October Sales Growth, Ford’s Manager Accountability, Early Black Friday

Paul J Daly  0:00  
We've made it. It's November 1. It feels different because it's November. We're going to talk about October sales growth Ford's management accountability, and, yeah, we have to say it. Who's cracking open Black Friday first? People

Unknown Speaker  0:14  
really want to

Paul J Daly  0:17  
already have already my

Kyle Mountsier  0:18  
sister put up Christmas decorations last night. It's like, their thing and, oh,

Paul J Daly  0:23  
November one year. Oh, every year on

Kyle Mountsier  0:26  
they they finish Halloween, they do, they do the stuff, and then they go to Christmas. And every year I just like, I cut off communications for a month. I'm kidding. I don't do that.

Paul J Daly  0:38  
I met your sister last week. That was or this week, that sister? Yes, that sister. She's crazy. She looked a little crazy.

Kyle Mountsier  0:47  
She's awesome. No, so my sister's amazing. Oh, man,

Paul J Daly  0:50  
so many good things going on. And it's November. It's the season. It's unusually warm in a lot of places in the country right now, like we were in Lafayette, Indiana, it was 80 degrees. It was unbelievable. Last night, my wife and I, we actually didn't do Halloween last we went on a date, and that's awesome. And then we were, like, walking around, and it was 75 and breezy. What is going on around here? It was like, 38 last, last 38 and sleet, you know, whatever. Oh, we just got a few things going on. Want You to Know about we have a new webinar coming on the sixth so next week, Wednesday, 2pm It's auditing your 2024 ad performance with our friends at stream companies. It's part one of a part two, but this is the time of year where it makes sense to say, how have we been doing? Let's recalibrate. Let's reset. And when we go into 2025 let's have a nice plan. So we're gonna have, we're gonna help get the gears going. You know, sometimes it just takes that thought or two, that insight or two to be like, Oh, okay, that's the direction. So you can get started and you can keep going. So we're gonna do that. Go to asotu.com and you can just sign up to be a part of that webinar, or get the recording if you can't make it. But we love it when you join us while we're doing it. Doug on the live stream Good morning. He says we were sweating in our costumes last night in Atlanta. I mean, like, it is kind of hot in Atlanta, typically, not that surprising. But I mean, you still plan, even if you're Atlanta, you gotta be planning for like, a 50 degree evening, right? Not an 80 degree

Kyle Mountsier  2:16  
even in January. You just gotta plan for that. So

Paul J Daly  2:19  
I know, yeah, we got our costume wearing out early this year. You and I

Kyle Mountsier  2:23  
did. So did you? We all did. Oh, it was too much. It was I think I wore costumes more than my family this year, which is not a normal thing. I'm

Paul J Daly  2:30  
trying to think the last time I wore a costume like, like an honest to goodness costume, I don't know, not like that. I never dressed up like Woody. I'll tell you, I had people texting me picture. Phil Gill from Tom Gill, he sent me a picture. He goes good costume choice, and it's him and Woody. He wore he wore it better than I did. We're gonna see definitely, probably wore it better, yeah. What's up? Fred solution on the show this morning. What's up, Fred Leonard, man, you guys. I miss you guys. It's been too long since Fred and Lou

Kyle Mountsier  2:57  
actually was texting Lou last night. What? And we need to do a podcast with Fred and Lou. Again. That's just always fun. Make that.

Paul J Daly  3:05  
Brian chimes in. Says he wears costumes every month. I

Kyle Mountsier  3:11  
think on Halloween, on on purpose I costume up. Yeah. He's like, this is actually, this is actually my costume. This is a non me, me. It's great.

Paul J Daly  3:20  
So I look once a year. All right, let's get into some news. October brought some robust growth in us, auto sales led by higher consumer interest in EVs and hybrids. As automakers were capitalizing on rising inventory and incentives, Hyundai and Kia specifically set records up 16% and 18% respectively, with notable gains in electric and hybrid models, which is a trend we're seeing industry wide. Us, light vehicle sales expected to climb 11% year over year from last October, with retail demand offsetting the declines in fleet sales. Some analysts are saying their annualized sales industry's annualized sales rate projected to hover between 15.8 and 16 point 1 million sustaining the strong September pace. I'm trying to remember what Jonathan smokes prediction was. It was right there.

Kyle Mountsier  4:07  
Yeah, I think that 16 million SAR is, is kind of where everybody's been projecting. And so we're staying on that trend, you know, still a little bit lower than the than the highest out there. We still have some vehicles with, you know, low supply. And, you know, obviously we've been talking about affordability as an issue with just still sidelining buyers. Yeah, right. Without

Paul J Daly  4:28  
a doubt, new inventories are up, obviously, 25% though, year over year, but still below pre pandemic levels. Isn't that weird, because now we're starting to feel have people get on inventory, but we're still below so rising inventories, pushing incentives higher. Incentives now averaging $3,149 per vehicle, which is a 71% year over year, obviously seeing the highest incentives.

