Tariffs Drive Sales And Dealer Questions, Amazon’s AI Flex

Paul J Daly  0:01  
Good morning. It is Wednesday, April 2 is it's today, Liberation Day. I'm confused, but it's the Automotive State of the Union on Paul J Daly with Kyle Mountsier. We have a very special guest today. I heard he is LinkedIn and Wall Street Journal, famous. Now there'll be no living with him. I can just see him, like, waving, waving food away from him. Get this. Just get this away from me. Get this

Kyle Mountsier  0:24  
away from me. Give me the steak. That's all. He says

Paul J Daly  0:28  
I was thinking more like cycling through, like I didn't want the chocolate frost that I wanted the glazed

Unknown Speaker  0:35  
that's messed up,

Paul J Daly  0:38  
Austin. He's having Austin bring him. Well, I didn't say who it was going to be. Oh, he kind of gave it away. Toyota. He's got Austin bringing in boxes, just, you know, at his whim. But look, episode 1007 today, obviously, tariffs are the talk of the town. We're going to talk about tariffs dealer questions. Also talk about, like, what it is to have Amazon's new AI bot like purchase things for you. Wow, is bad enough. We'll we'll save our comments for then. But look, all roads lead to a soda con right now. We want to talk about it. If you haven't got your tickets, now's the time to get them. Zach's going to be there. We'll ask him what he thinks about it. Thank you to our friends at Reynolds and Google for being presenting sponsors and helping us make this happen. We have a whole list of industry partners that made this happen. We have a whole list of startups that are going to be there, pitching on the pitch tank. We have a whole list of dealers who have already bought tickets. Hotel rooms are just about booked solid. In the main hotel. We're going to release the other hotel soon, because we're going to have to and the best time to get your tickets is now, because they're cheap as they're going to be, and probably the only time to get your hotel rooms in the event hotel is going to

Kyle Mountsier  1:48  
be like this week the next week. Yeah, that's it. So

Paul J Daly  1:51  
I don't know, I think we should get into it, because let's get into it. We

Kyle Mountsier  1:54  
got it's a big conversation this afternoon is, is Trump is expected to kind of give the final verdict on what's supposed to happen on tariffs. So let's get into what

Paul J Daly  2:02  
we get right? Let's bring Zach Kinch into the show. By the way, Zach was driving his kids to school when I texted him, and so he's still driving, actually, kids in the car seat in the back. I'm just kidding. He's back here. Everything's good. Yeah, everything's good. So I want to start the story, and then we're going to talk about what happened to you yesterday and what you kind of experienced right now on your LinkedIn page, but spurred by tariff fears, consumers have been flooding showrooms in late March, giving the US auto market a surge just in time for q1 closing, urgency sparked by record the record performances were sparked by across multiple brands, sending sales soaring. Ford was up 19% Hyundai up 15% Kia, up 25% posting their best March and q1 ever. GM posted a 17% q1 jump. Buick, the biggest jump, obviously the fewest cars to make the percentage jump up 39% basically, inventory shortages, especially in high bridge, are expected to go through q2 as a result of the pull forwards in q1 the average March retail price hit $44,849 Oh, which is $637 year a year. We thought we were going in the other direction. We were wrong. Randy Parker, CEO of Hyundai and Genesis North America saying, quote, it's probably the best weekend I've seen since cash for clunkers. Lots of people rushed in this weekend, especially trying to beat the tariffs. How about that?

Kyle Mountsier  3:27  
Did you see a great weekend at the store? Great question there. Zach, what did it look like?

Zac Kinch  3:31  
Yeah, for sure. Yeah, we definitely had a good traffic increase just due to it. I said to someone that asked the same question, it could be the march wave as well. I mean, always the last week of March is the dynamic, like the turn for the Midwest. I mean, that's where we are, so it could be part of that too. But I would say everyone who bought definitely mentioned tariffs before they bought, whether that was a guiding factor or what they definitely had it on the tip of their tongue. So I would say consumers are definitely looking at it going, what the heck is this going to be? And the good news is, for the consumers out there, dealers are saying the exact same thing. What the heck is this going to be? Because we have no clue, really.

