The Automotive Troublemaker w/ Paul J Daly and Kyle Mountsier ASOTU Podcasts

It’s Thursday and we’re talking about Carvana’s best performance ever. We’re also discussing Hertz’s decision to sell more of it’s EV inventory, as well as a wild story about the ongoing dispute around the legendary Delorian.

Carvana’s latest earnings are signaling a substantial turnaround with a net income of $49 million in Q1, a 17% increase and a significant recovery from a $286 million loss in the same quarter last year. Shares soared by 37% in premarket trading.
The Q1 net income of $49 million, marking a major shift from last year's $286 million loss. The figure includes a $75 million gain from stock warrants in Root Inc. Without that, there would have been a $26 million loss posted. Still, the best results in the history of the company. Carvana sold 91,878 used vehicles, an increase of 16% year-over-year, signaling robust demand for its online vehicle retail model.Despite strong sales, inventory shortages continue, with vehicles listed for an average of 13 days on its website before purchase.CFO Mark Jenkins noted that the inventory situation is limiting sales volumes and the company plans to increase production to enhance vehicle selection for customers."This quarter validates our belief in the potential of online retail to drive industry-leading profitability and customer experiences," said CEO Ernie Garcia.Hertz is set to offload 30,000 electric vehicles from its fleet due to "substantial depreciation" and escalating maintenance costs, highlighting broader challenges in the EV rental market.
Faced with unexpected high maintenance costs and rapid depreciation, the company plans to sell an additional 10,000 EVs beyond its initial projection of 20,000.Hertz reported a $392 million loss for the first quarter, despite a revenue increase of 2%. Depreciation charges significantly contributed to this financial downturn.Originally, Hertz had committed to purchasing 100,000 Teslas post-pandemic to modernize its fleet, but the financial reality of maintaining and operating EVs has forced a strategy reversal.Kat DeLorean, the daughter of the iconic car's creator, faces a trademark challenge in her quest to build a modern DeLorean, despite another company owning her family's name
When creator John DeLorean died, Stephen Wynne, a mechanic heavily involved in the DeLorean brand, secured the DeLorean trademarks in the 1990s from John’s disputed widowKat had all but abandoned the vehicle and had a young family and was working as a cybersecurity engineerIn 2020 Ángel Guerra crafted a modern DeLorean model during Covid lockdowns in Spain as a tribute to the iconic DeLorean DMC-12, blending nostalgia with contemporary design elements, the instagram post he made about it blew upHe reached out to Kat, and her wheels started spinning despite having shunned her automotive history as an element that destroyed her childhoodNow, Kat is planning a modern remake of the DeLorean, despite the trademark disputeHosts: Paul J Daly and Kyle Mountsier

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There’s nothing like a sunny May 1st. Today we talk about Ford’s new AI driven Dealer training tool. We also review the fastest and slowest moving inventory, as well as the newly launched ability for Roblox users to purchase real life Walmart items in-game. 
Ford is introducing "Ford University," a cutting-edge AI-powered training platform aimed at enhancing dealership staff effectiveness and customer interactionsThe platform, designed with cinematic storytelling, covers Ford's history and detailed technical breakdowns of vehicle features.Ford University utilizes AI to analyze dealership employees' performance, offering personalized feedback and "missions" that simulate customer interactions.AI feedback focuses on speech nuances, use of filler words, and the accuracy of vehicle descriptions against competitors.Launched in U.S. dealerships, the system will expand content to include technical staff by year's end.Some wheels take off faster than a teenager after curfew. Others linger awkwardly like guests at a party long after the music has stopped. As the latest study from iSeeCars shows, when it comes to clearing out inventory, not all cars are created equal. See the list hereFast Movers —Hybrids lead the charge: The Toyota Highlander Hybrid is the fastest-selling new car at 14.2 days on market.Top used cars: Lexus RX 350h tops the list at 12.3 days on market, followed closely by other Lexus models.Sluggish Sellers —EVs lag behind: New electric vehicles are the slowest in the new car market, taking 70.6 days on average to sell.Used car slow sellers: Maserati and other premium brands dominate the list of slowest-selling used cars.Slow to go: All of the slowest-selling used cars are taking 90 or more days to sell, with the top-ranked Jeep Cherokee taking more than three times the 54-day average, at 169.7 days.

