Carvana Scales Capacity, Most Fatal Car Study, Tech Hiring Slowdown

Paul J Daly  0:00  
I guess we have a really nice dichotomy going on. On Monday, November 18, Kyle's in Palm Beach. I'm in Syracuse. I got a jacket on. He's in a T shirt, but we're both about to be in Virginia to film another more than cars episode, but

Unknown Speaker  0:14  
news on a Monday. Who I

Kyle Mountsier  0:16  
is and who I be. You know, it's way easier to like champion you when you're standing

Speaker 1  0:22  
up. Vacation vibes going on right now. He's dancing. There's palm trees behind.

Kyle Mountsier  0:27  
Look, you know, I mean, Glenn. He was like, Where's Paul? I was like, man, we're doing more than cars. Like, you know, it's already going to be a lot for me. Like, he's at the house. This is one of the greatest, you know, Scott sales, cool, but like, you get to come name out is great down here you come for this in the winter, in the in the fall, it is just, it's such a great vibe. And I love the community that gets created here. Everybody stays on property. It is a really great event. Yeah, kudos to patch events and the entire team here, Don and the whole team have been just great. Like, it's really incredible to see.

Paul J Daly  1:02  
Tell you what, I caught no less than five tongue lashings from my family when they realized this was MRC weekend.

Kyle Mountsier  1:09  
Oh, because they always go,

Speaker 1  1:11  
because my kids start feeling the itch right, like, Hey, what are we going to that Florida that's you're like, I want to go to that really nice hotel. Again. I was like, yeah, it's actually this week out there. Like, what? Like guys, you can't do everything. We can't do it. Can't do it all. I know. Yeah, well, that's

Paul J Daly  1:30  
great. Look why you're there. Why don't you just share one thing from your time there? Because MRC is usually the people who are really paying attention to tech and the next steps. It's the first place that anybody heard the letter CDP put together in order. That's right. So what are the conversations with everybody talking about?

Kyle Mountsier  1:48  
Yeah, it goes along with the CDP conversation. But what I found really interesting is everybody's starting to talk about, how do we handle the interaction? And we've always had equity mining tools and never really thought critically about how to handle what the percentage and the close rates and the outreach rates and all of that. But now that you have the CDP coming into play, and you're really, really thinking critically about, what are the opportunities in front of me, it's totally different than a BDC, right? It's not I need 100 leads to get 15 sales. It's like, I need opportunities and outreach and consistent, and so, like, even just the metrics alongside of what what's good is hearkening back to original like, oh, internet days now I have leads what's what does good look like? So everybody's trying to figure out what good looks like when interacting with these people, whether it be through outbound email and SMS, automated, or via real like phone calls and emails from humans, and what type of metrics from like an opportunity to interaction, to to in the showroom, to close rate is good. And so that's been a lot of the conversation on not just interesting it, once we start doing it, how do we measure it and figure out if it's working? It

Paul J Daly  2:57  
reminds me of the conversation we had last week on the webinar where we were trying to talk about what does good look like. And I think that would be really helpful, like white paper, or piece of content, or topic of conversation going into next year, what does good even look like as we do this, yeah, we'll have a session about that at ASOTU con.

Kyle Mountsier  3:13  
There you go. What I think, I think also, by that point, there'll be enough dealers with enough data on it

Paul J Daly  3:19  
who can show start to get some reasonable good looks like, hey, maybe we'll put that on. Listen, if you're not already signed up for it, go to ASOTU con.com make sure you're on the pre sign up list. It's in May. However, we're about to launch a Black Friday sale where you will get the cheapest tickets you will be able to get period ever if you want to be at ASOTU con. It was packed last year. It's going to be double packed this year. So we're double packed. It's going to be close. So we want to give you the people who are on the first to know list, the cheapest tickets possible, because they're just going to get more expensive as time goes on. And I'm sure we'll have some fun stuff for the people who get on the list, you know, as soon as possible. We also, oh, so many things. And you got to go. We have a webinar, another one coming up on Friday. Go to asotu.com and just check out what the webinar is. We're going to talk about digital merchandising from our friend with our friends at car cutter. So go check that out. We're going to be talking more about it in the next few days, and we hope you join us. Let's talk about some news. Let's do it. Carvana is reimagining its operations through strategic integrations of the Odessa auction network, emphasizing its vertical integration and expansion. Boy are they on the hunt the used car retailers converted three Odessa sites into multi functional hubs in 2024 with plans for a sixth site by a year end, introducing which introduced Carly, who are a little familiar with C, A, R, L, I, vehicle tracking, system, optimizing, reconditioning, inventory management. We happen to know a couple people who are on that. Carvana has increased retail gross profit per vehicle to 3497 in q3 up 30% year over year. CEO Ernie Garcia is highlighting the company's capacity for processing 3 million. Million vehicles annually with get this minimal capital expenditure

