Latest / Auto Collabs / What’s Really Breaking Trust Between OEMs and Dealers From Someone Who's Lived Both Sides with Igor Skinder

Transcript

What’s Really Breaking Trust Between OEMs and Dealers From Someone Who's Lived Both Sides with Igor Skinder · Auto Collabs

• 0:00
  The first time I met our guest today, I was a bit afraid. [upbeat music] This is Auto Collabs. [laughs] He is a bit commanding and present.
• 0:15
  And that's only because he's, like, 9 foot 13. He's like Michael Cirillo, but bigger. Well, I'm like- Taller... I'm like a mirror image shadow... looks like he would just come with an elbow real hard.
• 0:28
  Uh, Igor Sch- Skender is, uh, anything but the guy that would come at you with an elbow. He- Sweetest man on the planet... just so, so sweet, but also, like, so resolved at whatever he's got his hands on- [exhales]...
• 0:44
  taking care of it- That's how to get it done... making sure that it's done well, making sure that, that he connects the right people and brings people together.
• 0:52
  I'll never forget the time that I was like, "You gotta meet this guy, Jimmy Douglas." [laughs] And he was like, "Yep, I think I do." Dude, they're best friends now. [laughs] That's exactly...
• 0:59
  And they're best friends now. They really are... and that he just, like, puts... just bear hugs around anybody that he comes in contact with. He, he was. He was.
• 1:07
  When he was here, uh, this is one of those interviews, now we're trying to do more in person, and so I was fortunate enough that he came here to the studio, and we were able to have an in-person conversation.
• 1:16
  And you know who we were taking- Ah... selfies and sending pictures to. Jimmy Douglas. [laughs] Just like that. I didn't even know you did that. See? I know you didn't. [laughs] Look at that. So good. Oh.
• 1:27
  Well, whatever, whatever, um, whoever you're sending selfies to, we hope you enjoy this conversation that I got to have with Igor Skender.
• 1:36
  [upbeat music] I did learn something about you that I, I, I didn't know before, and I feel a little bit left out, is that your friends call you Iggy? Um, I... Yeah. [laughs] So... [laughs] I've never heard that before.
• 1:48
  I just saw it- Yeah... saw it somewhere. So that, that's interesting, 'cause it really only came to, to light, uh, really in the last probably three to four years. Get outta here. Yeah.
• 1:56
  Who, who was the first to give that to you? Uh, it, it was a VW. It was a VW. So I let it slip, and then, you know, uh, my colleagues- Wait, you let it slip?... started calling me... Yeah.
• 2:07
  Was that, like, a childhood- It was. It was. And there was, uh, back in the '90s when I was growing up, uh, in former Yugoslavia, there was a, like a, uh...
• 2:18
  I don't know what genre of music he belonged to, but, uh, his name, of course, uh, was also Igor. But, um, he went by Dr. Iggy, and everybody loved Dr. Iggy and his music. Dr. Iggy. So, [laughs] yeah.
• 2:30
  I mean, I feel like you should bring Dr. Iggy back. Um, so I thought like, "Hey, this is a solid," you know, uh- I could roll with that. Yeah, I could roll with this too. But- What... So do, do you know where I grew up?
• 2:40
  I talk about it a lot, but. Philly area? Yeah, yeah. I mean- What do you think they call me in Philly? Uh, Paul? [laughs] They, they... That, but mostly- Paulie. There you go. Yeah. [laughs] That's- Yeah.
• 2:52
  Uh, no one calls me Paulie, though. Nathan doesn't. I keep trying to get him to call me Paulie. I could, I could try. I could. Nah. We'll, we'll let- Paulie... we'll let it go. It's funny, my family calls me that.
• 3:02
  Who else calls me that? My aunts, all my Italian aunts. Nice. Paulie. It's more like Pally. Yeah. Yeah. They get Rocky and Paulie. Yeah. Yeah. [laughs] Yeah. We were gonna, um...
• 3:12
  I was gonna be, like, a third-generation Junior, but my mom wouldn't have it. She's like, "No, you're not gonna be. My dad's name is Jim. You're not gonna be Baby Jim." Baby Jim.
• 3:21
  [laughs] I told Miles, my son, that we, we considered, like, "Do we want a Junior?" And we decided against it. Yeah, I don't think I can see you as a Jim now that I know you as a Paul, right? No. No, I'm a Paulie.
• 3:30
  Yeah, yeah. Yeah, the Paulie. You gotta, you gotta do the hand. Make Cirillo proud, you know. Yeah. [laughs] Um, you and I have talked before and been friends for a while. Yeah.
• 3:38
  And there's, there's something that's so cool about your story, journey in automotive, and I think something really unique that you have an understanding from, uh, I think all three sides that you need in the industry, the OEM side, the dealer side- Yeah...
• 3:52
  and now the industry partner side as well, right? Like, you've worked that whole triangle. Yeah.
• 3:55
  And so you, you see things from a unique perspective that, um, I think the lack of the perspectives are often one of the things that trip us up, trip dealers up, trip OEMs up, 'cause everyone's, all, and industry partners.
• 4:09
  Everyone says, "Well, you just have to do this," I think is a very common... "They just need to understand"- Yeah... is something that you hear a lot.
• 4:16
  And I think you have an interesting perspective where you kinda do understand from the sides. So, um, I think it'd be cool to just talk about when you got into the industry. I know you've been a car- Yeah.