Seemingly at the top of their game Walmart and Roblox are first-in to pioneer accessible virtual e-commerce, launching a collaborative platform where users can purchase real-life items and have them shipped to their home through an immersive Roblox experience.The partnership introduces "Walmart Discovered" on Roblox, allowing users to buy physical products from a virtual store that mirrors Walmart's online shopping experience.Users can try virtual versions of products on their avatars before purchasing, with all transactions securely handled via a Walmart API.The initiative targets users 13 and older in the U.S., featuring products designed in collaboration with Roblox creators like Sarabxlla and MD17_RBLX.The pilot, running through May, serves as a test to evaluate the potential for Roblox to facilitate physical goods sales without taking a revenue share during this period.Hosts: Paul J Daly and Kyle Mountsier

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As stores across the country are playing ‘The Final Countdown’ as April wraps up, we’re talking about Asbury’s listing strategy for 10 of their stores. We’re also talking about Tesla’s next round of layoffs, as well as one Tiktoker who is less than excited about their interest rate. 
Show Notes with links:
Asbury Automotive Group, ranked fifth among U.S. dealership groups, is eyeing the sale of 10 dealerships after its recent divestiture of the Koons Lexus of Wilmington. Here's the breakdownAsbury listed $242.7 million in assets, including the dealerships, real estate, and various franchise-related assets.The group sold Koons Lexus for $102 million, aligning with Lexus' franchise limit of eight stores per dealer.CEO David Hult highlighted a focus on selective acquisitions and maintaining shareholder value, noting a leverage ratio of 2.6 times earnings. The group currently has 157 storesAsbury has repurchased 240,000 shares for $50 million this quarter, with plans to buy back more.Hult said: "In the current market, there's certainly a lot of stores on the market from an M&A standpoint. But I think we really want to be extremely selective," said Hult during an earnings call.

Tesla continues its aggressive cost-cutting strategy, announcing further layoffs that affect senior executives and the entire Supercharger team. This move comes amid broader tech industry layoffs and follows a significant quarterly earnings shortfall.Tesla has laid off more than 10% of its workforce, including high-profile executives and the team responsible for Supercharging infrastructure.The elimination of the entire Supercharger team, led by Rebecca Tinucci, signals a potential pivot in Tesla's approach to EV charging infrastructure despite the adoption of Tesla's NACS plug by other manufacturers.Alongside the layoffs, Tesla sees departures of key personnel like Drew Baglino, VP of Powertrain and Energy Engineering, underlining internal challenges and dissatisfaction.These layoffs coincide with Tesla's request for a substantial shareholder payout, contrasting sharply with the company's financial and operational cutbacks.Blaisey Arnold, a TikTok personality, recently faced the harsh reality of auto loans when she decided to part ways with her Chevy Tahoe due to overwhelming interest payments totaling $50,000.Arnold's loan for the $84,000 Tahoe came with a 10.2% APR from GM Financial, leading to massive interest accrual over the loan's term.With no down payment and negative equity from a traded vehicle, Arnold’s monthly payments of $1,400 barely made a dent in the principal amount.Arnold criticized the dealership for allegedly taking advantage of her lack of financial savvy, a claim that underscores the broader issue of consumer education on auto loans.Quote from Arnold: "I did not go with my husband and as a female I feel they took advantage of me. They knew I really wanted the car and that I was by myself," Arnold shared with The Daily Mail.


Hosts: Paul J Daly and Kyle Mountsier

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We’re starting out on the last few days of the month with a look at the Top 100 Used Car Dealers in the US. We also take a look at the potential of Tesla’s deal with China’s Baidu, and what it means for Full Self Driving. We’ll also review the latest Experian EV insights report. 


Following the Top 150 Dealer List, Automotive News has released their list of the Top 100 Used Dealer Groups.The top 100 dealership groups collectively sold 3,215,702 used vehicles in 2023, marking a slight growth of 0.1 percent from the previous year, indicating a stable used vehicle market despite economic fluctuations.Top 10: Lithia Motors Inc., AutoNation Inc., Penske Automotive Group Inc., Group 1 Automotive Inc., Sonic Automotive Inc., Asbury Automotive Group Inc., Hendrick Automotive Group, Morgan Auto Group, Ken Garff Automotive Group, NR Hudson Automotive Group.The top 10 dealerships alone accounted for 51.3 percent of the total sales among the top 100 groups, highlighting the concentration of market power within a small number of players.Acquisitions and expansions were common strategies among the top performers, as dealerships sought to increase their market footprint and capitalize on economies of scale.GOING TO BE AT ASOTU CON: Lithia, AutoNation, Group 1, Walser, Zeigler, Ourisman, Rohrman, McGovern, Fox Motors, #1 Cochran, Pohanka, Germain, DGDG, Carter Myers, Sam Pack.


