The Tyranny of Over-Disclosure with Brian Maas

Kyle Mountsier: 0:00

Hey Paul, what's short and stubby and not here?

‍Unknown: 0:08

This is Auto Collabs

Paul J Daly: 0:12

chicken nugget. Michael Cirillo got side of the world right now.

Kyle Mountsier: 0:21

He is it's unbelievably posted about

Paul J Daly: 0:23

it yesterday that that that man is in the Middle East. He's in Pakistan, I believe. Yep. And he can't so he can't be here today.

Kyle Mountsier: 0:32

He can't be here. We're so sad. It's like one of the very few times where we're not all three together. I like we love having guests on this podcast legitimately. But we also love the micro moments that we get with just the three of us to make really stupid comments about nothing's. Well,

Paul J Daly: 0:51

what's really it's it's this blend because he's always good for some comic relief. Right? Slightly irreverent sometimes. But then he just comes across with like, the deepest question known to man. So like you never know, but it's really hot or cold. It's comic relief, total joke, or it's like an incredibly serious question, just something

Kyle Mountsier: 1:09

that we can never even think about. Speaking of things that we couldn't think about it, I mean, us being on the East Coast and central timezone. Thinking about operating in the West Coast is like, it's like a foreign country in my world crazy how that is. Yes, yeah. So today, we've got Brian moss, the president of the California auto Dealers Association, and we've gotten the opportunity over the last I don't know year now at this point, to just kind of get to know him and Autumn in the marketing team. And in here exactly what they're doing. They came to us kind of through the more than cars channel.

Paul J Daly: 1:46

At that time, who was myself owl. And Jordan, got to spend some time with them at their dealer reception at NADA, a few weeks back. And the moment I walked in there, like the vibe was different. Number one, everyone was like dressed really well. And I was like, Oh, this is California. We're in California. Right? Yeah, right. But everybody was everybody had no shoes and no socks, and they look better than me. And that's all I can say. They're just better than me. And, and everybody was just very, like warm and welcoming. And was having, you know, fun loving, but very serious about like doing a great job to serve customers. And so it kind of brought me right back to the fact like it no matter where you go in this industry, right? You see this table stakes of giving the consumer what they want, and understanding the importance of giving them a great experience, like through and through and serving them well. So we hope you enjoy this conversation with us and Brian Moss, learn a little bit about the West Coast if you live on the east coast, and you don't get there that Hey, Brian, it's so good to have you here. Thanks for joining us today on Auto Collabs. Thanks, guys.

Brian Maas: 2:52

Happy to be here.

Paul J Daly: 2:53

It was so much fun that like some of the asoto team got the hang out with the California auto dealer Association at the NADA show. You know, it's always tough, right? You have these two coasts. And even though it's one industry, you know, going coast to coast is difficult. And I have to tell you spending some time with the California auto dealers, like in the room meeting a lot of people I had to feel I told Kyle this is like, man, we're really, I feel like we're really missing out. So we're really glad to bring some of that energy into the asoto verse today. Awesome,

Brian Maas: 3:23

happy happy to join you guys.

Kyle Mountsier: 3:24

How is that though? Like, when? Because I'm, you know, so much of our industry right now is an even just the country like looks at California from a retailing landscape, a political landscape, a culture landscape. And so there's a lot driven by what's happening in California, but it's like four hours behind everything. I feel like, at least in my world and your world. It isn't it's like, oh, we're in the real time. But how, like, where does that come into play in your world? Do you guys feel that kind of necessity to be at the front end to be talking about the things are at the front? Or is it just kind of normal at this point and pace for you?

Brian Maas: 4:08

Yeah, it's a little normal. We're used to it. But the fact that we're the pace setters for pretty much everything. Some trends that are good, some trends, maybe not so good. But, you know, if you look at the history of California from the gold rush to present day, we've been leaders in technology and defense industry. You know, we're the largest state for auto retailing and one out of every eight cars sold in the United States is sold in California. I mean, the markets that the markets huge. And you know, Hollywood's based here, I mean, you can go on and on and on. A lot of the things that people talk about, start in California,

Paul J Daly: 4:55

man, so I heard an interesting stat. Alright, interesting. One piece of information is that you don't have social media but you kind of a voracious reader of news. Like and I know a lot of Kyle myself, right? Like we spend a lot of time on social media, a lot of people do. What is your you're at the head of the pack? Are people relying on you to kind of keep tabs on what's going on? Can you tell us like, what is your regular routine? Or how do you consume news and process it in bulk like that when it's not in like three second, LinkedIn feed mode.

