TOGETHER WITH:
Howdy, Fam!
Who actually owns your customer relationship after the sale?
GM's software business keeps roughly 70 cents of every dollar in revenue. Vehicle sales keep 4 to 10 cents. As OnStar and Super Cruise subscriptions grow, GM is building a direct, high-margin relationship with its customers that doesn't need a dealer in the middle, unless that dealer is actively staying part of the conversation. Every OEM is watching this play out. It's worth asking where your own brand stands.
Also in today's email:
Ford's real bet on customization, and it's not about the parts
Why dealership buy-sell activity is up 23% while buyers get pickier than ever
A NASA astronaut back on Earth after 241 days, and a bridge 25 years in the making
Keep Pushing Back,
—Chris with Paul, Kyle & Kristi
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GM Is Becoming a Software Company. The Margins Explain Why.
GM's OnStar and Super Cruise subscriptions keep roughly 70 cents of every dollar in revenue, dwarfing the 4-10% margins on the vehicle itself.
As vehicle profits normalize industry-wide, GM says subscriptions are becoming a genuine growth engine, recurring, high-margin revenue that keeps customers connected long after delivery.
📊 The Numbers
GM's software business keeps ~70 cents of every revenue dollar, versus 4-10% on vehicles
OnStar generated $800 million in Q2 revenue
GM expects nearly 13 million OnStar subscribers by year-end
Super Cruise revenue up 70%, 850,000+ subscribers expected this year
30-40% of eligible owners keep paying after their free trial ends
We do think we have tremendous levers, multiple layers of growth... to grow, improve margins, and become less cyclical.
Want the full conversation?
🎙️ Listen to today's Automotive State of the Union episode for the complete discussion.
70 Cents on the Dollar
That margin dwarfs the vehicle sale itself. Our hosts pulled real pricing live: Super Cruise runs $40/month, Ford's BlueCruise $50/month, Tesla FSD $99/month. Three bets on how much drivers will pay monthly for software on a car they already own.
Who Owns the Customer Relationship After the Sale?
Kyle's point: dealers need their own version of the recurring-revenue game, especially around maintenance intervals and app communication, since whoever keeps the customer's attention between purchases has leverage over the next sale.
What This Means for Your Store
Worth an honest look at whether your dealership has its own recurring-touchpoint strategy, service reminders, and app engagement that keeps you part of the relationship the OEM is now building directly and profitably.
Are Your VDPs Earning the Click?
In a market where shoppers are stretching every dollar, your listings need to answer every question before it’s asked.
93% of car buyers use auto marketplaces in their path to purchase — and when budgets are tight, a complete listing is often what separates a click from a pass. How you merchandise your vehicles influences every stage, from AI-powered search to the moment they pick up the phone.
Cars.com’s merchandising guide gives you the tactics to make every VDP work harder and turn more views into qualified leads.
Ford's is Looking to Turn Buyers Into Brand Loyalists
Ford is expanding its Custom Garage program, chasing a piece of the $53 billion U.S. aftermarket industry.
📊 The Numbers
46% of Ford's new vehicle buyers already customize
Bronco buyers lead, then Mustang and pickup owners
Packages built into the factory warranty; cost can roll into the monthly payment
The more that someone spends on accessories with us, the higher the loyalty is.
Buying an Identity
A customer spending $13,000 on a Bronco package isn't just adding parts, they're signaling which brand they belong to. That's a stickier relationship than a standard purchase, and why Ford's building this into the factory process instead of leaving it to the aftermarket.
Consider This Today
If you carry Bronco, Mustang, or F-Series, check: is customization an easy, obvious conversation at point of sale, or does the customer go find it elsewhere after?
Nearly half your buyers already want this. The dealer who makes it effortless keeps both the margin and the loyalty.
Buy-Sell Activity Is Up 23%
Dealership M&A is climbing on portfolio optimization, not exits.
Lexus, BMW, and Toyota multiples are up. Volvo, Infiniti, and Volkswagen just lost valuation guidance entirely.
Porsche Is Cutting 1 in 5 Jobs by 2035, VW's CEO Wants to Double That Group-Wide
Porsche will cut 9,000 positions through attrition and voluntary programs, the same restructuring pressure we flagged yesterday.
Oliver Blume, now solely CEO of VW after ending his dual Porsche role, is pushing to double group-wide cuts to 100,000, with four plants at risk, including one belonging to Audi.
🚘 Car Stuff
Waymo's robotaxis have racked up 83 parking citations totaling over $9,000 in Austin, a reminder that "statistically safer" doesn't mean trouble-free everywhere.
America's Car-Mart warned it faces "substantial doubt" about surviving another year without new financing, even after closing 60 dealerships.
Minivans are having a real cultural moment, sales up 21% in 2025, as millennial parents discover they're roughly $4,000 cheaper than a comparable three-row SUV.
💰 Not Car Stuff
A NASA astronaut just returned to Earth after 241 days in orbit, 102 million miles traveled, 3,856 trips around the planet.
Connecting Detroit and Windsor, the Gordie Howe International Bridge officially opened to traffic after 25 years in the making.
A Colorado neighborhood woke up to horn honking in the middle of the night, only to discover the cause was a bear trapped inside someone's SUV.
1928: William Durant, founder of General Motors, purchased the Locomobile Company as part of GM's early expansion strategy.
1948: A gold bullion heist was foiled at London's newly opened airport (now Heathrow) when the inside man got cold feet and tipped off Scotland Yard at the last minute.
1982: "Knight Rider" made its primetime television debut, introducing audiences to KITT, one of the most iconic cars in TV history.
Thanks for reading, Friend! Monday down, Tuesday to go!
