April 10, 2025 • 17 mins
Episode #1014: Today, we’re covering President Trump’s pause on reciprocal tariffs leaves auto imports still facing steep duties, while a record number of buyers turn to 84-month loans to afford today’s rising prices.
Show Notes with links:
- The auto industry is still squarely in the tariff crosshairs, even as President Trump backs off his broader reciprocal tariff plan. While a new 10% base tariff replaces most of the global duties, the 25% tariff on vehicles—and key materials like steel and aluminum—remains firmly in place.
- Treasury Secretary Scott Bessent confirmed auto, steel, and aluminum duties are sector-specific and still active.
- Despite ongoing auto tariffs, markets surged on the pause news—Tesla jumped 22.7%, GM rose 7.7%, and Ford gained 9.3%.
- Industry leaders are pushing for relief with MichAuto’s Glenn Stevens Jr. advocating for protecting the international supply chain, calling the fragmentation “harmful” to competitiveness.
- President Trump said he would consider exempting specific companies from tariffs, saying “We’re going to take a look at that.”
- More new-vehicle buyers are turning to 84-month loans than ever before, highlighting just how financially stretched today’s car shoppers remain.
- According to Edmunds, 20% of Q1 new-vehicle loans were for 84 months, up from 16% in 2024 and 13% in 2019.
- The average amount financed also jumped to over $41K compared to $32K in Q1 2019.
- On the used side, 12% of loans ran 84 months, more than double the 5.3% seen in 2019, with an average of $28K financed.
- Dealer Michael Cummings of I-10 Toyota: “I really, really don’t like going 84 months... it’s not healthy for the customers in the long run. It’s not healthy for us dealers in the long run.”
- A new report from Retail TouchPoints, citing Forrester’s 2024 U.S. CX Index, reveals that customer service is at its worst level since 2016. Despite access to advanced tech, only 3% of brands are truly customer-focused — and shoppers are losing patience.
- 70% of customers say it’s hard to find in-store help; 83% of associates say their jobs are too complex.
- Shoppers prioritize speed over flair—19% say quick item location drives return visits.
- Brands like Tractor Supply and Dick’s use “store mode” apps to show real-time inventory and item locations.
- GenAI is gaining traction: 84% of customer service managers plan to deploy AI agents in 2025, up from 42% in 2023.
- “With greater customer experiences comes greater responsibility,” says CI&T’s Melissa Minkow.
Join Paul J Daly and Kyle Mountsier every morning for the Automotive State of the Union podcast as they connect the dots across car dealerships, retail trends, emerging tech like AI, and cultural shifts—bringing clarity, speed, and people-first insight to automotive leaders navigating a rapidly changing industry.
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Paul J Daly (00:01):
Good morning. It is Thursday, April 10. This is the
automotive State of the Union onPaul J Daly. This is Kyle
Mountsier. Today we're going totalk about, yeah, you know,
tariffs, 84 month loans andcustomer service. Kind of taking
a dive across the board wasdefinitely kind of thing.
(00:21):
Yesterday was like, an up and adown kind of day, you know, a
lot a lot of mixed, a lot ofmixed reality and emotions with
the, you know, rescinding of thereciprocal tariffs automotive
realizing, like, I don't know itfully, you know, takes us off
the hook. Also heard some newsfrom some OEMs about some of the
strategies that they're planningon dealing with terror price.
(00:43):
So, like, you know, just anotherjust the
Kyle Mountsier (00:46):
Wednesday. It was yesterday, just another
Wednesday. Yeah, you and I goingto be on the ground, which was
amazing. It was so good. Yeah. Imean, look, we, every once in a
while, we get to step foot in adealership, whether it's
shooting more than cars, or justbeing being around. We got to be
with Patrick, a bad yesterday,and like you were, you were
walking through the servicedrive, like, breathing heavily,
(01:06):
you know? And it's just reallycool to see, you know, the way
that that some of thesedealerships like that, just
like, there's a smile, right?
Like you feel the smile when youwalk in. The doors were open. It
was a beautiful day. I just, Ifelt all kinds of happy. Yeah,
Paul J Daly (01:22):
it's great. You know, just being in touch with
what's going on on the frontlines, no doubt, always an
invigorating thing. You know,coming from the service side of
the business. I love the servicedrive in the morning, and I
think a lot of people do youknow that as well. When you show
up in the morning and the piecesare moving and customers are
showing you
Kyle Mountsier (01:40):
know what? You know what? One of my favorite
sounds in all of the carbusinesses is it, nope, nope.
