Latest / CBT Live / Where Is AI Actually Paying Off for Dealers? RAV4 Crunch, Fed Hike Seen (10.21.26)

Transcript

Where Is AI Actually Paying Off for Dealers? RAV4 Crunch, Fed Hike Seen (10.21.26) · CBT Live

0:00
SPEAKER_02: Dealers are putting AI to work.
0:02
SPEAKER_04: What where are they seeing real savings?
0:04
SPEAKER_04: What is Lexus doing to prepare for 2027?
0:07
SPEAKER_04: All that more coming up right now on CBT Live.
0:19
SPEAKER_04: Hey everyone, I'm Jim Fitzpatrick.
0:21
SPEAKER_04: Welcome into another edition of CBT Live right here at CBT Automotive Network.
0:25
SPEAKER_04: Today's Wednesday, October 21st.
0:28
SPEAKER_04: Can't believe it's October 21st.
0:31
SPEAKER_04: As I mentioned, I'm Jim Fitzpatrick.
0:33
SPEAKER_02: And I'm Bridget Fitzpatrick.
0:34
SPEAKER_04: Joined by Bridget Fitzpatrick.
0:35
SPEAKER_04: That's right.
0:36
SPEAKER_02: Yes, thank you all for being here.
0:37
SPEAKER_02: We're really excited about today's show coming up on CBT Live.
0:41
SPEAKER_02: VIP Auto Group's Chief Marketing Officer, Ben Sworn, joins us to share how they have replaced outside software costs with custom-built tools.
0:50
SPEAKER_02: Plus, we'll have Dewan Ross, VP and General Manager of Lexus North America, to join us to talk about the direction Lexus is heading in 2027.
0:59
SPEAKER_02: So great show coming up, and we are really excited to talk to both of these gentlemen.
1:03
SPEAKER_04: Yeah, for sure.
1:04
SPEAKER_04: Yeah.
1:04
SPEAKER_04: It's um everybody's using AI.
1:06
SPEAKER_04: I want to hear from our guests as to what uh what they're what they're planning on, what they're doing.
1:13
SPEAKER_04: It's it seems as though these comp these dealerships now are bringing you know people in-house to design their AI needs rather rather than going to to vendors.
1:23
SPEAKER_02: Yeah, I want to ask Ben if he's got one on staff.
1:25
SPEAKER_02: But I love these conversations because they every time we have one, it seems to be evolved more differently each time because of how quickly AI is is changing this landscape.
1:36
SPEAKER_04: Yeah, no, no question.
1:37
SPEAKER_04: And uh also want to talk to him about I want to get his take on Polestar and Stellantis.
1:41
SPEAKER_04: Oh yeah, I think he's a Polestar dealer.
1:44
SPEAKER_02: Also he's from they're from Long Island.
1:47
SPEAKER_04: Long you mean Long Island.
1:48
SPEAKER_02: Who else is from Long Island?
1:49
SPEAKER_04: That's right.
1:51
SPEAKER_04: Yours.
1:52
SPEAKER_04: Who yourself?
1:52
SPEAKER_04: That's right.
1:53
SPEAKER_04: The best people come from Long Island.
1:54
SPEAKER_02: Right.
1:55
SPEAKER_02: I I've never met any of this.
1:57
SPEAKER_04: We're new in New Island.
1:58
SPEAKER_04: We were just in New York this past weekend.
1:59
SPEAKER_04: Yes.
2:00
SPEAKER_02: Love New York so we're with a lot of Long Islanders.
2:03
SPEAKER_04: Yes, we were.
2:04
SPEAKER_04: That's right.
2:05
SPEAKER_04: We probably came back with a Long Island accent.
2:07
SPEAKER_02: I know.
2:08
SPEAKER_02: You know, it's funny, I'm sure Ben's the same way, but whenever we talk to people and we hear the New York accent, I know obviously New York, but Jim can say to them, Oh, what part of Long Island are you from when he hears that accent, which is so funny because I'm like, how do you know they're specifically from Long Island?
2:22
SPEAKER_04: Sometimes I can break it down to the area on Long Island that you're from.
2:27
SPEAKER_04: That's right.
2:28
SPEAKER_02: Right.
2:28
SPEAKER_04: You're gonna see and see if Ben, if if Ben is from Long Island, you wouldn't sound like it.
2:33
SPEAKER_04: If he's a transplant, that's gonna come out too.
2:35
SPEAKER_04: So we'll see.
2:36
SPEAKER_04: You will know.
2:37
SPEAKER_04: We'll see.
2:37
SPEAKER_04: I will know.
2:38
SPEAKER_04: I will know Ben if he's standing by.
2:40
SPEAKER_04: So break this up on your Long Island Long Island.
2:43
SPEAKER_02: Right.
2:43
SPEAKER_02: So before we talk to Ben, I do have a few stories to get to.
2:46
SPEAKER_02: Yes.
2:46
SPEAKER_02: Um the first one I would like to start with is North American production of the RAV 4 is down 30% through September, while U.S.
2:54
SPEAKER_02: sales have dropped 29% this year.
2:56
SPEAKER_02: Toyota says that dealers have just four days worth of RAV4 inventory compared with an industry average of 51 days.
3:03
SPEAKER_02: Four days.
3:04
SPEAKER_04: Yeah.
3:04
SPEAKER_04: It's that that new RAV is supposed to be, you know, all that.
3:08
SPEAKER_04: I mean, it it's it's getting phenomenal reviews, consumers are loving it.
3:12
SPEAKER_04: Toyota obviously can't keep them in stock.
3:15
SPEAKER_02: But they love the outgoing as well.
3:17
SPEAKER_02: Production was extended on the outgoing RAV4, which actually delayed the transition to redesig the the redesigned 2026 model, which is so popular too.
3:26
SPEAKER_02: So now there is, you know, there's still long waits for this.
3:29
SPEAKER_02: And um Damon Rose, Toyota's North American sales chief, told the Wall Street Journal that demand for the outgoing model was so strong it almost defied logic, he said.
3:40
SPEAKER_02: I know, and he also acknowledged that production delays have left Toyota with some catching up to do.
3:45
SPEAKER_04: Yeah.
3:45
SPEAKER_04: So Toyota always has catching up to do.
3:47
SPEAKER_04: That's what makes Toyota so great.
3:49
SPEAKER_04: If you're a Toyota dealer, you have about a 12-day supply of vehicles, and uh that's you know, and then you you have got, you know, other uh manufacturers out there where they've got as much as a one-year supply of vehicles.
4:00
SPEAKER_04: Yeah.
4:01
SPEAKER_04: Um, who said Stellanus or Ram trucks or what have you, but we'll be talking to a dealer here shortly and get his take on that.
4:07
SPEAKER_04: But yeah, Toyota just does it right.
4:09
SPEAKER_04: And you know, it's funny because during COVID, as you and I would talk about this all the time, do you think that the in industry is going to learn from the lower day supply of vehicles?
4:19
SPEAKER_04: It brings more gross profit to the dealer.
4:22
SPEAKER_04: Uh, it also puts more of a value on that vehicle that a consumer buys rather than a race to the bottom and we're giving thousands of dollars away on new cars to try to sell them.
4:32
SPEAKER_04: You know, consumers don't like that either because they buy a car for 50 grand and they drive it off the shore and it's worth 35 or 40 grand because you can get a new one.
4:39
SPEAKER_04: And um, so Toyota has just gotten this thing right to keep it lean and mean.
4:43
SPEAKER_04: Also, a dealer doesn't have all that cost and floor plan, you know, to keep those new cars around.
4:48
SPEAKER_04: And uh, as you can tell, because I'm a Toyota guy, I'm uh I'm huge on Toyotas and what they do.
4:53
SPEAKER_02: A former Toyota.
4:55
SPEAKER_04: Yeah, I'm a former Toyota guy.
4:56
SPEAKER_04: So yeah, they just do it right.
4:59
SPEAKER_04: But but everybody in the industry knows that.