• 4:27
  You've, you've been into cars. Like, you're one of the people- [laughs]... who's actually a car guy. Yes. Right? There's so- there's a lot of us who are like, "Ah, I'm not that into...
• 4:35
  I love cars, but I don't love cars, love cars outside of this industry." But you love cars. I, I do. I do.
• 4:42
  And, uh, but I will say, just the head of everything is that, um, a- as I'm being held accountable to this at home by my older daughter, I love people more than I love cars. [laughs] And that is...
• 4:52
  [laughs] We'll go with a tagline and stick with it. But yeah. She pulls that out when it's, when it's right, doesn't she? Absolutely, yeah.
• 4:58
  [laughs] And, and kids have a, a tendency to remind you sometimes to stay in the right lane, which is really cool. But, um- Especially if you've corrected their lane. Absolutely. Absolutely.
• 5:07
  [laughs] So, so from, uh, in that regard, you know, yeah, I've always been a car guy.
• 5:12
  Uh, you know, being born in former Yugoslavia, I was born three hours away from what used to be, uh, an assembly plant for Volkswagen's, uh, Golf family, and it was right in Sarajevo, uh, today's Bosnia and Herzegovina.
• 5:25
  So, uh, three hours away from there was this crazy little child, me, born in 1983.
• 5:32
  Uh, and, you know, I fell in love with, uh, with the whole car industry probably at the very young age because I fell in love with a product called GTI Golf from Volkswagen. [laughs] It's a legendary one. Yeah, it is.
• 5:45
  I think a lot of, a lot of people fell in love with that, and still do. Absolutely. So, so then to, to fast-forward, you know, when we came to the States in '97, my family came as refugees.
• 5:57
  And, uh, you know, we would land in, uh, New Holland, Pennsylvania, of all places, which is not that far from Philly. No. Uh, but it, it is nothing like Philly either. [laughs] So... No, it isn't.
• 6:08
  I re- I mean, funny enough, I remember 1997 very clearly. It's the year I graduated high school. Yeah. So it's, like, almost, like, giving me an interesting frame of reference- Yeah...
• 6:17
  is that, because, uh, you know, you're a few years younger than me, but not that much younger. No, no. So- And so when you moved, did you speak English when you moved here? Uh, no. No.
• 6:24
  So my family, we-We were, you know, fresh off the boat, if you will Yeah, in every way In every way you can imagine, and- Well, as a refugee, often- Yeah... right, there, there's, there's, like, a situation of duress.
• 6:36
  It's not like you were planning a- No, no, no... planning to relocate for- Absolutely... five years, and it finally came together. Absolutely.
• 6:42
  For, for those that are not familiar with what happened in the '90s in former Yugoslavia, Yugoslavia was one pretty sizeable country- Mm-hmm... powerful country in Europe.
• 6:52
  And, uh, after the fall of communism and socialism, uh, came the ugly, uh, side of nationalism. Mm. And so as a result of that, Yugoslavia had a, a very bloody civil war.
• 7:07
  And, you know, my parents, for example, would be considered a mixed marriage at that time- Mm... uh, only because my mom, uh, is Serbian and my dad was Croatian, which in a sense, to me, they are the same people. Right.
• 7:22
  You know, they may be... o- one might be, uh, Christian Catholics and the other one is Cr- Orthodox Christians, but at the end of the day, it was, uh, same people. So many similarities- Yeah... and you're like, "Yeah."
• 7:31
  Uh, absolutely. But in the war, it didn't matter. Mm. Everybody was against each other, so to speak. Mm. So my parents, uh, led with love and peace, and they wanted to provide a better life for me and my younger brother.
• 7:47
  So when there was a program to actually come to the States, we came to the States in '97 through this immigration program. Uh, I did live through that war. Mm.
• 7:55
  Uh, it was two years after the war ended that we would land here, but finally, when we did, it was, it was amazing. Um, first came my mom, my brother, and I.
• 8:04
  She had 20, couple dollars in her pocket, and we had one suitcase of clothes. Oh, my goodness. And then here you are in New Holland, Pennsylvania. And New Holland isn't, like, a bustling metropolis. [laughs] No, no.
• 8:17
  [laughs] That was the shocking part, right? Because through the process when we were, uh, applying for, for, uh, the status of refugees to come to the States, uh, we had options. They said, "Where do you wanna be?"
• 8:29
  You know, "You wanna be in Chicago? Do you wanna be in New York?" You had St. Pete's in Florida, which now would make sense this time of the year, but- [laughs]
• 8:38
  And, you know, a- and I knew that my dad's cousin lived here- Mm-hmm... uh, i- in New Holland, Pennsylvania. So I remember that from, uh, one of the either Christmas cards or whatever we received. How about that?
• 8:52
  And so I, I said it at the embassy. I said, "How about New Holland?" And they're like- [laughs]... "Uh, we can look into that. What's your backup?" [laughs] Uh, Chicago, I don't know. Just outside New Holland? Yeah.
• 9:03
  [laughs] You know, Bulls were very popular- Right... so I was like, "Chicago." [laughs] Yeah, right. Michael Jordan, you know, the whole thing. Yeah, let's go see him.
• 9:10
  And, um, and lo and behold, we get accepted and, uh, you know, go through the process of, of- Mm-hmm... uh, all the blood work, X-rays, everything- Mm-hmm... you have to do before you come to the States. Mm-hmm.
• 9:20
  And, uh, the nice part was they're like, "Hey, we found New Holland. It's in Pennsylvania, and you're going there." So, um- What time of year was it? It was in May. Oh, beautiful time of the year.