It's, which is the role of adoor opening in the service
drive in the morning. Yeah,those face yeah, oh, that is,
like, That sound is like, Oh,we're here. We're ready to go.
Like, if you're the guy thatgets to hit that button in the
(02:01):
morning, the guy that gets tohit that button, you
Paul J Daly (02:04):
know, unlocking the doors of a restaurant almost.
Yeah, that's the same we'regonna be. We're gonna be
unlocking the doors to ASOTU CON2025, in just a little bit over
a month. Whoa, presented by ourfriends at Reynolds. Reynolds
and goo goo, like we say itevery day, but every day we get
closer. We get moreconfirmations, more ticket
sales, more like things comingtogether like this is the moment
(02:27):
where all the like, the swagcomes in, and the topics come
in, and we're starting to, like,transition and massage some of
the topics so they're superrelevant when you get there,
without a doubt. We were talkingto Patrick Abbott about it
yesterday, and the recurringtheme. And we start, actually,
we started releasing a bunch ofcontent about what people feel
about what happens at ASOTU CON,and how the takeaways that they
(02:49):
get the feel is, Patrick's like,this is where you go if you
actually want to solve problems,actually be around the
innovators. David spizack wassaying that he's like, you know,
you can go to 20 groups, and youcan go to, you know, like to
your OEM meetings, he goes. Butthe truth is, when you go to OEM
meetings, it's a lot of peoplewho think like you do, and are
bound by the same constraintsmentally that you are because of
(03:11):
he's a soda con is a place youcome to get outside perspective,
to bring real innovation intoyour store. So, you know, when
talking about unlocking thedoors, if we had a roll up door
to let everybody
Kyle Mountsier (03:23):
one day. Al, COO tree, where you at? Yeah, give
me what would be like. We can.
We can, if you don't know, Al,on our team, you got to meet him
when you come to us. Oh, yeah,
Paul J Daly (03:32):
Nashville. Al, Nashville. Al, it's great. Yeah.
So you get your tickets ASOTUcon.com are we? Did we really?
Yeah, we really seen the game we
Kyle Mountsier (03:41):
did. Let's do it right now. You can go to wait. I
don't think we have a graphicfor this. No. Nathan, Southwick,
Nathan, Nathan, come on. Why didyou create this game? Where did
this even come from?
Paul J Daly (03:53):
Well, we say we mean a game like you mean a real
play it online and you getaddicted to
Nathan Southwick (03:58):
it. This is a Paul thing. I think you and I
had talked about it at onepoint, like, in, like, December
or January, maybe, and then youand I were talking about
something about ASOTU CON. Andthen you were
Paul J Daly (04:12):
just like, let's just see, like, what we can do.
And you opened up, grok, and youwere like, it's like, what are
these games called, where itjust goes from one side to the
other? Right? Just a little sidescroller, right? Yeah, right.
That's what you said. You said aside scroll. I was like, Okay, I
opened up grok. I was like,create me a side scroller game
for SOT con. And I hardly gaveit any prompt. And I went out
and figured out what a soda conwas about, and it generated,
(04:33):
like, code and a concept. Werelike, could we really make this
work? And we spent, like, whatwe probably spent, like, five
minutes in my office, like,Okay, we need to do this. We
need to load this. Had a littleissue. And then we and it was a
Friday, and Nathan goes, I thinkI might, you know, spend a
little too much time on thisthis weekend. And when we came
back, there was a game. This is
Kyle Mountsier (04:53):
what we got.
This is what we got. We got agame. Look at this. Oh, we can't
add it to the stage. How can we?
Can. We
Nathan Southwick (05:00):
can. I gotta, I gotta, I gotta. Check this
out. If you
Kyle Mountsier (05:02):
go to jumper, where is it? Jumper? Dot ASOTU
con.com, you'll see this game.
