Service Soars, Penske Fills The Best-list, Is Chat GPT Getting Dumber?

Paul Daly: 0:26Monday. It's like the first day of school for some kids. I don't know what those kids are. They're not around here. But we're talking about service soaring. Penske filling up the best list. And the big question is chat GP actually getting dumber. Wow. That's a chink in the armor.

‍Kyle Mountsier: 0:44

Man. We're talking public groups, no OEM stories today. Thank goodness, every once in a while you need a break from all they were definitely

Paul Daly: 0:51

something to talk about. But, you know, I'm a conflict averse person by nature. So like, and I grew up in a family, where my dad was a union phone installer for Bell Atlantic, which is now

Kyle Mountsier: 1:04

yours, you're screwed. and a half months,

Paul Daly: 1:06

there's like, I just remember the constant conversation around my family dinner table about are we going to go on strike and this like just a kid's view of like, this strange fight between the person that paid my dad and the people that like, rep wanted to like seem like they cause trouble for the people that paid my dad, it was just this really weird thing to understand it a kid my dad billing, I have to go stand in line with

Kyle Mountsier: 1:31

it internal turmoil, turmoil for the next two and a half months. Basically, I

Paul Daly: 1:35

very clearly remember one of the T shirts my dad had and I couldn't understand it. But the back of it had a picture of a squirrel dead on a road and it said don't get run over by the information superhighway.

Unknown: 1:45

Wow. Just give me some time. That was probably in

Paul Daly: 1:50

the late 80s. Right? So the information superhighway everybody, Hey, it's Monday, we got a fresh start. And like kids all over are going to school my kids in the north but kids in the south they want a school for them. So, so sorry, to the kids. Congratulations to the parents. It's a day of mixed emotions for everyone. I'm sure right?

Kyle Mountsier: 2:08

Yes, all the kindergarten moms are out there crying. We were here for you all that.

Paul Daly: 2:13

But then they got home and they were like, You know what? I think we're gonna do some yoga.

Kyle Mountsier: 2:19

Why isn't gotta be yoga? Why? Because it just, you know, tell the people listen, we got a couple of things going on a couple of huge things out there, we got to so to con coming in hot the speakers are rolling in if you go to a soda con.com forward slash speakers, and just the people that are going to be on the stage is really talking about operations, talking about marketing, talking about people and culture and real practical application for two straight days all the way slap, it's going to be absolutely amazing. We're at the venue last week, it's gonna be all the energy plus all the information so that you can absorb it because your brain gets activated by all of that energy. So we really want you to be there. Make sure grab your tickets, you can do that we put up this little QR code right there over to this side. And if you're listening, go to a soda con.com snag your tickets. The hotels are now starting to go very quickly. Like we are going

Paul Daly: 3:11

to get the good one. Yeah, if you want. Good, but there's the one in

Kyle Mountsier: 3:15

the main hotel, you gotta jump on it because it is legitimately probably by the end of this week gonna be booked out. So check that out and then hate and we

Paul Daly: 3:25

have great rates. Oh, we know $600 hotel rooms are super nice hotel rooms, but they 600 Yeah, and like

Kyle Mountsier: 3:33

your airport fly southwest like getting into Baltimore. And then the 10 Minute Uber ride away. I mean, travel and expenses are are cheap, because you literally depending

Paul Daly: 3:41

on where you live could probably be out of flights and hotels for like under 600 bucks.

Kyle Mountsier: 3:45

Absolutely. And then the only food that you need to figure out is Tuesday night and there's probably a one to industry partners that want to take dealers out anyway, so you're good to go.

