Scout Goes Direct & Dealers Pushback, EV Roundup, Monochromatic Car Trends

Paul J Daly  0:00  
What's up? Friday, October 25 it's not Halloween yet, but around here in our office, today's the day you dress up. So I dressed up like, I don't know if you can see it, but I dressed up like Kyle. Today we're gonna talk about Scout releasing their vehicles. A little bit of an eV Roundup.

Kyle Mountsier  0:15  
Hey, isn't who I be. They stopped to do that everyone. Wow. For the people, there's just so much. Everybody loves to talk about it. You know, we try and not overwhelm you, but it happens. I

Paul J Daly  0:25  
know. I just it's been a heck of a week. I don't know what feels like this week has been. I don't know longer or shorter. I don't know, I don't know what it feels like. But I woke up this morning really tired. I was like, but in tired, but energetic. If

Kyle Mountsier  0:38  
that you know what this week feels like to me. It feels like it should be the last week of October, but it's like a whole nother. Yeah, that

Paul J Daly  0:45  
definitely has something to do with it. What the end like? I

Kyle Mountsier  0:48  
feel like we're tripping into November, but you got a whole week of October still left. And that is, I don't know why that is a weird thing. I

Paul J Daly  0:54  
don't know. I'm gonna assume today days, no,

Kyle Mountsier  0:57  
I'm wearing ASOTU. When

Paul J Daly  0:58  
I was dressing up this morning, I was like, I was kind of like, this is what Ben stuck feel like every day, every day, it's kind of cool. Like, if you're, I think if I had to wear a suit, if you're

Kyle Mountsier  1:08  
into that, like, neck choke thing,

Paul J Daly  1:10  
I wouldn't, I would need, like, a flex suit so you can do the old thing. But I think it would be cool if, like, you had dry cleaning service, and every day you had, like, a super crisp pressed shirt and suit you put on, because that does, like, you know, this is I wear, like, a little weight, yeah, right,

Kyle Mountsier  1:28  
yes, yeah, I don't know, 10 white shirts, 10 suits, all press, yes, nail just dialed in. Still wearing sneakers, though, it's kind of like our jeans and black T shirts. My Yeah, pretty much, exactly the same. Pretty much,

Paul J Daly  1:42  
that's what it's like. Hey, we got a couple great things coming up next week. We are going to be on the ground shooting more than Episode Five. It's the first one of season two at roarman in Indiana. So we're all excited about that. We're gonna have the whole crew, the production crew, from Nashville, Kyle Nathan, j, c, Al, like everybody's going to be on site, and we're going to dig into this dealership group that's so great. However, more than cars. Episode Four is releasing in just a couple weeks from now, and November 13 circle the date on your calendar. Now we're going to do the live stream premiere at 1pm we'll give you some more information on how to connect with that and make sure you get on it soon. But that's gonna be going on as well as we just did an amazing webinar just a couple days ago. Oh my gosh. You can all the good things, and you can still see it. We were with them all, from full throttle talking about free TV. It was the thing, like, run a webinar when you and I are like, I never thought of that. I never kind of mind blown. That always makes for a great webinar. Yeah, great. Paul and a tie. Doug in the comments, Paul and the ties. Hell freezing over.

Kyle Mountsier  2:49  
We do it twice a year. And yeah, it happens. No, everyone, not

Paul J Daly  2:52  
Paul, did you not read my name tags? Kyle, it's Kyle. Let's get this right. This is Kyle and a tie, dude. Okay, let's get into some news. Do a little bit of an eV Roundup, because there's a lot of EV news going around. We haven't covered, but the kind of the biggest news in the EV world yesterday, after almost two years of being tight lipped and all the anticipation, Scout motors, the spin off from VW, has unveiled its direct consumer approach for the terror pickup and the traveler SUV, bypassing the traditional dealer network and sparking some strong reactions from US auto dealers. So basically, both the pickup in the SUV, where production ready concepts are like, this is what we're making, and they're looking at looking to be rugged, you know, repair ability feature an optional extended EV system that has like a generator, very similar to like the RAM charger, where it gets up to 500 miles of range. So scale sales, this was the big question. What are they going to do, direct, consumer or dealer? They're going to skip the dealers instead going direct with a $100 refundable deposit. Dealers are obviously not happy over the lack of communication and the potential legal issues are going to start piling up. John Devlin, we know him. We love him. We know that automotive Association warns of the challenges facing scout in nearly every state, saying, Scout can't expect dealers to sit by quietly. This is going to face serious pushback. My counterparts around the country are not just going to roll over,