• 9:30
  Yeah, it was a beautiful time of the year, but I had along the way, ex- we, we flew from Belgrade in Serbia to Amsterdam, then to JFK, then to DC, then to finally Harrisburg, PA. Okay. And I was knocked out tired.
• 9:44
  Oh my gosh, yeah. So I didn't see anything from the airport to the time we actually, uh, landed at the house.
• 9:50
  I fell asleep, so the very next morning, naturally, I wanna see the skyscrapers, all the things from the movies. [laughs] I walk outside, and I'm like... I look around, and there's this horse and buggy.
• 10:01
  [laughs] It's an Amish person. Yeah. Yeah. So- Did you even know what an Amish per- No... like, Amish... [laughs] No. [laughs] But, but my mom did, 'cause- That's perfect. Yeah, I asked my mom- Said, "New Holland." Yeah.
• 10:14
  [laughs] And so, so I asked my mom. I said, "Hey, you know, uh, this is nothing like the America I saw in the movies." And my mom's response, "You're not old enough, but if you would've seen The Witness, you would've...
• 10:23
  it would've made sense." [laughs] Harrison Ford. Yes. That's old school. Yeah. So, so tell me, when, when did the... You had this, uh, a love for cars that started. You had this- Yeah...
• 10:35
  incredible, um, incredible and just, um, I don't know, kind of an overwhelming experience of living through a war, refugee to US, landing in New H- New Holland- Yeah...
• 10:47
  to, to wake up and see a buggy, a rider in a buggy- [laughs]... crossing by. When did you... How did you make your way back into the car business or into the car business- Yeah, so-... for starters? Uh,
• 10:58
  I was very excited. The age of, of driving in the States was 16 opposed to 18, and it was- Oh my gosh... very easy to get a license. Now, my parents didn't let me get my first car until I was 18, uh, for
• 11:11
  many reasons- [laughs]... probably because we were not accustomed to, you know, driving and owning a car so young. Yeah, felt so young. But- Yeah...
• 11:19
  that being said, when it was time, it was, I turned, uh, 18 right before my senior, senior year. Yeah, you were only a couple years away, right, from when- Yeah... you came here. Yeah, I was 14 when we came here. Right.
• 11:28
  And- So you were like, in two years- Yeah, yeah... gonna learn some English, get a license. Yeah, this is gonna be the best. Life is gonna be good.
• 11:33
  And, and, you know, I was roaming the, the dealerships of, of New Holland, which there is plenty, right? Mm-hmm.
• 11:38
  You know, New Holland Auto Group was big, and so I would see all these new cars, love them, but then my heart was where it always has been. So there was this little place on, uh, Route 322- Mm-hmm...
• 11:50
  uh, called Huber Auto Center, and they specialized in VW and Audis. So I was always peeking in there, looking what they had, and, uh, that summer, my first car would've been purchased right there.
• 12:05
  And that summer, I would look for a loophole to come back and wash my car for free, so I offered, you know, services like, "Hey, are you hiring? I could wash cars. I could do this."
• 12:17
  And, uh, the owner at the time, his name, uh, is Elvin, who has taught me a great deal about used cars, about doing it the right way. Mm. Um, he said, you know, "Hey, you, you turned 18, right?" I said, "Yeah."
• 12:29
  He goes, "You wanna sell cars?"Yeah. Wow. Why not? So my, my entire senior year of high school, I did that part-time.
• 12:38
  Through college, all four years, I was working there, uh, handling the marketing, really kind of bringing that dealership into what, uh, where the industry was going, right?
• 12:48
  Into the- Ah, 'cause they're very established- Yeah... old school. Probably a big local- Yes... customer base- Yes... because they were there for a while. But then we took it to the next level.
• 12:56
  We were, uh, specializing in, in getting the very rare Passat wagon TDIs and all these other products. Which is right in your lane, 'cause you're- Yeah... you love the, the rare stuff. Absolutely.
• 13:08
  So the cool part about that was, you know, internet. Hm. [laughs] It's really taking off, right? You know, we, we're not waiting around to see if this is gonna work out. It really is working. So that's when
• 13:20
  we went from having those, uh, you know, place mats on, on the diners and, and, uh, cars by dealers magazines to what is Autotrader? What is- Yeah... cars.com? And, and everything started to really take shape.
• 13:35
  So I, I took that dealership kind of on my own. Super organically.
• 13:41
  Yeah, and just learned as I went with the changes, which was really cool, and that would last all through college and then a couple of years, uh, after college too, before I moved into the franchise world. So, so
• 13:55
  tell me how you ended up in the OEM world. So the OEM world, yeah. Uh, that was, that was, that was a really, uh, interesting way. I've always said I'm gonna end up working at Volkswagen, so I did.
• 14:08
  [laughs] Uh, but the, the way it started is, uh, first transitioning from Hubers to York Volkswagen in, in York, PA. Mm-hmm. It was already a well-established Volkswagen dealership, but where my name probably got to
• 14:24
  become known within the VW of America community was we were also the number one CPO dealer in the Northeast region. Got it. And that really fueled me.
• 14:35
  I wanted to be the, the CPO man [laughs] so, uh, so year after year, we would continue to, to win and, and go on these fancy trips, and that's- You're on the lists that's- Yeah, you're-... distributed to everybody.
