Sales Climb In August, Qualcomm Leads the Chip Pack, Canva Gets Pricey

Kyle Mountsier: 0:01

Oh my goodness, it was only one day with Paul, but I'm here with Cirillo. I'm so excited. It's Wednesday, so we're talking about sales climbing and Qualcomm and combat and all that stuff. Who

‍Unknown: 0:13

I is and who I be. They stop. I'm

Kyle Mountsier: 0:14

just too excited. Wants

Michael Cirillo: 0:16

no need to repeat. Run up on me. Watch you. You Len, you went Vic. You were like, yo.

Kyle Mountsier: 0:23

I just paused, just stopped. I apologized.

Michael Cirillo: 0:27

I wish I could say I have that effect on people. I get them all excited.

Kyle Mountsier: 0:32

I was excited. I was like, how am I gonna introduce Cirillo today, it's been so long since you've been on the show with me, I feel like, what's

Michael Cirillo: 0:38

better way than to let everyone know. We called each other late last night to coordinate our outfits.

Kyle Mountsier: 0:46

Look at that. We both wore the love people shirt. Imagine that I tell people all the time. Actually, I get this so on the church on Sunday, I get messed with so hard that, like, everybody will be like, Look, I match Kyle today. And they're like, Well, I kind of knew that was going to happen, because I just put on a black just put on a black shirt.

Michael Cirillo: 1:05

A broken clock is right twice a day. They're like, if I at least wear a black something today, I'll match. I'm matching

Kyle Mountsier: 1:10

Kyle. That's exactly what it is. Yeah. Hey, before we get started today, we've got like this, you know, we, one thing that we love to do here at asotu is just produce content, because we never know what content you need right now when you need it. So we've just got a lot coming at you. We've got a whole bunch of in the dirt episodes of a podcast called in the dirt that we have. We were at name add the minority auto Dealers Association event a couple weeks ago, and we got to get sit down with Kylan. He is a 2024, 40, under 40 winner Automotive News. And it was a really cool interview, like this guy played college ball and and is now a GM at a dealership, and just has a unique perspective on how to grow, build and lead teams. So you're going to want to check that out. We have a lot of great content sitting over there. And then we got a so do edge Quick Shot webinar next Wednesday, September 12, all about the title department, which I don't think I ever thought we would do a webinar on the title department. Cirillo, but here we are doing a webinar on the title department. But it's like a massive CSI thing. It definitely helps out. You know, you, you're, you're, you've got your hands dirty with a little bit of dealership life, and you're realizing how, how critical the title department actually probably is.

Michael Cirillo: 2:37

So you know what's crazy about this? Like you're talking about this. And I've had this this, I've had this happen before, but it's like this sinking in aha moment of we went out. It's like, whatever you focus on, you find. And what I mean by that is we've we've gone out to industry events, we've gone out into the industry, into dealerships, into dealer groups. And what we're realizing is that this industry is so JAM PACKED of amazing people that are making a positive impact, that want to leave a positive legacy. And and I'm going to be honest, I didn't know that it was going to be this big, like, right, that there would be this many people. So you're talking about 40 under 40 winners, and hearing their their, you know, philosophies and mindsets, and you're like, Oh, another one. Oh another one, another one, another one. And these are people that I think typically, are just going about their day to day life in their habitat and their ecosystem. And so it's so, so exciting that we get to find these people and highlight them and show just the broad scope of how awesome this industry is. Yeah.

Kyle Mountsier: 3:48

I mean, you just think about like, we talk about 17,000 franchise dealerships there's, depending on how you count it, anywhere between 25,050 1000 independents, right? The leaders at each of those, the employees at each of those, the tech partners of each of those, the services partners of each of those, the OEMs that are a part of each of those and each of those are attempting to lead and live lives of purpose that are all like wrapped up in this retail auto industry, and we're just telling the story. We're just helping them tell their story, really like we're helping you tell your story. That's it, right? It's not our story to tell. It's it's your story. So that's why we do all this content, that's why we share these stories. So

Michael Cirillo: 4:33

it runs deep, right? There's people in our industry that were responsible for bringing the Saturn Ion to market. That's

Kyle Mountsier: 4:42

deep, that's deep. Cirillo, you had to go cut them like that. You had to go cut them like that. Oh, well, speaking of bringing stuff

