Honda’s Earnings Bump, The Reign of Fein, Sky High Demon

Paul Daly: 0:26Okay, we found a good enough Wi Fi signal so we are live are we playing music Nate? Are we playing music? I can't hear the intro music this is the problem with on ground productions. But we're gonna talk about the reign of fate as we're calling it and Sky Demon prices say You know, my voice is already shot. My voice I'd like to

‍Kyle Mountsier: 0:49

I can get real but it is I will say we're out here at used car week we're hanging out with a lot of people you can eat outside in November apparently and Phoenix really

Paul Daly: 0:59

desert experience yesterday. It was 80 degrees and sunny. Don't feel bad for us. And we walk into a Starbucks and everything is Christmas red. And pumpkin spice is all wrong. I was like this should not be allowed. It is not Christmas here. It is not Thanksgiving. There is no pumpkin spice in Phoenix, Arizona. But there was

Kyle Mountsier: 1:18

I did have it and someone had a pumpkin spice but we wouldn't do it.

Paul Daly: 1:21

No, but I used car week is buzzing. It was our first one. Yeah, first day,

Kyle Mountsier: 1:25

they said it's their largest attendance since like the mid teens years. They were 15 over 1400 people here a lot. And it's interesting, like a lot of the conferences that we go to the desires to get a lot of dealers out and they have that same desire. But there's actually a lot of intention put around like the remarketing space. And then we heard that a ton of the conversations from stage actually, we're around repos and what it's doing to financial,

Paul Daly: 1:53

all the repo companies are here connecting with banks, which is a really important indicator for by the time we hear about it. Three people are here connected with the banks. There's a need. Exactly. Yeah. I mean, we didn't talk about the story, but the fact that consumer credit card debt has hit an all time high. It's like 1.0 4 trillion, something like that, like all the savings is gone. The credit card bills are high. So I mean, definitely, the repo guys are used car week. Yes.

Kyle Mountsier: 2:20

The other really cool thing that we saw yesterday was actually there's a lot of because it's a used car conference. And because it spans not just like what dealers are doing, but starts to span into just what consumers want. There was a cool company with like, speakers that they really added to the sub, avec totally rewired subgroup.

Paul Daly: 2:40

We're gonna check that demo out today to get the seat yesterday, but try and bring it it's like a briefcase sized subwoofer. That's battery powered Unbeliev I talked to the guy for like five days. I talked to him about it yesterday. It's pretty cool. It's pretty cool. I'll tell you more about it later. Um, so we're used car week, today, we're going we're not going to be able to livestream that the internet is just not up to par. The podcast aid we recorded some content yesterday with a few folks. We're going to be recording some more content after the navcon Cup. Kyle is going to be one of the guest judges with some folks from car Max and auto tech

Kyle Mountsier: 3:12

ventures and then I came over I'm losing no disrespect, sorry,

Paul Daly: 3:16

but but we're gonna as soon as the winner is announced. We're gonna move right over to the podcast stage. And we'll bring you the winner will probably upload it to Nate Nathan can run it tomorrow or run it today. Later on. No, not today.

Kyle Mountsier: 3:27

We're on. We're on Iron Mountain where it's basically midnight Eastern.

Paul Daly: 3:32

But let's talk about some news before we get back to the show and go try to bring us more content. So Honda Honda, we haven't talked about Honda we haven't talked about Honda. Yeah, they're raising their full year earnings forecast due to strong US sales. stable supply of semiconductors. Remember, we

Kyle Mountsier: 3:47

were talking about those so much. I haven't even said the word semiconductor. I know in like six months, Isn't that wild? It just was like then another day to reset it every day. And now it's like man, you know, it's just true. It's working.

Paul Daly: 3:58

Good exchange rates. Despite the US offering demand Honda is doing well. Their q2 profit rose by 31%. Due to higher volumes and improved pricing. Remember

Kyle Mountsier: 4:08

their q2 their end of fiscal year is March so their q2 is our q3 Right? Just

Paul Daly: 4:15

one cue off, you know they have their stable semiconductor conductors being made no problem. Cars are moving through the factory. They actually are to sell 25,000 fewer vehicles in North America as anticipated. Yep. And so they go less cars operating profit is

Kyle Mountsier: 4:32

up. And so there was a couple of things the reason why the operating profit is up the they're anticipating 25,000 less than what they projected but it's still up year over year. And and actually the growth in deliveries in the North American market up 40% in their in their last quarter is contributing to the growth and the bigger thing is, is the strong dollar and falling in is actually contributing massively to their profit margin because they're their US sales. Yes, exactly. Isn't that interesting? Like the dollar is really strong right now? A lot of markets across the world and so they're actually reaping the benefits of that, plus the fact that there's so much there's been so much pent up demand here. Actually, their their Asian sales are actually down in their Asian markets, but the demand is in the US because it's not

