Carvana Efficient Growth, Ford Pausing Lightning Production, Starbucks One Price

Paul J Daly  0:01  
It's that day, folks, the day where Kyle and I aren't dressed up. It's Halloween. Lots of fun stuff going but we're talking about Carvana, Ford, Starbucks, time innovations of the year.

Kyle Mountsier  0:14  
Wow.

Paul J Daly  0:15  
We are tripping over ourselves to we can't wait to use our Halloween segue button.

Kyle Mountsier  0:20  
We gotta nail it that. I'm praying that we got it locked and loaded.

Paul J Daly  0:25  
New guy actually remembered, if you haven't seen we hired a new production. Production person, Spencer. And Nathan was like, you know, Spencer was like, do we still have that Halloween segue button? Oh, yeah, we do. Oh yes. We gotta stick around for a few minutes. We'll figure out a way to, yeah, but

Kyle Mountsier  0:41  
you can't just play it. You can't just, like, let it out.

Paul J Daly  0:44  
You know what I mean was to playing it. Yeah,

Kyle Mountsier  0:46  
you were about to, I saw you reach over to that. I did. Oh, you saw that because you didn't know. We've just hired, you know, we're a small team here, but we've just hired two incredible new personalities, people that are part of the ASOTU team. We've got Spencer, he's on our production team, and then we've got John. She's in our partner relationships team. So you may see some of them hanging around the ASOTU calls on LinkedIn at nada, some

Paul J Daly  1:11  
love. Yeah, show them some

Kyle Mountsier  1:13  
love on LinkedIn. You know,

Paul J Daly  1:15  
it's so fun. You know, we were very we were talking yesterday. So we were we've been at the Roman Auto Group the last few days shooting an episode for season two of more than cars. It'll be released next year. But we were talking yesterday about who asked us, this was it? Zach Zach Kinch, we were on their podcast, and he asked about, yeah, what's it like to hire and recruit? Because we were talking about the value of making content, and how that you know is a big recruiting tool, if you're a dealership, is making good content. People know who you are. And we were like, you know, we're really fortunate to be in this place now, where we're three to four years in, and because we're so we make so much content. People know what we believe. They get excited about. What we're excited about we have this community is that hiring becomes very attractional, and then it's like, you get people that join the team who already believe what you believe and want to like intrinsically, make more of that in the world. So So John is definitely that, because she's been in the industry, can't wait for you to get to know her a little bit better. And Spencer, kind of like he used to work for Nathan back in the day, and now he works for Nathan again. I guess it's just Nathan. Basically,

Kyle Mountsier  2:17  
there's black male somewhere in there. I'm just messing No, no,

Paul J Daly  2:20  
it's real good. It's real good. Maybe we get a little reverse blackmail. Maybe Spencer's got some dirt.

Kyle Mountsier  2:25  
Maybe Spencer has the dirt. Nathan's like, keep him close.

Unknown Speaker  2:31  
There's not on the

Paul J Daly  2:34  
live stream this morning. So, oh, hey, we got a couple things going on. We have a greatest soda wedge webinar that we had last week that you can get on replay. It's a mall with full throttle talking about free TV. You can go to asotu.com and get that download it, get the recording. Still, it's worth watching, especially if you're a marketer. More than cars, Episode Four coming in, super hot, less than two weeks. Now, less than two weeks. I'm so excited. November, November 13, this, this episode is going to be so amazing. So it's going to be so amazing, very competitive environment, lots of surprises, lots of energy, and just a real fun way to wrap up season one with our friends at Mohawk Chevrolet. Especially want to give thanks to our partner for that episode, UVI, who they have their system in Mohawk, Chevrolet, and they helped us make this episode possible. Couldn't have recorded it, filmed it without it, and they've been super patient on releasing the episode sometimes. Again, we're a small team. It took us a while to get through this one, but we got through it. Speaking of UVI,

Unknown Speaker  3:36  
bam, good segue way

Paul J Daly  3:41  
into the show. Let's go thriller like this is just a little special. Want to give a shout out to our friends at UVI, doing the automotive industry right their AI driven auto mate, automated inspection system. You've probably seen the things that the cars drive through. It was actually on Time Magazine's Most 2420 24 best inventions list, which is pretty amazing. It's showcasing innovations that transform daily life. That's the time list. They recognize its impact on safety, reliability and transparency, which is something we know every consumer wants. So that's a win for the industry. They're used by over 300 US dealers and scan half a million vehicles monthly in the service drive CEO of Amir hever calls the honor quote a testament to the ingenuity of his team, and given the credit right back to the team. So