Unknown: 4:51

to market, segway,

Kyle Mountsier: 4:55

all right, lots of OEMs bring in some significant stuff to market as. Far as just sales are concerned, the auto industry is poised to post its highest volume sales of the year in August, projected to rise, but get this seven to 8% thanks to strong demand from specifically crossovers and hybrids, as well as Labor Day discounts and a couple extra selling days ending on a Saturday. You know, all the good stuff that an August comes with, five Saturday month. Here's here's who here were the winners. Hyundai sales surged 22% led by an 81% increase in hybrid models, with the Santa Fe up 120% Tucson up 97% and Kia sales grew 4.3% so Kia and Hyundai really leading the way. Their day supply is at 68 days, already up 54 from a year ago. So you know, some people, you know that I've been talking to are like, hey, look, a little bit of day supply isn't bad, because you get available inventory which customers want options when they're looking at new cars, their average incentives are $3,035 per vehicle, up 60% from 2023, and only 13% of vehicles were projected to sell above sticker last month, average transaction prices for the industry landed at 44,000 down a little over a little under $2,000 from August 2023, so pricing parity is coming back. The SAR forecast is 15. It has gone up from 15 point 2 million to 15 point 4 million for August, in line with last year, but down from July's pace. Chris Hobson of S P Global Mobility cited high interest rates and slowing vehicle prices, saying the new vehicle affordability still remains the biggest obstacle to growth. So there is, man exciting news, like, August was good. I heard a lot of good going on in August, but still, like, not as fast a pace as maybe we would want, because of affordability.

Michael Cirillo: 6:56

Hey, but those new Santa Fe's, whoever was redesigning these Hyundai vehicles is knocking it out of the park, if I may say, so, look,

Kyle Mountsier: 7:05

I I will say that is, it is like a totally different vehicle than what you would expect, right? Oh, yeah, that's, that's

Michael Cirillo: 7:14

what I love. We both turned into Martin Short, I must say,

Kyle Mountsier: 7:17

I must say, I must say, yeah, yeah, no, the Santa Fe, I mean, Hyundai is, they've been kind of like, leading the charge in net new, you know, the ionic series and and just what they're doing with hybrids and electric vehicles, like, they're not missing right

Michael Cirillo: 7:36

now. No, they're not missing. Those are sexy. Those are sexy.

Kyle Mountsier: 7:46

As cars evolved into rolling supercomputers, we're talking about chip makers a little bit more, Qualcomm, Nvidia and Mobileye are at the forefront, competing to supply the technology that will drive the next generation of vehicles. This is why Qualcomm's automotive revenue actually surged 87% to 811 million in quarter in q2 thanks to his focus on connectivity. It's digital chassis platform that is supporting a lot of the in cabin tech and Driver Assist functions. Nvidia, on the other hand, reported 340 6 million in automotive specific revenue, a 37% year over year increase, so both up significantly, even though Qualcomm is kind of leading the way. Mobileye is doing a lot of the Driver Assist. Computer vision technology posted a $430 million q2 automotive revenue, a 3% decline, and mainly, a lot of that decline is because of challenges in the Chinese market. Qualcomm is customizing a lot of vehicles for automakers like GM, BMW and Volvo. Nate Nicole Dougal, General Manager for the company's automotive industrial and cloud business, says it's an exciting it's exciting in some ways, but we're doing what we said we do. So Qualcomm leading the way. I have just real quick before you comment on this. This is interesting. I was actually on a plane with our lead videographer for more than cars. His name is Jim. They do the Qualcomm event every single year. It's similar to the Apple like WWDC event, and it's out in Hawaii. He was like, Oh, we've been filming these like crazy screens for the last three to four years for product releases. But Qualcomm is definitely leaning into the automotive landscape. And I had no clue that they were leaning in this hard, kind of wild.

Michael Cirillo: 9:41

Nerds unite, you know, like, I mean, like, this is awesome and it and it's exciting actually, to see there is an undercurrent that I don't think a lot of people understand about how our industry moves and how many, let's call it, outside eyes are looking. At our industry. How do I get in? How do I get in in in my entire career? Now, in automotive, we're talking like almost 23 close to 24 years now, I've only met two people that are like, You need to get out of automotive. And then you look at all of these massive companies like you're saying Qualcomm's pipeline valued at 45 billion, right? Like, these are big companies, and they're all like, No, how do I? How do I get into this space? And so that tells me something about the future of our industry. People are really, really paying attention. And it's, I think it's just a good bet, it's good place, I