Brian Maas: 5:32

So part of it is a personal interest, I always been a big consumer of news from a lot of different sources, including, of course, your newsletter, but trying to stay up to speed with what folks are talking about. And my personal feeling is some of the social media, it's hard to figure out what's really going on. You know, you can follow trusted sources, of course. But, you know, following all the major papers in California, the New York Times Wall Street Journal, Washington Post, figuring out what people are talking about, and then obviously following the industry publications to learn what folks are talking about. So I feel like, the more I know about what's going on, and what people are talking about, the better I can serve our members, because they expect us to be on top of whatever trend is happening.

Kyle Mountsier: 6:36

They do how and how it gets to the ground, like, you know, because a lot of people are very, very close to their dealer associations, and they're extremely involved in some may not really know exactly what's going on at the association, especially deeper into the dealer, into the dealer body or into the dealership and less of like, the executive team. How do you get to the ground reconciling what's happening in culture and what's happening in, in the economy and and serving the actual dealer body? What are the practical ways in which you're serving, like current day right now?

Brian Maas: 7:09

Yeah, it's a good question. I think, what we realized, in some ways, it was the gift that COVID brought to us, we had to completely pivot in how we talk to our dealers, what we talked to them about our modes of communication, right? We couldn't do live events, we used to do seminars up and down the state, and you know, all that kind of stuff, we couldn't do that. So during the midst of COVID, especially when it started in 2020, we were sending daily alerts to our dealers seven days a week, for the first two months, because local jurisdictions were shifting their policies and all kinds of crazy stuff was going on. Absolutely. And I think our dealers were conditioned to rely upon us to figure out what the heck was going on, in some cases in their own jurisdiction, because they weren't getting a straight answer from, you know, the city or the county or the state. And we took it upon ourselves to talk to them about that. And that's carried through. So our cadence of communication has amped up exponentially since then, we've got a great comms team that is communicating on all the social channels. I, you know, trying to talk to traditional news media whenever I can, to really talk about who we are and what we're doing for dealers and their customers. Yeah,

Paul J Daly: 8:44

that was my follow up question to what and when you started talking was going to say was going to be like, has that change stuck? Right, the dependence on the dealer Association, sounds like it has, which is a huge benefit, right? Because everyone was playing in their own little sandbox, even within the state. And then this brought like a solidarity and a dependence on one another, I think of the ATA and it's like, that is that's a one another organization. It's not like a separate organization. It is a collective of, you know, the dealers, especially

Brian Maas: 9:19

in, you know, what we focus our association. And again, California is a little unique than, you know, some of our other states where maybe they're not over regulated, or their legislature isn't in session, 10 months, a year, every year like we are in California. So we focus on advocacy on their behalf in Sacramento and with state government, and compliance. Our dealers need to know what the rules of the road are. And California's rules I can say confidently are the most complex in the country. So they rely on us to help them navigate through that COVID I think, reinforced that. But you know, we've got employment laws that are crazy. We've got very detailed advertising and sales rules. And the list goes on and on and on. So being a resource for our dealers who have questions about what the rules of the road are, and we don't have an axe to grind, we represent all dealers, we're trying to help them navigate through this stuff. And we want to be a trusted source for them.

Paul J Daly: 10:30

You represent so many dealers, and obviously various size shapes. DeRay, like how long they've been in business? If you would, like, give us maybe three categories? How would you bucket out the dealer? The dealers in the three categories? The ones that you serve?

