Rivian Grows Normal, Indie Service Creeps on Franchised, Food Junk Fees

Paul J Daly: 0:19

Yo first Friday of May coming in hot, which means the first Saturday, amaze coming. Everyone's excited. Today we're talking about rivian getting normal indie service creeping on franchise service and food junk food. People a young food, not junk food. Food. Junk food. Those are

‍Kyle Mountsier: 0:42

after everybody. Paul

Paul J Daly: 0:45

erba here coming up,

Kyle Mountsier: 0:47

buddy. Yeah.

Paul J Daly: 0:49

I saw a post yesterday and this isn't one of the stories today but something about like, the cars rule. Estimated implementation is like 60 days away or something? Like, wait, why? Something like that? I can't remember I

Kyle Mountsier: 1:04

have to. That must have been the original one because yeah, it was like July one was

Paul J Daly: 1:08

okay. Dry. Okay. I have to figure it was like a reliable source. It wasn't like a no name, whatever it was, but it was just a post on LinkedIn. You know? Yeah,

Kyle Mountsier: 1:17

that's it's just a

Paul J Daly: 1:18

post on LinkedIn. Tomorrow. Everybody. Adrienne Gibbs, is on the live stream this morning. And she is going

Kyle Mountsier: 1:24

to be if you don't follow Adrienne Gibbs on LinkedIn, you are doing yourself a disservice. You're missing our game is on fire. It is the chef's kiss it is. And

Paul J Daly: 1:37

she is going to be at ASOTU CON this year. We are so excited to be with her at ASOTU CON and so many of you hundreds of you actually these tickets keep coming in. The hotels all over now are starting to book right. It's not just the vent hotel, the other hotels, speakers are excited. They're sending us videos I saw I saw a couple more dealers buy tickets yesterday who I know, and I've been wanting to meet them in person. And now I'm gonna get to meet them in person. I don't know, I know, maybe they know, I know. And they assume we know who buys tickets. But I was so excited. Look, go to soda con.com. And check out everything that's going on special thanks to our presenting sponsors Gugu, Reynolds and Reynolds for helping us put this thing on also, our other sponsors, industry partners, collaborators, we like to call them are ready to contribute, right? They're not going ready to hound you. They're going to be in the panel conversations and listen and come up with new solutions because ASOTU CON is a place actually where industry partners get together and come up with new solutions to serve dealers except industry. Like, what else can we ask for? I don't know a swimming pool does you know there's no switching note

Kyle Mountsier: 2:51

that on the effective podcast stage this year. That's right in the middle of the conversation Hall. Yeah. Did you know that there's over I think it's over 30 conversations

Paul J Daly: 3:02

and we're gonna wait a while we only had like eight grand last year No, no, no

Kyle Mountsier: 3:06

27 or something like that. 28 It's going to be that's an that's a whole

Paul J Daly: 3:11

other stage this year. It's wild. That's a whole other stage. Like last year, it was more of like a secluded, one secluded, but you know, it just wasn't set up to be a stage and we got it. It's gonna be a stage this year. So those are some of my both of ours. We've said some of our favorite conversations.

Kyle Mountsier: 3:27

It's like one of the few podcasts that I actually listened to during a year now.

Paul J Daly: 3:31

So literally, I go back and for the next like 30 days after sono con I'm at least listening to one of those a day because we have a bunch of different hosts. The conversation is like a little more freeform. It's great. All right, let's get into it, Paul. Because we're going over to all things use cars clubhouse room as soon as we're done here in no more than 12 and a half minutes. So as Tesla is cutting jobs, Evie startup competitor rivian is set to expand its normal Illinois plant adding 500 jobs to produce the new are two crossovers like the small should be leveraging a significant $827 million incentive package they just got from the state of Illinois. It's not a cash infusion, but it does include 75 million from a deal closing fun and 634 million in tax incentives over 30 years with a commitment to maintain Vivian's commitment to maintain at least 6000 jobs there. It diverged from their initial plan to actually build in Georgia. Instead, they're putting more into consolidating their plant in Illinois, and the company adds they've invested 2 billion in normal Illinois, which has generated 3.9 billion of value add for the local economy. CEO rj scaringe said Governor Pritzker has always been a strong advocate for providing epic economic opportunities for Illinois residents and business owners alike.