Kyle Mountsier  4:20  
yeah, you know, this is an interesting one, because, like, you know, from just a consumer perspective, I'm sure a lot of consumers are excited about trying to interact with this brand, from a direct to consumer approach, just the reality of it, it's a cool brand. You know, I've had multiple conversations with Association presidents, with, you know, with the president of nada, right? Like, I don't even want to say his name because, like, I feel like I'm about to say something that's going to get him in trouble. But you know, the number of times that they have reached out to scout and tried to, like, come to. A conclusion, and dealers want to sell these cars, right? Like, it's not like dealers are anxious to be a part of this network, yet they're going to get cut out. So I think if I was the dealers and the dealer associations and around the country, like, what I would be prepping right now in the background is, like, the case for why? Yeah, experience is better, right? The experience for Scout as an OEM, the consumer, right? Like, how we can actually tie together the open loop and not just, like, fight it from a we deserve this as a franchise. Yeah, right. That's

Paul J Daly  5:38  
a really smart perspective, because that that rarely wins in the consumer. Consumers generally might not understand the full complexity of the situation. It's very easy that this could be seen as like dealers just being greedy, but this is really based on the fact that Volkswagen dealers specifically invest millions and millions of dollars into the Volkswagen brand to sell. Volkswagens therefore feel like they have a kind of a right to sell the products that Volkswagen makes. I mean, that's a very fair assumption. And then Volkswagen spun off this to kind of like, have a little tributary around the side, and VW dealers argue, like, wait a minute, art dollars went to the company that funded this tributary, so we should have the ability to sell their products. So that's kind of the complexity of it. It's not just them saying no one can do this little bit different. As far as the cars go, they look really cool. Actually, just the front of it reminds me of like an old Bronco, yeah?

Kyle Mountsier  6:33  
Well, it is. It's like a mix up between, I think it's like a mash up of a few cars,

Paul J Daly  6:38  
yeah. I mean, if that's production ready, that's a sharp looking truck. Sharp looking truck. So, man, I know it.

Kyle Mountsier  6:47  
I want one. Speaking of

Paul J Daly  6:49  
one, one stop. Good one, good one.

Kyle Mountsier  6:54  
That's good segue.

Paul J Daly  6:57  
CEO Jim Farley recently shared some insights from driving. Do you know how to say this company's names? Xiaomi, zombies, Chinese manufacturer su seven sedan around Chicago, highlighting how far American automakers are lagging behind. China's a highly integrated Tech Automotive ecosystem, which is increasingly driven by consumer tech giants like Zoe. Zoe, Xiaomi. Tommy, Xiaomi, anyway, uh, finally, praise that see the SUV, calling it a fantastic, calling it, quote, fantastic, and noting their ability to sell 10s of 1000s of units per month with wait lists as long as six months. Well in China, brands like Xiaomi and Nathan put these in the notes just so I had to say them 100 times.

Kyle Mountsier  7:45  
X and h, x,

Paul J Daly  7:49  
xome and Hu way seamlessly integrate their operating systems across vehicles and consumer electronics. We've been talking about this offering an experience that you just can't duplicate in the Western brands. You know, so far, Lee said, quote, in the West, our cell phone companies aren't in the cars. In China, they are inside every single vehicle. His epiphany has pushed forward to rethink its approach, with the CEO emphasizing quote, we're not going to miss this one, this one, we're going to have to get it right from scratch. It's a little late for that. But okay, I,

Kyle Mountsier  8:21  
you know, I have a challenge on our cell phone companies aren't into cars. Like, I feel like they're all trying to get into cars, and they want to win with cars, and they want great collaboration. Maybe I'm wrong at the C suite level. I could be completely wrong, but my guess is, actually, that's what they want. You know, we this has been like, there have been many pundits and many experts saying, like, watch out. These manufacturers are going fast and far. They are integrating technology. They're thinking about this as a phone on wheels, or thinking about the technology as a consumer experience, you know, and the fact that now Jim is on a podcast talking about it. He's been driving this car around,

Paul J Daly  9:03  
like saying that he doesn't want to give it back, back to the Segway, saying he doesn't want to get back. I think it's a super smart thing for any CEO to do is drive or use competitors products for an extended period of time. And look, I like the pressure, because we all want to just get in the car and have it connect. I have it be integrated. Have it work. If they can do it, we can do it. I'm thinking of a Segway right now. This is a little part of the EV update, so we got a little extra story in there. So in the past, Elon Musk has assured people that they did not want to make profits from their service and supercharger network, but their latest earnings show that they've had a notable surge in profits from service and super charging in their 2020 q3 results, Teslas, in the category service and others, profits grew from $250 million up 90% year over year now a significant chunk like it's over a quarter of their $800 million and. 800 million annual gross profit. Wow, so super charging service centers. Part sales Drew, drove the growth initially, Musk said, I don't think it's good to make a profit off service. Saying, quote, the best service is no service.