You can choose your player,Paul, me, and then there's some
craziness. You can read all theinstructions, because there's a
lot of instructions, but it'sjust one of those jumper side to
side games. Then you can, like,get michaelified, and then
you're invincible. You gottadodge buzzword bums, yeah, you
(05:22):
dodge diamonds, and then can'tfall. If you fall games over,
you get extra lives if you hitit with when you're on Michael
FIDE It's magical. Then he playsaway. Oh, look at Michael woods
in the background. Look at thatguy. He's gonna be there, my
goodness. And there's aleaderboard. So old
Paul J Daly (05:42):
school, put your three initials in and there's a
leaderboard. What's the highscore? Right now,
Kyle Mountsier (05:45):
the high score is high scores,
Nathan Southwick (05:46):
like, 800 something. I might even notice
13 coins. I might need to, like,refresh the leaderboard, just so
that we can start fresh. Yeah,look at this. And also, also, I
will say this to like, the musicis clutch. Like, if you are not
playing it with sound on, it issound on,
Paul J Daly (06:05):
sound on, lot of throwback. So Nathan's been
working on that, maybe not evenlow key. There's a time when I
walked in the editing room andall three of them were playing
the game, which is a testamentto is it's a dig. And whereas we
beta tested this around withfriends, like, I think Nathan's
whole family now is in a deadlyfight for
Kyle Mountsier (06:23):
Patrick, a bad Patrick, a bad yesterday
afternoon, spent way too muchtime. Oh, did he? Oh, yeah, it
got great that didn't serve itspurpose. He fell in like, four
coins and, like, immediatelyhit, start game again. He's
like, Oh no, I'm on competitive.
I'm gonna give it to his son,Parker. So all right, we should,
we should do some stories today.
(06:43):
But jumper dot ASOTU CON com,you can, you can find it all
day. Yeah, we'll
Paul J Daly (06:46):
launch in things like that. All right, let's talk
about some news. The autoindustry still squarely in the
tariff crosshairs, even asPresident Trump backs off his
broader reciprocal tariff plan,while a new 10% base tariff
replaces most of the globalduties, the 25% tariff on
vehicles and key materials likesteel aluminum are sector
specific, not reciprocalspecific. Yeah, and they're
(07:09):
still active despite ongoingtariffs. Markets surged on the
pause. News, Tesla jumped 22.7%GM was up almost 8% Ford up over
9% industry leaders are pushingfor relief from mish autos, Glen
Stevens Jr, advocating forprotecting international supply
chain. So what's, what's Mitchauto? Is that their Ada,
(07:31):
probably, yeah, yeah, they work.
They work close, because they're
Nathan Southwick (07:35):
Michigan. They work closely with a lot of
Canadian suppliers and stufflike that. Got it. Thanks for
that
Paul J Daly (07:40):
context. He's calling the fragmentation
harmful to competitiveness. It'shard to Yeah, President Trump
said he would consider exemptingspecific companies from tariffs,
saying, quote, we're going totake a look at that, whatever.
Kyle Mountsier (07:52):
Yeah, just last week. Well, I think it may have
been announced this morning, butNvidia got some, some particular
kind of all of theirs. They gotsome considerations for, you
know, bargaining against, like,Hey, we're going to invest in,
you know, North American us. Oh,right, hey, we'll cut you on the
(08:13):
tariffs, as long as you investlocally as well. So we're going
to see a lot of these kind ofnegotiations. Yeah, everything's
not off the hook. But a lot ofmanufacturers are already
starting to press in. We gotsome information that Mazda
yesterday is saying, hey, look,we're going to make sure that,
you know, that we're going tobalance some of the changes
across the board, across parts,across inventory. You won't, you
(08:35):
won't really feel the impact.
You know, the manufacturers onthat side of trying to mitigate
the impact of the consumer andto the dealer. But don't let
your guard down quite yet. Butthere's definitely good news. It
seems like there's a lot ofcountries that are willing to
negotiate, willing to kind offigure it out, and then Yes,
yesterday, just to see the Dow,the S and P take some of its
(08:57):
biggest increases in many years,right? We've seen it take some
massive decreases now, a massiveincrease. Everything's volatile.
Don't let your guard down, butdon't, don't pay attention too
close, because you can controlwhat you can control right in
front
Paul J Daly (09:12):
of you. Yeah. And you know, you and I have been
having conversations with a lotof people, and some of the
savviest operators are like,we're going to keep doing what
we're doing and what we alwaysdo, yep. And right, like we're
not going to let tariffs get inour way. Basically, is just
That's it, just like we're notgonna let a pandemic get in our
way, just like we're not gonnalet a recession get in our way.