• 14:47
  Absolutely, yeah. Yeah. And, and so the nearest competitor in volume for us was downtown LA, and- Oh my gosh. Yeah. It's the other side of the country. S- yeah.
• 14:55
  And so but the trick was, you know, if you s- And a couple more people there, too. Yeah, I would say so.
• 15:00
  [laughs] So, but, but at that time, it was kind of cool to see that one store out of York, PA, can really put out that kind of, uh, volume, right? Mm-hmm.
• 15:09
  And part of that was, you know, if you stock 100-plus units, you're going to naturally sell more cars anyways.
• 15:16
  But, uh, when you become really good at it and focus on that one specific, uh, you know, genre, if you will, of VW CPO, you become kind of a master at, at- Yeah... at the trade. And so we had a really good team.
• 15:28
  We had an excellent service shop, and everybody knew what their job was in all of this and their role, and, and it made us very successful. So
• 15:36
  started meeting the executives that were on these rewards trips and, you know, I would always be the guy that I am today, meeting people- [laughs]... shaking hands.
• 15:45
  And, um, the question that I posed to, to a gentleman back then is, "Hey, um, how does one come to work for Volkswagen of America?" Yeah, asking for a friend. Yeah. [laughs] Asking for a friend.
• 15:58
  Only to l- lead us into the future where I was, you know, running the CPO for the United States in my most recent role at VW, [laughs] so. Okay. All right.
• 16:08
  So you asked the questions, and you started making the friends, and you're obviously very passionate about the product to begin with. Yep. Very successful on the dealership side, and then you become the head of...
• 16:19
  What was the official title? It, it was the, the national operations and strategy manager for the used car operations and CPO. And that's what you were doing when we met- Yes... when our paths crossed. Yes.
• 16:30
  Um, what, what does that position... Like, what did that look like on a day-to-day for you? Were you traveling all over the country?
• 16:35
  I'm sure you were dealing with a lot of, working with a lot of dealers across the country.
• 16:38
  Well, w- we did have a f- uh, field team, and, um, the team that was out in the field was responsible for the day-to-day operations. Mm-hmm.
• 16:46
  So majority of, of what I was dealing with is, uh, working on the following month's programs, working on the following month's plans of, of where we're going to be at, what are we going to have to subvent in terms of rates, what goals do we need to hit- Mm-hmm...
• 17:03
  uh, looking at inventories, what's, what's hot, what's not- Mm-hmm...
• 17:07
  are we stocking too high on Tiguan's versus this and that, and then how do you bring a strategy forth that's going to influence the dealerships to, A, sell more of that vehicle and, and get, you know, unload that particular, say, model line- Mm-hmm...
• 17:23
  uh, because you have to pay attention to all the other numbers. Like, "Hey, what are the maturities looking like?" Mm-hmm. "Are we going to have a big influx of Tiguan's coming back at this particular time?"
• 17:34
  Because say we had a signed and drive event in the middle- Mm...
• 17:38
  of winter or weather, whatever time that was, uh, then you had to really kind of put all those dots together to make sure that everything is moving, that you're not creating bottlenecks.
• 17:49
  Um, and then a lot of it is red tape, right? OEMs move a lot slower than dealerships or automotive groups. Mm-hmm. But there's a reason for that.
• 17:59
  It's, you know, it's a, it's a huge company with a lot of responsibility, and so you have to make sure that you are addressing all the needs that are needed at the time, but you also have to stick with, you know, compliance and everything else that comes with it.
• 18:14
  So oftentimes that, that comes with, uh, a lot of time spent and burnt before, uh, something comes actually, um, to fruition and you can say, "Hey, here it is. We're here."
• 18:26
  What was the most common complaint you would hear back when you were in that position from the dealers? What, what is the thing that they said the most? Like, "Can't you understand this about what we're challenging?"
• 18:38
  Like, where was the biggest disconnect?I, I think, uh, most of the time where we have looked at, uh, areas of improvement based on the feedback from the dealers is, uh, sometimes it's just the efficiency of what we're doing and, and why we're bringing something to the market and to the table, right?
• 18:57
  The other times is, uh, residual values, right? Dictate what the vehicle is going to be worth three years from the date that it was leased. Mm-hmm.
• 19:09
  And then if you get that number wrong, which often OEMs are within the ballpark, but it can really- Mm-hmm...
• 19:15
  it can really fluctuate with the market conditions, and then nobody predicted COVID, nobody predicted all of those things that we had.
• 19:23
  For, for those reasons, one of the number one complaints was that, you know, hey, in some instances the cars are too expensive- Mm... when they're coming off.
• 19:30
  In other instances, "Hey, you're requiring too much for this to be certified, and..." But, you know, it's, it's, you have to kind of balance that out and then just carry on, uh, you know, push, push what's
• 19:45
  the best for the, the greater, greater good of, of the whole network. Isolations of pockets with issues have always been the case no matter where you go- Mm-hmm... but you couldn't solve every challenge on that level.
• 19:58
  How do you think that gap can be closed? Because oftentimes there's a lot of animosity between dealers and OEMs. I see, I see a lot of... I see a pretty broad variety of attitudes between- Yeah...
• 20:12
  OEMs and dealers, but I do, do believe that there is still a gap, and it's pr- always going to be there, right? Yeah.
• 20:21
  Because two different businesses, especially when you have a very entrepreneurial group like auto dealers. Like, just speaking personally, it's like- Yeah... I always wanna do it right now, right?
