Tariff Fears Cause 150K Sales In March, Tesla and China, How to Develop Frontline Workers

Speaker 1  0:01  
Good morning. Friday, Friday, Friday. April 11. Lot of stuff going on today. Lot of announcements, but tariffs, pulling forward sales, Tesla and China. Oh, by the way, this is the automotive State of the Union. Still not into that new intro yet.

Kyle Mountsier  0:18  
I caught it like as you were going through the three and I was like, okay, like,

Speaker 1  0:23  
I had this like, little stutter stumble in the beginning where you could tell I wasn't fully confident what I was saying, and it's just right, and that's why I figured it out. This is the automotive State of the Union. Folks, yeah, if you haven't, if you didn't know that, Kyle, what am I fully live? Yeah, this is fully live. We record nothing unashamedly live that's perfect. Like, who wants the PR version of something? I mean, nobody wants that. I mean nobody, nobody wants the soft publicly traded companies want that. Kyle, that's just why we will never be publicly traded. I'm just not going to be publicly traded, and I won't have a PR department. I would not publicly traded issues. You know what? I mean, yeah, of course, of course, of course. Listen, um ASOTU CON talking about real time conversation that's unfiltered, where people have their guard down and they're willing to share what they're actually doing and help one another innovate. We call that a soda con. It's in May. It's about a little over 30 days away. Tickets prices are going up on Sunday, all right, it'll be our final ticket race from the early bird. Early bird that started back on Black Friday, where we sold a bunch of at half price. Well, they're about to be full price, right? They're not full price yet. Go to ASOTU CON com. Get your tickets, both dealer tickets and industry partner tickets. We'll be seeing a bump in just two days. Make sure you go there. A lot of the internet about mobile service lately, we're going to have an amazing mobile service session, along with a bunch of other sessions about AI and company culture and sales strategy and bringing multi growing, multi store, multi rooftop stores. What else am I missing? Data Analytics, marketing, brand building, mobility for the industry. You know, EVs, growth strategies, acquisition strategies, acquisition strategies. Look this is really a holistic event where you can actually learn a little something about learn a lot of something about the area that you're most concerned with. And we always encourage people to go to one or two sessions that do not involve their daily activities, because we fully believe that understanding the entirety of the business and bringing it closer together is how you win, is how customers win. And by the way, a soda con is just a very meticulously put together event. It's like South by Southwest meets

Speaker 2  2:29  
nada, maybe somewhere in there,

Speaker 1  2:33  
somewhere in there. Oh, and barbecue, James, gather in the comments at the barbecue. I don't know what he's cooking. No pun intended, but maybe pun intended, but there's an amazing graphic out there. Jim ganther Holding, you know, in front of a grill, holding a spatula. And he's got something very special he's gonna be bringing, we don't even know what it is. It's gonna be part of this prize. And we have an opening keynote announcement that we're gonna make on Monday. So look out for that. Oh yeah, talk about some understanding about some big business across the board, retail culture, the whole thing. So we're gonna announce that on Monday, and I'm gonna make an even bigger announcement. Not the very first piece, very first item that's going in the swag bag showed up yesterday. This is, I mean, you're not gonna be able to see the logo. This is the ASOTU. This is the ASOTU CON pen, Kyle. You haven't seen this Yeah, and that's a nice pen. You can tell it's, like, thick so that, like, you can hold it well, got a rubber grip right here. The egg doesn't smear, but rolls super smooth. Listen, this is the pen I've been relying on. This is the pens we have for congruent I have. This is a clarity con pen. That's the same pen. And so, like, Who wants a crappy pen? So we're live we also have a really sick craft paper journal that's going in the swag. Oh, I felt that this week. That's your unbelievable journal in this pen. I mean, not like you, you, you come to a show like this for the swag, but when you get the swag bag, you're gonna be like, I might come from this flag next year.

Unknown Speaker  3:59  
That's right. What

Speaker 1  4:00  
else? Let's get into it. One more thing, one more thing before, if you are in the LinkedIn world, you should follow us. So do, by the way, but you should go to Kyle's page today and just look at the post he made this morning, because there is just an insane amount of investment capital represented on the stage he's on and is going to be again. Talk about that. Talk about that image? Well,

Speaker 3  4:21  
yeah, so you've got Bill Karis, Chase Frazier and Steve Greenfield in that image, all with massive funds, yep, multiple massive funds, supplying the industry with the funds it needs to innovate. Then a couple on that, Beth Hill from the shop, who they are with Ford direct has, like, poured tons into the industry for innovation over the last 25 years. That's right. Then we're adding Brian Donnelly to the stage this morning, or this year from auto tech, VC, and so that's coming in. You've got, I mean, just an incredible and then I've got a couple dealers that. Going to be in the pitch tank world as well that really know innovation, that are challenging stuff, that are going to be poking back at people. Hey, if you want to be on pitch tank, you can go to ASOTU CON com, forward slash pitch tank, submit your videos. Cut off ends tonight. Yes.