Paul Daly: 3:54

Oh my goodness. You were gonna say something else before I interrupted you. I don't remember what it was. Well, I

Kyle Mountsier: 3:59

was going to talk about our webinar on Wednesday you can go to a so yes, I so two.com and checking our webinar webinar where dealers are saving money on total expenses with rental cars. Really, really interesting topic. I'm excited about it,

Paul Daly: 4:12

for sure for sure. Alright, let's talk about a little bit of news. This is fun. Starting off the week with some good fixed ops information a with consumers keeping their cars longer due to affordability and availability issues. The six largest publicly traded companies are reporting an 8.2% increase in year over year sales logging almost 4 billion in revenue in q2 Auto nation reports a 9.1 first half increase year over year same store sales the CEO Mike Manley credits their large existing customer base they're already familiar with the auto nation brand. And also the they have a lot of service bays and a lot of train technicians. Funny thing about that you have the supply. The demand is there. That whole thing works. Lithium is up 5.8% for the quarter and see see Oh, Chris holds who made similar comments in a recent investor call. He says, with the average age of vehicles rising coupled with the increasing complexity of new vehicles, our team of certified factory trained techs are working hard to deliver the massive demand for services from customers. As far as the other groups, the way they're stacking up Penske is up 10.7%, Sonic up 8.9, Asbury up 6.2. And group one reported nine consecutive quarters of fixed up growth,

Kyle Mountsier: 5:29

unbelievable. And I think the key point in this don't miss it, because a lot of these dealer groups are buying stores. But this is in stain, same same story. So that's a big deal. That's and you know, for the last three, four years, really, there has been a ton of talk, I don't care if it's on conferences, webinars, within 20 groups, all of that around loyalty, lifetime customer value, and how to we make sure these people are coming back to the store. So I think it's not just like, Oh, we've got a loyal customer base that we haven't been talking to all of these major dealer groups are implementing CDP structures with marketing automation platforms, in order to drive customers back into service. They really understand things like how to do service. Well, with service processes. There's just been an intensified focus on this, I think, and the results are starting to prove out. Plus, again, now we've got a situation where a lot of the market has been sidelined. We've been talking about this where the lower credit, maybe, you know, lower affordability market has been sidelined. And so they're forced back into the service line more often. So all of those factors driving toward a massive increase in service and I talked to single rooftop groups, small groups, it's across the board. It's not just the big groups. So what do we need? We need technicians? Yeah, well,

Paul Daly: 6:51

it's also false in line with all the things or a lot of the things that dealers can control at a time when there are a lot of things you can't right. Service brand customer experience. It's all there. And speaking of some publicly traded groups, segue, I don't know. But there might be some phone calls and emails being exchanged this morning. Between between automotive news team, and Penske see, because Penske auto does kind of take it out of pun intended and early victory lap, as they've announced a significant achievement that 44 of the automotive news top 100 Best Places to Work list is actually going to be a Penske store. So 44% of that list is Penske stores. The list actually doesn't get released until October. And although Penske didn't say these are the numbers, they don't know the rankings. They are in another

Kyle Mountsier: 7:43

rankings. Lightning, right? What keeps him safe, maybe who knows that's probably

Paul Daly: 7:47

released it but there's definitely like, hey, let's just tell you what half the list is already. It says pecky. So the annual list, which is now in its 12th year, recognizes top dealerships nationwide for their exceptional work environments, and community engagement. There's like an extensive nomination process and surveying. And it really is an amazing initiative that Automotive News takes. So for inclusion on the list, they have to really get your own community to participate, which is the part I love if your people are willing to participate in the survey, because non responses actually count against you. So you really like is like the owner cracking people in cabling excited about like showing, showing off the fact that they have a great place to work. So basically, yeah, early victory lap, I don't know that I wouldn't be surprised if they're like, please, like next year, there's going to be language that's like, you can't tell anyone that you've won yet.

Kyle Mountsier: 8:42

You know, kudos to Penske. I don't know the group that well, but to basically take almost a third of the entire top 150. Is that's impressive. And I you know, whether it's an internal PR campaign, it's

Paul Daly: 8:58

only it's only 100. of 100. So 40 100 All right.

