#682 - 🚗 Triple-Friday!

TOGETHER WITH

Howdy, Friend!

A Friday before a holiday weekend feels like a double-Friday. But this Friday, before ASOTU CON, feels like a triple-Friday.

We’ve worked hard to ensure that everyone can fully participate in next week's conference, leave it all on the field, and still go home more refreshed and grateful for this industry than when they arrived.

Remember, when you smash the words “rest” and “creation” into each other hard enough, you end up with “recreation”—enjoyable work. Let's make the most of it!

Keep Pushing Back
-Paul, Kyle, Chris & Kristi

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BUSINESS

Friday News

One more weekend until ASOTU CON, friend!

We can’t afford to lose sight of what matters: this whole day ahead of us, but we can see our time in Baltimore on the horizon and are thrilled to be there soon.

We expect many new faces this year and trust the whole community to help us make them feel at home. Grab a selfie with a new face, tag us, and use the hashtag: #asotucon

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Ford

In a strategic pivot, Ford may delay its all-electric fleet in Europe until after 2030 due to slow EV adoption, continuing to offer ICE models, including hybrids. 

This shift follows the phase-out of several models, such as the Mondeo and Fiesta, in favor of new electrics like the Puma Gen-E. 

Meanwhile, Ford faces safety scrutiny in the US as NHTSA questions its recall strategy for over 42,000 SUVs (2022-2023 Bronco Sport and 2022 Escape) with potential fuel leaks. Despite a proposed fix involving a software update and a new drain, concerns remain over not replacing the faulty fuel injectors. This issue follows a similar recall affecting nearly 522,000 vehicles in 2022.

Polestar

Polestar is jumping from the top rope into the "price war." Until May 31, their Polestar 2 is available for a 27-month lease at $299 a month. 

• Customers have to pay $3,299 at the start.

• The price reflects the $10,000 from the Clean Vehicles Incentive. 

• Customers can upgrade to the dual motor model for the same price as the single. 

To sweeten the deal, Polestar's CEO Thomas Ingenlath says they are open to integrating Apple's CarPlay. The software would control all the screens in the car but leave the actual driving to Polestar tech. 

"If this low price doesn't bring people in, maybe letting them pick their speedometer background will!"  Ours would be Ricky Bobby saying, “If you’re not first, you’re last.”

Tesla

What if you bought a loaf of bread and found a small locked box with two more slices inside, but you had to mail a dollar to the Bread Bunny to get them? That would be wild. 

Anyway, Tesla now offers RWD Model Y owners the chance to unlock up to 60 extra miles of range for $1,500 to $2,000, increasing their vehicle's range to match the latest 320-mile Model Y. This pay-to-unlock feature targets owners who need more range for long trips but might not benefit those using their EVs locally. 

However, the US Department of Justice is investigating Tesla for potential securities and wire fraud over its self-driving vehicle claims and discrepancies in vehicle range performance. Multiple recalls and fatal crashes linked to its advanced driver-assist systems complicate the issue.

Service Lane Data

How do you describe quality? Done right? Isn't that just correct? Can't something be done correctly but in an unsatisfactory way? It's enough to make you wonder if words mean anything. 

The JD Power 2024 US Aftermarket Service Index (ASI) Study found that people are forming a preference for aftermarket service options over returning to dealerships due to quick appointment options and preferred quality.  

• Customer Quality Preferences:

  • Gen Z shows lower satisfaction, highlighting a need for more engagement and trust-building through service advisors.

  • Photo/video documentation of repairs increases customer likelihood of authorizing recommended work (51% vs. 24%).

• Technology and Trust:

  • Franchised dealerships score higher in customer trust and use of technology, BUT aftermarket services are seen as more accessible and easier to do business with.

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TOGETHER WITH OUTSELL

More Than Data

If you’re headed to ASOTU CON next week, don’t miss your chance to meet with Outsell—where the rubber meets the roadmap for smarter customer engagement in the retail auto industry.

Why Outsell? Well, they get how important it is for dealers to keep their customers coming back. Forget the old-school way of thinking that loyalty in this biz is a lost cause. Outsell is all about giving you the tools for better, smarter, and more personal customer interactions.