Kyle Mountsier  4:29  
cool. Yeah. Claps. Claps for our friends. I love skin like an inside auto I mean, obviously they do a lot of other stuff outside of auto, but like an inside auto technology company breaking into this real time

Paul J Daly  4:43  
list, baby. Yeah, really great for them. Congrats on that. All right, let's get to some news. This is he came late in the day, but it's been all the chatter on this. Carvana posted their q3 net income, which was very impressive. Impressed Wall Street despite an 80% decline from last year's. Figures like they've really come a long way. The net income hit $148 million up 208% from q2 but down from q3 last year, 741 million. Here's the deal, though, vehicle sales rose 100 to 108,000 up 34% year over year. Operating income reached 337 million, up 602% year over year. Gross profit. Here's the real one gross profit per vehicle climbed 25% supported by the reduced cost structure and faster sales. CEO Ernie Garcia praised the quote, efficient growth from Carvana Odessa, network expansion, enhancing cost efficiency and customer experience. Brian Kramer had a great post on LinkedIn. He called it a monster finish for q3 and he said credit the company's disciplined acquisition and inventory management strategies. You look at their grosses per car front end back at like, dang, like they are disciplined. That was at the point of his post. He said, Don't tell me they don't have a disciplined strategy, which is obviously what he's all about. Well, they introduced this year that that price tracker right for for your car. And I think, like I didn't see anywhere in the report, but if I had to guess, that thing has a massive impact,

Kyle Mountsier  6:17  
I got emails for cars I don't own. I get the I get the cars. Here's here's the other. Like, if we just remember, q3 of last year was raging for them. Q4 was when they just went into the tank. And even as late as q1 of this year, people were like, are they even gonna make it? Stock price was under $10 and now it is just like, 250 booming. 250 it was up 25% in trading after their, uh, after their q3, reports, crazy, dude,

Paul J Daly  6:51  
that's amazing. Yeah. So, I mean, I think you know, one of the cut the comment I made on Brian's post was like, there is always so much to learn from a situation like this, because, you know, when you have a fast horse or a motivated horse running next to you, it makes you pay attention. Run a little faster, and just like when Carvana first came out, my position was like, they're doing us a great service by showing us what it is that consumers are actually gravitating toward. And I think we made a lot of positive changes in the industry as a result of Carvana hitting the market. I think this is also showing us that these things, like Brian mentioned, discipline, acquisition strategy, steady marketing, or giving the customer what they want, the value, the value tracker, all the things you just mentioned, I think that's going to help make us all better in some way.

Kyle Mountsier  7:38  
It's just art if possible, right? It's like, yeah, that is possible to do. Yeah, yeah.

Paul J Daly  7:42  
I wanted to have a segue there, but I couldn't. We're gonna use the button maybe one more time. We gotta work uh, Ford is pausing their f1 50 lightning production for seven weeks. So basically, through the end of the year, into January, responding to slower than expected demand for their electric pickup production is going to stop on November 15. Resume on January 6, after a holiday break, as they adjust to find a better mix of sales growth and profitability, despite they have an 86% year to date sales increase through September. Wow. Lightning did lose the title as the the best selling electric pickup. The Cyber truck took that Ford. Supply of models is still high. 100 days supply of the f1 50, lightning. 130, 130 days of the Mustang Mach e1. 28, days of the E Transit per Cox automotive data. CEO Jim Farley remains optimistic about the long term strategy, but acknowledges, quote, The slow uptake of E v s emphasizing the company's pivot to more affordable e v platforms over the years. He said, though, quote, I wouldn't trade our strategy for any of our competitors. So he's still confident. It sounds like,

Kyle Mountsier  8:44  
yeah, you know, I mean, it is kind of wild that you can basically take two months off and still be good on day. Supply of a car. At least they're doing that, and they're just not throwing they're doing it, I think old smart, instead of just like shoving more cars down in the hood, yeah, yeah, down dealers, down into dealers inventory. You know, we'll see if, we'll see if they can keep pace, especially now that the cyber truck is introduced, the slightly lower price model, and there's most likely going to be an even lower price model coming out there. And it is,

