Used Car Pricing (almost) Record, Ram Rev Membership Closure, Remember Web3

March 8, 2023
Welcome to Wednesday as we talk about some notable movement in the wholesale used car market. We also talk about the new EV Ram as well as the quiet transition of Web3
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  • The used car market almost broke a record that has been in place since 2009. Remember ‘cash for clunkers’? The Cox Automotive's Manheim Wholesale Used Vehicle Value Index rose 4.3% in February from January which is the largest February increase since a 4.4% jump in 2009
  • 2022 only saw month over month increases in May and December and the overall prediction was that 2023 would be a year of consistent decline
  • Our friend, COX Chief Economist Jonathan Smoke told Automotive News that didn’t seem to be the case: "We've instead seen increasing wholesale prices, and I believe it's principally a reflection of how tight supply is in the used-retail market," Smoke told Automotive News.
  • “Cox Automotive estimated that the retail used-vehicle supply in the U.S. was at 41 days at the end of February, down from 48 days at the end of January and 54 days at the end of February 2022. Wholesale used-vehicle supply ended February at 24 days, down from 26 days at the end of January and 29 days at the end of February 2022.”
  • According to Black Book, retail listing prices are still down, but will likely follow the upward trend of wholesale prices

  • Remember that amazing EV Ram 1500 Revolution prototype with its aggressive stance and progressive interior? Remember those controversial Super Bowl commercials about premature electrification? Well, Stellantis released images of their production model of the 2024 Ram 1500 REV and it looks much more like the current Ram than the prototype…but at least it has a frunk
  • The company opened pre-orders, which required a $100 deposit for a “Rev + Insider Membership,” but that program was shut down about a week later citing “membership max capacity”
  • No additional information was given regarding the actual number of memberships sold or if the pre-order would reopen
  • There is still little information on the exact specs of the truck, but we do know the target range is 500 miles
  • We also don’t know the price of the truck, although it is widely assumed that it will be similar to the F150 lightning starting price of $56k

  • It’s been a while since we’ve mentioned 3 specific letters on this show; NFT. We aren’t the only ones who have seen the once culturally pervasive term lose relevance and interest. That doesn’t mean NFT’s are gone, they are undergoing a subdued coming of age according to a new AdAge article highlighting how big brands like Nike and Starbucks are rethinking their use.
  • “Consumers don’t care about Web3 or NFTs,” said

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Paul Daly  00:32

Wednesday, halfway, I don't know if you call it halfway through the week anymore, we can call that we're talking about. We're talking about use car pricing, almost record, rams rev position and web three. Remember what the three

Kyle Mountsier  00:47

rings? Were? Every show had something about web three, three. So every, every article, every commercial was a web three, period.

Paul Daly  00:58

I'll talk about it. It's not gone. It's not gone. No, it's just going. We'll call it a rebrand very far from it. It's probably more part of your life today than it was in the past. You just don't realize it. But we'll talk about that in a minute. Lots going on this week. A lot of people doing a lot of things get that speak with some dealers this week. I'll tell you what, man, dealers dealers, on the hustle that read non stop. Non stop.

Kyle Mountsier  01:22

Yeah, every single one that I talked to is like, full throttle. Here we go. And, you know, we're, I mean, we're gonna be talking a little bit about used car prices today. But it's just like, everybody's everybody's back in can't find used cars, selling lots of used cars selling lots of vehicles. Here we go. marches, right.

Paul Daly  01:39

It's, it does feel like there's like, it's hard to say that, like, everybody hasn't had their game face on, right, like through the last few years, because everyone's showing up and we're playing. We're pivoting, we're moving. But there is like a game face mentality that I pick up, you know, talking to dealers and just perceiving what's going on that everybody realizes like, this is when we're going to find out who the championship team really is.

Kyle Mountsier  02:03

Because there's gonna be some winners and losers this year, that's for sure. Because it's gonna be there are auto market.