Kyle Mountsier: 10:39

think, like, from the front line, what does this mean for me? You know, we've seen Nvidia in the news a significant amount of times for their supercomputers. A lot of their chips are being used for AI modeling because of the power of them. Qualcomm is being used in the majority of the world's devices outside of Apple. And you know, these are not small names. And so consumers are also thinking about they're like, recognizing that the chips that are used, you know, Apple's kind of created this demand for what's the chip inside my phone, right, right? So, like, consumers are going to want to know, like, down to what chips are used in the computer systems that are on board this car, right? That's now like a value proposition to someone that's interested in the tech inside the vehicle. It's not just what does the screen say? It's what type of performance does the computer on board this really this, this computer on wheels have? So it's important to know on the front lines, like, what is your manufacturer utilizing when it comes to chips across its vehicle? It's not just like, Oh yeah, it's got a bunch of computers or chips anymore, like consumers have been trained to acknowledge the type of chips that are going into their devices, because it's important to the performance of those devices. This is just another device. Cool. Well, hey,

Michael Cirillo: 12:01

speaking of chips, computers and AI chips, because I like potato chips, and that's no secret. God, I'm speaking of AI though, yeah. Speaking of AI, I posted on LinkedIn or Facebook one of my socials, I posted a picture of me with my motorcycle, and people were like, dude, cool photo. And I was like, yes, except that wasn't the shirt I was wearing. I don't have tattoos. The shoes I was really wearing were white, and my motorcycle didn't have this, but now it does. And I through generative aI had drawn in and typed in what I wanted to replace and it didn't. Nobody could tell the difference. And well, hey, Canvas, aggressive integration of generative AI tools is driving up prices for its Canva team subscription by over 300% leaving many users facing significant cost increases as the platform expands its offerings, Canva teams, users in the US report prices jumping from 120 bucks to 500 annually, while Australian users are seeing a 68% price hike. Real. I mean, they're realizing how expensive that Canva was. Like, wait this, this whole AI thing's expensive. All these tokens, the price increases follow the rollout of AI tools like magic media and magic expand, which Canva claims add value to the platform's expanded product experience, and the new pricing has merged many users, some of whom are considering switching to Adobe or other alternatives. I mean, good news for Adobe. Yeah, right. The changes come as Canva prepares for potential public listing in 2026 following its acquisition of affinities, creative software suite, so canvas, Making Moves. It's

Kyle Mountsier: 13:56

making moves. You know, it's wild, like I remember when, like 90% of Canva users I knew were on free plans. Then everyone was like, you know, the 499 is worth it, right? Like the 499 a month for the premium, you know, the premium stuff. And then that 499 went to 799 and then 899 and how you can add AI tools, and you've, you've just got these, like massive leaps in the cost, and you start to see costs that are much more similar to Adobe's suite of products when you look at like buying the entire suite on a monthly package for a personal package, or something like that. And you know, Adobe obviously has a much more broad suite of stuff, and they're injecting AI at probably a little bit higher level of performance. So it's going to be interesting whether or not they can keep up. Obviously, It's browser based. It's a little more accessible for the light designer. You know, are just so, you know, like just we we use Canva internally for some of our stuff. We use a lot of Adobe stuff, but we use Canva. A, you know, for some repeatable stuff with, with a so do and our producer, he was like, you know, I use this regularly, but the AI is nice, but it's still not that integrated, and not, not that, you know, quick. The images come out a little bit rough, so the cost may not be totally worth. It, from the Canvas side is, is Nathan's take on hot take on Canvas price increase?

Michael Cirillo: 15:25

Yeah, I gotta, I gotta wonder where we are on this whole bell curve. Because everything starts out expensive, then it gets democratized, then it gets really cheap. But it kind of gives us an indication of where the future is headed. I don't think anybody in the AI space right now really thinks that this is going to happen in the next year where there's going to be broad adoption, but it's, it's going to be like our generation got in. It's kind of like cell phones, right? I mean, like, we all still remember pay phones. Yep, we all still remember the first cell phone and, and, but here we are, 30 years later, brought like, now everybody's got it. And so it's kind of like, how do you anticipate right now, there are more there is more population in the world who will never touch an AI offering than that will touch it in this generation. But it shows you where things are headed. It shows you that our kids, like the adoption for our kids, is going to be aI everything, and they're what are the implications of that on school work and,

Kyle Mountsier: 16:22

well, everybody with an iPhone is going to be touching it here soon. Yeah. So I've got

Michael Cirillo: 16:26

it, because I'm such a here's a Canadian word for you, a keener. And I have to get the developer beta.

Kyle Mountsier: 16:32

The developer beta, I was scared this time. I felt a little bit dicey. So I just have the regular that's Meredith. That's merited All right. Well, that's it for us today. I'm telling you what we went through a few nerdy things, few exciting things. Hey, August was a good month. Keep that month rolling. Doesn't mean you have to stop it. Doesn't mean the fall has to pull back. Let's go search some people.

‍