Same story from the from thedealers who are really making
(09:33):
it, speaking of really making itor not making it. Not surprising
news. More more new vehiclebuyers are turning to 84 month
loans more than ever,highlighting just how
financially stretched today'scar shoppers remain. According
to Edmonds, 20% of q1 newvehicle loans were for 84
(09:55):
months, 20% up from 16% in 2024it's a significant increase.
Increase and 13% in 2019 soalmost doubling in five years.
The average amount financed alsojumped to over 41,000 compared
to 32,000 in 2019 on the useside, 12% of loans ran 84
months, more than double the5.3% seen in 2019 with an
(10:19):
average of 28,000 finance dealerMichael Cummings of i 10 Toyota,
said, quote, I really, reallydon't like going 84 months. It's
not healthy for the customers inthe long run. It's not healthy
for us dealers in the long run.
Kyle Mountsier (10:32):
Yeah, this is, this is clearly an issue when it
comes to trade cycle managementand getting people out of these
vehicles. Obviously, when pricesgo so high, people are still
trying to maintain a payment,and lease rates and residuals
have not kept pace with theability to get that low payment,
so you still don't have theability there. And then, when
you look at anyone that can'tqualify for subvented leases,
(10:53):
you know you kind of have to go84 we'll see if you know, the
market may just change, right?
And you may just see tradecycles be become a little bit
longer, although, you know, oneof the things that that I'm
talking to dealers about isyou're still seeing used car
valuations pretty high, andwe're going to see that through
the through this year. So, youknow, there's kind of a
balancing act between, like,trade cycle management being a
(11:14):
little bit worse because ofhigh, you know, high interest,
high term loans, and trade valuestill being high enough to be
able to trade these people out.
So I think the market isbalanced, but still kind of a
scary thing to look at, almostdoubling on new cars and and
doubling on used cars. Theamount of 84 month loans, like I
remember, you know, if we weregoing 84 months, you know, in
(11:37):
like 2013 2014 we werestretching like we had two banks
that would do it, right? It was
Paul J Daly (11:42):
a totally, yeah, I think that definitely increases
the value of it after marketservice contract at the point of
sale first, right, to make surethat that vehicle is Gap
coverage, right? Gap coverage,mechanical, major mechanical,
even the small stuff. I do thinkthe human nature of the desire
for change still kicks in, rightthat 3634, years in, a lot of
(12:05):
people just start looking. Thereal point is, obviously, how
likely are they to get out ofthat vehicle, even, even so
they're not rolling a bunch ofnegative, negative equity. Who
the heck knows what the marketconditions going to be in three
years? We don't even know what'sgoing to be in three minutes.
You know, we have no clue, butyeah, just like a little sign of
the time speaking assignment,the Times stop. Segway,
Kyle Mountsier (12:30):
a new report from research firm retail touch
points, cites Forrester's 2024UX usdx index and reveals that
customer service is at its worstlevel since 2016 Yikes, despite
access to advanced tech, only 3%of brands are said to be truly
customer focused, and shoppersare losing their patience. 70%
(12:52):
of customers are saying it'shard to find in store help. 83%
of associates say their jobs aretoo complex. Shoppers are
prioritizing speed over flare.
19% say, quick item, locationdrives, return visits, so the
ability to just get in thereattraction AI is gaining
traction. 84% of customerservice managers plan to deploy
(13:13):
AI agents in 2025 up from 42% in2023 so people leaning on AI
agents as a and, and it seemslike increasing the complexity,
even still, of of individuals,jobs, reducing staff, making it
less possible. I think that thisis, this is an interesting kind
(13:34):
of move when we feel like wehave all of the technology at
our fingertips, yet customerservice seems to be waning
because we're probably focusingless on training our people to
be great. We're
Paul J Daly (13:46):
gonna pull Nathan in for some personal context on
this before come on in. Nathan,yeah, I have a really, I mean, I
guess the data is the data Ihaven't looked at. I have a
really hard time believing thatcustomer service is worse than
it was during COVID, I'd belike, a really hard time. Oh
(14:07):
yeah, yeah. I mean, it was
Kyle Mountsier (14:08):
pretty terrible, well, but this was Since 2016
Well, I guess I know that's mypoint. Well, but I mean, you
know, we got, especially in theretail business, we got lazy
during COVID. And there was alittle it was a little bit
slower, you know, you could slowdown, take your time with
people, you know. And now it'slike, there's, there's a retail
(14:29):
that's insane. It's hard to findstaff. Nathan,
Paul J Daly (14:31):
what's, what's your context?
