Holman is 100, Toyota Doubles Down, and Loyal Gen Z

Paul J Daly: 0:00

I know your eyes do not deceive you. It is Monday, August 26 and I brought in the big gun, since Kyle's on vacation with Daniel Gover co hosting this morning as we talk about Holman turning 100 Toyota doubling down and loyal Gen Z, loyalty, absolutely. DG, what's going on this morning? Happy Monday.

‍Daniel Govaer: 0:29

Happy Monday. Couldn't even be feeling better. It's amazing. I hope that Kyle and gets to the vacation. Okay, I might have changed his hotel room and lost the keys for him just to give me an extra day or two.

Paul J Daly: 0:41

But oh, I know, though Kyle's probably, I don't know when he left, if it was like Saturday, Sunday or he's leaving today, but, uh, he he's getting some much deserved RNR with the family and the kids in the beach and all perfect. Excited for him. Excited for him. Uh, man, last week was a total blur, as we were running around at the Reynolds event. And then name add the second half of the week, and just got to be on the ground with a ton of dealers, and just remembering why we work so hard to put out content. Because so many people come up and they say, Oh, I saw this. I heard this. Oh, that episode with this person. And it reminds you, like, sometimes you know, you know, it's like, you're making a ton of content. You're like, Is anybody out there? I mean, you know, you know who's out there, but you just kind of get the feel when they actually made a change because of it. So we have a new auto collabs episode coming out this week, or it's out already. Auto collabs is one of our other podcasts talking about aligning the right inventory with the right market, with Susanna Cunningham of automotive mastermind. So it's very tactical, and I think something the dealers are fighting with a lot. So check that out. You can just search auto collabs, C, O, L, L, A, B, s, or really

Daniel Govaer: 1:51

like mastermind, actually, also that's, that's awesome.

Paul J Daly: 1:54

Ah, shameless bug. We also have a new more than cars vlog coming out on location at Jaguar Land Rover South Shore. This is where Jordan Cox, on our team, goes out and produces some really, really fun vlog content that gives you a little insight. And in this one, he did the old YouTube snap trick where all of a sudden he was ding snapped, and he was in a suit complete with the tags still on the sleeve. So you're gonna have to check that out to see the vlog. But it's worth, it's worth the watch for sureness,

Daniel Govaer: 2:24

yeah, it

Paul J Daly: 2:25

is okay. What? What a G, total G, now that I'm watching the bear again, I like, he's a total G has come back into my vocabulary. Yeah,

Daniel Govaer: 2:33

I'm gonna he does do the hold music for them. He is that voice of Range Rover for their hold music.

Paul J Daly: 2:39

He it makes you. It makes you it makes me just want to buy one when I walk in, like, yeah, you're so smart. You're so much smarter than me selling a car right now. So, so the best way to see that, if you're not following us on LinkedIn, that'd be a great way to see the content, because we post it all. There's go to LinkedIn, follow asotu, or more than cars same page. Or you could go to our YouTube channel, asotube, asotu.be and see all the video content that we put there, including the podcast and the vlogs and the shows and all that. But let's get into some news that people are tired of announcements. I hope, I hope Daniel's ready for the color commentary on this

Daniel Govaer: 3:14

been warming up all the last 10 minutes. Okay?

Paul J Daly: 3:18

Homan is marking get this a century of automotive innovation and growth, celebrating 100 years on August 23 so just three days ago, they turned 100 as an organization from a single Ford dealership founded by Stuart C Holman in 1924 in New Jersey, they evolved into one of the largest family owned auto services organizations worldwide. Basically, they have 59 dealerships across nine states. They employ. Get this over 9000 people globally, with presence in not just the US but United Kingdom, Canada, Germany and Mexico. They've expanded into a lot of different auto services, a big intentionality toward fleet, commercial vehicle equipment, manufacturing, powertrain, distribution, and now they have a whole tech and innovation investment arm. Big news came out about that two weeks ago. CEO Chris Conroy highlights the dedication to an exceptional customer experience. He says, quote, while the purpose of our company remains focused on providing a rewarding career and better life for the employees that come to work at Holman, it's our relentless pursuit of creating an exceptional customer experience that drives our organization forward each day. Mindy Holman, chair of the board, she says, quote, As I reflect on this milestone, I'm incredibly grateful to our people. I know dad and granddad would be equally proud. 100 Years. Man, it's, it's 100 years,