Kyle Mountsier: 4:54

There's three things that really surprised me about this story. One, the fact that this story got you to say normal More than three times.

Paul J Daly: 5:04

Normal I live in normal, normal, just normal says nobody ever. The second

Kyle Mountsier: 5:08

one is I just remember back to all the conversation that we were having about, you know, Georgia and whether or not Georgia was going to kind of let rivian in. And if I'm Georgia right now, I'm looking at this and expanded interest and continue to press in into the local economy of Illinois, and going, totally missed out. The other piece of this, and this is kind of the, you know, the rub right at the beginning of the story that I think is important to note is that rivian is expanding, they're adding jobs, you know, that they've kind of been, honestly, in the news radar over the last, like, we'll call it year, except for the release of they are to crossover, kind of a little, you know, Sleeping Giant, you know, just consistently growing, you know, maintaining enough ground stock to where people can get them quickly. And you you just like, I know a few people with rivi ins in the Nashville area, they absolutely love them, they're obsessed with the quality obsessed with the drive style, all of that stuff. So that one's gonna be, I have a feeling about rivian. i They're not, they're not,

Paul J Daly: 6:17

they still just figured out, they have to figure out how to be profitable, they've put a lot of their eggs in the R two. And the other one was the r1. Know, the R three, the other one, the small one that they surprised everybody where they are thrilled. Yeah. However, they're doing a great job with the brand. Overall, they have now really established a loyal customer base, who understands what it is to drive a Rivia. And it's about adventure. It's kind of like if Tesla was a Jeep, you know what I mean? And they've kind of like positioned rivi in that way. seem like they're doing okay, with quality. It's can they be profitable enough? Because they're still burning a ton of cash. So they

Kyle Mountsier: 6:53

have the same question that Carvanha had, like five months ago. Oh, my gosh, we

Paul J Daly: 6:57

almost talked about that. Carvanha is Ernie Garcia and dad, like, up up their wealth by 11 billion yesterday because of the status show. I know. But But yeah, I would definitely not count them out. After the I've just like now I would never look at a reveal. But like now it's like looking at the Tribeca seems like a nice vehicle. You know, it seemed like the one with the weird headlights. But now it's like actually maybe and I saw a post yesterday it was it was like Tesla's social media and or Tesla in the news. And then it was meanwhile rivian and rivian had like posted a picture of the the r1 pickup and it was like the frunk was like loaded with puppies.

Kyle Mountsier: 7:34

Like I saw that I saw that picture was genius.

Paul J Daly: 7:39

Their brand their brand team is on point. And yes, yeah, I don't think Tesla has a brand team anymore. They've just you know, they fired

Kyle Mountsier: 7:45

all of them Elon, brain brand team the whole nine yards.

Paul J Daly: 7:50

Spinning in a brand teams. Segue. Sorry about franchise, service and independence JD Powers recent 2024 study highlights aftermarket service stations gaming on franchise dealerships service departments and a customer satisfaction in the area of customer satisfaction being driven by easier access and quicker service. Here's a quote from Leonard Martin from JD Power. He says this is a key opportunity for aftermarket providers not only to compete with franchised dealers on price, but also to add customer value with quicker and easier service experience. So it's heating up younger customers, particularly Gen Z Report lower satisfaction levels with aftermarket services though JD Power suggests enhancing service advisor interaction. So basically saying that, hey, the better service advisor interaction you have, the higher service score is going to go especially with Gen Z. They also went on to say and this is I think, a really important point, providing photo or video documentation of recommended repairs significantly increases customer approval of the work get this 51% of customers who receive such documentation, go on and proceed with suggested repairs. Why only 24% who do not that is more than a 100% increase. If you're a candidate I can vouch for this like real time impact. It is without a doubt the highest volume value impact to everything when it comes to customer service when it comes to dollars per row when it comes to approve, approve, approve lines per recommended lines like that, as a customer service piece is also something that a lot of the independent shops are not leveraging in their technology. So franchise has an opportunity to get back ahead as they're losing. Because yeah, because of convenience and access, right. Yeah, you know, we see we see the best dealers are not the best dealers, but the ones who are paying attention like quick service is important and it takes a heavy lift to convince people you can get in and out of a franchise dealership. Yeah, it just is a heavy lift because the perception conversation a lot and it's better We'd like you've just think from a physical location standpoint, you see a Jiffy Lube. Here's the road. Here's the entrance. There's the service bay franchise dealership. Here's the road that goes in it's way back there somewhere in the middle. I

Kyle Mountsier: 10:12

mean, you've heard me talking about for years and years the fact that I believe that OEMs need to do a lot better job at standing up quick service operations with their franchise dealers across the city. You know, when you have you know, two Mazda dealerships one Audi dealership to Lexus dealerships, you know, a couple of Chevy dealerships and if you're not like in a major metro, like a, like a Chicago, the access for the regular user on there every day is just not possible. These micro shops is just a necessity to compete.