Paul J Daly  4:08  
Okay, so let's, let's continue down this so we can get to the post you made and the story you were in the ripple effects through the auto landscape over the weekend. You're feeling Fielding. Dealers are fielding a surge of questions and consumer visits, which is, you know why dealers are so important, actually, dealers looking to educate consumers, educate themselves. The 25% import tariff is set to hit 7 million vehicles plus, starting today, tomorrow. Oh, is it that's just there tomorrow. It's only the third. It's yeah, I'm a day ahead. I'm a day Yes, Thursday. So Rhett record, remember Rhett? If you don't remember Rhett, I mean, you don't, you never forget Rhett. If you meet Rhett. But he was the chairman of the NADA when COVID hit, and he is still the CEO of record automotive group said that one out of four calls this weekend, we're asking about tariffs and which cars would have them or not have them. Saying. Quote, it's a multi chaotic market, and dealers are the shock absorber. He actually didn't say that in the article. He said that in a text message to me. Zach Kinch, she was here. GM, Bob, warm and Toyota said, quote, This is what you said, and you can tell us if they got it wrong or not. Says, this is going to be learn and fly by the seat of our pants. I think the auto industry is going to have to figure it out. And did you say that?

Unknown Speaker  5:24  
Yeah, sounds pretty,

Paul J Daly  5:26  
pretty simple, close enough. But I think the coolest part of the story is the fact that you made a video, posted it on LinkedIn, probably other places as well. I saw it on LinkedIn, where you were going around from vehicle to vehicle, just saying, this one has a tariff, and this is why this one doesn't have a tariff. This is where it was made. And then all of a sudden you realize it has 800,000 impressions, and then the Wall Street journalist reaches out and calls you, or somewhere in there, and now it's over double that and still running. And so why do you think that post is running so hard? And what is it like when the Wall Street Journal reaches out? Well,

Zac Kinch  6:01  
I think of the uncertainties, the number one, why is it? Why is it doing so? Well, I think everybody has no clue. So any information out there that's showing you know, any data that's more than someone's opinion is so valuable right now, and that's really what the crux was, is like we are the shock of, I love that quote saying, like, that's really where we are as a dealership operation, and when consumers are calling us about the tariffs, it's like, we're putting the tariff on the car like, No, we're absorbing this tariff just like a consumer is. We're going to figure out how to make sure we take care of the customer, because at the end of the day, that's all that matters. And I think that was the purpose of the video, was to go around and show you know, 50% of Toyotas sold in the United States are manufactured in the United States. That's why, and 80% that are sold in the US are manufactured in North America. So it's really to go through and kind of educate like, Hey, I think being a, you know, Japanese company in Toyota, the main thought is, everything's imported. Well, we wanted to show what actually was built here. And a lot of them, being the Indiana dealer, are really close to home in Indiana and Kentucky. So that was kind of the crux of it and the principles of it. But also to make sure people knew, hey, if you are looking at something and you're 90 days out, and we have it on the ground, this is going to be the cheapest. It's going to be it may stay at the same price if the manufacturer steps up and eats some of this, but it's not going to be ever less than what it is today. As as kind of the stats you showed before our, you

Paul J Daly  7:21  
know, you have, you're a general manager, so you oversee everything in the store. Yesterday, Kyle and I were talking to Brian Kramer a lot about reconditioning, a lot about, you know, fixed, stops, parts, parts, you know, surprises in the service lane. And I stopped by, there's a small local shop that is right down the street. And I stopped in, and I asked him. I was like, you know, I do a lot in the franchise space. What are you experiencing? And basically the guy said to me, well, our big part supplier to United, United Auto Parts around here, said they had, he was talking to the owner, had a $5 million shipment coming in, and like they missed some cut off, and it immediately became over a $6 million shipment. And so, yeah, and so he said he's like, I haven't seen it yet in my pricing, but they've been communicating about this for like, the last 60 days, that it's possible that this is coming. So what are you seeing in the service bay? Are you making adjustments to reconditioning, like, how you approaching it from that side of the business?