Speaker 1  5:13  
And as always, nice. Great job. Nathan, getting that post up that fast. That's really good. He didn't know that was coming. Wow. And thanks for bringing me donuts today. If you want to know the story behind that, go to my lab. Story behind that, go to my last post and read the comments. So also, want to thank our friends at Reynolds and Reynolds and goo goo for being our presenting sponsor this year, making it all happen. We have a lot of sponsors that make this happen, and they're all committed, just like Reynolds and goo goo, to seeing this industry moving forward and serving the industry. So thank you. It's gonna be a rip roaring show in just over 30 days. Go to ASOTU CON com, get your tickets before they go up in price on Sunday. All right, let's talk about some news. Tesla has stopped taking orders for its US made Model S and Model X crossovers in China. Wow. Trade tensions between the US and China flare. It once again. So no more exports of Teslas to China. Right now, China is going to be increasing its tariff on US goods to 125% on April 12, including cars. Tesla's Model S and X are built in Fremont, California, making them directly affected the option to order these models did disappear from Tesla's China site early April Tesla's Shanghai factory, which makes the model three and y is not affected by the new tariffs. Obviously, the Model S and X made up fewer than 2000 of their overall 661,000 unit sales in China. So I don't think you know they're gonna be fine. It's actually probably a little easier for them.

Speaker 3  6:35  
It's way easier think about all of the shipping logistics that you don't have to worry about from now on. But also now you've got 2000 more vehicles that are us made, that aren't affected by tariffs, that that US customers can also purchase. So look at the look at the way that that kind of just shifted. It gave more access to some of those vehicles and a higher capacity turn rate on vehicles that in the US are more sought after because we look for slightly larger vehicles than, like, the model three would maybe be in the US, like, we're more of an SUV culture. So I think, Man, this probably, this actually, is probably, like, really good for Tesla overall.

Speaker 4  7:10  
I mean, obviously they're not commenting. I think they still don't have a PR department. They don't have their PR department is one guy tweeting. One guess, can you imagine, for better or for worse, for better or for worse, it's like that. That's like, that's like a full on marriage statement. It's like sickness and in health, Elon Musk will be our total PR department. I know we still call tweeting Xing.

Speaker 5  7:34  
Are you allowed to call? Yeah? What? What do people say? I don't even know what people say. People say I saw your tweet on X Yeah. That's weird.

Speaker 1  7:41  
Going on next to tweet, tweeting on X today, I don't know Well, speaking of that, last one felt weird. Keep on. We need. We need to just stop. Just out. Just get the stop. Today, a spike in new car sales last month wasn't just spring fever. According to cloud theory, auto shoppers race the dealerships in March, we know to beat looming tariffs. Here's the here the numbers, though, March saw 1.3 1 million via new vehicles sold a 38% jump from February. Cloud theory attributes, 153,000 of those sales were pull ahead, pull forward sales due to fear of impending price hikes from tariffs, average marketed prices rose about $1,100 from February through March, with SUVs, full size pickups and heavy duty trucks seeing the most increase thanks to v8 engines sourced from Canada, so the ones that have been effective sooner, discounts and incentives dropped by $432

Speaker 3  8:40  
in March as OEM braced for higher cost. Here's a quote from Cloud theories. Rick Wayne soul says, while this led to very strong results in the short term, the longer term effects will likely be detrimental. Yeah, you look at all the pull ahead here, right? And that's, that's, I think we're going to see that again in April, right? Because not all of those tariffs have gone in. So how much pull ahead are we going to have, and will the demand still be there to carry us through the summer? Yes, that's, that's, it's still a question. I don't think there's much worry about it from the dealers, from the dealers that I'm talking to,

