Episode Transcript
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Paul J Daly (00:00):
Good morning, and
welcome to the last Monday of
(00:02):
the month. It's July 28 This isthe automotive State of the
Union. I'm Paul Jay Daly. Thisis Kyle mounts. Here today.
We're talking about EU's tarifffinally getting to the ground,
and a couple other things aswell. Everywhere I go, the kind
of a lot of
Kyle Mountsier (00:15):
really matter,
because this EU tariff thing
was, was raising everybody'sblood pressure. You know what I
mean?
Paul J Daly (00:22):
You know? You know,
sometimes when you you buy,
like, an outfit, and you'relike, This is gonna look great,
and then you put it on, you'relike, I kind of hate this.
That's kind of how I feel aboutmy new color grading on my
camera.
Kyle Mountsier (00:35):
You got, like,
explain to the people, well,
first off, you don't know whatcolor grading is. It's all about
the fact that lenses need alittle bit of like
Paul J Daly (00:44):
light bodies are
different. Yeah, all the whites
look white, and the skin colorsneed to look skin color, and all
the way. So Sony has a hard timewith skin tone. Sometimes
cannons on a Kyle's on a Canoncamera. Now, if you're
listening, you have to go watchthis. Kyle's on a Canon. I'm on
a Sony. And I was like, Yeah, myshirts looking kind of yellow.
So Nathan came in, we adjustedit. I mean, granted, the picture
is really small. We wereadjusting. We're like, looks
(01:06):
great. Now that I'm big, now myshirt looks like, you know, I
washed it with something orange.
It does. It does, yeah, I
Unknown (01:12):
know, yeah. But your
skin tones look better. Look at
your face. My skin
Paul J Daly (01:18):
looks beautiful.
You look like you've been at thebeach. This last looks like on
February upstate New York, pale.
If we make my shirt look andthat's not how I look, we'll
figure this out. Wait. What away to start away. Get it. I
know. Look. We have a next week,we have an upcoming ASOTU Edge
webinar. These are our QuickShot webinars, 2530 minutes with
(01:40):
our friends at car RX, drivingloyalty data, with Shane Wilson
and Levi Beatty. This is goingto be Wednesday at 2pm but you
can go to asotu.com registernow. You can be there live, or
you can get the recording. Youknow how webinars work, and
these are always a ton of fun.
Kyle Mountsier (01:56):
Just, yeah, this
one's really great. It's near
and dear to my heart talkingabout anything retention,
anything loyalty. You know, it'sthe way to stay in business. How
to
Paul J Daly (02:03):
Win you that's how
you win the long game. Yep. All
right, speaking of the law game,European lawmakers got a
breather from the US, and as theUS and EU struck a long awaited
trade deal dialing back tariffthreats that had been weighing
heavily on the industry, the USwill apply now a 15% 15 one,
five tariff on EU goods, easingpressure from the previously
(02:26):
targeted 25% big difference.
Stocks of German automakers likeBMW, Mercedes and Volkswagen,
initially surged on the news.
Barclays analysts note the 15%rate is six times higher than
pre Trump levels. So what isthat? What is it like? 3% two,
3% the EU may cut its 10% tariffon US imports benefiting BMW,
(02:47):
Mercedes, which export us builtmodels back to Europe. BMW and
VW also hoping for additionalrelief tied to these investments
they're making in the US.
Barclay said, quote, logging in15% tariffs as a run rate will
still represent a year on yearon year headwind in 2026 versus
2025 so there's still going tobe a little bit of a headwind.
But I feel like everyone can,like, get to get to work now,
Kyle Mountsier (03:11):
yeah, you can at
least breathe knowing what the
what the stakes are, right? Thedifference between that 15 and
25 it's the it's almost thedifference of the two and a half
to the 15. So still, a starkdifference in what it takes to
get these goods into the US. Youknow, if we talk to our friend
John Sacco, I'm sure this has amajor impact on his business,
(03:32):
maybe not as much as as the 25%would, but it's still going to
have a lot of manufacturers,goods producers, importers, kind
of struggling to meet thebalance of like, consumer
pricing, demand, the you know,the taxes on these goods coming
in but, but definitely, it'slike, Okay, now we know where
the stakes are. Yes, here'swhere we can put stuff in the
(03:54):
ground, and here's how we canmove forward
Paul J Daly (03:56):
anytime a
conversation like this gets to
ground. Finally, like a lot oftimes. The worst part of all of
this stuff is the uncertainty,is the consumer sentiment. And
what should I be thinking about,right? Once all this gets I
think 3060, days from now, wejust won't be talking about it
anymore, hopefully, and it'lljust be part of doing business
from the consumer standpoint,and the retail dealers will be
able to just get on knowing alittle bit more certainty about
(04:18):
their inventory and what theycan expect. So there you go for
we'll call that forwardprogress, yeah, speaking of
forward progress, right,
Kyle Mountsier (04:27):
there it is a
real one, too.