Zac Kinch  8:19  
Yeah. So the biggest thing we've seen so far is part suppliers throwing out eta delays. Like they're saying, hey, 3060 days we don't see anything. But if you're ordering anything that could be 90 days out, they're not even giving us an ETA like they had been. So they're already saying, like, Hey, we're pausing everything to figure out what's going to happen tomorrow. And I think that's the uncertainty that unfortunately, I think some people will take advantage of that uncertainty and go, this is our opportunity to get more. This is going to be about who serves the customer more, and it's going to go all the way, like you said, through parts reconditioning, and it's going to be who can stabilize. And I think that's the big crux of what we're trying to do with, you know, Roman Toyota. What we're trying to do with the Roman Automotive Group is to make sure that we're out there sharing good information. And that's why we started social media. That's why we started LinkedIn and really posting more than just what's going on in our day, and not saying, hey, so and so who works for a solar car. And he did great this month. It's like, how can we actually get behind the curtain and show a customer what's going on and be that direct to consumer, versus allowing everything else in the media to go out there? So Well,

Kyle Mountsier  9:18  
in so many studies, consumers, the reason why is that, why they want to do business with a dealership is because they're looking for that extra tidbit of information that they can't find online quickly, right? A relevant resource that can get the information that they need really quickly. And so that's where, like your LinkedIn video, or educating the salesperson, or educating the parts desk employee, the service advisor, is extremely important right now, so they can pass that education on to the consumer, and not feeding misinformation, not feeding sensationalism, not freaking out, because we don't actually even know what's going to happen tomorrow, but being measured and resolved in the education is just going to that's what the consumer is looking for. They're looking for a trusted advisor in. Car business. Everybody wants their car person, you know. Okay, we

Paul J Daly  10:03  
have a great comment right here. Zach, I see a cowboy hat in your future. By the way. John Roper says that show now, from henceforth to be known as the tariff sheriff. I'm telling you, that'll run. You got it? Yeah, at least a couple months. Oh, yeah, easy, the tariff. Sure, that's That's amazing. I like it. I mean, it'll go away as soon as the carrot tariffs are gone. But, I mean, you're gonna get a good run out of this one. I think the next time Wall Street Journal calls you're like, there's one condition, yeah, let me go get my hat. You will refer to me as otherwise, aka the terror Austin.

Kyle Mountsier  10:40  
Tell Austin his nickname has nothing on you. No, he's got no joke. He's gonna be the sidekick.

Paul J Daly  10:45  
Now, like I know he's

Unknown Speaker  10:47  
big, big upgrade for

Paul J Daly  10:49  
me to bring the graphic up. One of the coolest parts about this is that Zach is going to be at a soda con. Look at the handsome devil. Okay, may 13 through 15th and Photoshop. That was AI, but you know, same thing these days. So look, we hope that you come out and spend some time in person with Zach and Austin and all these other dealers who are trying to help one another be better. And we'll see. Maybe you're gonna have to figure out how you're gonna fly with a cowboy hat. You've probably never had that.

Unknown Speaker  11:18  
Hey, we'll get it done. Spirit Airlines, baby, hook me up.

Paul J Daly  11:21  
Well, Zach, as always, thanks for doing the work. I know you got a busy month and a busy week, probably it's only going to get busier with all this with all this news. So thanks for joining us today and being part of this community, and can't wait in May.

Unknown Speaker  11:32  
Yeah. Oh, by

Paul J Daly  11:34  
the way, make sure you go, Oh, he's back. Make sure you go to Zach's LinkedIn. It's AC C, K, I, N, C, H, look him up on LinkedIn. Make sure you check out that video and follow along. He has a lot of great content that he puts out on the regular but like, let's

Zac Kinch  11:52  
I want Sheriff tariff in the comments. Let's go.

Kyle Mountsier  11:57  
Sheriff tariff.

Paul J Daly  11:59  
Sheriff just put tariff sheriff in his comments, and you'll know we came from here. Thanks, God Zach, have a good day. See you guys.

Kyle Mountsier  12:07  
All right, keep it rolling. We're looking at Amazon as they are diving in to AI with what they're calling Nova Act, a semi autonomous agent designed to operate both online and in the real world, with capabilities like browsing, shopping and task execution. Nova act is aiming to be your new digital helper so few things that they Nova act can do. It can complete tasks like finding rentals, placing orders, filling out forms. It also, and probably more broad use, is going to be allowing developers to build bots for things like hotel bookings, food orders and more comes in text generation tiers, micro, light and pro and supports image. It's called Canvas and video real creation. Nova.amazon.com puts the power of Amazon's frontier intelligence into the hands of every developer, says Rohit Prasad, SVP of Amazon, AGI, they're given it out.