Paul Daly  02:08

Yep, there are well, we're super excited to be on the ground as a soda with actually more dealers this year. We're traveling to multiple cities, Arlington, and Atlanta, and Tampa, and some others, maybe even some, some in the West Coast. Because we're trying to highlight what's going on inside dealerships with this drooling narrative of investment in people, whether inside the stores or outside the stores, and how all of that transitions translates to better businesses, more profitable businesses and more sustainable businesses. So a lot more about that first stop definitely is in Arlington, May 5, Arlington, Texas, I should we should specify that not Virginia. There's an Arlington in Virginia that has a little bit of a little bit of a notoriety into it, but Arlington, Texas, outside Greater Dallas Fort Worth area, we're going to be there on April 5, circle the date on your calendar, we're doing an evening event. So the make make it available. So like if you work in fixed ops or your tech or you have the day shift, like you can participate in a soda event without going too far. So circle the date a lot more details coming on that shortly. Just want to put that marker out there. Also, hey, if you haven't subscribed to our email list yet, that list is growing. The open rate is soaring. People love the things people love it. That's right. We don't get to pick which emails you open and click on and read through every day. You get to pick that we even have some really fun surveys and integrations that that people interact with. Like we know that people are reading it when we get the emails back and like hey, somebody answered this poll somebody interacted So sign up for it at a See if it isn't the most fun you have in the automotive industry once a day in the morning time. It's right again of having fun in the automotive industry with segway Oh, this is fun. This is fun track with us. Do you use car market almost broke a record that has been in place since 2009? We're gonna say almost broke record. Remember cash for clunkers? You do Kyle right. You kind of came into the business during Cash for Clunkers last more like cash for cash for clunkers. I was taking words out of the junkyard and get them all locked up mushed up and like pour the stuff in the engine. It was a real thing cash for clunkers. But that was as long ago as it was the last time we saw a month over month increase this large in the wholesale use car market. Cox automotive Manheim wholesale vehicle used value index rose 4.3%. From January to February it was 4.3%. Last time it was even close to that high was 4.4% drop. So just point 1% Higher back in 2009. So the whole year of 2022. We just got through only saw a month over month increase at all twice the whole entire year. May and December. That's the only time the index actually went up.

Kyle Mountsier  04:52

Because like I think everyone's mindset was like it was crazy last year right but this is this is just a new thing that we're entering During and after seeing, what October November December of three straight months of significant decline to see incline amid rising interest rates is not only thing,

Paul Daly  05:13

right, and not only an incline, but an almost record setting in class. Like so our friend, Chief Economist at Cox, Jonathan smoke told automotive news that seeing a complete a consistent year of declines in 2023, like everyone was predicting, he said, it doesn't seem like that's going to be the case. We've instead seen increasing wholesale prices and I believe it's principally a reflection of how tight suppliers in the US retail market smoke told Automotive News, Cox automotive and again for the automotive news article Cox automotive estimated the retail used. Before for the 20% D increase. So, yeah, like supply is getting tight, prices are going up wholesale market, you know, the retail typically will follow the wholesale curve. So that whole like, hey, things are getting more affordable. Who the heck knows what's going on?

Kyle Mountsier  06:16

That's not happening. Who knows? Golly, it's it's, I mean, you're kind of like, if you're an economist, or you're trying to tell the market where it's headed yet at this point, you just throw the papers on the on the table one just go? Well, it's gonna do what it's gonna do. Right. And I think that this is where from a from Yeah, maybe. Right. And that what that what it tells you is that from a used car operation, side of things, you have to be dialed into an every two weeks strategy. Our good friend, Jason rice always talks about this, that looking at things in a month, or 45 or 60 day timeline is just not possible. At this point. You have to be looking at two weeks over two weeks over two weeks to understand where that market move is happening. So that you don't get caught in wholesale or in retail.

Paul Daly  07:04

Yeah, you're almost just kidding yourself. If you think he can reprice your cars every 30 or 45 days. Oh, yeah. By based, like, it's crazy. I mean, but But look, a lot of people still operate that way. And they they're trying to figure it out. And there's there's a better way. So I mean, regardless, economists probably have the best job security of anyone and in this this market, right? Like, because even if nobody knows, I'm gonna think the economist is best guess, that exists out there. And, you know, we didn't have this in the article, but the jobs report came out more strong jobs. The Fed is, you know, basically, you know, analysts are like, look, they're not going to stop rising interest rates until they cause a recession. Yeah, they said,