Kyle Mountsier  5:06  
operations. I know it. I mean here, the whole key to used cars is Process Time to turn and profitability per vehicle, and they match up perfectly. So if you can nail that and the distribution hub around a desktop. We always knew that that was an opportunity, and they've kind of figured it out. Over the last year, you start to see these profits rise up 30% when everybody's complaining about squeezing margins, and Carvana is figuring out, hey, it's about turn it's about, how do you process the vehicles through the pipeline to get them speed to lot as quick as possible? Because that's when your profitability is the best. And it sounds like they're figuring it out. It

Paul J Daly  5:41  
sure does. We got to talk to the people at Carly. We know enough dealers that use that yeah, platform. We're gonna a little note there. If you know someone at Carly, send them to ASOTU, like, let them know what's going on over here. Because there's a there's a lot of what are they called? There's a lot of blue sky for them in this ecosystem. But we gotta keep talking. You have a meeting to get to yes, a recent study from our friends at IC cars revealed Tesla vehicles have get this the highest fatal crash rates among automakers in the US, raising questions about how they are driven and their design. Basically, they led with 5.6 deaths per billion miles driven, double the industry average of 2.8 Kia 5.5 and Bucha 4.8 followed as the next two in line as highest fatality automakers. The Tesla Model y recorded a 10.6 fatal crash rate, nearly five times the SUV average, while the Model S rate was twice the average. Despite the figures, Tesla scored very high in the crash test ratings. Analysts call Carl Brower, link the high crash rates to driver behavior. He says the quote, the biggest contributor to occupant safety is avoiding a crest, and the biggest factor in crash avoidance is driver behavior. So maybe not the cars. Maybe it's the people look

Kyle Mountsier  6:55  
honestly. The biggest concern that I've had in building in these like double iPad screens in the cars, is the level of distraction that comes with that opportunity to move your point of focus. And I don't know whether that's the truth here. I don't think it's probably doesn't have to do anything with autonomous driving or any of that. It's probably the opposite. It's probably that the distraction or the point of focus has moved to something that we're more native to moving to, and that's my biggest worry here. And so, you know, and then you look at like, who's the close follow both car manufacturers that have increased the screen size of all of their technology and built screens that go all the way across. So just think about

Paul J Daly  7:41  
that, because I was thinking, I mean, it probably doesn't hurt either that, you know, these things are lightning fast, right? And maybe people tend to drive them a little more aggressively, but the combination of those two things is a very bad recipe, right? The faster you go, the faster the over corrections, yeah. So be interesting to look at that and see, and maybe we can learn a thing or two on the way through here. Last but not least, the post pandemic hiring landscape is revealing a sharp slowdown in tech roles, with oversupply automation and changing priorities, leaving many professionals facing a white collar recession. White Collar roles like it, engineering and marketing, fell 20 to 32% in the last five years, and AI tools like chat GPT have enhanced productivity, reducing the need for new hires with things like coding, copywriting, etc, sectors like health care, they did but they bucked the trend. They increased hiring by 10% to address burnout and staffing shortages. Job openings now receive an average of 222 applicants, nearly three times as many as at the end of 2021

Kyle Mountsier  8:47  
wow. So actually, what you're going to want to go do is sign up for auto industry.ai. Perfect. Second you're going to want to read the article that Ben Hadley has on auto industry.

Paul J Daly  8:59  
I think we just lost your microphone. If you can hear us. Okay. Kyle doesn't realize we lost his microphone. He's gonna keep talking. Oh, there you go. Okay, Ben had that. He wrote it. You got

Kyle Mountsier  9:12  
it? Yes, there you go. So he wrote an article, and in that article is a screen grab of Stack Overflow and its comparison to when chat GPT launch, Stack Overflow is a developer resourcing portal that developers can go in and ask questions, how are you doing this? How do you unfix this? And basically, the day that chat GPT four rolled out, like the monthly and daily active users have been plummeting on Stack Overflow, because everybody's moving to utilizing GPT for that. So, like, that's just a microcosm of all these other roles that are getting enhanced by AI. The question is is, can that actual marketer keep up? Because I'm talking to a bunch of people here at MRC that are going, Hey, look, even with all the tools, someone has to use them absolutely and we still are under capacity. So. Won't take this as an opportunity to let go of marketers lean in and give them more access to actually moving faster. That's the better move. Hey,

Paul J Daly  10:07  
we're trying to prep you for doing that. Kyle mentioned it. We have a new newsletter called auto industry.ai to help you be the smartest one on AI, you can be the one that gets to use all the other tools, make all the money, have all the friends. We will see you here tomorrow morning. You.

Transcribed by https://otter.ai

‍