5:02
SPEAKER_04: The Toyota dealers know what I'm talking about.
5:05
SPEAKER_04: For those non-Toyota dealers, they want a Toyota dealership, that's why.
5:09
SPEAKER_04: Right.
5:09
SPEAKER_02: Uh okay, in other news.
5:11
SPEAKER_04: In other news.
5:11
SPEAKER_02: A new Reuters poll shows economists expect the Federal Reserve to raise interest rates again in December.
5:17
SPEAKER_02: We kind of talked about this before, but the interesting part is of the 100 economists that were surveyed, 94 expect the Fed to hold rates with their meeting that they're having next week.
5:28
SPEAKER_02: Just hold it, not rise.
5:30
SPEAKER_02: Right, not on the next week.
5:31
SPEAKER_02: But the one coming in December, all 100 expect an increase.
5:34
SPEAKER_02: So that's pretty strong.
5:35
SPEAKER_04: Okay.
5:35
SPEAKER_02: Um big shift from last month when less than half expected another rate hike this year.
5:40
SPEAKER_04: Okay, so we're getting a rate.
5:41
SPEAKER_04: It sounds like we're getting a rate hike.
5:43
SPEAKER_02: Okay, yeah.
5:44
SPEAKER_02: Every analyst, all 100 that they were that were polled, if they're all correct, then yes, we are.
5:48
SPEAKER_02: And uh looks like yeah, going into next year for sure at least.
5:52
SPEAKER_04: Which is very surprising to me because I thought that when he appointed who we're showing right now, this this new um Fed chief, I thought for sure that uh Trump would have had him swear that he's gonna lower the rates.
6:07
SPEAKER_04: But so far he's in office, he's got that position, and I I gotta hand it to him.
6:12
SPEAKER_04: He's saying not so fast.
6:14
SPEAKER_04: I mean, listen, I gotta hand it to him in the sense that he's independent, not gotta not hand it to him that he's raising rates.
6:19
SPEAKER_04: Right.
6:20
SPEAKER_04: Let me be clear on that.
6:20
SPEAKER_04: I don't like the idea of raising rates either.
6:23
SPEAKER_04: But uh I also don't like three and a half or four percent um inflation rate either.
6:28
SPEAKER_04: That we gotta we gotta do something to curb that.
6:30
SPEAKER_04: And that's why they raised the rate.
6:32
SPEAKER_02: So and I'm really I love this next story.
6:35
SPEAKER_02: Finally, a historic milestone for women in retail automotive.
6:38
SPEAKER_02: For only the second time in its history, the National Automobile Dealers Association has elected a woman to lead the organization.
6:44
SPEAKER_02: Sandy Fitzgerald, Angelo, vice president and dealer operator of Pohanka Automotive Group, has been elected NADA chairman for 2027.
6:52
SPEAKER_04: Yes.
6:53
SPEAKER_02: So that's exciting.
6:54
SPEAKER_02: She has been in the automotive industry forever, just starting at 15 years old, working as a dealership receptionist and switchboard operator.
7:01
SPEAKER_04: Yes.
7:02
SPEAKER_02: Yes.
7:02
SPEAKER_02: And she will be the second woman to serve as NADA chairman following Annette Sakura, who held the position in 2008, which was a long time ago, 18 years ago.
7:12
SPEAKER_04: That's right, there she is.
7:13
SPEAKER_02: Yeah.
7:13
SPEAKER_02: So uh she officially will begin her term uh in February at the NADA show.
7:18
SPEAKER_04: Yes.
7:18
SPEAKER_04: Yeah.
7:18
SPEAKER_02: So that's exciting.
7:20
SPEAKER_02: Yes.
7:20
SPEAKER_02: Yeah.
7:20
SPEAKER_04: You know, I I did an executive profile, uh, flew out to their dealership, Pohanka, and interviewed Mr.
7:26
SPEAKER_04: Pohanka, and who's running the company today.
7:28
SPEAKER_04: And he told me about her, uh, told me about Sandy and the fact that she held all these different positions in the dealership, and he moved her up and moved her up, and she's phenomenal.
7:36
SPEAKER_04: And here she is, chairman of NADA.
7:39
SPEAKER_04: I'm so excited about that.
7:40
SPEAKER_02: We will be having her on as well, I'm sure, here pretty soon.
7:43
SPEAKER_02: Um, we typically interview the um the incoming chairman at the NADA show, so we'll probably talk to her there as well.
7:49
SPEAKER_02: So I'm really excited about this one.
7:51
SPEAKER_04: That's right, that's right.
7:52
SPEAKER_04: We need more females in the industry for sure.
7:55
SPEAKER_02: We do.
7:55
SPEAKER_04: They only make up more than 50% of the consumers, and uh yeah, out there.
8:00
SPEAKER_04: I mean, it makes sense.
8:01
SPEAKER_04: And dealing and all female dealers have all got these great success stories.
8:06
SPEAKER_04: I mean, talk about success, look at Mary Barra, you know, and the revenues that they're doing at GM.
8:12
SPEAKER_04: So uh GM is doing very well.
8:14
SPEAKER_02: And we have a show on CBT News called Women Driving the Industry, where I speak to a lot of these incredible women in the industry, so be sure to check that out.
8:22
SPEAKER_04: Yes.
8:23
SPEAKER_04: Yes, you do.
8:23
SPEAKER_04: You're an incredible woman in the industry, I think.
8:26
SPEAKER_02: I'll interview myself.
8:27
SPEAKER_04: Yeah, I'll interview it.
8:28
SPEAKER_04: Women driving the industry.
8:32
SPEAKER_02: Featuring Bridget Fitzpatrick, hosted by Bridget Fitzpatrick.
8:36
SPEAKER_04: So tell me, Bridget, what makes you so agree?
8:39
SPEAKER_04: My earpiece keeps falling out.
8:40
SPEAKER_04: Why is it?
8:41
SPEAKER_04: Oh, we actually have a comment.
8:42
SPEAKER_04: We have a comment early on in the show.
8:44
SPEAKER_04: By the way, for those of you that are watching, please comment, share your thoughts.
8:48
SPEAKER_04: We want to know what you think about any of the topics that we're talking about on the show.
8:54
SPEAKER_02: And uh but uh so the comment is going to be for Ben when we have him on.
8:57
SPEAKER_04: Oh, okay, great.
8:58
SPEAKER_02: So we'll wait.
8:59
SPEAKER_02: We'll let's bring him in.
9:00
SPEAKER_02: Hey, people want to hear from Ben.
9:01
SPEAKER_04: Do you really think we should bring him in?
9:02
SPEAKER_04: You think he's ready?
9:03
SPEAKER_04: He's he's there on Long Island to come on.
9:08
SPEAKER_02: VIP Auto Group has replaced outside software costs with tools built in-house and tripled customer service ticket productivity.
9:16
SPEAKER_02: Wow, tripled.
9:16
SPEAKER_04: Yeah, that's Ben Sporne, CMO on uh of VIP Auto Group on Long Island, joins us to break down where AI is delivering measurable results and what it takes to get there.
9:28
SPEAKER_04: Thank you so much for joining us, Ben.
9:30
SPEAKER_04: Welcome, Ben.
9:31
SPEAKER_04: Of course.
9:32
SPEAKER_04: Thanks for having me on.
9:33
SPEAKER_04: Sure.
9:34
SPEAKER_04: So uh first and foremost, where in Long Island are you?
9:37
SPEAKER_04: I'm calling from on Long Island.
9:39
SPEAKER_04: I'm actually calling in from Lindenhurst.
9:41
SPEAKER_04: Lindenhurst, okay.
9:42
SPEAKER_04: I'm a garden city boy.
9:43
SPEAKER_04: Very nice.
9:44
SPEAKER_04: So yeah, pretty close.
9:46
SPEAKER_04: Pretty close.
9:46
SPEAKER_04: Yep.
9:47
SPEAKER_04: What's the weather like up there in uh beautiful Long Island?