Kyle Mountsier: 9:02

Yeah. So almost 50% of the top 100. It's, it's either incredible PR or there's really, really just a strong culture and, and I'm sure between like, the region's and the local stores, there's just a push toward great employee culture. So look, just kudos. And I know whether or not you're supposed to talk about it doesn't really matter, because everybody will forget about in a couple of months,

Paul Daly: 9:27

and I will say they will. But if you're in a Penske organization, your manager GM, if you know what it's like, we don't have enough Penske DNA in automotive State of the Union, right? Yes, I've been to several Penske stores, especially the one in turnersville. That's mentioned many times on the list. If you click the link in the show notes, I visited there back with my auto reconditioning days, and we were checking out some equipment and I distinctly remember, like being impressed by the team and that was before I paid attention to like, national level dealerships, but I was impressed because I grew up not too far from there. So if you're in the Penske, Oregon, position. If you want to come to a soda con, let us know we would love to to involve some Penske leadership in the conversation because I mean 44 out of 100 It's pretty good. Yeah, it's pretty

Unknown: 10:11

good. Speaking of doing math, segue

Kyle Mountsier: 10:17

maybe 44 out of 100 and not a great way. PPT may or may not be getting a little bit dumber. There's been multiple studies over the past few weeks that have led us to believe and led the greater public to believe that chat GPT may be getting dumber. Recently, Wall Street Journal asked this question and started asking it to perform basic math operations. The study was done by Stanford University and UC Berkeley. So essentially, what happened is they tested two versions of chat GPT, the 3.5 and the 4.0, and found that the 4.0 version had a lower amount of accuracy in identifying prime numbers. Originally, it identified prime numbers at 84%. And now it's down to 51%. In June, 6 of eight tasks all worsening performance in the newer version, or the older version actually showed improvement in six areas, but still remain less capable in most tasks. The article implies that prompt engineering can induce drift in AI models and attempts to prevent inappropriate error responses, developers may inadvertently impair the AI's ability to in areas like math and problem solving. So essentially, what's happening is people involving themselves in the AI because it's constantly learning from the prompts are starting to inhibit its ability to answer correctly. And

Paul Daly: 11:47

that's because they're influencing the way it deduces information, right? Because they're hacking the inputs to try to get it to do something, right. They're trying to trick it into doing things. And because of that, it's all this information isn't quite how a person thinks. It's actually how a person manipulates. So it's kind of manipulating the language model, right? Is that my understanding

Kyle Mountsier: 12:09

exactly what's happening? It's saying, like, Hey, I'm gonna input this to get out something that I wouldn't have naturally just done like from a task. So everybody that's kind of like just trying to stay the narrow, ask it to do tasks, acids do regular repeated things are getting impacted by like, larger company or prompt engineers that are attempting to manipulate the actual knowledge of the database. And all of these inputs are, are equally weighted. There's no like, this is right, this is wrong. This, you know, there's no, there's no cow yet for the AI yet. And this is why there are a ton of people advocating for, like how AI is regulated, not just in its ability to do tasks, and what tasks it's allowed to do, but also in the inputs and how those inputs drive the AI model. So basically, right now, the performance over time is deteriorating, due to its complex and non linear progression watching

Paul Daly: 13:11

was just a week, week, just when we were thinking we could trust AI. Kyle, you were so close to even start, don't worry, we're so close to trusting it with everything. And then that goes and starts getting prime numbers.

Kyle Mountsier: 13:25

Reality is there are a lot of dealers and dealerships that are, that are continuingly started starting to use chat GPT for regular tasks, don't get caught in the trap of not understanding the tool that you're using. It is a massive tool with massive implications. And just like going in there, and trying something is not always the best thing, like do, like look at it, understand it, realize whether or not you're actually getting real truth out of it. Because you can't just flippantly go in there and start asking it stuff and expect it to spit out right answers every single time,

Paul Daly: 14:02

it is actually pretty good at putting together some basic cardio financing. And I bet more and more consumers are going to use it because I've been I've been trying it just saying like, what would my payment be if this is the purchase price of the car, and this is my interest rate. Right? And then you can tell like I'll factor in 7% sales tax, it actually does a great job of explaining how it got there. So from a consumer standpoint, as they use the tool. It's just gonna end it could actually help you structure deals too. But to Kyle's point, it better be right especially for talking about math. Yeah. I hope it doesn't start doing dealer math, like the dealer math. No, we don't need

Unknown: 14:41

any of that. Oh, but

Paul Daly: 14:42

hope we gave you a little shot energy going into Monday. Look, a solo con is going to be the thing. It's only like six or seven weeks away, go to a soda con.com Check out the speakers. We'll see you tomorrow.

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