Nathan Southwick (14:33):
Well, so I was, I was out last night with a
couple of friends. We were atthe mall, and one of my friends
wanted to go to Dick's to tryand some shoes. He's a runner,
and he's looking for some newrace shoes. Kyle, you and I can
geek about that later. But hegoes in and he wants to try on
two separate pairs. And so helets them know, like, here's
what I'm looking for, and here'swhat it is. And and they've got
(14:54):
all their stuff that's like,this is Josh, and these are the
shoes that he wants to go lookfor. And like, it pulls. The
thing on their app, the guycomes out with one pair of
shoes. And my friend is like,hey, is there? Is there another?
And the guy just sort of like,gave him a blank stare. Like,
like, No. And Jess is like, yousure? Like, and the guy just
sort of like, shook his head andhe walked away. And Josh like,
(15:14):
there's definitely another pairof shoes back there. He just
didn't look and like, twominutes later, another associate
comes out with the second pairof shoes, right? But just, how
Paul J Daly (15:24):
does this work? You you open the app and you, like,
summon shoes from the back.
Nathan Southwick (15:30):
I'm not sure if he did that, or if you just
let them know that, like, he'swanted to try on two pairs of
shoes, and then it like,
Kyle Mountsier (15:37):
well, and I think what this is, is like, it
just points to and us in autoretail, I think this is
something that we can focus on.
It's like, No, you have to go tothe end of the road with every
single customer interaction. Andso if customers are what an
opportunity right now, ifcustomers are experiencing
lackluster service acrossretail, right and they could
walk into a dealership and likethe variable between great
(16:00):
service and lackluster servicecan be so very one side to the
other, and you can literally,like, we have an opportunity
right now to lead the pack andother people to look and retail
it like, Why? Why does everybodylove shopping for a car? You
know, it's a great opportunity.
Nathan Southwick (16:19):
We were talking about will gadera
earlier, and if you remember histhe interview that you guys did
with him last year, he said,like in an industry where where
the expectation is bad, all ittakes is carrying a little bit
more and trying a little bitharder, and it'll put you up
over that. That's that topgreat,
Paul J Daly (16:34):
great point. Well, great personal context as well.
So look a little bit more.
That's all you need just try alittle bit more today. Focus on
that customer service. Focus onserving your team, and I think
the other things will fall inline. Thanks for being with us
here today. Go to what is it?
Jumper, dot ASOTU con.com,
Good morning. It is Thursday, April 10. This is the
automotive State of the Union onPaul J Daly. This is Kyle
Mountsier. Today we're going totalk about, yeah, you know,
tariffs, 84 month loans andcustomer service. Kind of taking
a dive across the board wasdefinitely kind of thing.
(00:21):
Yesterday was like, an up and adown kind of day, you know, a
lot a lot of mixed, a lot ofmixed reality and emotions with
the, you know, rescinding of thereciprocal tariffs automotive
realizing, like, I don't know itfully, you know, takes us off
the hook. Also heard some newsfrom some OEMs about some of the
strategies that they're planningon dealing with terror price.
(00:43):
So, like, you know, just anotherjust the
Kyle Mountsier (00:46):
Wednesday. It was yesterday, just another
Wednesday. Yeah, you and I goingto be on the ground, which was
amazing. It was so good. Yeah. Imean, look, we, every once in a
while, we get to step foot in adealership, whether it's
shooting more than cars, or justbeing being around. We got to be
with Patrick, a bad yesterday,and like you were, you were
walking through the servicedrive, like, breathing heavily,
(01:06):
you know? And it's just reallycool to see, you know, the way
that that some of thesedealerships like that, just
like, there's a smile, right?
Like you feel the smile when youwalk in. The doors were open. It
was a beautiful day. I just, Ifelt all kinds of happy. Yeah,
Paul J Daly (01:22):
it's great. You know, just being in touch with
what's going on on the frontlines, no doubt, always an
invigorating thing. You know,coming from the service side of
the business. I love the servicedrive in the morning, and I
think a lot of people do youknow that as well. When you show
up in the morning and the piecesare moving and customers are
showing you
Kyle Mountsier (01:40):
know what? You know what? One of my favorite
sounds in all of the carbusinesses is it, nope, nope.