Kyle Mountsier  4:53  
I, if I had to guess, and I'm you know, or if I had to be a betting man, I would bet that. Going to see that just we're going to it's going to get shattered in December is the incentives brands that have a good amount of inventory on the lots, or like these EV brands that are seeing these 100, 125 day vehicle supplies, like I'm watching December to just see a ridiculous amount of incentive. I

Paul J Daly  5:19  
just say, clear it out, move it out. Speaking of clearing things out, stop segway, by the way, real talk, by the way, if you didn't know this fun, historical ASOTU, fact, that segue that you just heard that little sound design, Mr. Brian Ortega made, Mr. Brian, we got to get him some luck, because you're on the stream. He made that segue. And for him, never gets old. It's timeless. MC Hammer, little stop Ford CEO Jim Farley is driving a new culture of accountability with his management by linking manager bonuses to some new key goals that have to do with quality and cost cutting. And he's reducing bonuses about 65% of the total for the potential year. Basically, their earnings met only the low end of expectations, causing shares to drop over 10% this week. In a recent town hall, he stressed the urgency of new performance based bonus systems. Sounds like an auto industry thing. He says, We quote. We are now truly we now truly differentiate the reward reward excellence at I'm sorry, we now truly differentiate and reward excellence at Ford, as he described this as shift, as a massive culture change. The move aligns with their broader trends. And GM also updated its bonus structure this year, now offering top performers 150% of their bonus. So it seems like, you know, GM used the carrot, and Jim Farley is using the stick.

Kyle Mountsier  6:50  
Yeah, I don't know. I mean, it's obviously, we all saw the q3 results that weren't as lovely as expected, and the the, you know, shares dropping, you hate to kind of get the like at we know we got these bonuses, but you can't really get them way before the end of the year. I don't know which is better, but you know, the legacy automakers are still trying to figure out how to operate in this net new normal, you know, and balance their EV production issues with their, you know, gas powered production, and how to get profitability and expenses right and all those things. But difficult job, it's tough. I can't imagine being he said, here's

Paul J Daly  7:34  
a here's a quote from his earnings presentation. I went back, just went back and found it because I saw it earlier. Said, I'm proud of the progress, but we're not satisfied at all,

Kyle Mountsier  7:44  
as they shouldn't be. There you go. Lots more to do.

Paul J Daly  7:47  
I know, speaking of lots more to do, let's get going. All

Kyle Mountsier  7:53  
right. So target is launching its Black Friday deals earlier than ever, offering shoppers a jump start on savings with multiple ways to snag the best prices this season. The three day black early Black Friday sale runs from November 7 to November 9, giving shoppers early access to top discounts. Really, all this, Paul, I'm just gonna, before I get to the end of the show is the seventh through the ninth. All this is, is like, emotional buying response, right? It's like, okay, you got done with the whole you know, the voting, yeah, you get your emotional buying, dude. Oh, rachel therapy,

Paul J Daly  8:31  
so they give you a day to recover, but it's like something to look forward to.

Kyle Mountsier  8:37  
Right guarantee is ensuring that shoppers will get the best deals with price matching on items that drop in price through december 24 so you buy now, price drops later, you're good to go. Daily Deals start November 1, and each week's discounts include up to 50% off items like floor care and toys exclusively for the old target circle members. Rick Gomez, EVP, at Target said, We're kicking off the holidays in a way only target can Okay, until we run the story about Walmart tomorrow. You know,

Paul J Daly  9:09  
I think people like anecdotes for this, all I think about is, first of all, a post election sale is one of the best things I've ever heard, so good. Like, give people something else to think about, please, right? Like, how, like, you did an awesome job. You got through an election. It's like, the election season's over, celebration sale, right? And we'll just have a great time with it. And people will get smiling, happy, like an auto dealer will get all over that. Oh, I know it. I think that's a great I really do. I think, like, it should be, like, free drinks at Starbucks, right? Like, the whole time, absolutely all things should happen. Lean into it. Just leaning this arrow has me thinking about people like your sister, who already decorated for Christmas, right? They're in the Christmas spirit. There are those early movers who are like, planned out, and they have their shopping list and they know who they have to buy for. Like that is a it's probably 15, 20% of the population. And so this is incentivizing the. Them to feel like they're ahead, get the early deals. But you know, you know what it is like in these this day and age, like, is anything really the best deal at this point in the year?

Kyle Mountsier  10:07  
Who really knows? I think that what this, what what we're learning, is, like, capitalizing on the thing that you can control, yeah, and the deal that you can offer, and maybe, like, integrating a few pieces of the retail environment are smart, right? Yeah. Like, sometimes you, you know, especially as a marketer, you kind of get tired of the rigmarole of like, oh, it's that season again. We got to talk about it. But it doesn't mean that culture isn't excited about buying based on those types of signals in retail. So, right? You just got to lean in. You know.

Paul J Daly  10:38  
Well, last comment from the live stream. Everybody's chippy in the comments today, double class, Doug class says we need real therapy after this election, not regal therapy, real therapy. Well, get tune in tomorrow, when Kyle and I are going to go in depth on who we are voting for and why. I'm just kidding, we're never gonna this show. We'll see you tomorrow. You

Transcribed by https://otter.ai

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