• 20:29
  And I wanna do it twice as fast as the next guy, right? So there's this pressure to have to move. What do you think can close the gap, like, practically speaking? Yeah. I... You know, it's, uh,
• 20:42
  it's a large, large ocean that we're all playing in, right? Mm-hmm. In the automotive space.
• 20:48
  And I always say, uh, oftentimes you hear people say, "We're all in the same boat," and that's, that's where I say that that, that is not true. Yeah. Uh- Yeah, maybe we're in the same fleet. We might be in the... Yes.
• 20:59
  Right? And we might be in the same, you know, uh, body of water, but we are all in, in mostly different boats. And one of the ways I think that we could see OEMs get better at,
• 21:12
  uh, what we have generally heard from dealers in terms of complaints is, is not only to have a better listening ear, but also to ask the right questions. Mm-hmm.
• 21:21
  You know, it's one thing to listen, but it's another thing to ask follow-up questions to make, make them count. Um, I've had the pleasure of, of being on both sides of the coin- Mm... being on the retail side,
• 21:35
  in the store, in the trenches, and as well as as high as being on the national level of an OEM, and if, if I had one,
• 21:45
  one minor or maybe even some major recommendation, is, it would be to, to look at the real time problems and find ways in OEM space to look for the real time solutions that can be done fairly immediately. Mm-hmm.
• 22:01
  Oftentimes what I do see is that a problem becomes an issue today. And yes, perhaps the dealer body may be very vocal about it for the next three weeks, but they're not just sitting and being vocal about it.
• 22:14
  I think you and I both can agree that, uh, dealers generally are very adaptable and they'll figure it out. Mm-hmm.
• 22:21
  And so what happens is that message may get across to an OEM who's trying to, uh, implement a program or, or a patch, if you will, a- and sometimes it comes too late- Mm-hmm...
• 22:36
  because of the, the red tape and the processes that don't allow it to get to the market as quickly as it should. Mm-hmm. And if we could close that gap, particularly where if we have an issue but we can deliver
• 22:49
  the punch, if you will, immediately- Yeah... then I think we could have a much better dialogue and better understanding and communication between the dealer body and the OEMs- Mm... addressing the problem at hand.
• 23:02
  You know, it's got me thinking about just human nature when it comes to waiting. I spend a lot of time in restaurants and in hospitality, and I think about my perspective when I go to a restaurant.
• 23:13
  You sit down, you look at the menu, you order. Depending, everyone at the table's ordering different things. Yeah. Right?
• 23:19
  Depending on the restaurant, you could be ordering something that takes 22 minutes to prepare, something that takes, you know, 14 minutes to prepare, and maybe there's one item that was gonna take 25 minutes.
• 23:30
  And you're trying to balance all of these dynamics with process. Yeah. And one of the things that a restaurant does is they make... A good restaurant, is they make sure that your meal is being paced.
• 23:41
  That here's some bread, here's drinks, here's this, here's that. And I almost wonder, like, in this situation where the dealer has this need, it's like a desire for quick response- Yeah...
• 23:52
  but oftentimes it's a need, right?
• 23:54
  Because you, a dealer has people coming in the front door every day asking about this or needing this or desiring this, or there's an accounting issue, or there's an inventory issue, and the dealer's dealing with every single day.
• 24:07
  Not like an OEM does where it's like, "Okay, it has to be dealt with," but the dealer, like somebody's [knocking] Yeah, yeah... standing there.
• 24:14
  And I wonder if there's, there's an, an, a world where the pu- you said delivering the punch faster. If there's like, "Okay, here's the punch we need to deliver," but what is, what is some quick relief?
• 24:27
  Something, anything that you can start delivering shorter wins in a smaller window to... Because when that happens, right, like, what happens when the breadsticks come down? Everybody gets a little less angry.
• 24:37
  [laughs] Yes. Right? [laughs] The bre- the good old breadsticks. Yes. Breadsticks. You want some breadsticks? Maybe that's the answer, breadsticks. Yeah, yeah.
• 24:43
  No, but, but I, my mind's going there, and I don't know of anythingYou know, if it's a response team, if it's a communication method.
• 24:50
  But I'm just thinking about, like, what can ma- Because there's nothing, there's nothing worse than when there is a pressing situation. It just, it doesn't get better in the car business. Bad deals get worse, right? Yep.
• 25:00
  Yep. Time, time is gonna make it worse. Absolutely.
• 25:04
  You know, from that perspective, I think I'm not sure that we have the breadsticks for the situation, you know, to address something to, to fill in the void for time being.
• 25:14
  In the dealership, uh, environment, problems are real. If the parts are on backorder, they're on backorder. Mm-hmm. There's no breadstick solution- Right, right... for the part- Yeah...
• 25:21
  that's on backorder, and the vehicles must sit or- Yeah... whatever the case may be.
• 25:26
  But I think in that, in, in those instances, it's how you handle those situations and how you take care of the customer that ultimately wins. Mm-hmm.
• 25:34
  Uh, which I think OEMs need to have that flexibility, uh, to allow the dealerships a little more autonomy over how they take care of those customers. Sometimes it might be a
• 25:47
  longer, uh, term in a loaner or whatever the case may be. Mm-hmm. You can deliver a little, bridge a little bit of that gap.
• 25:54
  But when we're talking about, say, the, the sales side of the things, one of the things I never, I was never a fan of, Paul, is, um, when the OEMs drop incentives mid-month because something's not going well. Ah.