Paul J Daly: 10:42

I'm thinking of Ford, particularly the opportunity to put up a retail gas station size plot, have some superchargers have some quick service

Kyle Mountsier: 10:53

and have some coffee. I just don't understand why is and and franchise network.

Paul J Daly: 11:00

I know you're a plug in there, you know how to run server build, build a little box that you can put on a piece of real estate and yeah, and then

Kyle Mountsier: 11:07

and then like the speed to get that but Oh, great. We're gonna go ahead and take care of your thing. We've got a couple of loners outside we're going to take it back to the main shop because we can't handle that here like foam customer.

Paul J Daly: 11:17

By the way. By the way, this is what your car's worth, you know. So however, franchise dealerships, were rated as more trustworthy in areas because they use more technology to enhance the efficiency repair. So franchised dealership trust in the service department is higher independent trust and if you've been to some independent service centers, like it's kind of understandable by speaking speaking and things that are a little dicey. Segue.

Kyle Mountsier: 11:45

You even see that one coming.

Paul J Daly: 11:47

I did dicey foodie get it? On your

Kyle Mountsier: 11:50

boys birthday July 1, California is going to mandate the elimination of unexpected charges. We've never heard that before, on not something that you would have expected on restaurant bills. The plan excludes taxes and require requires full disclosure of any fees in advertisements or menus. So obviously, the opinions of many people are quite mixed with some appreciating the potential for a simplified billing process, while other worries are where other people are worried about significant price increases due to the adjustments with the new law. Basically, the law aims to get rid of the service charges that at some restaurants, especially like in San Francisco in the big cities can be as high as 20% of the overall bill between like assessed tips or service charges or delivery fees are anything that is not baked into the price of a food item. This is food expert Marcia goglia dari Gagliardi,

Paul J Daly: 12:55

that was great Gagliardi one,

Kyle Mountsier: 12:57

there you go, I was close, said, She's, this is just a great quote, just when you thought your pork chop was already really expensive, guess what? We're going to be seeing higher prices, because there's nowhere else these restaurants can put these fees and higher wages in order to maintain these employees.

Paul J Daly: 13:13

They go. I mean, that's I didn't know. The lesson here is like, everything's got to be paid for. And the consumer wants to know what it is they're paying for when they buy it. They don't want line after line after line of surprise after surprise after surprise, especially in an industry like this, right? It's a service fee. It's like a Yeah, like paying for services are part of your overhead, which should be baked in the price of your product.

Kyle Mountsier: 13:40

Yeah, what would you would you rather pay the higher price like C dilation hit the prices? Absolutely. Same thing, like I would change the price of the thing? Yeah,

Paul J Daly: 13:49

the flip side is that I would rather that. But I would not be the person that's trying to factor in plus, plus plus when I decide whether or not to buy a thing. So I mean, from like a business standpoint, the consumer might be upset about it. But most of them probably won't be when the higher prices of the items will probably be talked about. But I mean, realistically, how much higher? Are we talking if you're buying an expensive pork chop and say you're spending $40 for a pork chop, right? And that that $41 turns into 4425? Are you not going to get it like there's places and out maps

Kyle Mountsier: 14:23

to get out of here. Not blinking. But if it gets added afterwards, you're blinking. You're like, man, bad taste in your mouth, which is not when you're not sure if you recognize this, but there's some relationship to our good automotive industry in the way that consumers feel about the prices that they're looking at. Yeah, and the relationship between our industry and their love for a big slab of high quality meat.

Paul J Daly: 14:47

More stakes in this business, I think than any other business besides the beef business. We hope you have an amazing weekend. We'll see you tomorrow morning for the Saturday episode. In the meantime, check out ASOTU con.com

‍