Speaker 3  9:13  
but it is kind of like an interesting stat, wild to see, though, and I'm we're seeing this across a lot of manufacturers, where prices are going up, manufacturers trying to combat that to keep demand. So it seems like the manufacturers are still flush with some level of cash to be able to balance this. And maybe they did well during the COVID times to make sure that they were flush with cash to manufacture rebates and incentives. So I think all of that kind of combined, there's going to be this meet in the middle, and then when you see you know things like interest rate reductions happening at the same time, that's going to balance for monthly payments, even if prices go up, I still think there might be, like, a very small blip right at the beginning of this thing, when customers start to start to like the fear of perception overcomes reality and. And once that flips, it'll be right back

Speaker 1  10:01  
if interest rates go down in a meaningful way, and people start I mean, I guess it's the whole theory behind, like, the strategy right now to grow the economy and make everything stronger as payment pressures decrease, even if prices increase, the balance, I don't know, and I wouldn't expect, doesn't surprise me when you said you haven't really heard much from dealers on this right now? No, you know why we're in the money right? Like, right now, when the showroom is patents for you, like, I'll worry about that in I worry about tomorrow, but I guarantee you, if that comes in two or three months, it will be on the front page of every Automotive News oriented article. And we'll be talking about it then, but we'll deal with it then. Yeah, what are you gonna do now? What do you honestly? What are you gonna do? You're just gonna, like, focus on the cars today, focus on your people. And speaking of focusing on your people.

Speaker 3  10:51  
Hey, ran that through. There's a new Harvard study, they're smart over there, that says the key to lowering retails, notoriously high turnover, may be simpler than we think. The answer invest in frontline workers career growth and mentorship. Researchers found that most low wage workers actually want to keep their jobs to avoid disruptions in their lives, especially once they're comfortable with get this they're co workers. Over 60% said they would stay with their employer if they saw a real path to advance, but with many supervisors overseeing up to 20 employees, personalized feedback and coaching are becoming rare. Employees often fear asking for promotions or raisings, worried it might cost them their jobs. A related McKinsey study also showed career development was the top reason non managers wanted to leave their advice and power managers because their impact cascades the whole organization. Some about, some something, people, something, something people, right? Yeah,

Speaker 1  11:51  
I think, I mean, this is just when Harvard releases a study showing it right. Everybody leans in just a little bit more, right? But the reality is, the true it's something we talk about a lot in this industry, it's really the more than cars. Mentality is that when you focus on the people, the people are the catalyst, and thriving people and thriving culture are really where innovation thrives, are where customer experience thrives, where retention thrives. And you know, it's not just these little improvements and best practices that you can do. This is the long game of the most successful businesses, and the ones with that do the most for the community is that they focused on mentorship. And I can't think of another industry that has so many areas of mentorship built in than the auto industry. People still mess it up, but training is part of the culture of automotive like from service to sales, and I think if you just push that down. And like the great organizations that we see, like bozart Ford and Bozar University, when you push that training and that mentorship down just the level, right? Because, like when you have sales, you have sales, push it down just a little bit to, you know, lower, lower entry level positions, to lot folks, to receptionists, to all the people that do these jobs, you unlock a whole pathway to people that are going to get fired up about what they do, care about what they do. And again, this industry like they could definitely end up as a manager, like relatively

Speaker 3  13:12  
well, and not just a manager, but an owner. How many owner operators do we know that came from washing cars, legitimately not like they their daddy owned the dealership, and they wash cars. It's like, No, I started washing cars now I own five stores. Yeah, oh, yeah,

Speaker 1  13:27  
washing cars and so, doing nothing. Reality. Let me name two of the biggest groups. Two of the biggest groups that we know. Of people started at entry level positions. Yeah? Greg ceoca, there it is. Heard him see, okay, they're in the top 150 they're in the top 50. Scott bueler, I mean, I think they forgot to apply this year, so they disappeared from the list. And I think they're in the 20s somewhere. Yeah,

Unknown Speaker  13:49  
yeah. Like,

Paul J Daly  13:50  
there's nowhere else like it. Like

Speaker 3  13:52  
there's nowhere else like it. So if you're in management and leadership or anything like that in the industry, just recognize that that's the career growth opportunity. So why wouldn't you give that opportunity to every single one of your employees that you possibly

Speaker 1  14:04  
can Well, we're gonna have some conversations around that as well with a lot of people that maybe started at the bottom and now they're here at ASOTU CON again. Go to ASOTU CON com. Get your tickets before prices go up on Sunday. We'll see you tomorrow morning, Saturday night.

Transcribed by https://otter.ai

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