9:50
SPEAKER_03: Not too bad.
9:51
SPEAKER_03: There you go.
9:52
SPEAKER_03: Uh I heard your comments earlier in the show.
9:54
SPEAKER_03: I'm actually a Long Island native.
9:55
SPEAKER_03: My grandfather moved out here in the 50s, actually.
9:58
SPEAKER_03: Oh, wow, very nice.
10:00
SPEAKER_04: Okay.
10:00
SPEAKER_04: Cool.
10:00
SPEAKER_04: Yeah, I can tell from your accent.
10:02
SPEAKER_04: There you go.
10:03
SPEAKER_04: And if you later in the show, I probably could have nailed it that it was Lindenhurst.
10:06
SPEAKER_04: No, I'm just kidding.
10:08
SPEAKER_02: I'm sure you do the same thing, Ben.
10:10
SPEAKER_02: You're like, what part of the island are you from?
10:11
SPEAKER_04: That's right.
10:12
SPEAKER_04: We were up there in New York, as I was mentioning this past weekend, and uh we absolutely love the city.
10:17
SPEAKER_04: We go, you know, as much as we can, but uh boy, a lot of New York uh accents that we heard at this at our um uh niece's wedding.
10:24
SPEAKER_04: You know, they're my whole family is from uh Long Island.
10:28
SPEAKER_04: So and you and you he said it right, by the way.
10:30
SPEAKER_04: You don't live in Long Island, you live on Long Island.
10:32
SPEAKER_04: On Long Island, you live on the island.
10:35
SPEAKER_04: That's right, right?
10:36
SPEAKER_04: Absolutely.
10:37
SPEAKER_04: Absolutely.
10:38
SPEAKER_04: And it's funny how we're getting too far into this, but it's funny how Long Island is so different from the rest of the state, right?
10:43
SPEAKER_04: You know what I'm talking about.
10:44
SPEAKER_04: It's like if you're upstate, no, that's not really that's not really New York.
10:48
SPEAKER_04: And of course, upstate people, yeah, if you say, Oh, are you from Long Island, like, no, I'm not from Long Island, right?
10:54
SPEAKER_04: You know what I'm talking about, Ben?
10:55
SPEAKER_04: It should be its own.
10:56
SPEAKER_04: It should be its own state.
10:58
SPEAKER_04: Exactly.
10:59
SPEAKER_04: So, first and foremost, before we jump into the questions today that we want to ask you about marketing and AI, how's business at your group?
11:06
SPEAKER_03: Business has been strong.
11:07
SPEAKER_03: Um, overall, you know, we're waiting the storm of uh various things with continued high interest rates and things that matter.
11:13
SPEAKER_04: Yeah, yeah.
11:14
SPEAKER_04: Um uh what about Pulestar?
11:16
SPEAKER_04: Are you you guys were a Polestar dealer, right?
11:18
SPEAKER_04: Uh we were, yeah.
11:20
SPEAKER_04: Okay.
11:20
SPEAKER_04: Any leftovers or are they all is Polestar all gone now?
11:23
SPEAKER_03: Yeah, we're selling them down and kind of we were reworking some things from there.
11:27
SPEAKER_03: Um we stole some real estate that we're kind of working through and things like that.
11:30
SPEAKER_04: What do cut what do consumers say when they come in and go out, wait a minute, buying a pulse star?
11:34
SPEAKER_04: You can't can't you can still service them though and and such?
11:38
SPEAKER_04: Yeah, still service them, still get the parts.
11:39
SPEAKER_04: Uh just selling down existing inventory.
11:42
SPEAKER_04: Yeah, okay.
11:44
SPEAKER_04: Yeah, no, no, no.
11:45
SPEAKER_04: I know it's it's it's it's a great car.
11:46
SPEAKER_04: The people that we've spoken to that we know that drive a pulse star like them, and then some of them bought two or three of them, you know, over time as they traded them in.
11:53
SPEAKER_04: Yeah, so it's a sharp-looking car.
11:55
SPEAKER_04: Yep.
11:55
SPEAKER_04: Who knows?
11:56
SPEAKER_04: Maybe they'll be back.
11:57
SPEAKER_04: We'll see.
11:57
SPEAKER_04: We'll see what happens with Chinese vehicles.
11:59
SPEAKER_04: Don't get me started.
12:00
SPEAKER_02: But so, Ben, you've developed more than a dozen AI power tools across VIP Auto Group.
12:07
SPEAKER_02: Talk to us about some of the things that you've replaced and what kind of savings that you've seen.
12:13
SPEAKER_03: Absolutely.
12:13
SPEAKER_03: So the way that we've thought about AI has been identifying friction in our organization, whether it's in a particular department or even a particular individual.
12:22
SPEAKER_03: Um, and we do something called a friction audit, where we actually look at the opportunities that we have relative to the amount of friction they have or the amount of uh difficult they have uh for certain individuals or certain departments.
12:34
SPEAKER_03: And in some cases, we've actually built one-of-one tools completely around certain individuals, and in other cases, spanning across an entire department.
12:42
SPEAKER_03: Um, and what's the amazing part is we we can do it all in-house, and we're able to be radically self-reliant without needing to hire external uh developers, external designers.
12:52
SPEAKER_03: Um, I'm basically building these things myself.
12:55
SPEAKER_03: Wow.
12:55
SPEAKER_03: Wow.
12:56
SPEAKER_02: So would you call yourself are you the AI engineer on in-house there?
13:00
SPEAKER_03: Yeah, what I would what I would define as the term that I'm kind of working at is what's called a forward-deployed engineer.
13:05
SPEAKER_03: Uh, it's kind of the combination of a CTO, a CMO, and a COO.
13:10
SPEAKER_03: So you understand the connectors, you understand the business operations, but you also understand the marketplace.
13:15
SPEAKER_03: Yeah, yeah, gotcha.
13:16
SPEAKER_02: So, out of those, uh, where have you seen the biggest return?
13:20
SPEAKER_03: Good question.
13:21
SPEAKER_03: I would say there's there's kind of three core buckets of things that we've done.
13:24
SPEAKER_03: It's been uh workflows, so things that we've been able to replace, like uh saving a lot of time from our managers from having to uh put you know, pen to pencil, uh pen to paper, and generate certain reports.
13:36
SPEAKER_03: Um, the second bucket being agents, like creating things that use AI for advanced decisioning, and the third being software.
13:42
SPEAKER_03: Uh the biggest return has been in eliminating outside vendors by building in-house software tools.
13:50
SPEAKER_02: Okay, cool.
13:51
SPEAKER_04: Yeah, your e-commerce parts operation tripled its customer service uh ticket productivity.
13:56
SPEAKER_04: Talk to us about that.
13:58
SPEAKER_03: Yeah, so this was actually the first AI workflow that I launched.
14:02
SPEAKER_03: Uh, about a year and a half ago, maybe two years ago, um, I had a full-on breakdown with everything that was happening in AI.
14:07
SPEAKER_03: I was like, I gotta figure this thing out.
14:09
SPEAKER_03: And um I oversee our e-commerce operations where we get inbound, you know, between 15 and 20,000 tickets a month.
14:16
SPEAKER_03: Yeah.
14:16
SPEAKER_03: Um and we've always been constrained by the amount of labor we have, constrained by the amount of people that we have.
14:21
SPEAKER_03: So what we set up was a workflow that um identifies the ticket content, is able to check our databases for the relevant information, and then it actually puts the AI draft into the inbox of the reps.
14:32
SPEAKER_03: So it's not replacing anybody, it's actually keeping what's called a human in the loop, which is a really important concept for us.
14:39
SPEAKER_03: Overall, across our group, we've saved about a million dollars a year, 3,000 hours a month off human hands.
14:45
SPEAKER_03: Oh my god.
14:46
SPEAKER_03: Zero jobs, nobody's lost a job.
14:48
SPEAKER_04: Wow.
14:49
SPEAKER_04: That those are numbers are staggering.