Paul Daly: 5:24

dollar based. Yep,

Kyle Mountsier: 5:26

I go macro global. Speaking of dollar base,

Paul Daly: 5:29

oh my gosh. Okay. So just when we thought it was over, UAW, Shawn, President Sean fain announced he was going to make an aggressive push to organize you need something to do with all the aggression, something to do with it. Now. I can't insult Jim Farley anymore. aggressive push to organize non union US auto plants, I hope you can hear that play that it's coming, right. It's actually a banjo PI's style helicopter. So, an aggressive push to organize non union US auto plants, leveraging their new contracts in Detroit. And Toyota is recent wage hikes to rally people to sign up to be a part of the Union. So, you know, Toyota, we talked about it earlier this week added or maybe was late last week, added a 9%. wage increase voluntarily. And so Shawn fain says, and we quote, when we return to the bargaining table, and 2028, it won't just be with the big three, but with the Big Five, or big cities

Kyle Mountsier: 6:28

like we're coming for. He said, we're going to pull out all stops, we're going to leverage any leverage every avenue we can, and we're going to find creative ways to get to workers, which sounds a little dicey said we're going to employ everything we can to support workers and give them what they need. They also decided that there's been a lot of like workers at those plants that have reached out to the UAW asking them, they said hundreds, you know, there's no specific number, but I can imagine, look, if I'm, if I'm paying attention to this market, and this is why I think that he's saying, and I think appropriately that Toyota had to make these wage increases. When you look across, if you're in the auto space, and you're paying attention, what's happening at other factories, you are paying attention to the fact that the UAW just got not you, but all of your friends in these plants, massive wage increases. Yeah.

Paul Daly: 7:18

Maybe there's a space? I'll tell you. I think you'll have a hard time with Toyota. Yeah, they

Kyle Mountsier: 7:22

will. Yeah, I mean, well, and because Toyota, in many southern states, actually, you it's a lot harder because of like, right, the way the right to work laws are put, it's a lot harder to unionize. And so it will be kind of an uphill battle for a lot of the manufacturers that actually reside more in the in the south, the majority of the big three reside more in the north and so they don't deal with a lot of that when they can't, that's a really interesting

Paul Daly: 7:48

dynamic. Well, it's obvious that he's got another hillclimb, you know, they say about power. They say about power, and he's got his team. He's got like, AOCs former people and all the political like, let's get people nice and angry about a thing. He's already starting in 2020 2020 20. And I'm already tired. Come

Kyle Mountsier: 8:06

on podcasting by 2020. Well handed off to someone.

Paul Daly: 8:09

It'll be it'll be the next ship like you talk about grandpa Shawn Right. Speaking of can't be grumpy. So speaking of things,

Kyle Mountsier: 8:18

speaking of power, see?

Paul Daly: 8:22

So here if you thought a $10,000 market adjustment bumped during COVID was high, right, everyone's putting these $10,000 bumps a Dodge dealership in Maryland darcars has set a staggering asking price of $386,321. For the limited edition Challenger Demon 170, which is significantly over its MSRP, which is appropriately 96,006 66. Exactly. Alright. So there's a picture. I don't know. Okay, we have a picture of the bumper sticker. Up there. Alright, we'll read it for you for not watching. So you have like the MSRP price at the top and all this stuff. This one had like some other features on it. And then we have the old darcars assurance. That x 2495 bumpsteer 3495. And then we have of course, the dealer processing that 500. And here's the kicker. You don't buy a $386,000 car without springing for the $195 We'll lock them we'll lock yours on that. parked at all kinds of shady areas. This one. So the adjusted market price is up$250,000 lead to the full price of 386. Right 321 Wow, they only made 3300 of these. When they announced it, Scott Simon's phone was ringing off the hook. Everybody wanted to get one and apparently, if you got one, maybe it's your payday. You think someone's gonna buy it?

Kyle Mountsier: 9:46

Probably. That's what's crazy. Someone's gonna buy it. Probably maybe not exactly for that price, but probably close. They should negotiate the wheel locks. Yeah, just like go in and be like I'm not paying for the wheel locks right. I feel like you want to say Gotta win something this is it's tough because for me, you look at this and you're like, hey, look, if someone's willing to pay that, that's market demand, right? But I just, I can't get a wrap my head around that type of market adjustment on a vehicle, even if demand supports it. Like, what? Someone's got to come in and pay cash for that thing, because there's no one financing that, right,

Paul Daly: 10:22

like someone is and, look, if an individual bought this for MSRP, the individual would be doing the same thing. Right? If that's what the market demands,

Kyle Mountsier: 10:31

exactly, they would be marking up so it's, you got to follow the market. It's just just

Paul Daly: 10:36

a funny one. It's just a funny one. So the Jalopnik article, the writer of the article said, Hi, got an idea. You can get a base model challenger for 30 to 465. And a 1025 horsepower hellephant crate motor for just over 27 grand he goes just build your own for 60 grand.

Kyle Mountsier: 10:56

The Jalopnik Gotta Have you want to click into the show. No, it's fun. It's a fun like Jalopnik holds, holds no, holds no punches, they went for it. Kind of fun. So yeah,

Paul Daly: 11:06

so that's it for the day. We're just suiting up so I know it's late to release the podcast in the live stream

today, but it's only 8: 11:11

40am We're gonna head over to the our first session. Yeah, and I see Steve Greenfield car dealership guy do a little thing and then it's cars gonna be the judge will go crashing on stage. So we'll get there. We'll we'll give you updates. We'll see you tomorrow.