Toyota's Testing Trouble, Dealers In Powersports, and GM's EV Clutch

Paul J Daly: 0:02

It is the first regular show of June. It's Monday. I have the biggest tree in the world because I get to come back from a few days off. And I look at the other side of this live stream is the one and only Michael so the people with cricket glasses. I need they stopped us to get a little love. Know me. I love Kyle. But it's a treat to have you on the show this morning from my first show back. You

‍Michael Cirillo: 0:26

know, I'm blushing.

Paul J Daly: 0:27

I know. I know. Kyle is that dmsc in Austin, Texas right now. So he's closer to you than he is to me. Oh, yeah, that's an Austin now he used to be in Napa. Now it's in Austin. So shout out to all of our friends at the Pash event dmsc in Austin, Texas. We know we love you. We miss you. But Michael Cirillo, and I are rocking it today.

Michael Cirillo: 0:49

I wonder if they're getting the the same storm system that we've been receiving. I want Kyle's taken on it.

Paul J Daly: 0:58

I mean, I think Did you expect when you move to Dallas a year ago, it was a little over a year ago now. Right?

Michael Cirillo: 1:04

Yep. Two years ago, two years.

Paul J Daly: 1:06

Nine. Did you did you like no, there this level of weather in Texas? Well,

Michael Cirillo: 1:12

I mean, the first couple of years. See the first couple of years are like your firstborn child. You know like your firstborn child is like the lead magnet. It's like the tripwire offer to make you think that having more kids is a good idea you know stop me two years where your miles great at this for graded this bullet tornadoes this and that. But I was reading something. This was for Oklahoma in particular. But I mean their rate, right, I'm an hour away from the Oklahoma border. I think their record was for the last who knows how many years was 52 Tornado touchdowns in the month of May, but this may was 92.

Paul J Daly: 1:53

So it seems like it seems like more. It

Michael Cirillo: 1:56

seems like a little more. And last night my wife sent me a text saying imminent severe thunderstorm warning golf ball sized hail. To which we immediately proceeded to drive to this abandoned gas station that still has the like,

Paul J Daly: 2:12

is that like how many people know about this?

Michael Cirillo: 2:17

They're still using the overpasses and creating traffic jams. Is that what happens and my wife and I just cruised under watched a Netflix show in the test. See?

Paul J Daly: 2:26

Oh, were you out? Or did you leave your home to do well, we

Michael Cirillo: 2:28

left our home it's about a minute away. People might be thinking, Well, why don't you park in your garage? That's for the motorcycle. No,

Paul J Daly: 2:37

we go to the abandoned gas station to make out watch movies or avoid the hail either one of those first date. Oh my gosh, I saw somebody with the halo. I didn't think about the hill. They they had like just a I think Emory on our team posted it in Slack. It was someone that just had like cardboard taped cardboard.

Michael Cirillo: 2:53

I was like, I love that we're in the South because you never know if people are saying what they hail or hail.

Paul J Daly: 3:01

Really funny. Oh my gosh, it's amazing. I love this. See, this is why I like having you on the show. We haven't talked about anything substantive yet. We're three minutes in, we are gonna be talking about some trouble Toyota is having with testing requirements. I've seen the word scandal floated around also going to talk about dealers getting into power sports, something that's close to both your and my heart. We'll talk about that more and GM trying to add a clutch to an Eevee. So you also are someone who is Evie savvy, and I rented one over last week. And it makes me a next to expert, I think having more experience with one than most Americans now. But we're gonna get into that now. But first, we want to talk about the fact that all of our breakout sessions are now released from ASOTU CON on YouTube. So if you couldn't be there in person, you could interact, you missed a lot of the interaction but doesn't mean you have to miss the brilliant things that were said you can go over to our YouTube channel, which is so tube ASOTU dot B II clever on our part, and we just crossed the 1000 subscriber mark on our YouTube channel. That's that feels like a fun little milestone. But when you start seeing the richness of the content that's in the side stages, you're only gonna have to watch one to be like, Oh my gosh, I need to watch all of them. So now you can do that.

