep rolling. So our friends at cars recently released a like feels like a just a real time survey. That reveals the top three pain points dealers are anticipating in 2023. It's a survey of 121 dealers between January 1 or sixth January 11. So it's only like a week old. So this is real time data and shows their top concerns to be turning more use vehicles properly or profitably, right. So 94% of dealer said acquiring used inventory maximizing margins are are the top concern. Second is investing in better marketing data and more efficient and investing in better marketing data more efficiently. 81% of dealer said, high quality audience targeting to better leverage their media was the second most sixth of significant challenge. And third, on the top three list is 80% of dealers noted differentiating their dealership from competitors also as a top concern. So that feels pretty good. Like all three of those, they feel controllable. That's what I like about them.


Kyle Mountsier  08:39

Yeah, I mean, the the the, the dicey one there is definitely better marketing data more efficiently just because there's so much silos and data from a US meeting that dicey one like the dicey one, like are we gonna be taught to fix it? Right? It's gonna be tough. Yeah, it's it's, it's a lot more disparate in our industry than I think a lot of people realize and and, and, and so it's gonna be tough to continue to find efficiencies until kind of everyone lets down the walls. I think, you know, the US vehicle profitability is definitely something that can be controlled based on education, understanding of the US market, paying attention to what's going on, and the trends and consumer data supply demand, accessibility, to purchasing used vehicles, all of those types of things like you can get dialed in on used cars. And I think that stating that it's a top concern is really a realization that understanding of being a used car, a strong used car operator, makes sure that you don't have to worry about any fluctuation in inventory or demand or rebates or anything like that on the new car side. And, yeah, and then and then from a differentiate from competitors, like, I think we've been we've been as an industry trying to figure this out for a long time and everybody always tries to play the while I did it first game. Yeah. And so I would say stop leaning into that stop being the biggest stop being the person to do it for First, like, if that's consistently your pursuit, you will always run out of the opportunity to talk about that. And you'll always be chasing the next thing, chase the thing that nobody else can touch, which is your people. And so how do you figure out how to craft community around your community, I think is the way that that dealers should be differentiating. And then in the new year,


Paul Daly  10:18

yeah, I mean, we can't and it can't be like our people are the difference, right? Because everybody says that. All right. I mean, he bought, I don't I do a lot of like brand marketing, consulting for groups and things like that. And like through and through, there is always a hidden gem inside a dealership that that they're not seeing when they only go at the top level stuff and talk about inventory, or location or all that stuff. So I feel I feel good about these because they're controllable. Number two, like you said, like, we need some more people to play nice together with data and move data back and forth more effortlessly to control it more, but I like these three because none of them are like well, I hope I get enough vehicles in my new car inventory. You can't control that you can control all three of the things on this list, which gets me excited. Here's a quote from Alex Vetter, CEO of cars says retailers face new challenges this year, as new car inventory returns, used car supply shrinks and prices normalize dealers competitive advantages will come from efficient operations, marketing and customer experience. We agree with those things from our friend Alex speaking of


Kyle Mountsier  11:19

operations, marketing and customer experience.


Paul Daly  11:24

Alright, I'll give the people what they want.


Kyle Mountsier  11:25

So the Wall Street Journal this morning has released its annual list of Best and Worst not automobile makers, airlines. And we know we're talking about airlines this morning because we carry relevant. Yeah, it's very relevant to the automotive industry and a whole bunch of people probably 20 to 25,000 gonna be flying next week than me and I'll be agree that 2022 was quite a bumpy ride. So making the list the top spot Delta hangs on to the top spot, followed by Alaska alert or Alaskan southwest United Allegiant American spirit frontier and Jet Blue taken dead learn


Paul Daly  12:00

we're Greenfield might be the delta reason like he picked the right it's because they got a million miler last year that like,


Kyle Mountsier  12:09

yeah, exactly. Well, you know, when you think about delta as just as far as a consumer experience, like they are a higher price airline, but they they just take the customer, you know, seriously at every turn, I will say like, even just utilizing their app to make changes and all that type of stuff. Easier experience,


Paul Daly  12:28

you know, a lot out of Syracuse somewhat, I mean, we do fly but like everyone's to Atlanta, Atlanta, everybody, flights Delta to right, of course.