Brian Maas: 10:48

Yeah, I think there are I know, what are the largest groups, some public, some private, and these are, you know, large organizations. And in California, they might represent anywhere from 10 to 50 stores. So they're organized like a corporate entity, they have a corporate headquarters, they have chief compliance officers, what have you. So that's one category. The next category, I'd say is kind of the mid sized group, anywhere from two to 10 stores. These are folks that are potentially growing there represent typically a region, although in some cases, they're expanding beyond a particular area of California. And their needs are a little bit different. They want to grow, but they're nowhere near as big as some of the larger groups. And then we still have, especially in a state as big as California, small groups, you know, the one or two three store folks, where the owner operator is in the store every day, working with his or her staff, to sell vehicles in their local community, and their needs are all a little bit different. But the great thing about an association is we try and find the common ground that every dealer has in common, right? We want to protect the franchise laws, we want to make sure that dealers have a voice in Sacramento, no matter their selves. And that's how we combine the three groups that I outlined.

Kyle Mountsier: 12:30

Yeah, now you you've said a couple of times, like how do we care for the customer in that and the interactions that I've had with you and your team is like, that's an extremely point, extremely, like large point in the way that you head to the state government, but also work with the dealers. How do you balance the fact that like, you know, regulation and laws and compliance and doing business, it has to be met with an association, also caring about the customer experience, or how the customer is getting interacted with, with all of those things that I just listed off? Look

Brian Maas: 13:10

it It all starts and ends with the customer. I mean, dealers are in business to serve the personal transportation needs of the people that visit their store, whether they're buying a car or servicing a car or getting parts or we're, you know, in the f&i buying other products, and if we don't help the dealers understand what the trends are, what consumers are expecting what the regulators think the dealer should be doing relative to consumers, which is an important part of it. And part of our job is to educate the policymakers that they may have an idea of what a dealership looks like, but it's not necessarily factually based. And so we have to go in and explain to them no, this is what you require, for a car sale to occur. The conditional sales contract that our dealers use is 27 inches front and back. And probably 80% of that is mandated by either federal or state

Paul J Daly: 14:14

law. Wait, you're talking about 27? Like if you stack the paper? No,

Brian Maas: 14:19

I'm talking the contract is 27 inches long, front and back, front and back. And there are requirements on font size, placement, font color, what have you, and dealers have to navigate that very carefully. Now, the good news is there's lots of vendors that help them do that, but they need to make sure they're following the proper protocols and procedures. Otherwise, regulators are going to come after them and say you're not serving your customer.

Kyle Mountsier: 14:51

They're part of that is like, Hey, you have to have this whatever that is. 54 inch long. contract basically, that you need to make sure the customer still has a great, you know, experience when they sign it. Right. Like, that's the I think that's the dichotomy you're pointing to is like, here's all of the rules and regulations that pertain to listing out all of these things on a contract. And we also want the customer to have a really great experience, which is why we put all this in place. But yet, they they're looking at a contract going, what am I actually signing myself up for it this conversation,

Brian Maas: 15:31

right, and we help constantly have a conversation with policymakers. And we want to avoid what I call the tyranny of over disclosure. So somebody might come up with a good rate phrase, somebody might come up with a good idea. And say, you know, what we need to tell consumers that, you know, this is the rule or this is the right or opportunity that they have. Let's create another form and require the dealer to present the form to the customer. Every time they sell a car, we have, you know, a rule in California, you have to have front and back license plates on every car. And people who buy high end cars don't want the minimum wage employee drilling holes in their front bumper. So they frequently declined to have the license plate, we have to give customers a front license plate bracket disclosure form, to indicate that we've given them the bracket, and they understand the obligation that they are required to display front license plates. That's all great. Sounds good in isolation. But when you pile that on a 27 inch contract, and a number of other disclosures, it's like sign here, sign here, sign it, nobody's reading it, nobody's paying attention to it, flying through it. It doesn't help customers. So that's the dialogue we're having where we need to strike a balance between providing customers valuable information, but providing them so much information, that the real details they care about it loss.

Paul J Daly: 17:14

Can you imagine if like there were over disclosure requirements on like a dating website? Yeah. Exactly. No, no, no, no, no, you need to disclose the allergy you needed. This is what you did last summer, you need to disclose all