14:51
SPEAKER_04: That that's incredible.
14:52
SPEAKER_04: How is the drawing every day?
14:54
SPEAKER_04: I mean, when you when you install something like this and bring this into a store, it affects the culture.
14:59
SPEAKER_04: And right?
15:00
SPEAKER_04: And how is how is the team um working with with AI?
15:05
SPEAKER_03: Um, our teams love it.
15:06
SPEAKER_03: I think that's what's interesting is you read in the market about all this jumerism, about the negativity that AI is having as it relates to day-to-day employees, and we're finding that employers are more productive, they're able to get more done, um, they don't feel overwhelmed by their day-to-day processes of doing a lot of manual grinding.
15:22
SPEAKER_03: Uh, we're using AI to kind of alleviate the lower level or lower value tasks off their plate so they could focus on the strategic work at hand.
15:30
SPEAKER_04: Okay.
15:30
SPEAKER_04: Was there any pushback from the team at all?
15:33
SPEAKER_03: The only pushback I got was around cost was okay, what is this going to cost me, right?
15:38
SPEAKER_03: Um as as it relates to our managers or even day-to-day, uh day-to-day folks.
15:42
SPEAKER_03: And uh what we found is when we started this process, obviously there was a decent amount of AI tokens we were spending.
15:47
SPEAKER_03: But as the models have advanced and the frontier intelligence has become more dispersed, um, we've actually seen our AI token costs go down.
15:55
SPEAKER_03: Okay.
16:01
SPEAKER_03: Wow.
16:02
SPEAKER_02: That's yeah, that's incredible.
16:03
SPEAKER_02: Where have you found AI still makes mistakes or has some challenges that you're working on?
16:10
SPEAKER_03: Yeah, there's always gonna be um risk of AI hallucinations.
16:14
SPEAKER_03: That's why for the important tasks, whether it's um notifying customers with relevant information, drafting emails that are actually going out to customers, making sure you're keeping a human in the loop or a human on the loop at all times is gonna be super, super important.
16:27
SPEAKER_03: Um, you know, the areas where it can make mistakes is in um uh if there's uh multiple issues on a particular ticket or things that it doesn't have access to, the most important thing we've been able to do is we're starting to centralize all of our data architecture into what we're calling our company brain.
16:44
SPEAKER_03: So that's bringing in all of our data across the variety of all of our tools so that whatever AI we're drafting from has the most relevant information in real time.
16:52
SPEAKER_04: Are you uh uh has the discussion happened yet, where you say, wow, maybe this is something we could sell to other dealer groups since we put it together.
17:02
SPEAKER_03: Yeah, I've started um I've started working with a few other dealer groups and other businesses.
17:06
SPEAKER_03: I've always worked with startups throughout my career.
17:08
SPEAKER_03: Uh so at this point, I think the the tool set and the opportunities are valuable enough where the uh other folks in the private market can can definitely get a benefit from it.
17:16
SPEAKER_04: Yeah, that's great.
17:18
SPEAKER_04: Many dealers have already invested in third-party AI and software platforms.
17:23
SPEAKER_04: From your perspective, how should they evaluate what they already have before deciding to build something new or replacing a vendor?
17:31
SPEAKER_03: It's a good question.
17:32
SPEAKER_03: I would say the concept that I'm pushing out there is to not necessarily always go to renting your AI or being what I call an AI consumer, right?
17:40
SPEAKER_03: So if you're just using somebody else's tool or you're going to Claude or ChatGPT just to get a particular answer, you're prompting from the mean, meaning you're just getting whatever the average intelligence is out there.
17:51
SPEAKER_04: Right.
17:52
SPEAKER_03: The most important thing you want to do is figure out how you could harness these tokens, combine it with your own data and your own company brain to actually deliver business value.
18:00
SPEAKER_03: So I would say I would be reticent with just using some other third-party tool and just renting somebody else's AI because you're gonna be prompting from the meme, meaning you're going to be just using whatever the average level of intelligence is out there.
18:13
SPEAKER_03: You want to figure out how to harness these tokens, you want to figure out how to deploy it yourself, because that's where you could be radically self-reliant and you can do these things yourself.
18:21
SPEAKER_03: And the cost for a lot of these things is um is not so steep if you know what you're doing.
18:26
SPEAKER_03: Yeah.
18:27
SPEAKER_03: Um a lot of these tools, like these AI companies, um, they're being sold like software, right?
18:32
SPEAKER_03: But on their side, they're it's not the same cost structure.
18:34
SPEAKER_03: It's it's a little bit different.
18:36
SPEAKER_03: So if you just go and sign up for another AI tool and it's you know,$8.99 a month times 10 stores times 12 months, it's it's gonna be a huge cost investment in the same way that you know SaaS 1.0 was.
18:46
SPEAKER_03: With AI, the whole idea is that you should be radically self-reliant and be in control of your own tokens, be in control of your own uh data and be able to develop your own product.
18:54
SPEAKER_03: Similar to uh if you were to deploy a software and it was as easy as buying a product on Amazon.
18:59
SPEAKER_03: That's what it should be for a dealer.
19:02
SPEAKER_04: Um in terms of you're the CMO of the company, um where where where does this uh how does this affect um you bringing in outside marketing companies?
19:13
SPEAKER_04: Or I should say, do you bring in an outside marketing company, or do you handle everything in-house for the marketing of the stores right now?
19:20
SPEAKER_03: Yeah, it's a good question.
19:21
SPEAKER_03: I would say there's a few areas that I think AI will be very disruptive in the short term.
19:26
SPEAKER_03: It's gonna be in places like verticalized solutions and verticalized vendors and tools.
19:31
SPEAKER_03: The like big source of record companies like your CRM and your DMS and your um highly consultative and strategic marketing firms, I think, are gonna continue to be valuable.
19:42
SPEAKER_03: The execution, or if you're working with a firm where all they're doing is just pushing buttons and um and clicking publish, uh, the value of that is probably gonna go down.
19:50
SPEAKER_03: I think with AI, it's going to alleviate some of the low value tasks, but the high value strategic tasks, the taste, the um the strategy, those things are actually becoming more important.
20:00
SPEAKER_03: So making sure you have the right vendor, the right marketing vendor, yeah, uh is increasingly important.
20:06
SPEAKER_03: Whereas in the past, you know, everybody kind of had more or less the same playing field.
20:10
SPEAKER_03: Now the folks who have taste and who have a strategic mindset and know how to implement these things, um, the effects of those things are going to compound, meaning it's not gonna grow linearly, you're gonna have an increased compounding effect of that.
20:23
SPEAKER_04: Yeah, yeah, I can see that.
20:24
SPEAKER_04: And I'm so I'm assuming you do work with an outside vendor for marketing.
20:29
SPEAKER_03: For for a variety of our marketing, we do, and then we do a lot in-house as well.
20:33
SPEAKER_03: Um, for example, I recently launched our own auto group centralized blogging site, where in the past, with any SEO vendor, I'm sure you guys may be familiar, you know, you pay$1,000 a month, you get two articles a month for an average auto dealer.
20:46
SPEAKER_03: Yeah.
20:46
SPEAKER_03: Um$500 an article.
20:48
SPEAKER_03: Yeah.
20:49
SPEAKER_03: Um we've been able to use AI and unique kernels of truth, not just using AI slot, but actually putting good stuff out there.
20:56
SPEAKER_03: And we're writing about 15 articles a day at this point.
20:59
SPEAKER_02: That's nice.
21:00
SPEAKER_03: Wow.
21:00
SPEAKER_04: That is that's changed, huh?
21:03
SPEAKER_02: So, with all of the management that goes along with this, you said that you haven't had to get rid of anybody, um, but have you had to hire anybody to help manage the AI?
21:14
SPEAKER_03: Um, I've built out an agent for.
21:16
SPEAKER_03: So I've hired a lot of agents to help me with the work.
21:18
SPEAKER_03: There you go.
21:18
SPEAKER_03: Um, I do have one part-time person who's helping me right now continue to deploy.