What Outsell delivers:

• Improve the dealership and marketing team’s efficiencies

• Increase customer retention - especially around your best customers

• Maximize gross profit

Bottom line, Outsell and the power of their AI Brain engages your customer at the right time, in the right medium and with the right message. 

Join the more than 2,000 dealers who trust Outsell. P.S. — Ask them about their new Converter Campaign™ and the results they are driving. Schedule a demo today, or visit with them in person at ASOTU CON!

DATA & INSIGHT

Bulls vs. Bears

Recent data suggests our current economic landscape is being heavily influenced by stubborn inflation (still), a seesawing labor market, and bullish corporate earnings. Here's the latest:

• The Fed – Inflation is sticking around like a bad habit, forcing the Federal Reserve to hold interest rates steady. Earlier dreams of rate cuts have been pushed to late 2024 at the earliest. It’s a waiting game, with the Fed continuing to treat inflation cautiously before making any moves.

• Labor Dynamics – The labor market is sending mixed signals—initial data on rising labor costs caused a stir, but a cooler-than-expected April jobs report (adding only 175K jobs against an expected 240K) calmed the waters. This indicates a potential moderation in wage growth, which could help tame inflation.

• Corporate Earnings – Despite anxieties, corporate America is delivering some good news. A significant chunk of S&P 500 companies have outperformed first-quarter earnings expectations. Strength in sectors like consumer discretionary and health care is hinting at a broader economic resilience that’s buffering the stock market.

April's auto market analysis reveals a mixed bag of trends with fluctuating consumer confidence and diverging vehicle segment performances. Here's what you need to know:

• Vehicle Market Values and Sales — The Manheim Market Report indicated a 1.6% drop in the Three-Year-Old Index over April, with a weekly depreciation slightly above the long-term average. Retail used-vehicle sales dipped 4% from March but increased by 9% year-over-year. Interestingly, the average retail listing price for used vehicles rose by 2% in the last four weeks.

• Fleet and Rental Market — Fleet sales dropped 5.6% from last April, contributing to an overall new-light-vehicle sales decline of 3.3% year-over-year. Rental risk unit prices saw a 12.2% year-over-year decline, although average mileage dropped slightly by 1.3%.

• Segment Performance — Different vehicle categories saw varied year-over-year declines. Compact cars suffered the most, down 17.6%, while luxury vehicles held up relatively better with a 12.9% drop. In contrast, the electric vehicle (EV) segment mirrored this downturn, with a 17.5% decrease, closely tracking the non-EV market's 13.1% decline.

The dynamics of vehicle sales and financing are evolving, influenced heavily by economic uncertainty and shifting consumer preferences. Here’s a closer look at what we’re seeing:

• Persistently High Interest Rates –  Both new and used vehicle markets are contending with high interest rates, continuing an upward trend seen in Q1. Dealerships are increasingly stepping up by leveraging OEM incentives and cultivating lender relationships to offer competitive rates and help customers navigate their purchasing options.

• Resilience in Used Car Sales –  Despite a slight dip in March, used car sales have generally outpaced last year's figures. With improving new vehicle inventories and incentives, further growth in this segment is anticipated.

• Lease Deals Gain Popularity –  March witnessed the highest percentage of lease deals since July 2021, influencing financing and cash transactions significantly. Attracted by potential savings from manufacturer offers and federal tax credits for electric vehicles, more consumers are opting for leases.

👉 Keep reading here for more market updates. 👀

Quick Hits

• Warner Bros.' Discovery is trying to land an NBA streaming deal after a rough quarter. 🏀

• The U.S. Marines are testing Robot Dogs with AI rifles. Yay? 🤖

• Blablabla, Drake hates Kendrick, and Kendrick hates Drake. Questlove hates this whole beef scene. He says, “Hip-hop is truly dead.” 🥩

History

• 1904: Audi is founded, sort of. 🤷‍♀️

• 1962: Marvel Comics publishes the first issue of The Incredible Hulk. 🦠 

• 1975: Sony introduces the Betamax videocassette recorder. 🎥

Thanks for reading, friend! Don’t forget that #asotucon hashtag. Keep us up to date with your packing, your travel, and your thoughts throughout the conference!