Brian Maas: 17:34

let's say we'd have a lot more single people

Paul J Daly: 17:37

don't even want a car anymore. So the let's let's pivot the conversation for a minute to the Eevee conversation, because California has been in the game for a really long time has way more EVs on the road, way more advanced charging infrastructure and experience overall? We're seeing just just this week, right, we see Apple pull the plug on their Evie, we see BYD saying they're not coming to the United States. And just a lot of other people largely pulling back from this, you know, Evie momentum that's been going, what's the perspective of California? Because you all seem to have at least had a head start in building infrastructure, seeing how people adopt it. And maybe you have some of the answers to the questions that are being asked about how to charge my vehicle how to use it in different Well, no, I wouldn't say that many different weather climates, but you know, not too much cold in California. But, you know, what's your perspective as you watch it unwrap kind of like rollout across the country. What would you say to the dealers that live in the different climates where Evie adoption is low? I'm just really curious what your perspective is, because you're at the front of the pack? Yeah, I

Brian Maas: 18:46

think the short term we I'd say is electrification of the vehicle fleet is coming. What we can't agree on is how fast it's going to come. And what what's going to be required to happen by certain dates. California has enacted a policy that says 100% of new vehicle sales in 2035 have to be zero emission. So that is the policy of the state of California. And it's the policy of several other states that have adopted the Air Resources board's rules. So we're trying to work with policy makers to educate them on how we get from where we are today, which is about 21% Evie penetration in California, to 100% in just 11 years. And we're going to need more infrastructure. Yes, we have more than any other state, but it's not as ubiquitous as gas stations. And that's kind of what consumers expect when they buy a car. I can go to a local gas station, the price is posted up there. That's what they expect. That's not we're nowhere close to that in evey infrastructure or transparency See yet. So we want to be realistic. And you know, here I'd say the market is king. You know, consumers speak with their dollars. And they're they're signaling right now that as much as the manufacturers are making these cars, maybe they're too expensive. Maybe they're not they don't meet the needs of customers. And I suspect that policymakers are going to have to take a hard look about the pace at which they expect this transition to happen. We're in a position where we're trying to be supportive, as best we can. We sell what customers want to buy, though. And if they don't want to buy these cars, we're going to figure out how to stock the ones they do want to buy. And we see in California, you know, hybrids are doing great plug in hybrids are also doing well. And I think what that tells us is consumers want options. They just don't want to be dictated that this is the only path you go down. They want choice.

Kyle Mountsier: 21:07

Yeah. And I mean, the I'm really interested to see what happens in q1 this year, right? Because California, and by that nature, the rest of the US and q4 saw a downturn in evey sales from q3. And so like whether or not that was market dictated or interest dictated is still yet to be determined until we see like pace over q1, q2. And I'm hearing like, the putting the putting the money on the hood is starting to incentivize a greater level of adoption at some in some markets in q1. I wonder, have you heard anything now through two months in q1 about the way that people are interacting with Evie purchasing as compared to q4? Or is it still too early to tell?

Brian Maas: 21:58

It's probably a little early to tell. I think if you look at inventory numbers for dealers, especially of EVs, the day supply is still pretty high, even in a place like California. And we're going to have to figure out how to, you know, right size that, you know, you look at this industry over the last five years, we had, you know, a more or less normal market in 2019, than we had COVID, where dealers were selling vehicles at MSRP, or in some cases higher than MSRP. There was no supply, there was still demand. And now we've kind of flipped back to, you know, closer to a more normal environment where, you know, supply of vehicles that consumers aren't interested in is growing, and vehicles where, you know, there's high demand, there's not as much supply. I mean, you ask any Toyota dealer right now, they can't keep they can't keep a hybrid vehicle in stock. Right, because that's what consumers want. And I think what we've done when we've advocated to CARB is provide options and get consumers conditioned to buying vehicles that are alternative powertrain. Yes, we understand that the mandate is to go 100%, Evie, and 11 years, but now that we've passed the stage of early adoption, and you have to go to the mass market, and talk to you know, average customers, getting them

Paul J Daly: 23:47

deeper, real quick.

Brian Maas: 23:48

Yeah, you got to get them out of a nice car into a hybrid and pat yourself on the back that that's progress. So rationally, you get from a hybrid to a plug in hybrid, that's progress. You can't expect every Californian to snap their fingers and all of a sudden stop driving an Ice Vehicle and be in an Eevee instantaneous

Kyle Mountsier: 24:10

change lifestyle add a charge or change the way they drive through the day like it's a whole it is it's a wild

Brian Maas: 24:20

it's the most radical transformation in personal transportation since we went from horses to internal combustion engine vehicles in wow, you know, 100 years ago, and

Paul J Daly: 24:32

we didn't even have back then if you look at the like, compare the two. We have such a rational path to Evie. Like you just laid it out. We have gasoline. Now we have hybrid and we have plug in hybrid. And then we have full electric back then they didn't even have those like there was no stairsteps it's like this one you feed and it poops and this one you don't feed just goes right to different there's it's there's Such a you just was you were talking through it. I'm like, it is so plainly rational that you would stair step people through that. And that is just how people change. If you just study like the, the sociological points of how people change, it's that way.