Paul J Daly  13:06  
All right. There are a few terrifying things about this. This may be the most terrifying development in AI since, since I've started paying attention. Number one, leave it to Amazon to find a way for people to buy stuff automatically. Just right? It used to be one click, but now this thing can just go buy stuff second. If we can create bots, can I create a bot that hinders my wife's shopping ability on Amazon? It's like anti bot, right? Rolls it back a couple more. Are you sure? Does Paul know about this? Should he, you know this? This is a pretty amazing development, I think because Amazon has put it into a very practical retail sense, I think with open a eyes, what's their agent? Called What's the what's their thing? It's just agent, yeah, just right, that can, like, go through tasks and browse the web and carry out functions and take stuff from website, put in spreadsheets, all these things. Amazon is such a clear path to a functionality that everyone understands booking a hotel room fine, and I think that they probably gonna be best at it, because they understand consumer behavior on retail sites better than anyone else. So I think this is gonna get quick traction, because they have so much understanding, and it's already the clearest path that people have to purchasing things. And now, once they get into the booking space, I think it's going to be a massive window of opportunity for them to lean into airlines and hotels and so on and so forth

Kyle Mountsier  14:33  
well. And if you look at so one of the interesting things that maybe not a lot of people really recognize about what Amazon has at its fingertips. One, it is one of the top three leaders in cloud services and database storage mechanisms in the world. You basically sit whether you're in like Google Cloud or Amazon's cloud. That's, that's where, like, the world's data the world. It's development resources, like deploying things, all comes from that as a resource. And then you couple that with one of the most impressive databases when it comes to consumer information, as well as consumers like address, right? Because that consumer is always updating their address to make sure they get, they keep getting their packages. Like it's probably better than your lender, honestly, without a doubt it is, yeah, and so, like, you couple you, like, line all those things up and then deploy AI over the top of it and allow it to use that data to get into, like, booking things for you or buying things for you, and the relevance that it can create, it's quite staggering. Honestly, it really is. And because, like, Google doesn't have my address in all of its in, in no

Paul J Daly  15:53  
and all of your credit cards that you actually use, and the multiple addresses you ship, place, your home address, your work address, if you have a vacation thing, it has it all. So that's a really great insight. You know, I do think, as this applies to the auto industry, obviously Amazon making waves, selling new cars, about to start selling used cars. This is all going to become part of, at some point, the car shopping process, where people are going to deploy these bots there it is, to figure out what is best for them. Ask for recommendations. Ask for dealer recommendations. So the industry should be paying very close attention to this. And by the way,

Kyle Mountsier  16:27  
we're going to be talking about Gen, generative engine optimization at sodu con dang there is a full panel on Geo. It's the it's a new acronym that you got to know. It's not SEO search engine optimization, it's generative engine optimization. And so thinking about that right now is going to optimize you for some of this stuff, right?

Paul J Daly  16:48  
Which is how you're building your website, how you're creating other content, so that when someone types in the GPT or this Amazon tool some asking about a car or something, it prioritizes your stuff. Also, Amazon autos is going to be at ASOTU CON. They're one of our industry partners. They're gonna, actually, they've taken the Northwood sponsorship. So do we announce that yet? We just did

Kyle Mountsier  17:10  
we just did? You just did it? Yeah, I was actually on

Paul J Daly  17:13  
a call with Northwood yesterday. They're super excited, and it's showing that they're looking to invest in the future of automotive leaders and technology. So look, if you want to first hand, you want to meet some of these folks for the first time, have some real conversations. ASOTU CON is going to be the first opportunity you have to do it in person this the rest of this year. So look, I think that's enough for a show today. We had yes as a hot we had tariffs. We named Zach Hinch the tariff sheriff. Make sure you go check out Zach's LinkedIn today, and also make sure you get your tickets out. ASOTU CON com, we're on for the ride, and we'll see you here tomorrow. Bye.

Transcribed by https://otter.ai

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