Daniel Govaer: 4:41

isn't it? It's not even just 100 years of the same thing, I think 100 years of the same principle, the same concept of this forward innovation, forward, uh, kind of thinking, to challenging the status quo. And they're kind of a, kind of a quiet, quiet giant, because they're absolutely a giant in in everything that we do, not just in dealerships, right? But in the. Venture capital and investment and innovation that they do, right? And I'm just interesting, even if you just read, just read about the company, and then you read on their careers page, how they what their culture and how they who they hire, and the positions that they've got available, you're going to see that this is, this is a company that's truly, I mean, gosh, it sounds so cliche to say a driving force. I just don't know a better way to describe it. You know, that started in automotive for over a century, and has continued on the path of like, striving forward and really got into the path of like, we've been dealerships now we're going to get into putting money, really where our mouth is, and where we want to see innovations happen. That's been consistent for a year. And I'm sure granddad would be proud, but he probably couldn't even imagine just how far they've taken it until this

Paul J Daly: 5:41

point. Oh, without a doubt. I mean, you think of the context of the era that that he lived in, and how much different the context is now, and what it takes to scale. They started in 24 you know, a couple of things happened over the next five to eight years that, you know, were kind of a big deal, like a Great Depression, a World War. You think of the resiliency of some of these auto dealerships that have been around for a long time, 100 years, has seen Matt from like going into the Great Depression to now the emergence of AI tools and technology. It feels like science fiction, if you were to talk to somebody from

Daniel Govaer: 6:15

the Great Depression to where everybody was just greatly depressed and through covid.

Paul J Daly: 6:21

Oh, boy, see, this is the part where you're right, and we're gonna keep moving because you're right. Okay, speaking of doubling down, dG is all about doubling down. So Toyota is doubling down with plans to potentially convert most of its Toyota and Lexus lineups to hybrid only models, challenging the industry's path toward future full electrification. Basically, they may phase out gasoline only models in the US, starting with the Camry and the rev for the two best sellers, the company also aims for 50% of its US sales to be hybrids by next year. We're not talking about 2030 we're talking about 2025 you know, Toyota was slow to get into the EV game and the electrification game, pushing hybrids. And now it seems like more and more that that's the winning strategy, and they might be the first ones to get rid of gas engines in their best sellers altogether, their hybrid sales are up 66% through June of 2023 far outpacing all of their EV sales. Chairman, Akio Toyota emphasized a multi pathway strategy, including hybrids, EVs and hydrogen. David Christ, Head of Sales and Marketing for Toyota in North America, says, going forward, we plan to evaluate car line by car line, whether going all hybrid makes sense. Sounds like Toyota's standard measured approach.

Daniel Govaer: 7:47

I promised I wasn't going to say that was the word of Christ, but it was Mr. David Christ that said it and said it best, and I, and I object that to anybody who says that Toyota was slow to anything. They've been fast followers. I think primarily they've been saying, like, it just you don't, we don't got it yet. It's not and it's not that it's not ice, and it's not that it's not just purely EV but as they illustrate, like, we think there's a lot of and maybe we haven't even discovered, you know how to be sustainable in the next stage yet, but we think there's a few different routes that can answer the call, and there's not just one for everybody. There might actually be a combo of a couple of it, but I think a couple interesting things there with, you know, Toyota success, two really big things that stand out to me. One, their cost for a hybrid version of one of their vehicles is less than $2,000 difference from the fully ice version. Yeah, it's very different from what we've seen with a lot of other manufacturers, and the way that they want to go about giving themselves time to look at the other hybrid powertrains. Instead of taking an Ice Vehicle and adding a EV component to it to make it a hybrid, they're like, why don't we just look at it the other way? And we do a EV and of some type alternate power vehicle, and then we add small ice engines to it. And so the ice portion of it actually becomes, you know, what makes it hybrid, and then let's try it that way, instead of, you know, the way that everyone else has been doing it. So if that's the version of being slow to adapt, I think they've absolutely nailed the model. Any open points out there?

Paul J Daly: 9:17

Yeah. Column, column. There was another article that was out today, and we almost merged them together, but it was about the rise of plug in hybrid technology and how that's kind of moving and jostling its way to the forefront for people who want more of the electrified experience but still aren't ready to cut the cord on the safety net of having, you know, tank of gas with an engine and not getting stranded or being to know

Daniel Govaer: 9:43

what's going to be the mini disc player, right?

Paul J Daly: 9:45

So, like it really is. And I have, I have one of those. It's funny that you mentioned the mini disc player the Sony for the No, it's a sharp I had a Sony one. But for the majority of you who don't know what. Were talking about the mini disc was, you take a CD, which most of you know what that is, and you make it small, like, like, get it a mini disc, and then it goes inside, what's like an old school floppy, like, floppy disk encasement. So it's, like, probably on, like, three two and a half inches by two and a half inches, got a little disc in it, pop it in a little player. Like, look, now you can make CDs, but only smaller you can record on them. That lasted about, what, three years, maybe, yeah, yeah,

Daniel Govaer: 10:29

maybe. And they were, it was, it was, it went into the wearable tech, right? So it's like an early wearable tech type thing.