21:22
SPEAKER_03: I would say the area where it is needed is as we build these tools, there is a maintenance component and there is a human component, right?
21:28
SPEAKER_03: Just because you build a tool doesn't mean you're not gonna have bugs and doesn't mean you need to that that's the end of it, right?
21:33
SPEAKER_03: So we're we're putting on like internal product managers for some of these tools that we're building to make sure that if our employees have feedback, they have somebody that they could pick up the phone and call and we could implement those changes very, very quickly.
21:44
SPEAKER_04: The AI that's consumer facing.
21:46
SPEAKER_03: We're hiring more people.
21:47
SPEAKER_04: Yeah, yeah.
21:48
SPEAKER_04: The AI that's consumer facing, you know, the calls that come in, the the follow up on service, the recalls, things like that.
21:55
SPEAKER_04: Um, I'm assuming that you you're utilizing that, right?
21:58
SPEAKER_04: Um, how is that being received from the consumer?
22:00
SPEAKER_04: From your customers?
22:03
SPEAKER_03: The information that we get for external sources all flows through, again, like what we call our company brain.
22:10
SPEAKER_03: So our company brain is like a centralized repository that all of the external information and internal information kind of gets uh shuttled into.
22:19
SPEAKER_03: And then from there, um, we work as a management team to make sure anything that goes out external is highly deterministic.
22:27
SPEAKER_03: Meaning we're not going to let AI and just leave it up to chance as far as what kind of messaging it's communicating to customers.
22:33
SPEAKER_03: We're still in high, high, high control of the actual message that goes out to consumers so that uh we don't put any wrong information out there.
22:40
SPEAKER_03: So we still keep a human in the loop for anything that goes out to external customers to ensure that we have as high like an accuracy as possible.
22:47
SPEAKER_04: And is the feedback from the from your customers that that they're okay uh with AI, you know, if it's a phone call or if it's a text message or what have you?
22:57
SPEAKER_03: Yeah, so I'll give you an example.
22:58
SPEAKER_03: Um we have at our service centers um, you know, dozens, if not hundreds, of appointments that happen per day.
23:04
SPEAKER_03: Yeah.
23:05
SPEAKER_03: And we've found it difficult historically to present customers the information that's relative to the history of their RO records, right?
23:12
SPEAKER_03: So all the things that they've done in the past, a lot of times customers get those pieces of paper, they put them in their glove compartment, and then they lose track of sort of what they've done.
23:19
SPEAKER_03: So we've worked on creating certain menus and certain uh PDFs and information that we could present to customers that give them that full history every time they come into our service center.
23:27
SPEAKER_03: So it's it's being deployed in areas where we can do it in a very low risk way and a high degree of certainty.
23:33
SPEAKER_03: But for things as far as like the actual recommendation, what's going on to the car, we still make sure to keep a human in the loop for those things.
23:39
SPEAKER_04: Yeah, that's great.
23:40
SPEAKER_04: That's great.
23:41
SPEAKER_04: Um or people tell us that we've got some comments.
23:43
SPEAKER_02: Yes, we have some comments from our viewers.
23:47
SPEAKER_04: Which AI use case has paid off fastest for a dealership, and how did you measure the return?
23:55
SPEAKER_03: Good question.
23:56
SPEAKER_03: I want to use a unique one.
23:57
SPEAKER_03: So um let's think here.
24:01
SPEAKER_03: With regards to our AI implementation, the ones that have paid off the most um have probably been on the software side.
24:08
SPEAKER_03: It's been a combination of a variety of things.
24:11
SPEAKER_03: I'll just give you one example.
24:12
SPEAKER_03: Um, so we were paying for a third-party tool, it was a video solution tool.
24:16
SPEAKER_03: Everybody's got a video tool, yeah, and they all kind of work in different ways.
24:20
SPEAKER_03: Um and they're expensive, they're not cheap, and they integrate in a variety of matters.
24:23
SPEAKER_03: Um what we've been able to do is keep our company branding and our messaging consistent all the way through that video solution platform.
24:31
SPEAKER_03: So we've built our own tool I call it Pronto, pronto video solutions.com.
24:35
SPEAKER_03: Okay.
24:35
SPEAKER_03: Where basically you're able to, for each of our dealerships, record a custom video on behalf of uh our customers and our salespeople are actually recording videos, giving follow-up, sending it to the customers, and we have all the analytics and the tracking as far as the open rates, the click rates, and we're finding an increase in engagement from users who are watching those videos, which I don't think anybody at this point would disagree that video can lead to an increase in consumer engagement.
24:59
SPEAKER_03: Yeah.
24:59
SPEAKER_03: Um we're seeing that play out firsthand.
25:01
SPEAKER_03: Oh, that's great.
25:02
SPEAKER_03: That's great.
25:03
SPEAKER_03: Fantastic.
25:03
SPEAKER_02: I think we have one more comment.
25:05
SPEAKER_04: One more question for you.
25:06
SPEAKER_04: Yeah.
25:08
SPEAKER_04: Let's see.
25:09
SPEAKER_04: Are compliance risks greater when building your own versus using vendors?
25:14
SPEAKER_04: Good question.
25:16
SPEAKER_03: Uh there definitely can be increased compliant compliance risk, but you know, when working with vendors also, there's the same compliance risk, right?
25:23
SPEAKER_03: So you want to make sure you're reading through their contracts because a lot of times they won't include the necessary insurance certificates and things that you need as a business.
25:30
SPEAKER_03: Uh so I would say the risks are are equal.
25:33
SPEAKER_03: Uh you just have to make sure that you know what you need relative to the state that you're in.
25:37
SPEAKER_04: Okay.
25:37
SPEAKER_04: As the CMO of that company, um, what you obviously with in the last year we've seen the FTC really crack down on dealers, some in New York.
25:46
SPEAKER_04: Um, what what's your what's your position on that?
25:48
SPEAKER_04: How how do you manage that across all the brands and all the rooftops?
25:53
SPEAKER_04: And uh and and as you sit there today, do you feel as though the store is 100% compliant in its pricing?
25:59
SPEAKER_03: Yeah, it's it's a good question.
26:00
SPEAKER_03: I would say um beyond all the technical stuff, which we can get into as far as the specifics that a dealer needs to do, the greatest thing I would say is security awareness, making sure your employees are aware that there are phishing scams, aware that there are things out there that can be hurtful to the dealership, and just uh continuing to educate your onsite employees because there's risk as far as people getting into the system, but the greatest risk is somebody clicking on an email that uh may let somebody in when it's unexpected.
26:28
SPEAKER_03: So continued security awareness is a really, really important thing that we're continuing to do on top of all the technical security compliance checklists that we have.
26:36
SPEAKER_03: Yeah.
26:36
SPEAKER_03: And um uh you know, making sure that we're we're in a good position on that front.
26:40
SPEAKER_03: But security awareness is super, super important, especially when you have new employees coming from outside dealerships, retraining and making sure that those folks are continuing to get that education.
26:48
SPEAKER_04: Right.
26:49
SPEAKER_04: But in terms of the FTC's ruling on pricing transparency in the ads that you run, um that that's been a challenge for many dealers, as you know, especially if you're working with third-party lead providers and such.
27:01
SPEAKER_04: Uh, how how how are do you handle that as the CMO of that group?
27:05
SPEAKER_03: Yeah, very carefully.
27:07
SPEAKER_03: Um, going through channel by channel, making sure that all our messaging is on point.
27:10
SPEAKER_03: Yeah.
27:11
SPEAKER_03: Uh it starts with the website.
27:12
SPEAKER_03: Obviously, the website is where we get the majority of our traffic.
27:14
SPEAKER_03: Yeah.
27:15
SPEAKER_03: Uh we're working with all our vendors to make sure that if they are using third-party messaging that is going out there outside of the website, um, that we're keeping everything in track in check.
27:23
SPEAKER_03: Yeah.