Michael Cirillo: 4:14

I thought you were for a minute gonna save the richness of the YouTube AdSense dollars the

Paul J Daly: 4:19

richness of the AdSense dollars and probably the richness of our guests both literally and figuratively. Let's talk about Toyota they suspended sales of several models in Japan due to certification issues amidst a broader we're going to say the word I don't know if we're there yet but scandal involving multiple automakers and inadequate vehicle verification tests. So basically, they're halting. These are Japanese models, not us models the Corolla, Fiedler, Corolla Axio and Jaros cross due to testing discrepancies involving which testing methods were used, and how they differed from Japanese government standards. So basically, Mazda, Honda, Suzuki and Yamaha are all are facing similar certification issues. So it's not really isolated to just Toyota, although they're taking the brunt right now the Ministry of Transportation labels the incidents as undermining user confidence, although the vehicles have been deemed safe to drive, Toyota, Chairman a Kia Toyota, apologize for the oversight. And this is such a part of Japanese culture that I love taking a long or a deep low bow, a physical like manifestation of his apology. And, you know, I think that just says a lot to me. But you know, Toyota is definitely an automaker, that's known for kind of following the rules. So it'll be interesting to see where this leads, but you know, some of the stuff always drips its way over to the US, because it's affecting, you know, overall manufacture, manufacture, focus.

Michael Cirillo: 5:48

And nothing like government's telling us when they've undermined user confidence, you know,

Paul J Daly: 5:54

can you? Oh, man, I don't know what it's like in Japan. But yeah, that's an interesting point. If you think in the US, you

Michael Cirillo: 6:02

know, you undermine confidence of the user. It's like, okay,

Paul J Daly: 6:06

I know. And when you do when you do look at the like, although dealers are still pretty low on the the trust poll, always

Michael Cirillo: 6:13

below it,

Paul J Daly: 6:14

always. Government, you know, politicians. So we'll see what happens with this. I don't know if this is like, how big of a deal this will actually be. Definitely, auto news cycle is kind of slow in general, in automotive, so this is kind of like bubbled its way up to the top. But I think this could easily be something that does blow over but I'd be interested to hear from some of our Toyota dealers, some of our southeast Toyota dealers, like, is this actually making its way into the US, like, are we paying attention to this at all? And, you know, is this going to affect some, you know, supply because, you know, Toyota also, I mean, all one of the manufacturers that still only has like less than a 30 day supply. You know, like, it's not, they don't have 100 days. So, you know, Toyota dealers are pretty largely selling every car they can get still so I want to see what happens, but seem like the right way to start off on Monday. Yeah, king of supply. Oh, I gotta get my segway button. Right. Great segue. Auto retailers are increasingly entering the power sports segment attracted by the complementary nature of the business and substantially higher profitability. Power Sports includes, if you don't know motorcycles, ATVs, snowmobiles and personal watercraft. Automotive retailers like Sonic Lithia Ed Morse Auto Group are kind of on the hunt, acquiring a lot of power sports stores, margins and power sports can reach 10 to 12%. Compared to what we know 5% In auto retail post COVID Harley Davidson one of the most popular with about 30 dealership sales per year sales, you know to two people in the auto industry. Teddy Moore, CEO of edmore Sato group owns eight power sports stores across Texas, Colorado, Missouri and Florida. He formed Teddy Morss Motoko. I like that name to oversee the power sports segment. So he's got to a company that's managing just the motor sports and their plans are to acquire more stores this year. He emphasizes the shared passion for writing amongst customers, employees. He's like, hey, when you're in power sports, people are really passionate about the thing that they're buying. He said there's passion that goes along with it. You just can't manufacture and he said this one that made me feel so good. And I know you'll relate to this. Michael. He says riding motorcycles quote, makes you feel like the star of your own movie. Oh, it doesn't, isn't it? Yeah.

Michael Cirillo: 8:41

I mean, there's nothing like it. And the Italian in me right now is like told you so. Yeah. How long have we been saying? watch Star Trek. Captain. They've been right about so many things. And Captain Kirk in the future still rode a gas powered motors. Right? Not replace the thrill of animals, right?

Paul J Daly: 9:06

I mean, we were just hanging out with hanging out with Oh man. I have I have like graduation and anniversary brain right now. We were hanging out with Rick Reichert at ASOTU CON who owns you know, power sports companies, and a big and a Harley and like early adopters, even to the Evie bikes, but the synergy between the two is real, had some opportunity to spend you and I both spent some time around the power sports industry also around marine and just make sense like if in this world where dealers are expanding, looking for other ways to earn revenue and kind of like cross pollinate even marketing strategies, and you know, consumer bases powersports makes so much sense. It's way cheaper to get into, first of all is a different business model. But it you would just think that the marketing, understanding and the technology understanding alone if you've seen power sports there are far they're far behind. Right? It's a different buyer, but they are far behind in technology marine far behind in technology. So when a dealer buys something like this, just the already baked in understanding, yep. to overlay feels like a win. Sometimes

Michael Cirillo: 10:15

we sit here and we grovel at how antiquated we feel like our industry is, but when you really pull back the onion layer, you realize how much massive innovation happens within our industry. Yeah, massive innovation. So now you got you kind of got me thinking like the just the practical application of a motorcycle. You know what I'm saying? You got Captain Kirk, on one side of the spectrum. You got the dude from The Walking Dead on The Walking Dead on the other side of this, but there's just so practical. And you might be thinking, well, a zombie apocalypse is not eminent and I would challenge you to go visit your nearest University campus. Oh, that looks like a zombie apocalypse.