• 26:07
  And that's, that could be the breadsticks maybe that you're looking for, but, uh, I was never a big fan of that. Mm-hmm. And the reason being is you have all this marketing. Absolutely. Everybody's planning- Every-...
• 26:16
  around one output. You're telling customers something. Absolutely. "This is the best deal we have this month." And then, boom. The 16th hits, and they're like, oh. Yes. And you're halfway through deals.
• 26:25
  People have already purchased. And, and the KPI behind the screen at the OEMs is, "We need to move a specific car line and hit the number." Mm-hmm.
• 26:34
  Which I respect and, and value that, but I would much rather see a better program the following month rather than inject that, uh, into a middle of the month enhancement because, to your point, what if, what if I buy the car this week and you get a better deal next week?
• 26:52
  I might not be happy anymore. It leaves a little bit of a sour taste in my mouth, but- Well, it creates distrust is what it does. Yeah. Because the one who's gonna bear the brunt of that is the dealer.
• 27:01
  The dealer is gonna be the one the customer said that like, "They lied to me," or, "They changed the deal." Right? No one looks at the OEM and says- Right, and- Right.
• 27:10
  They're like, "No, that dealer-" Understands how their business works. Yeah. Yes. "You can't trust any of them," right? And that's what happens.
• 27:15
  You know, it's a tough environment to be in, and I realized this when I started working with some more publicly traded groups. Yeah. Um, and publicly traded companies in general.
• 27:23
  Um, it's easy to say, like, "Oh, they're the big guys. They're out of touch." Actually, they're dealing with, um,
• 27:31
  they're dealing with sentiment, like investor sentiment, and all these pressures that I never understood before, where whenever you try to engage in a long-term strategy, um, you'll get 30 days latitude.
• 27:42
  You might get 60 days latitude, but you better see something happen in 90 days 'cause the next time that earnings report comes out, you're gonna have, um, a whole, a whole army of people- Yeah... banging down your door.
• 27:53
  And so, like, that is a complexity that I think a lot of people don't understand in trying to- Yeah... trying to... And that's what you're saying, like why are there incentives popping up mid-month?
• 28:01
  Well, there's some significant pressure that has caused that. Maybe it's the end of a quarter. Maybe it's the end of a bad month. Yeah.
• 28:09
  Uh, and in some instances, you know, without going into naming the OEMs- Of course... we're speaking generally obviously, but, um, in some instances, you know, uh, I think production planning can, can im- Mm...
• 28:21
  influence that in a very bad way sometimes. Mm-hmm. And so I've seen specific OEMs particularly who overbuild. Mm-hmm. And, you know, you can only keep everything at bay at so long- Mm...
• 28:33
  before you have to wholesale it to the dealers- ships and then move, move the metal. Yeah. Uh, ports get full. Mm-hmm.
• 28:41
  Uh, plant, you know, parkings [ 2 laughs] at the plant get full, and the o- the only way to keep the plant going is to continue to produce that output. Mm-hmm.
• 28:50
  Well, that, that inventory has to go somewhere, and obviously, the ultimate challenge is to get it to the dealership and then get it retailed.
• 28:59
  That creates that anxiety and that, uh, probably enhancement in some instances because you, you... Everything is still coming. Yes. Moving. Absolutely. It's a, it's a real chain.
• 29:10
  There is no po- Yeah, there's no pause- Chain effect... button on that, so. Let me ask you this. What do you think about Rivian? I mean, not Rivian. Scout. I'm sorry. Scout. Uh, I- What are your thought?
• 29:19
  'Cause obviously a lot of, a lot of- Yeah... a lot of deep roots in Volkswagen. Yes. Um, you're a fan of au- cars in general. Of course. So, uh, what are your thoughts? I... So I, I love everything that they're doing.
• 29:30
  I do. And, uh- Explain that. What do you mean everything? So from, uh, from the electrification standpoint, I understand that, you know, we are in the, in inflection point where, uh, the EVs are
• 29:43
  not going to be a thing that fades away. Yeah. Yeah. They're here to stay. They're here to stay. Yeah. And so however we wanna look at it, we could have maybe put few more horses ahead of the carts- Mm-hmm...
• 29:55
  in, in our North American market- I mean-... opposed to loading up some carts and then pushing [laughs] them uphill. That would've worked for the Amish. There you go. [laughs] So- The Amish got it right. Yeah.
• 30:04
  [laughs] So but, but in, in this instance, you know, what I do like about Scout is the fact that, um, they really have looked at the, the customer sentiment about what this vehicle should look like and be like.
• 30:18
  They're talking about a small engine power generating type of thing with long, extremely long ranges on these trucks and SUVs. Mm-hmm. And that gets me excited- Mm...
• 30:27
  that part of it, because I think it's going to be a phenomenal, uh, product, but I think you and I both can agree that everybody at some point in time has had a little bit of anxiety about, "What about me filling this thing up, you know, juicing it up- For sure...
• 30:41
  when I'm going to Florida- Yeah... from up here?" Yeah. Oh, yeah. You, you gotta have it planned out. Now, Tesla has developed a great network, but outside of that, I think it's been a little bit of a struggle bus.
• 30:52
  Mm-hmm. And so I, I feel that- How about the sales model?... sales will come in and, you know- How about the model?The agency model? Yeah.
• 30:57
  I mean, because, you know, VW dealers for years, and you, you were one for a long time, right? Or at least- Yeah... CPO. Um, and I know a lot of those dealers begging for a pickup, right?