Kyle Mountsier  07:44

they said, like, literally they said, faster and higher. It was the quote, after the jobs report come out, we're gonna raise rates faster and higher. So it's still, it's still gonna

Paul Daly  07:56

in another in another related article that we didn't include, in today's stories, the Wall Street Journal article, talking about how so many women and I think appropriate, is National Women's Day, rational Women's Day, man, what are we doing in the office that Well, I'll tell you what we're doing. We do have a special video that we've been working on for a week. So maybe today's the day, but yeah, they were like popping Beyonce out here in the office and like doing what's National Women's Day. I was like, that's appropriate. That's great. Appropriate, right. But so the Wall Street Journal article was talking about how women in higher percentages are reentering the workforce, which is one of the reasons they had been stepped out, they had stepped out over the last two or three years. And now that the you know, kind of schooling is getting back to normal and daycare is normalizing and COVID is gone. You know, as far as like affecting the work, women are coming back in in droves, specifically into some like service and healthcare sectors. So that is also like a workforce that is coming back in that we're like, Hey, you see all these layoffs? How can we see the jobs report being so strong, it's because there had been a sidelined, large group of women that had been in the workforce stepped out hadn't come back in, and now they're starting to come back in. So it's like,

Kyle Mountsier  09:05

the new jobs all of the man incredible. Wow. So

Paul Daly  09:10

another little bit of context to what's going on all that to say, pay attention to your own operations, because you can affect far more change by paying attention, then you can affect what the Feds gonna do, or what the index is gonna do can affect any of that can affect speak out, what are we going to do? How are we going to transition to this one? Speaking of things you can't affect? You can never affect what's your design team do you know especially when it comes to that big gap between here's the prototype, and everyone's all excited. And then here's what we're actually going to give you. I feel like that gap has been closing over the years but with

Kyle Mountsier  09:46

the concept car to real car has been like squeezing in for sure.

Paul Daly  09:51

Super cool, super like which is great because everybody always wants the ones with the big wheels in the aggressive stance and all that well. Still Lantis is dealing with a little bit right now. Remember for that amazing Eevee Ram 1500 Revolution prototype we saw right they call it beautiful that was like a such a great term is beautiful with its aggressive stance and progressive interior. Remember those controversial Superbowl ads? Kyle, we were talking about premature electrification whilst Atlantis released images of their production model of the 2024 Ram 1500. And it looks a lot more like the Gasp version of the RAM than the prototype. At least it has a frank because the company ordered open pre orders, which required $100 for a ramp rev plus insider membership. Okay, but the program was shut down a week later, citing that membership was at max capacity, no additional information was given regarding the actual number of memberships sold, or if it would reopen and get this. We don't even know what the truck costs, the exact specs of the truck, we do know that it's targeted to have a 500 mile range does have a frunk. But, you know, we don't know much else. So this is one of those scenarios,

Kyle Mountsier  11:02

where it's like, all the things are happening. So nobody really knows what's happening. And it's still happening. It may make sense, but they may not. Right. Right. Yeah, I mean, I think we're gonna continue to see this as you know, I've read a lot, especially after the Superbowl and commercials of just the the dichotomy of having to lean into the the pop culture narrative of needing to talk about EVs, but not actually having ground stock in EVs, and having to sell ice vehicles. Right, as a manufacturer, how do you, you know, in the marketing department, you're like, we're gonna do an Eevee commercial, and they're like, wait, and we ain't got any of those, you know? I can't imagine being in that department and having to kind of like balance those two things. I continue to press on the fact that ground stock is ice vehicles for most of these manufacturers, and then trying to figure out like, how do we incentivize? How do we excite how do we, you know, push off and make sure we're balancing these couple of things. But I mean, you know, that train, give him that.

Paul Daly  12:12

Oh, man, I chose glitching out a little bit this morning. And we're all over the place. It's all over the place it. It's crazy. Well, hopefully, we're not all over the place on the recording, I hope you're seeing. And hearing at least some of this, at least this show is recorded and won't give you a bunch of content from it. I don't know sometimes the internet just breaks when


the web is messed up, you might as well just talk about.