Paul J Daly (04:29):
Toyota's next four
years we packed with new EVs,
freshened best sellers and asurprising push to keep sedans
relevant. The highlighter is goget the now we've always asked
why, what the differentiation issome of these models, but now we
know the Highlander will go allelectric in 2025 following the
(04:50):
new grand Highlander, a threerow electric crossover. Oh, next
line, a three row electriccrossover, Bz 5x will launch
from Kentucky. Key late 2025that's like, kind of, is that
like, kind of like a model Ycompetitor, right? We would
consider that rev four design ismoving it up to 2025 with new
platform, with a new platform,safety and infotainment
(05:12):
upgrades. Toyota has continuedto invest in sedans. The Corolla
freshens in 2025 the Camry willbe redesigned in 2028 a compact
Corolla pickup is indevelopment, set to rival the
Ford Maverick expected in 2027and a Kyle Toyota's gr super may
end production in 2026 thoughemotions could keep it alive.
(05:34):
Yeah. I mean, people love that
Kyle Mountsier (05:36):
car. It's kind
of sad that the super may end in
2026 I don't know if we'll seethat happening. The stark thing
for here, for me here, is thatwe're talking about changes in a
line in 2028 and this is thething that I think the Chinese
manufacturers are challengingthe rest of the world with, with
these 12 to 18 month developmentcycles, completely refreshing
(05:57):
brands, manufacturingfacilities, builds in those
timelines, because the availabletechnology, the body style,
differentiation, all of thosetypes of things have to keep up
with consumer demand. And youstill see some of the legacy
automakers making 345, yearchallenges and changes and
pivots. And I just don't thinkthat that pace is going to keep
up with the way the consumerlikes to interact. You see
(06:20):
Apple, they've already struggledwith the fact that one year over
one year and changing their theyou know, their hardware and
their software is starting towane in its ability to keep
customers excited. So we'll seeif they'll if OEMs can do the
same.
Paul J Daly (06:35):
You know, I think a
derivative effect of what you
just mentioned, thissignificantly increased
production cycle, where productsgo from concept to market in 18
months. It's going to wreakabsolute havoc on the used car
market. That's right, you know,and especially when the Chinese
brands now thinking a littlemore internationally here with
the Chinese brands, with all ofthese EV makers, likely going
out of business, like so many, Idon't, 120
Kyle Mountsier (06:58):
oh my goodness,
cars just sitting on the road.
Wow. We're
Paul J Daly (07:01):
like, what is that?
Again? What was that? You know,like, the used car market. I
mean, we've seen pictures oflike, EV boneyards, right, where
all that stuff out there, andit's not going to get any
better. But I think Toyotaobviously just a staple, so
savvy, so ahead of the curve byjust being patient and reacting
to the market, or predicting themarket, yeah, I don't know that
they predict the market as muchas they react. Like, Gary talks
(07:22):
about this like, he's like,people think I see the future.
He goes, I'm just a greatcounter puncher. I just
understand what punch is beingthrown first. And I think that's
Toyota.
Kyle Mountsier (07:34):
And you watch it
quickly and move quickly, yeah,
that's the difference. That'strue,
Paul J Daly (07:37):
yep. Speaking of
moving quickly,
Kyle Mountsier (07:41):
almost, almost
too quickly, too late. Yeah,
millions are sharing deeplypersonal issues with AI. But
surprising admission from openAI Sam Altman has lawyers and
plenty of everyday usersbuzzing. He admitted last week,
the chat GPT conversations don'tcarry the same confidentiality
as talks with a lawyer, doctor,therapist, raising big questions
about privacy in the AI age. Hishis quote last week was, we
(08:06):
should have the same concept ofprivacy for your conversations
with AI that we do the therapistor whatever, and we haven't
figured that out yet. Legalexperts warned that without
privilege, user data could besubpoenaed if open AI is storing
it open. I did note, however,that with chat history off,
especially on paid plans, dataisn't saved or used for
(08:27):
training. Enterprise level chatGPT offers enter encryption and
compliance, but the free andplus versions laugh, lack those
safeguards, so even people onthe plus versions aren't getting
that full level of encryptionand free man, if you're in a
free account and you're sharingconsumer data, personal
conversations, questions aboutwhether or not you should do
something dramatic with yourlife, any of that like, Watch
(08:50):
out. Watch out, fam.