Brian Maas: 25:14

Yep. Yeah, it's in the industry, and gotta compliment the automakers here. A lot of the successful changes in vehicle technology have been seamless to the consumer. You know, we installed catalytic converters. Nobody, nobody griped about that. We've got, you know, ABS brakes, we've got other technological advancements that have happened, where the actual driving experience for consumers hasn't changed or has been made better than it was previously. The challenge with the electrification of the vehicle fleet. And Kyle, you mentioned it is you're asking customers to change their driving behavior. You can't go to a place and charge your car in five minutes. It's not possible. So how are you going to adjust as a consumer? If you live in multifamily housing? Where are you going to charge? So we have to be a little bit patient, we can certainly encourage people with tax credits and other things to think about, and really seriously consider making the transition. But we also have to be realistic that you just can't snap our fingers and have it happen.

Kyle Mountsier: 26:35

Yep. Well, hey, Brian, you're obviously thinking ahead of the pack and having to move in places that a lot of the country isn't so appreciate you doing the diligent work and and serving the dealers in the way that you did, the way that you do. And I really appreciate you being on Auto Collabs. And joining us today.

Brian Maas: 26:52

Paul, Kyle, thanks a lot for all the time. Really appreciate.

Kyle Mountsier: 26:59

All right. So this is it's it's interesting to me, because from an outsider's perspective, someone that doesn't live in California, you would kind of expect California to just be Oh, yeah, everybody's into this Evie thing quite clearly, we're growing at a rapid pace, right? 20% market share has EVs with like, we're, we're fully prepared. And so for him to say, No, there's no way we have the charging infrastructure, the next layer of adoption is just the same as the majority of the country where we don't know where we're gonna get it from uphill battle. Right. And it's an uphill battle all the way. Yeah, I

Paul J Daly: 27:35

mean, it makes sense that California's, like early adopters are done rests in and around 20%. And everywhere else, it's resting at about 8%. Right, because the technology really was pioneered out there. There's just more sun out there. Right. And there's a there's definitely more environmental, like mentality out there, like this is good for the environment. And, you know, obviously, Tesla was out there, like all the all the first the first mover, so but, you know, you have the early adoption adopters in the beginning, if you ever see the curve, right, and then you see a real steep incline. And the tippy top of that is mass adoption. Right? That's a hard climb. And I think he just did an amazing job of laying out the steps we can take to get there the rational steps we can take, and him, you know, bringing up that by 2035. California's, like, their their law is that every car 100% of drive trains have to be full electric. And I would love to see

Kyle Mountsier: 28:29

some level of like, production timeline that aligns with a potential consumer demand timeline. Right. Like how do we I bet you in an office somewhere at Toyota has it? We mentioned it on the Toyota definitely has ation, right. But it's like, what's the climb? What's the path to get there? And how do we go through the hybrid department hybrid to to Evie? And is is can we can we get closer now? Because we've had the last few years of data, can we get closer to a projected timeline where kind of consumer demand public infrastructure, private infrastructure and, and, and production all kind of like come in sync without a forced thing. But knowing that there's a great end result in mind. I feel like there's some accountant or some person that loves spreadsheets somewhere that's ready to put that together. Probably.

Paul J Daly: 29:24

I'm not convinced either that if we looked at Toyotas spreadsheet or their graph, or whatever it was, that there wouldn't be this little dark horse in there called hydrogen that had had a place on that sheet. Well, we'll see how that blows up. But obviously, California leading the way we can learn a lot from the way they've been adapting and the challenges they're having at 21% that a lot of people are feeling it like 5% adoption. So obviously great to spend some time with Brian. Great to spend some time with you. Thanks for joining us here today on Auto Collabs. Sign

Unknown: 29:55

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