Kyle Mountsier  10:15  
Yeah. I mean, cool. You believed, if you believe that there was a profit center available and Elon wasn't gonna take part in it, you're crazy. Also, just the fact that from the Supercharger network, and I don't know how much of that two 50 million, I didn't, I didn't look deeply into this, is from the Supercharger network, but now that you've got all these other vehicles able to plug in to that spec, right? Like, why not take advantage of other OEMs? You know, allowing their vehicles to park? True,

Paul J Daly  10:48  
that's a great point, right? Actually, the revenue was factored in from Tesla vehicles only, probably when they initially talked about it, and now that you have all these other do, do non Teslas pay more to charge of the super charger? No clue.

Kyle Mountsier  10:59  
I think they should find that. They probably do. I think they I would do that if I was, if I was Tesla. I also

Paul J Daly  11:04  
think initially, like, Tesla is thinking, like, we're gonna make these cars. They're gonna be they're not gonna break down very often. They're gonna but, you know, like, it's a machine, it breaks

Kyle Mountsier  11:11  
well, but Okay, again, what percentage of that is service center, centers, and what percentage of that is parts, right? Because, like, collisions. I know a few people that are in the collision business that are like, Yo, these these parts are expensive, and you can only get them proprietary one place. Yeah,

Paul J Daly  11:29  
all right, speaking of getting things that look like they came from one place.

Kyle Mountsier  11:37  
And a little aside from another story that we ran once a spot wide spectrum of vivid hues, the color choice for America's cars have dwindled over the past two decades, influenced by economic shifts and specifically cultural trends. In 2005 over half of cars featured bold colors beyond black, white, silver or gray. Now, less than 20% are outside of that color spectrum. Vibrant hues are increasingly reserved for things like luxury models. 12% of Chevy come in color, compared to 44% in Lamborghinis, because everybody wants a green Lamborghini, right? The red one red for a apple, shift to sleep. Mentalistic design in 2003 popularized, popularized monochromatic esthetics that spread into the auto industry. Obviously, Apple is a driver of, you know, everybody's perception of brand. And then also, a lot of cost cutting measure measures have have led to this. Ivan Drew also pointed to production, saying simplifying the production process is always going to be a winner. So less paint, higher volume, all right, more money.

Paul J Daly  12:43  
What color you have two cars in your family? What colors are they?

Kyle Mountsier  12:47  
Gray and silver? Yeah,

Paul J Daly  12:48  
I have a black and a white.

Unknown Speaker  12:50  
There you go. And,

Paul J Daly  12:52  
you know, Glenn Lundy started an independent lot, 800% elite auto sales, and he said, we're only going to sell cars that are black, white or some shade of gray. I was like, he is nuts. I'm like, that's crazy. And after he did that, I just started paying attention. And I'm on the highway and I'm like, oh, there's, there's a blue one.

Kyle Mountsier  13:10  
You look at this, 80% of consumers you're meeting right there.

Paul J Daly  13:13  
Let's talk about the best result of all of this. The best outcome possible is that there are fewer tan cars on the road. Amen. There is nothing worse than car and then the purple car, like the cruiser. I mean, please imagine just being, I mean, and this happens all over the country, and has happened forever over the years. You got some salesmen back in the day, all the salesmen used to smoke. They don't as much anymore, but I just have this the like, 12 sales people outside, and they're just smoking, right? And then the truck pulls up and there's a purple one on there, and they're like, well, guess

Kyle Mountsier  13:49  
someone's got to sell it. That's sale proof.

Paul J Daly  13:53  
I literally was there once. What a guy's like, Well, that one's sale proof. The manager, the manager, the manager, was right there, and he says, he's like, come on, you got to be more positive. He's like, I couldn't be more positive. That is absolutely not going to sell.

Kyle Mountsier  14:06  
I was still selling Mazdas when the Mazda two is the last year the mazat two was out, and there was this, like, bright green Mazda two. Dude, those things never sold. Nada. It was like, You got to, I don't know, someone had to trip and fall into that one pizza.

Paul J Daly  14:21  
Pete kelsle chimes in on the live stream. My wife had a purple PT when I met her, just saying, I mean, look, nobody.

Kyle Mountsier  14:28  
I don't know if that says something about you or your wife, but we'll leave it

Speaker 1  14:31  
right there. But the old dealer adage, if you know, you know, there's a fill in the blank for every seat and there is, look, we hope you have an amazing Friday. If you're selling on the weekend, take care of some customers. If you're refreshing, do great refreshing. We'll see you Monday.

Unknown Speaker  14:59  
You. Visit I.

Transcribed by https://otter.ai

‍