Tesla and China’s largest search engine and map provider, Baidu have sealed a deal enabling Tesla's Full Self-Driving system to operate in China, leveraging Baidu's crucial mapping licenses for navigation on Chinese roads.Baidu will provide Tesla with a mapping license essential for the operation of its Full Self-Driving technology on public roads in China, enhancing Tesla's navigation capabilities with lane-level precision.This partnership not only allows Tesla to legally collect vital road data in China but also clears significant regulatory barriers, setting the stage for FSD's deployment in one of the world's largest automotive markets.It remains unclear whether the data collected through this collaboration will be owned by Tesla or BaiduThe deal coincides with Tesla CEO Elon Musk's recent visit to China, where he met with Premier Li Qiang (Pronounced: Channg)to discuss further approvals needed for FSD's rollout and data transfer protocols.

Experian has released their Q4 2023 Electric Vehicles Year in Review and we’ve pulled out some (maybe surprising) insights that help us make a little more sense of the EV landscape. Electric vehicle registrations continue to climb, representing 8% of all new retail individual registrations in 2023, up from 6% in the previous year.The Tesla Model Y and Model 3 lead the pack in EV sales, dominating the market with substantial shares of 36.8% and 19.6% respectively.Top three makes 2022: Tesla, Ford, Chevy  In 2023 Tesla, Chevy, HyundaiHosts: Paul J Daly and Kyle Mountsier

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Welcome to the last Saturday of the month! Today, writers Chris Reeves and Kristi Canada join the show to talk about our partnership with Vehicles for Change and how we're giving away a car at ASOTU CON plus auctioning off a custom guitar to benefit the great things that Vehicles for Change do.
Hosts: Paul J Daly and Kyle Mountsier

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It’s the last Friday of the month as we pay tribute to a Ford leader who broke the mold. We also talk about a hot debate over legacy OEMs flirting with DTC models as well as consumer luxury purchases going on the rise. 

This morning we pay tribute to Don Petersen, a transformative leader who guided Ford through a critical phase in the 1980s.
Petersen, who passed away at 97 on Wednesday was at his home near Detroit in Bloomfield Hills, Mich., his niece Laura Peterson told Automotive News in an email., was celebrated for prioritizing quality and innovation, dramatically boosting Ford's market share and profitability.Under his leadership, Ford introduced influential designs like the aerodynamic Taurus and Mercury Sable, shifting industry standards towards more customer-focused products.He was known for fostering a collaborative workplace, which contrasted sharply with the autocratic styles of previous Ford executives. But at times was also said to have had some passionate outbursts. Petersen also spearheaded strategic acquisitions, notably purchasing a controlling stake in Hertz and increasing Ford's investment in Mazda, which significantly expanded Ford's global footprint and technological capabilities."He insisted on teamwork and excellence in the name of customers and guided Ford through a period of revitalization," stated Ford Motor Co.A recent Automotive News editorial is highliging a hot topic we’ll be discussing with the President’s of NADA and several State ATA’s on the main stage at ASOTU CON. 
Dealer associations are lobbying against direct sales models for new brands like VW Group’s Scout and Honda’s Afeela, pushing for adherence to traditional franchise systems amidst a slowdown in EV market growth.Tensions rise as dealers threaten to withhold service and parts for brands pursuing direct sales, fearing the impacts on their business model and the established relationships with legacy automakers.The advertisement by state dealer associations in Automotive News underscores a significant industry rift, as they urge legacy automakers to reconsider direct sales strategies that could bypass traditional dealerships."We believe there is a difference between a brand recently born and one seeded, nourished and grown under the protective arm of a legacy automaker," emphasizes the importance of maintaining traditional retail models for established brands.Despite economic inflation, the U.S. luxury goods market has seen a substantial 86% increase in purchase intent from 2021 to 2024, according to YouGov's latest survey.
The survey reveals that 26% of respondents are likely to buy luxury items within the next year, a significant rise from 14% three years prior.Notably, 15% of Americans have actually purchased luxury goods over the past year, marking a 9% increase since 2021, with shoes, accessories, and beauty products leading the purchase categories.Shoppers between 35-44 were willing to shell out over $1,000 on their coveted purchases.Hosts: Paul J Daly and Kyle Mountsier

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