Paul J Daly  9:17  
when's the scout coming live? Is that's 2026, I think. Yeah, scouts,

Kyle Mountsier  9:20  
scouts, a hot minute. So, so we got a year, though, yeah? And then you've got GM doing a great job with trucks as well. Like, it was really nice, yeah, this is, this is, it's gonna be a definite fight in 2025 for kind of truck King title that Ford just constantly holds in a lot of the US. You know, it's kind of like the Silverado in a part of it and the f1 50 and a part of it, like, is the cyber truck just gonna win. We'll see. But kind of wild under day supply, I

Paul J Daly  9:51  
know, speaking of kind of wild,

Unknown Speaker  9:53  
it's a good segue.

Paul J Daly  9:57  
I love this one because I'm an oat milk guy. This is. It's also

Kyle Mountsier  10:00  
I'll give you like an even more not just like I'm an oat milk guy, but Starbucks is giving non dairy milk fans a break by dropping the extra fee for non dairy milk customization starting November 7. This change coincides with Starbucks holiday menu launch, and customers can now enjoy soy, oat, almond or coconut milk without added costs. The new CEO, Brian Nichols, says the shift supports Starbucks culture of drink personalization, which we know that you got your non fat, no. Whit, baby, Bob, calf, no. Wife, no. I said, you know, whatever it is,

Paul J Daly  10:34  
it's funny. Read those fgt to create you the most complicated Starbucks order. There's so much fun to read. Oh,

Kyle Mountsier  10:39  
that's so that's so smart. The the non dairy milk customizations are the second most popular modification, just after the number of espresso shots in a drink, customers could see a 10% price reduction on orders with non dairy milk adjustments. All right, I'm going to give my story first, because, like, my wife, has a lot of allergies, right? And dairy is one of them, but also gluten and a lot of other things that end up costing her, and consequently, our family or other people that we're with more money to cook meals, eat out, get drinks. And it's not because she wouldn't get the regular milk. It's because she literally can't and it, I'm telling you this, like, yeah, will all people rejoice that? Like, maybe, like you, you're like, I'm an old milk guy. I don't want to pay more for that. But for people that kind of because of allergies, are required to be put in this position to order something that costs more. I'm telling you, like, when I tell my wife she's gonna celebrate, she'll probably go to Starbucks more just because it's like, Thank goodness for someone not making me pay more for something that I can't control. Interesting.

Paul J Daly  11:50  
That's that's a great point. You know, I think, from a consumer perspective standpoint, what we can learn from this is that they see the value. So I think it's like a, if you want oat milk, it's like a 30 cents up charge, right? And if you have a $3 coffee, right? 10% I think they understand that the biggest win is not the 30 cents in the extra margin there. The biggest win is people feeling like they can order whatever they want, saying, Hey, this is the place where you get it exactly like you want it. And I think in any retail, including automotive, figuring out a way to give people exactly what they want and have them start to make that association. It is what I want, how I want it. They can order their venti, double cupped, extra hot, Nitro Cold Brew, quad espresso with sweet cream, matcha, cold foam and caramel, hazel nut drizzle. Thanks, G, P, T, I know I had to do it. I had, I just had to do it. Yeah, and

Kyle Mountsier  12:38  
I mean, for auto, it's like, you know, this is the argument for omni channel retailing right where it's like the customer can buy how they want, and you give them the capacity for that. You know, the process being customized and curated based on the way that they'd like to drive go through the process, even then you hit everything, you know, whether you're financing or paying cash or whatever you don't get, you know, incentivized options to do one of the other. It's just, hey, look, it looks like you're buying. Let's do it that way. It is. Speaking

Paul J Daly  13:06  
of the outro, one more time. Little Michael Jackson, all right, but look, we've had a lot of fun with you today. We hope you go out there. Have some fun on Halloween. A great time to connect with your community and your team around some smiles, selling some cars, taking carry some people. We'll see you tomorrow, when it will be November. Everywhere

Speaker 1  13:28  
I go, the people really want to know who I is and who I be. They stop and stay when they see me, they consider wants no need to repeat. Run up on me. Watch you fall to your knees. Tip my hat when it's time for the kill. Ain't no beast. When you really be real. I am the boss. I am the dawn. I am the one they call the

Transcribed by https://otter.ai

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