Paul J Daly: 10:35

I guess you could put it there, yeah? But that's the point. I

Daniel Govaer: 10:38

had an armband for it. That's, I mean, I'm telling you from experience, this was wearable. All right, okay,

Paul J Daly: 10:43

you made it wearable. DG, makes a lot of things wearable that shouldn't be but, but there you go. He had a mini disc player around his it was a headband, not an armband. And but the point is, right, which one is going to seem like a good idea and then just be completely obsolete? You know, plug in hybrids, to your point, oftentimes are four or $5,000 more expensive than the hybrid counterpart. So it's like somebody's got to be really into, like, just plugging in only and driving their 3040, 50 miles a day on the electric only motor. So as that cost parity, I mean, if I had a choice, if cost wasn't a difference, of course I would take the plug in hybrid, right? Like would, who would? But

Daniel Govaer: 11:21

look, they did. You know the Camry? I mean, almost quietly, right in unless you're selling cameras every day, you wouldn't even realize the Camry is not offered in an ice model anymore. It's just right, right? Well,

Paul J Daly: 11:32

the best selling sedans in the country ever, and so, like Toyota, the company, was that everyone was throwing shade at saying, like, Oh, you're slow to this. You're slow that they're like, actually, we have more high we have more electric technology on the market, and it's the most eco friendly option, like, of any manufacturer. So I don't know, I never, I mean, we're huge Toyota fans in general, and so, like, we're always talking about, you know, how great they're doing, then the

Daniel Govaer: 11:58

next, I mean, I didn't even realize, like, 2026, is going to be fairly interesting with what they plan to do with the rav4 and I think that there's a lot of interest and speculation as far as what that's going to happen, which I did, you know, admittedly, didn't realize the rav4 was going to be that important. But being as it's the best, despite probably everyone our age will still remember a quote by the then Kanye West, about Rav fours, and was like, we didn't realize that they rose to such level of importance, but as one of the best or the best selling compact SUV, when they change that platform and what they do with that, I think they're gonna, you're gonna see even more of what they did with the Camry, and just very quietly, take over another market segment. Oh, speaking

Paul J Daly: 12:38

of taking over market segments. Segue, talk about Gen Z, despite common perceptions or maybe misperceptions, Gen Z is actually proving to be highly loyal to individual brands or reaching survey by Medallia, market research reveals that 61% of Gen Z, Gen Z shoppers consider themselves, quote, forever customers, outpacing millennials, who only came in at 57% and Boomers, not surprisingly, at 43% most customers find loyalty after some type of positive interaction with the brand. Price being the top factor for respondents becoming forever customers at large, like across the board, followed by product quality. However, the majority of customers refuse to shop at a retailer after a bad experience. So of Gen Z, 61% say, Yes, I have brands where I am a forever customer, meanwhile, saying price is a major consideration. So there's a little bit of conflict there, right? Because if like the price, if price is one of the reasons you're forever customer, when that mean, if the price is no longer the best, then you're probably not. You'll be somebody's new forever customer. You

Daniel Govaer: 13:51

don't know you're out there for the taking. I think, you know, I love this part, because I've always been big on the difference between loyalty and retention, and I do believe there's an active difference between them. And I think from a Qualtrics study a while back, you can look and see that how they defined loyalty is the likelihood that I'm going to do business over and over again with any one particular business, even though it's not the most logical, and even though it may not be the closest, but that I've developed a reason of emotion and emotion Trump's logic every single day, right? That's right. So we're seeing, you know, this is, this is basically the manifestation evolution of the the emotional aspect of spending our money, being emotional. You know that we can make our purchases based on how we feel, and I think that we've known that for a long time. It's great to see that, see the statistic that helps prove it. But if you give me a reason to do business with you over and over again, does price play a part in that? Yeah, because I'm not absent minded of the fact that I'm paying you money, right, but I'm also way more open to the idea that you build value and build a relationship with me, and through all the different touch points at the dealership that you give me a reason to continue to do business. That I would only think about doing business with you again and again. It's this is probably one of the most encouraging Statistics has come out for automotive, not to not to undersell it at all. One of the most exciting things that's come out in a long

Paul J Daly: 15:12

time. Yeah, that's a great point, because constantly talking about, what can we do to get Gen Z to come in the doors, give them a reason, build value. They're there for the taking, and we hope that if you're watching the show, that you're the one doing the taking, right? If they're not watching the show, they should be losing customers. It's all I have say. That's fair. DJ, thanks for joining us today. Everybody else, get out there. Sell some cars. Get some Gen Z ers in your door.

Unknown: 15:42

Perfect.

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