27:23
SPEAKER_03: But that's a good idea, I think, for an AI that I could potentially build is making sure we're putting some crawlers out there and looking at all these ads.
27:29
SPEAKER_03: That's right.
27:30
SPEAKER_03: Ensuring that everything is uh is consistent.
27:32
SPEAKER_03: So I appreciate that.
27:33
SPEAKER_03: Yeah, absolutely.
27:34
SPEAKER_02: So we do have one more question for you, Ben, before we let you go.
27:37
SPEAKER_02: We appreciate all the time you've given us so far.
27:39
SPEAKER_04: Yep, we're gonna keep you through dinner time tonight.
27:42
SPEAKER_02: People have questions for you, Ben.
27:44
SPEAKER_04: How did you get you go?
27:46
SPEAKER_04: Oh, okay.
27:46
SPEAKER_04: How do dealers strike the right balance between AI automation and human decision making?
27:55
SPEAKER_03: Um, I would say it's it's critical to understand the task at hand.
27:59
SPEAKER_03: So we break down the task relative to a few components.
28:02
SPEAKER_03: One is model selection.
28:04
SPEAKER_03: So understanding the dexterity and the complexity of a particular task and selecting the right model to do so.
28:10
SPEAKER_03: Because you could have a frontier model that has a high degree of accuracy, um, or you could have uh a lower, you know, a lower cost model that maybe has uh a lower degree of accuracy.
28:20
SPEAKER_03: But if it's something that is um easy to do, maybe you don't need to put the highest level of frontier intelligence on top of it.
28:27
SPEAKER_03: So the example would be putting like uh a student driver in a Ferrari, right?
28:30
SPEAKER_03: You don't always need to use the top-tier frontier intelligence.
28:32
SPEAKER_03: So I would say it starts with understanding the task at hand.
28:35
SPEAKER_03: Okay.
28:36
SPEAKER_03: If the task has low risk from a compliance and from an outside external messaging perspective, then you can use an open source model, you can use a low-cost model, or even use one of the frontier models, but you know, go a few generations back.
28:47
SPEAKER_03: That's kind of where it starts, is really uh dissecting the task and understanding what is the risk level of it.
28:54
SPEAKER_03: Um from there, it becomes at what point in the workflow, at what point in the automation does a human need to be in the loop or on the loop, right?
29:02
SPEAKER_03: So maybe they're at the front of the loop as far as triggering a certain automation to go.
29:06
SPEAKER_03: Um some workflow occurs and then it comes back to them for a decision, they approve it, then it goes out to the customer.
29:11
SPEAKER_03: Um, so it's really breaking down that workflow.
29:14
SPEAKER_03: And in some cases, you could just whiteboard it as well, really break down a task as far as how it should operate and um pinpointing the exact point that a human needs to be uh making a critical decision.
29:24
SPEAKER_03: Okay, okay, gotcha.
29:26
SPEAKER_03: Wow, good stuff.
29:27
SPEAKER_02: Yes, Ben Sporne, CMO of VIP Auto Group, Long Island.
29:30
SPEAKER_02: Thank you so much for joining us and giving us all the time that you've given us.
29:33
SPEAKER_04: Thanks, Ben.
29:34
SPEAKER_04: Appreciate it.
29:36
SPEAKER_04: Wow.
29:37
SPEAKER_04: That's going into it.
29:38
SPEAKER_04: I love those conversations.
29:39
SPEAKER_04: I know.
29:39
SPEAKER_04: Yeah, he's uh he's right in there doing his deal with AI.
29:43
SPEAKER_04: What a great conversation.
29:45
SPEAKER_02: Yeah, we'll have him back on again.
29:47
SPEAKER_04: Yeah, for sure.
29:47
SPEAKER_04: I'd love to do a follow up.
29:49
SPEAKER_04: He's gonna he's gonna be our go-to for AI.
29:50
SPEAKER_04: It's a constant.
29:51
SPEAKER_04: I mean, he's sounds like he's all dug in.
29:53
SPEAKER_04: He really is, yeah.
29:54
SPEAKER_02: Yeah, he's doing it right.
29:55
SPEAKER_04: But but I will say that we're talking to more and more dealer groups where they're actually bringing on people, you know, on staff that are building AI and you know, so that's great.
30:04
SPEAKER_02: Yeah, not everybody has a Ben, but no, no, I mean that's right.
30:07
SPEAKER_04: That's right.
30:08
SPEAKER_04: They need a Ben.
30:08
SPEAKER_02: Right.
30:09
SPEAKER_04: That's right.
30:09
SPEAKER_04: He Ben might get we need a Ben.
30:11
SPEAKER_04: He might get phone calls from dealers.
30:13
SPEAKER_04: They go, You happy there at uh Long Island?
30:15
unknown: No.
30:16
SPEAKER_04: That's right.
30:17
SPEAKER_04: No, not in this business.
30:19
SPEAKER_04: We never do that in this business.
30:20
SPEAKER_04: He would never leave Long Island.
30:21
SPEAKER_04: No, you would never leave.
30:22
SPEAKER_04: Why would you leave Long Island?
30:23
SPEAKER_04: No.
30:24
SPEAKER_04: It might be another Long Island dealer, though, they call it.
30:27
SPEAKER_02: So before we get to our next segment, I would like to thank our sponsor for the day.
30:31
SPEAKER_04: We can't do it without the sponsor.
30:32
SPEAKER_04: That's right.
30:32
SPEAKER_02: We can't do it without the sponsor.
30:33
SPEAKER_04: And this is a good one.
30:34
SPEAKER_04: That's right.
30:34
SPEAKER_04: They're all good ones.
30:35
SPEAKER_02: They are.
30:35
SPEAKER_02: The Joe Verde Group is the industry leader for online sales training with content that covers every step of the sales process.
30:42
SPEAKER_02: Your sales team will sell more units with bigger with better gross and greater customer satisfaction.
30:48
SPEAKER_02: Get your new hires up to speed fast, keep your entire team sharp, and sell more cars.
30:53
SPEAKER_02: That's what it's like.
30:53
SPEAKER_04: And he's got live workshops in-house or online.
30:56
SPEAKER_04: So there's no reason, there's no excuse, dealers, that you wouldn't have great training.
31:01
SPEAKER_04: You can do it any way that you, whether it be online training, in-house training.
31:06
SPEAKER_02: That's how you feel.
31:07
SPEAKER_04: Don't get me started on training.
31:09
SPEAKER_02: Well, we won't get you started, but maybe we can stop you there.
31:12
SPEAKER_04: Okay.
31:12
SPEAKER_04: Until later.
31:13
SPEAKER_04: That's right.
31:13
SPEAKER_04: Until another time.
31:14
SPEAKER_04: Call Joe Verdi.
31:15
SPEAKER_04: That's all I'm gonna say.
31:16
SPEAKER_04: You need training.
31:17
SPEAKER_04: Right.
31:18
SPEAKER_04: And and everybody needs training.
31:20
SPEAKER_02: He started, he's not stopping.
31:22
SPEAKER_04: Because training is tell us about it.
31:24
SPEAKER_04: Okay, I will.
31:25
SPEAKER_04: So training is so is so needed in the car business on an ongoing basis.
31:31
SPEAKER_04: And we think, I say we, painting with a broad brush here.
31:34
SPEAKER_04: For you people that have made a commitment to training, you dealers, great.
31:38
SPEAKER_04: Love you for it.
31:39
SPEAKER_04: That's what your team wants.
31:40
SPEAKER_04: Keep doing it.
31:41
SPEAKER_04: That's what your customers want.
31:43
SPEAKER_04: Um, because better trained salespeople do a better job with their customers.
31:46
SPEAKER_04: So which means increased gross profit and increased CSI.
31:50
SPEAKER_04: But the vast majority of dealers out there do not make a big enough commitment to sales training.
31:56
SPEAKER_04: And you know what I'm talking about.
31:57
SPEAKER_04: You know, just because you you sent somebody to a course, you know, for a couple of days or a day or whatever, and you go, okay, sales training's done.