Kyle Mountsier  12:39

Exactly. So most improved after a really bumpy road two and three years ago, two, three and four years ago, United who was in slot seven jumped to four and American move from from last night to six. And I can say like, we fly you and I fly American and united a lot just because of where we're headed typically. And I've definitely noticed a change in like their ability to provide customer service like United I'm telling you, like just anecdotally, their text communication service. Is style dialed in.


Paul Daly  13:16

Yeah, I feel like United does have that. I mean, I got upgraded for free on my last United flight. And I got to eat like a breakfast for Tata was silverware. And I needed it so bad at that moment. So United just has a superset. Like they upgraded the right flag in your heart number one in my book number one of my book after that I got real silverware out of play Kyle. Yeah, exactly. Which I'm thinking about it. They gave me a metal fork on a plane. That's common down around here.


Kyle Mountsier  13:44

That's bold. That's cool. Yeah, I mean, you southwest they stated in the in the article probably would have had a little bit of lower seating if we if they would have been able to put into the data, the hysterical craziness around the holidays, but all of that baggage stuff, and the cancellations actually wasn't calculated into this data. JetBlue New York City, that's what their excuse was, like, Hey, we got market conditions that nobody else has to deal with based on our location. But overall, staffing shortages, operational challenges have still been an issue for airlines. Here's the thing. I think that like airlines are just something that people continually have to use like to travel in the US if you want to travel on a regular basis you have to because there's no like, you know, like in England everything is eight hours away from everything else right. And and so


Paul Daly  14:34

are you got any other you got bullet trains, you got an ugly dude any other


Kyle Mountsier  14:39

vertical looking at her airlines and seeing like, how they're making shifts and move and how consumers are attracted to or not attracted to the consumer, you know, experience or the customer experience in an airline I think is smart. And so recognizing what delta is doing right what JetBlue is maybe not doing right for any other vertical even like Automotive is good. Understand how to care for customers.


Paul Daly  15:02

I think there's also like a really great lesson in here. I remember when JetBlue was first coming to market and they were like the Darling they were doing it differently. They were surprising and delighting they were, you know, like the cable TV DISH Network on the plane was like what is going on? And now they're last on the list. Now granted, like they cited some you know, they're, they have a larger exposure because the hub is in New York City. So if something goes wrong there, it's going to disrupt, but still, they're at the bottom, they're not in the middle. Same thing for Southwest right. They were the darling of the industry and now they've had some major problems maybe some underinvestment definitely some personnel issues and culture issues when they were like the celebrated culture that's in all kinds of business books. And then when was the


Kyle Mountsier  15:41

last time you saw like an a, you know, an Instagram real or a tick tock about a Southwest? Stewart? Yeah, or stewardess


Paul Daly  15:51

longtime. I'll tell you what, I flew. We just flew southwest to Baltimore. And I'm saying the staff was very nice, but they look tired. They just look tired like beat by I mean like look at where's your people, though? What uh, you know, so it doesn't matter where you are today or where you were yesterday? Like you have to fight for it every day right? You can't stay there for long if you don't continually fight and invest not get lazy and then for like the United's and Americans. You got united who, you know, like you said they had a bit of a rough ride. The dude wrote like America, United Breaks Guitars song went viral on the internet. They pulled that nice Asian guy off the plane, when the Chicago PD like just bloody does face up. Like that was a pretty big mess. And they've had a lot of things that have just like, took him to it. But guess what they leaned in, they've doubled down, they're moving up on the list. And we've had a lot of great experiences. So I think it just goes to show you if you're in business, you never you never stay at the top without fighting. And if you're not at the top anymore, guess what? Somebody's making mistakes and somebody is under investing, and it's your time to do it. Well, we hope you spend the day moving up the list in whatever you're trying to do. Whether that's the sales advisor, the gear, or the dealership in the market or whatever it is. Regardless, you got a couple of days go and have a great Saturday or six days left nada

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