Paul J Daly (08:51):
Should I go to
Coldplay concerts? Oh, yeah,
Kyle Mountsier (08:55):
should have
asked. Definitely should
Paul J Daly (08:57):
have asked. You
know, basically what I've seen
about this is, you know, thetemporary chat function, if
you're asking something, itdoes, it's not supposed to save
the chat history, right? The bigso if the they were saying, if
the data doesn't exist becausethe chat history isn't
preserved, then what is there tobe subpoenaed? The flip side is,
like, the utilitarian nature ofkeeping chat history on is the
(09:21):
fact that now you can actuallyhave a deeper, more meaningful,
more beneficial and helpfulconversation, because context is
saved, right? So, yeah, I thinkit will take, like people are
talking about this. I think itwill take the first real life
example of somebody subpoenaingchat GPT data, chat history, and
(09:43):
using that, submitting it asevidence, and it's going to
happen high profile case, youknow, I mean, the same rules
always apply, like, just don'tdo anything that's illegal, and
you probably do much betterstuff, but, but realistically, I
think Sam Altman's, you know,position on this, he's like,
Well, it's kind of if we'reusing this. As a therapist, like
we need the same legalconfidentiality, but it's
(10:04):
tricky.
Kyle Mountsier (10:05):
Well, I think, I
think the big thing to note here
for especially for any one inretail auto, where you're not
like a tech company and yourpeople are experimenting with
asking questions of any largelanguage model, yes, anything,
having strict guidelines andeducation internally on how,
(10:28):
when and where to use thesethings, right? Especially with
PII floating around dealershipslike it does, do not let your
contrast people, yeah, yeah, beuploading this stuff into like I
would say, you should be payingfor all of your employees to
have some AI that is like ageneralized AI. Maybe you have
(10:52):
maybe you have Google Gemini, ormaybe you have chat GPT,
whatever it is, pay for one sothat you can direct them to use
it because they want to use itno matter what, but make sure
that you pay for them at least,so that you can say that's the
only one you're allowed to use,and you must be logged in into
our business plan, so that youdon't have stuff exposed.
Paul J Daly (11:14):
Brian Ortega, you
got my Run DMC reference. I
almost let it drag on longerthan it did, but it's tricky. I
think, I think I might need thatas a new trigger pad that's
strong, that
Kyle Mountsier (11:25):
would be good. I
mean, if Brian's listening, I
bet you he's got you covered.
Paul J Daly (11:28):
Will YouTube flag
that if I just, like, play the
little bridge, if it's tricky,well, like, it's like a second,
it's like, proper of seconds.
No, I think you get, like, threeseconds.
Kyle Mountsier (11:38):
We'll get
someone to we'll get someone to
research that figure it out.
Maybe we gotta throw a littleflair in it, you know,
Paul J Daly (11:43):
because we have, we
have a second I saw, so we, we
talked about, I'm gonna releasea YouTube post on this soon
about my first use of the AIagent. Oh, right. And so I have
this little fit. It's fun. It'sa lot of fun. And it's gonna end
in a real world, physical thing,which is the coolest part in my
mind, Oh, that's great. However,I read an article today talking
(12:06):
about how AI people are startingto like seed websites that AI
agents may be scrubbing withinstructions to get the AI to do
things you didn't intend it todo. So like, I have my agent out
there going to a site, and it'sreading the data, and the data
instructs the AI to take anaction or ask me for something
(12:29):
so it can, like, fish it out. Iwas like, you
Kyle Mountsier (12:34):
suckers, Watch
out. Watch out. Y'all, I know
I'm telling you, look this. Thisis the reality, and I think this
is maybe the clamp on all ofthis is over the next two, three
years, as more and more peopleare leveraging this type of
service in person meetings,whether it be because they're
(12:56):
worried about whether or notthat's a real video, or whether
that's you actually talking, orhow you're interacting with the
world, or like shopping inperson, in person. Events going
to go into the local eatery,whatever it may be, are going to
be more and more important toour daily lives, and they're
going to be sought after. And socreate, create community around
(13:18):
those is what I would say. Yep,
Paul J Daly (13:19):
there you go. Brian
Ortega, I took your advice. He
said, Ask chat. GPT how manyseconds we can use the Run DMC
clip and we went temporary chat.
I don't need any of this gettingsubpoenaed now says there's no
safe number of seconds, even onesecond, you need explicit
however, it's often quoted that10 seconds. Maybe it's a riff,
it's a myth. It's not a law.
(13:43):
What might be permitted istransformative uses like
critique, parody or news morelikely to qualify, just like
this little segue button, stop,segue. Okay, now the stop is
definitely from MCM actually,Brian retire made that. So I
think he made a copyright safeversion. Come on now. I also
don't think it'll be competingwith the
Kyle Mountsier (14:03):
original. Make
us another version. Brian. Hear
us from across the interwebs.
Paul J Daly (14:10):
Got him all right.
Listen, we're just doing allkinds of craziness on the last
Monday of the month. Listen, themonth close is here. Lean in.
Make it count. Think about whatthose customers are going to do
three years from now, not justthis one time year server,
though.