32:04
SPEAKER_04: That person's training.
32:05
SPEAKER_04: No, it doesn't work that way.
32:07
SPEAKER_04: That's why, you know, Monday through Friday, that NFL team, well, it's probably Tuesday through Friday or Saturday, that NFL team that's playing great, they're in training those all of those other days to practice for Sunday.
32:19
SPEAKER_04: Well, in this case, your salespeople need to be in training every day to get ready for the customer that they're going to take today, whether they call, click, or walk in.
32:27
SPEAKER_04: There's my sermon.
32:28
SPEAKER_02: Well, and though for those of you that don't know, Jim was the national sales trainer for Autonation for many years, so he knows what he's talking about.
32:35
SPEAKER_04: That's right.
32:35
SPEAKER_04: Not many years, but but enough years.
32:37
SPEAKER_02: Enough years, right.
32:38
SPEAKER_02: Enough years.
32:39
SPEAKER_04: Hundreds, if not thousands, of salespeople.
32:41
SPEAKER_04: But there's only two ways to increase the sales in a dealership.
32:45
SPEAKER_04: One is to get more opportunities into the store, and the other one is to make more of the opportunities that come into a store.
32:53
SPEAKER_04: It's the only way to increase sales, okay?
32:56
SPEAKER_04: So why not take what I think is an easier route rather than going, we don't have enough leads, we don't have enough leads, okay?
33:03
SPEAKER_04: How about you train your salespeople and increase the store's closing ratio by maybe 10 or 20% and pick up another, I don't know, 50 cars a month, 100 cars a month, depending on the volume of the store.
33:15
SPEAKER_02: Yeah, you heard it here, folks.
33:17
SPEAKER_02: Right here, you heard it a lot more than maybe you wanted to, but I love it.
33:21
SPEAKER_04: I love trading.
33:22
SPEAKER_04: I love the car business.
33:23
SPEAKER_02: That's great.
33:23
SPEAKER_02: It is very important.
33:24
SPEAKER_02: I agree.
33:24
SPEAKER_04: Yes.
33:25
SPEAKER_04: So by the way, oh, go ahead.
33:26
SPEAKER_02: Yeah.
33:26
SPEAKER_02: So Lexus is looking to keep its sales momentum going into 2027.
33:31
SPEAKER_02: Recently sat down with Dewan Ross Group, Vice President and General Manager of the Lexus division at Toyota Motor North America to talk about what's ahead for the brand and its dealers.
33:42
SPEAKER_02: Here's part of that conversation.
33:44
SPEAKER_04: From your perspective, what is the mood of the dealers out there today?
33:49
SPEAKER_00: Well, I believe it's very positive.
33:51
SPEAKER_00: We're building momentum, as you may know, as they may have told you, we are coming off of an all-time best ever new vehicle sales year in 2025 in the history of the brand.
34:01
SPEAKER_00: Wow.
34:01
SPEAKER_00: And so the brand power is strong.
34:03
SPEAKER_00: You know, I think the one thing that we all agree on is that product drives this business.
34:07
SPEAKER_00: And in my 31 years with the company, I feel like it's probably the best product cadence we've had in my entire time with the with with the uh with the organization.
34:16
SPEAKER_00: So that's also a positive.
34:17
SPEAKER_00: Uh coming off of September, we had an all-time best ever month in September, uh, both in new car sales as well as parts accessory and online parts sales.
34:27
SPEAKER_00: So a lot of momentum there, not only on the new side, but also on the fixed operations side.
34:31
SPEAKER_00: So I think this balanced operations message, especially with the UIO that we put out in the marketplace over the last few years, is giving us some great at bat opportunities on the service and parts side of the business.
34:42
SPEAKER_00: So the dealers have really embraced that.
34:44
SPEAKER_00: And uh our focus with our dealers has been give us the best in the market.
34:48
SPEAKER_00: We want to definitely be best in market with both our people that they bring onto the Lexus brand locally, as well as the facilities that they provide for their guests.
34:56
SPEAKER_04: Yeah, for sure.
34:57
SPEAKER_00: And they've responded very well.
34:58
SPEAKER_04: Yeah, well, that's for sure.
35:00
SPEAKER_04: Congrats on all of that success.
35:01
SPEAKER_04: That's great to hear.
35:02
SPEAKER_04: Does that surprise you at all that that to that Lexus is having the year that it's having uh Toyota as well, uh, in in light of all that we see going on, you know, in the world today and more importantly in our country today, um, with gut gas prices and interest rates and things of that nature.
35:20
SPEAKER_04: Does it surprise you?
35:22
SPEAKER_00: Actually, it doesn't.
35:24
SPEAKER_00: And the reason for that, I would tell you, is that historically we've always had a value story.
35:29
SPEAKER_00: And I know the word value on the luxury side of the business probably doesn't go hand in hand, but we've embraced the fact that we can be a value brand.
35:37
SPEAKER_00: And historically, in times where we've had some headwinds with the market, whether affordability, tariffs, et cetera, uh, we've always managed to pick up market share because I think in the mind of the guest, Lexus is a safe, a safe buy.
35:50
SPEAKER_00: You know, it definitely um is a vehicle that we've uh highlighted QDR.
35:55
SPEAKER_00: So quality, dependability, reliability.
35:58
SPEAKER_00: And I think the other two elements that we've added over the past few years has been uh fun to drive and styling.
36:03
SPEAKER_00: So when you combine fun to drive and styling with traditional QDR, I think it sends a great message in the marketplace, regardless of uh economic conditions.
36:12
SPEAKER_00: Sure, sure.
36:12
SPEAKER_04: Very good point.
36:13
SPEAKER_04: Let's talk product a little bit.
36:14
SPEAKER_04: Um, obviously, Toyota and Lexis uh, you know, kind of pumped the brakes when everybody was going EVs.
36:20
SPEAKER_04: You all said, well, not so fast.
36:22
SPEAKER_04: Our consumers are, you know, not maybe not ready for an all-EV fleet.
36:26
SPEAKER_04: However, we are big on uh and big believers in the hybrids.
36:30
SPEAKER_04: So talk to us about that.
36:31
SPEAKER_04: Where does the fleet uh and the and the product lineup uh sit today?
36:35
SPEAKER_00: Yeah, absolutely.
36:36
SPEAKER_00: I I think um, as you know, we faced some some scrutiny early on with uh with the messaging on being the slow to the market with EVs, but I think over the years it seems to have paid off.
36:46
SPEAKER_00: And we still want to make sure that we play a part um in our BEV strategy, but I think the bigger um focus for the brand is multipath.
36:54
SPEAKER_00: And I would say both Toyota and Lexus.
36:56
SPEAKER_00: We want to make sure that we follow the guest and have products available based upon uh needs of the guests.
37:01
SPEAKER_00: And I think the reality is um all of our guests aren't interested in the same vehicle, right?
37:06
SPEAKER_00: Otherwise, it'd make a pretty boring industry.
37:08
SPEAKER_00: So we want to make sure that we come to market with products that the guests are looking for.
37:12
SPEAKER_00: Um that would include BEV, but not solely BEV.
37:15
SPEAKER_00: And I think we've done well uh as a result of that multipath approach, particularly with uh with hybrid.
37:21
SPEAKER_00: And I think as we move forward, you'll see that um we'll have a BEV in each of the key segments.
37:27
SPEAKER_00: But the bigger focus is that um we will have the majority of our vehicles have a hybrid option to them.
37:33
SPEAKER_00: Uh and I think that that message is being well received by our dealers as well.
37:37
SPEAKER_04: Sure.
37:37
SPEAKER_04: Do you see any kind of uh uptick in uh the the requests for um hybrids and and EVs in light of the fact that gas is is what it's what it is today?
37:47
SPEAKER_00: Yeah, I would say we can't build enough hybrids, and uh I would say if the if you ask the dealers, that would probably be number one on their list.
37:54
SPEAKER_00: Yeah.