• 31:07
  Like, begging for some kind of- Yeah... utility vehicle. And to, to see, you know, what, what's your perspective on it? Like, you just see, hear a lot of arguments and- Ugh. It's, it's tough.
• 31:17
  Uh, if I were a dealer, I would s- I'm not sure what I would even say because to make a such investment to go into a non, a, not necessarily uncharted territory- Yeah...
• 31:28
  but a territory that hasn't been welcomed in abundance- Mm-hmm... fair to say. [laughs] Mm-hmm. [laughs] Uh, you know, w- will I be willing to spend $5 to $10 million on facilities, everything that's necessary?
• 31:42
  M- m- the answer may be yes, may be no. I don't know. Right. So you're saying- But- I mean, 'cause some dealers are like, "Well, let us sell them."
• 31:48
  And no OEM lets you just sell a vehicle out of another OEM showroom, right? So VW's like- Yeah... "Well, this is not a Volkswagen," although- Yeah, it's a separate entity for sure...
• 31:58
  they share resources, share, shared resources, some shared leadership, obviously, or at least that's migrated over. It's not shared at the time, but- Yeah, not, not so much.
• 32:05
  I think it's completely separate entity, really It, it is. But, like, in the beginning, for them to say, like, "Scott Keogh is, like, totally detached from the VW brand," [laughs] you know- Well, he was He was. Yeah.
• 32:16
  I know, but I- [laughs] You know what I'm saying. Like, if I'm a dealer- So he worked on the same floor with him, and he was- Yeah... it disappeared. And, you know. [laughs] He was gone. He went Scout, so.
• 32:23
  [laughs] Yeah, no, but I'm saying, like, cultivated. If I'm a dealer, I'm thinking, like, "Hold on a minute." Yeah. "I'm selling the vehicles.
• 32:28
  You're building the, your organization off of the sales that I generate, and I've been asking you for this. And now-" Yeah... "and now you went and made it." Yeah.
• 32:36
  "And you took all of my input and all of our, your, your learnings, and you invest in this company that I have no, no, no hold in." I'm, I'm hearing, like, some of the dealers are, "Well, let us sell the Rivians."
• 32:48
  You're, and you're, you're coming back. You're like, "Are you really gonna invest $5 to $10 million in a facility for a product that is unproven and, and with a drivetrain- Yeah...
• 32:59
  now especially, that is showing significant waning in demand because the incentives has yet to regulate?" So, like, I haven't heard it positioned like that because I'm, I'm sure there's some dealers that would.
• 33:10
  But I think the majority- I'm sure there is some... of dealers would not. I would agree with that. Yeah.
• 33:14
  And so, a- and, and this is probably where my experiences of being, you know, in such a, in the OEM space, in the world of vendors, suppliers, partners, whatever you wanna call them- Mm-hmm...
• 33:25
  in the world of the dealers, understanding really everybody's processes, you know, understanding- Mm-hmm... uh, how that part of it works and what the expectations are perhaps is what formulated my answer. Yeah.
• 33:39
  Of course.
• 33:39
  Because, you know- Well, that's why I asked, because you have a, you have a, like I said back to the beginning, like, you have a perspective on the industry that is, I think, far more well-rounded than most people have the opportunity to have because you've been able to see it from the different perspectives.
• 33:52
  Yeah. I, I, I would agree, and I think, I think it is a big ask- Mm-hmm... for any dealer or e- even dealership group to, to make that type of investment without proven...
• 34:03
  We don't have necessary data numbers to back that up and say, "Hey, this is a guaranteed successful thing." Yeah, absolutely. Um- Speculative, for sure. Yeah. Meanwhile, the, the, the single giant EV
• 34:17
  producer, uh, Tesla- Mm-hmm... has never been in that realm. That's right. And so they're, time in, time in and time out, they're proving that this is working out just fine for them. Mm-hmm.
• 34:30
  Right or wrong or indifferent, I think the position is maybe it'll be necessary and needed down the road. Maybe it won't. And they, uh, I think- But-...
• 34:39
  you know, f- thinking about it, like, putting my, putting my Rivian strategy, I mean, not Rivian, Scout strategy on, I keep saying Rivian because- [laughs]...
• 34:46
  we, we joke that it's a, it's a Rivian, [laughs] it's basically a, a Rivian, [laughs] like, the, the way it looks. It's a, it's, like, you know. It's a, it's an inside thing, but either way. [laughs] Um, so
• 34:57
  putting my Scout strategy on, like, you can always pivot to dealer network a lot easier than you can pivot- Out of a network... out of a dealer network. Yeah. Like, once you go that way- Yeah...
• 35:06
  you can't change and, you know, I wouldn't be surprised if it goes that way, if Rivian finds it, if Scout finds it harder to penetrate the market once they start releasing and shipping product. Perhaps, yeah.
• 35:19
  And, you know, I think, I think you make a great point because, uh, if there was one example of where we saw agency model coming in, I think BMW, uh, either tried it or announced it or whatever for Europe. Mm.
• 35:33
  You know, and- Oh, right... I'm not quite sure how that really, uh, pans out in the end. But in time that we spend looking and- Ugh...
• 35:41
  studying what's happening around the world and what's happening here, we could potentially come to a conclusion that the network is necessary.
• 35:49
  Uh, my, my question is always, you know, from the service perspective, where am I going to be able to service this vehicle? Yeah. And the greatest need right now is in the fixed operations, you know? Mm-hmm.