Paul J Daly: 10:55

Oh my gosh,

Michael Cirillo: 10:57

that's a motorcycle.

Paul J Daly: 10:58

That's a great one. Buy a motorcycle. I hope that more dealers get into this obviously they are. I think this power sports allows you to get a little bit deeper into culture. They allow you to get a little bit deeper into kind of the hearts and minds of your consumer and building a more captive audience. But there is also something for having this equipment around. Right. And when there's a motorcycle and an auto dealership on the show floor. It gets all the attention even if you don't sell even if you don't sell motorcycles. They're rabid motorcycles,

Michael Cirillo: 11:33

itis soap stores and malls. That's how compelling a motorcycle is. Exactly.

Paul J Daly: 11:38

That's cool. Hey, look, that'd be an interesting thing. Like in your showroom. If you have anyone that knows anything about bikes, you should just get a motorcycle, put it on the showroom floor and watch the attention that it gets. I

Michael Cirillo: 11:49

feel. What would you if you owned a motorcycles shop? Like a power sports store? What would you call it?

Paul J Daly: 11:56

Oh my goodness. That's a big question to ask me on a Monday morning. I'm

Michael Cirillo: 12:00

thinking mine would just be called MC. Oh, Michael Cirillo motorcycle club. Oh, my MC

Paul J Daly: 12:08

mc squared. Oh my gosh. And then like your campaign for like, when you start selling electric bikes, it'll be like E equals MC squared. Right. There's your campaign. This is this is just off, you know. This is just, you know, we're just riffing

Michael Cirillo: 12:25

here on a Monday morning, you and I shouldn't start agencies.

Paul J Daly: 12:28

Oh my gosh, you and I should have marketing agencies that specialize in brand communication. That's, that's a great point. I really want to start that business. Now.

Michael Cirillo: 12:39

Speaking of developing things, segue, you're gonna be hitting homeruns with the segues today.

Paul J Daly: 12:48

GM is developing a clutch pedal for its EVs aiming to enhance the driving engagement and appeal to car enthusiasts. So basically, car three Z's we know criticized EVs for lacking driver excitement, due to one pedal driving and no rear rear wheel gearbox GMs new clutch pedal concept they filed a patent uses a hydraulic actuated to operate in a clutch in evey transmissions. Basically, an actuator pressure varies it gives them feedback to the pedal control by a piston that adjusts the clutch engagement to feel like the real thing system simplifies Eevee transmissions requiring fewer gear shifts, avoids motor instabilities, etc. It says in the pattern, it aims to improve efficiency performance, that's crap. EVs are really efficient right now you're not going to have any human interaction that makes it more efficient. However. If you would have asked me this before I drove an Eevee I'd be like great idea. Let's do it. After having driven several and I want to get your feedback on this because you you own a Tesla. After driving several EVs I literally just rented the Pollstar to last week I'm going to do fewer full review on it. My wife tolerated me as I was taking video footage cheap and helped. Like we can eat the diet you know, like chronicle this Evie experience on our anniversary. Food is awesome. But after driving several EVs I don't know I've really loved the even driving experience as is, you know

Michael Cirillo: 14:14

that scene from the movie Ghost where his ghost leaves his body for the it's like that. Yeah, yeah. Anybody who's Florida in an Eevee. Fastweb, they felt bad experience. Yep. And then you want to get in the way of it by forcing them to push on a clutch.

Paul J Daly: 14:36

I think it's going to hurt them more than it helps them.

Michael Cirillo: 14:39

You just have to understand what it is that we're driving. These are not vehicles. These are appliances. These are toaster ovens. They're built for Max efficiency. They just happen to have a steering column and wheels. If you want a drill, like if you're anybody who wants a driving experience That's like shifting and knobs and you know, tactile it. Just that's what the regular stick shift is for. Yeah. If you are the first one to buy the new clutch, Evie vehicle, just be prepared to be made fun of a yes. As long as you're okay with it but you will be made fun of

Paul J Daly: 15:21

not by us. We don't make fun of anybody around here. But if you haven't driven any vehicle drive one because there's probably a few surprises in there for you, whatever it is, new week, New day, new month, go out there and get some we'll see you tomorrow.

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