37:54
SPEAKER_00: Um plug-in hybrid has uh gained a little bit more popularity, probably as a result of rising gas prices.
38:01
SPEAKER_00: And I think we're we're really excited about TZ.
38:03
SPEAKER_00: I think that um the fact that we'll have a full-size three-row SUV that's all bev will be a new uh territory for us as a brand.
38:12
SPEAKER_00: I'm excited to see how that vehicle performs in the marketplace.
38:15
SPEAKER_04: Yeah, officially.
38:17
SPEAKER_04: Wow, did you see that car?
38:18
SPEAKER_04: That's when's that coming?
38:19
SPEAKER_04: Yeah, I don't know.
38:20
SPEAKER_04: Oh, you want that car?
38:21
SPEAKER_04: Okay, forget the key.
38:22
SPEAKER_02: Yes, you all's on our car buying journey a little bit here.
38:25
SPEAKER_02: Yeah, I'm gonna look at the key now.
38:27
SPEAKER_02: You saw that GX550, but I just saw that.
38:29
SPEAKER_04: And that that looks look at that thing.
38:31
SPEAKER_04: That looks pretty sweet.
38:32
SPEAKER_04: Very nice.
38:33
SPEAKER_04: Oh my gosh.
38:34
SPEAKER_04: That's coming out.
38:34
SPEAKER_04: Yeah, yeah, he's a list.
38:36
SPEAKER_04: Uh Duan's a great guy.
38:38
SPEAKER_04: 31 years with Lexus.
38:39
SPEAKER_04: Wow, that that's fantastic.
38:41
SPEAKER_04: What a career.
38:42
SPEAKER_02: That was a great conversation.
38:43
SPEAKER_04: Yes, and uh I mean, it's a great company.
38:46
SPEAKER_04: They, as you can see there, they did lean in on hybrids versus all EVs.
38:51
SPEAKER_04: As you know, everybody that was uh out there, uh GM, Audi, Portia, you know, all we gotta go all EV, you know, we're gonna be all EV environment.
39:01
SPEAKER_04: And there was a time that we all in the industry thought that's where it was headed.
39:04
SPEAKER_04: But uh guess what?
39:06
SPEAKER_04: Toyota said, no, we're not gonna do that because our studies say consumers aren't ready for that, nor is the infrastructure there.
39:15
SPEAKER_04: Yeah, so they their bet paid off in a very big way.
39:18
SPEAKER_04: I will say I was thinking about GM.
39:20
SPEAKER_04: We've we talked about that, where GM has not gone into the hybrid business or they did and pulled out of it.
39:27
SPEAKER_02: So you know what I mean?
39:29
SPEAKER_02: I mean, maybe they could do more, but they're doing it.
39:31
SPEAKER_04: I was gonna say maybe they could do more.
39:32
SPEAKER_04: Yeah, maybe that you know, if you talk to a a dealer or somebody walks into a sh a GM showroom with, oh yeah, I'm interested in a hybrid.
39:38
SPEAKER_04: No, we don't have any hybrids.
39:39
SPEAKER_04: How about this Corvette right here?
39:41
SPEAKER_04: You know?
39:41
SPEAKER_04: So it's they I don't think they can like he said, they can't build them fast enough.
39:46
SPEAKER_04: Yeah, so I'd have to believe that some of those consumers would consider you know a uh a GM you know product.
39:53
SPEAKER_02: I don't think they're paying attention.
39:54
SPEAKER_04: That's right.
39:55
SPEAKER_04: But uh GM's doing you're right, GM's doing pretty good.
39:58
SPEAKER_04: Mary Barr is doing a great job.
39:59
SPEAKER_02: She is, yep, yes.
40:01
SPEAKER_02: So be sure to head over to cbtnews.com for more great conversations like this.
40:07
SPEAKER_04: And also by the way, we should mention if you want to see the rest of that interview.
40:10
SPEAKER_02: Yes, I do.
40:11
SPEAKER_02: Okay.
40:11
SPEAKER_02: Oh, you did mention that.
40:12
SPEAKER_02: Right, we can head over to cbtnews.com as well.
40:14
SPEAKER_02: Yes, yeah, for more for more great of that great conversation that you had with DeWanda, there's more where that came from.
40:20
SPEAKER_02: Yeah, so anyway, sign up for our newsletter at cbtnews.com where you'll get these conversations and even more delivered straight to your inbox every day.
40:29
SPEAKER_02: We've got um lots of great content that we don't air on the live show, so be sure to check that out.
40:34
SPEAKER_02: And then I'm really excited about tomorrow on CBT Live.
40:37
SPEAKER_02: We're gonna have the former FBI hostage negotiator, Kyle Vauwinkel.
40:42
SPEAKER_02: He's gonna join us.
40:43
SPEAKER_02: Uh, you don't want to miss that one.
40:44
SPEAKER_02: We are gonna talk about staying calm under pressure, handling difficult conversations, and what business leaders can learn from some of the toughest negotiators and negotiations imaginable.
40:55
SPEAKER_04: So it took us a long time to negotiate that interview.
40:59
SPEAKER_02: He was good.
41:00
SPEAKER_02: That's how good he is.
41:03
SPEAKER_02: And then we're also gonna be joined by Jeremy Raymaker, brand specialist at Mercedes-Benz Country Hills, about how to make the most of your social media.
41:11
SPEAKER_02: So those are two great conversations we're gonna have tomorrow.
41:13
SPEAKER_02: I'm looking forward to both of those.
41:15
SPEAKER_02: Yes.
41:15
SPEAKER_02: So be sure to join us back here tomorrow at noon Eastern for more CBT Live.
41:21
SPEAKER_02: We're gonna close out today's show a little differently.
41:23
SPEAKER_04: We are.
41:23
SPEAKER_04: So this video that uh you know I love social media videos, although this one is not a funny one, per se.
41:29
SPEAKER_04: Uh it's not it's not a funny video, but it's very, very touching.
41:32
SPEAKER_04: This individual happened to be with this dealership for 50 years.
41:36
SPEAKER_04: He was in the auto industry for 60 years.
41:39
SPEAKER_04: And I thought when we saw it and and our producers brought it to us and said, You gotta check this out.
41:43
SPEAKER_04: It's really touching.
41:44
SPEAKER_04: But uh so so I won't say too much more.
41:47
SPEAKER_04: Uh only to the extent that for those of you that think you can't hold on to salespeople or technicians, take a look at this video.
41:56
SPEAKER_04: And uh, I thought they did a great job with it.
41:58
SPEAKER_04: And uh congratulations to this individual that's now retiring.
42:02
SPEAKER_04: But uh, think we get a lot out of it as it plays us out.
42:04
SPEAKER_04: So thanks for watching today.
42:06
SPEAKER_04: See you tomorrow.
42:06
SPEAKER_04: But take a look at this.
42:09
SPEAKER_04: So here we have it.
42:14
SPEAKER_01: Thank you everyone.
42:28
SPEAKER_01: Um, you know, I'm incredibly proud today, and I know you have members of your family here, your sister and your brother, um, to see this accomplishment.
42:37
SPEAKER_01: 50 years at a dealership.
42:39
SPEAKER_01: Congratulations.
42:41
SPEAKER_01: 50.
42:42
SPEAKER_01: Absolutely incredible.
42:44
SPEAKER_01: Um and to top that off, we wanted to do a little bit more.
42:50
SPEAKER_01: You want to get a jacket that we felt would suit you, and this is it.
42:56
SPEAKER_01: You can wear that wear that out of it.
43:01
SPEAKER_01: So we have one more token of appreciation.
43:04
SPEAKER_01: I'm gonna say, on behalf of John and Muller's Canada and the Lynn's Group GMC, thank you so much.
43:10
SPEAKER_01: Years for 50 years, 60 years in the technician given awards is absolutely incredible.
43:15
SPEAKER_01: And for me to be able to stand here and say this to you and be that individual means so much to me.
43:20
SPEAKER_01: So here we have it.