Paul Daly  12:37

Well, it has been a long time since we've mentioned web three. And if you've been with us on the show, for any length of time for like a year plus, we used to talk about web three and NF T's because they were such a part of the cultural conversation, then we're kind of like, we like to nerd out a little bit over the culture and the brand side and the tech side. But we're not the only ones who have seen it go away. It doesn't mean that NF T's are gone, or web three is gone. They're just kind of undergoing a coming of age, right? A rebrand according to a new Ad Age article, highlighting how big brands like Nike and Starbucks are rethinking their use. I have to be honest, the reason I saw this article is because I saw the floating NFT Nike in the box, I'm like, what is that article, and then it actually ended up being relevant to a number of things. So this is according to Senior VP of strategy at Vayner three. So that's Gary Vaynerchuk. Web three company used to be called Vayner NFT. They've rebranded the company name to Vayner. Three, he says consumers don't care about web three or NF T's they care about a more ownable personalized and immersive internet. So he took the concept that everyone kind of was relating around the technology, and he said, Actually, people want to feel more connected, and they want to be a more personalized experience. So kind of the things kind of let's talk about, like what got us to this point, right?

Kyle Mountsier  13:55

Fraud. Speculation. Absolutely. Yeah. And then And then specifically, because NF Ts are backed by cryptocurrencies, if they have any sort of value, the the massive decline and things like Bitcoin and eath contributed to people just pulling back and not dipping, they're dipping their toes back in. And I think that what's what people are turning to is saying, Hey, this is where we need to look at NF T's and reclassify them, talk about them differently, exercise where they were their best, right things like smart contracts or storing things on the blockchain or or giving people access to something that they may not have had access to verified access. And I love you know, Avery Akkineni, the president of Vayner three also said that they're referring these to these things more as digital collectibles or digital assets, because they want they want people to like if you think about that, when I had to explain non fungible token Can two people who are like,

Paul Daly  15:02

they were tired before I should get to the point?

Kyle Mountsier  15:08

Right. So but me, me thinking, Oh, I can collect something. And it's digital boom, immediately, I'm relating that to a way that I've experienced a lot of other things. So I think that this, this shift is also going to potentially endear people more to the web three space, it will, it will give people access to say I'm interested in securing things or having access to other things. And thinking of that in the way that the internet and the digital ecosystem work. So I'm excited to kind of see how like, a little bit more balanced and measured approach into it, which is a big part of like, what we'd like to talk about anyways, a balanced measured approach into most things, right? Is is going to allow more people to be attracted to the web three space,

Paul Daly  15:56

pretty, pretty good timing in May, we're gonna have some level of coverage from V con, which is the premier and ft web three, and, you know, event live event that Gary Vaynerchuk puts on. So we're gonna bring you some level of coverage from that. So it's appropriate. But I think we tie all of this background is something we talked about all the time and automotive brand, automotive marketing, company culture within the ecosystem that automotive, and it's this community, the real value of an NFT, the real value of a digital collectible, are people feeling like they're a part of something that is meaningful part of something that they give them some level of elevation personally, because I feel like yes, I am associated with that I'm willing to hand raise with that. Two major brands that they talked about Starbucks, and Nike who are kind of like taking steps forward in this exclusivity community world. They're not calling it an NF T, they're not calling but startup. I mean, Nike has a program called dot swoosh. And basically, this is a community that you have to like go through the blockchain, the NFT, you know, ecosystem to become a member, but they have 300,000 members, and they, they have some exclusive products. They also are using it as a test case to see what people in an integrate with. So this community is actually

Kyle Mountsier  17:09

because your community is typically your early market, right there. Your early adopters are always your adopters. So if your early adopters are in it, good chance that you get the next layer, right,

Paul Daly  17:18

and Starbucks has something called Odyssey, which is actually kind of a little bit of a gamification, that you can get discounts and rewards, you have to be participating on, you know, kind of an NF T blockchain based ecosystem, but they're allowing space for that. And they say they're learning a ton from these focus groups. So hey, like, we're not the only ones in automotive dealing with disruption and change. There's all kinds of things going on. And the point is the point that we do the show the point of asoto is to how can we align ourselves, the industry, with culture to get people what they actually want? And that thing all the time every time is community

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