• 35:59
  The fis- fixed operations across the board in, in the automotive industry is struggling because, A, talent acquisition is, is nearly impossible. Mm-hmm.
• 36:09
  And B, uh, you know, it's, it's what really i- is the main bloodline of every dealership. You know, we always talk about, uh, health of the dealership by, um, you know, what is, what is your, uh, um,
• 36:27
  lost the, the train of thought, uh- Oh. Fixed ops? Uh- Fixed, the, the absorption rate. Absorption rate, yeah. The absorption rate, right?
• 36:33
  And so, uh, unless you're north of 75 or inching to 100%, you know, it could be a struggle bus in other areas- Yeah...
• 36:42
  because the best dealerships that have that absorpt- absorption rate figured out and are doing well in that regard can survive tougher months- For sure... can survive- Keeps feeding the machine. Absolutely.
• 36:53
  You know, uh, uh, Slate just announced this, uh, this past week that, um-They're gonna be partnering with a retail network. Um, what was it? Was it RepairPal? Mm-hmm.
• 37:05
  Yeah, they're gonna be partnering with, like, a third-party repair network to fix the vehicles, and there's so many questions there. Um, you know, and so I don't know, you know, what Scout is thinking.
• 37:16
  And, and I think all of these conversations that we're having, we've been around enough to realize... Remember when autonomy was gonna ruin the car business? Yeah.
• 37:23
  [laughs] With the, I mean, with-- And that was, like, dire straits, right? Like, no one's gonna drive cars anymore. Autonomy's gonna fix it all. And that was in the pretty recent, recent past. Yeah.
• 37:34
  I'm still waiting- That wasn't 20 years ago, right? It was- I'm still waiting for the flying cars. Today on 81 reminded me I want one. [laughs] You want a flying car really bad. Well, well, I don't know.
• 37:42
  I, I kinda wanna call you Dr. Iggy now. Yeah. [laughs] Oh, no. [laughs] You- We're, we're gonna leave it to that, [laughs] the original one back in, uh, Europe.
• 37:50
  Well, it's been so great to catch up, and, and obviously thanks for sharing your insight. Thanks for making the trip out here to be in the studio.
• 37:55
  Think it makes a big difference, and really excited to see what your next steps are in your career. Yeah. I'm excited, too. We'll see. Kinda soon enough. [laughs] Appreciate it. Thank you for having me. My friend,
• 38:07
  thank you. Yep.
• 38:11
  [upbeat music] You know, one of the things that I love about Igor is that, first of all, he understands the things very clearly in executable concepts across whether you're talking about OEMs, 'cause he has relationships there, um, in the vendor space, he has experience there, and also in the dealer space, 'cause he has experience there.
• 38:28
  We didn't get to talk about this on camera, but one of the first conversations we had, um, was about this time when he was working in the, in, uh, in the dealer world, and a dealer put, uh, kind of, like, life-changing money in front of him to take over a store.
• 38:42
  And he knew what it would take, and he turned it down because his, his daughters were so young, and he knew what it meant for him. Mm. And he knew what the next steps of his career would be.
• 38:52
  And so he's always thinking about, like, "What exactly do, do I want? What do I need to do to make it happen?" And that concept continues throughout every, every bit of the industry in his mind. I, I don't know.
• 39:02
  Like, right now he's between things, and I don't know where he's gonna land, but wherever he does is gonna be certainly fortunate to have him. I mean, I'm always inspired by that level of, I, I, I wanna say sacrifice.
• 39:17
  That's not the right word, but it is kind of like a sacrifice for us, like, A-type, go-get-them personalities- Mm-hmm...
• 39:23
  where it's like, you know, you have to reconcile a decision, a very clear decision, like what you just shared he made, against then also seeing people who look like they're growing faster because they were- Mm...
• 39:36
  doing it a different way. Um, and, and, like, I, I don't know. I just have so much respect for people who are confident in the decision that they make to follow the path that they're on. Yeah. That's definitely him.
• 39:53
  He- That's, that is for sure him. Yeah, yeah. And, and [sighs] I'm so glad that you got to hang out with him, but I'm also sad all at the same time. I was gonna say, you're jealous. Glad isn't the word. I'm so jealous.
• 40:03
  You can say it. You should. Well, look- And you should be. You should be... if you're listening to this podcast, you should be jealous that you weren't in the room with Paul and Igor, too.
• 40:11
  Uh, but you can probably find him out on the circuit. He loves to attend, uh, shows. Make sure if you run into him, you stop. He'll slow down for you. It's gonna be at AsotuCon. Gotta come to AsotuCon.
• 40:20
  He'll, he'll be at AsotuCon. He'll slow down for you, we guarantee that. Uh, on behalf of Michael Cirillo, Paul Jay Daly, myself, Kyle Mounts here, we really thank you for hanging out on AutoCollabs.
• 40:30
  Like, subscribe, mash the buttons, do the thing. Yeah. Share the conversation so that more people can get on the More Than Cars movement. We'll see you next time.
• 40:38
  Sign up for our free and fun-to-read daily email for a free shot of relevant news in automotive, retail, media, and pop culture. You can get it now at asotu.com. That's A-S-O-T-U.com.
• 40:51
  If you love this podcast, please leave us a review and share it with a friend. Thanks again for listening. We'll see you next time.
• 41:00
  [upbeat music] Welcome to AutoCollabs. Welcome to AutoCollabs. [laughs] Are we recording yet? Are we rolling yet? Not yet.