It's, which is the role of adoor opening in the service
drive in the morning. Yeah,those face yeah, oh, that is,
like, That sound is like, Oh,we're here. We're ready to go.
Like, if you're the guy thatgets to hit that button in the
(02:01):
morning, the guy that gets tohit that button, you
Paul J Daly (02:04):
know, unlocking the doors of a restaurant almost.
Yeah, that's the same we'regonna be. We're gonna be
unlocking the doors to ASOTU CON2025, in just a little bit over
a month. Whoa, presented by ourfriends at Reynolds. Reynolds
and goo goo, like we say itevery day, but every day we get
closer. We get moreconfirmations, more ticket
sales, more like things comingtogether like this is the moment
(02:27):
where all the like, the swagcomes in, and the topics come
in, and we're starting to, like,transition and massage some of
the topics so they're superrelevant when you get there,
without a doubt. We were talkingto Patrick Abbott about it
yesterday, and the recurringtheme. And we start, actually,
we started releasing a bunch ofcontent about what people feel
about what happens at ASOTU CON,and how the takeaways that they
(02:49):
get the feel is, Patrick's like,this is where you go if you
actually want to solve problems,actually be around the
innovators. David spizack wassaying that he's like, you know,
you can go to 20 groups, and youcan go to, you know, like to
your OEM meetings, he goes. Butthe truth is, when you go to OEM
meetings, it's a lot of peoplewho think like you do, and are
bound by the same constraintsmentally that you are because of
(03:11):
he's a soda con is a place youcome to get outside perspective,
to bring real innovation intoyour store. So, you know, when
talking about unlocking thedoors, if we had a roll up door
to let everybody
Kyle Mountsier (03:23):
one day. Al, COO tree, where you at? Yeah, give
me what would be like. We can.
We can, if you don't know, Al,on our team, you got to meet him
when you come to us. Oh, yeah,
Paul J Daly (03:32):
Nashville. Al, Nashville. Al, it's great. Yeah.
So you get your tickets ASOTUcon.com are we? Did we really?
Yeah, we really seen the game we
Kyle Mountsier (03:41):
did. Let's do it right now. You can go to wait. I
don't think we have a graphicfor this. No. Nathan, Southwick,
Nathan, Nathan, come on. Why didyou create this game? Where did
this even come from?
Paul J Daly (03:53):
Well, we say we mean a game like you mean a real
play it online and you getaddicted to
Nathan Southwick (03:58):
it. This is a Paul thing. I think you and I
had talked about it at onepoint, like, in, like, December
or January, maybe, and then youand I were talking about
something about ASOTU CON. Andthen you were
Paul J Daly (04:12):
just like, let's just see, like, what we can do.
And you opened up, grok, and youwere like, it's like, what are
these games called, where itjust goes from one side to the
other? Right? Just a little sidescroller, right? Yeah, right.
That's what you said. You said aside scroll. I was like, Okay, I
opened up grok. I was like,create me a side scroller game
for SOT con. And I hardly gaveit any prompt. And I went out
and figured out what a soda conwas about, and it generated,
(04:33):
like, code and a concept. Werelike, could we really make this
work? And we spent, like, whatwe probably spent, like, five
minutes in my office, like,Okay, we need to do this. We
need to load this. Had a littleissue. And then we and it was a
Friday, and Nathan goes, I thinkI might, you know, spend a
little too much time on thisthis weekend. And when we came
back, there was a game. This is
Kyle Mountsier (04:53):
what we got.
This is what we got. We got agame. Look at this. Oh, we can't
add it to the stage. How can we?
Can. We
Nathan Southwick (05:00):
can. I gotta, I gotta, I gotta. Check this
out. If you
Kyle Mountsier (05:02):
go to jumper, where is it? Jumper? Dot ASOTU
con.com, you'll see this game.
You can choose your player,Paul, me, and then there's some
craziness. You can read all theinstructions, because there's a
lot of instructions, but it'sjust one of those jumper side to
side games. Then you can, like,get michaelified, and then
you're invincible. You gottadodge buzzword bums, yeah, you
(05:22):
dodge diamonds, and then can'tfall. If you fall games over,
you get extra lives if you hitit with when you're on Michael
FIDE It's magical. Then he playsaway. Oh, look at Michael woods
in the background. Look at thatguy. He's gonna be there, my
goodness. And there's aleaderboard. So old
Paul J Daly (05:42):
school, put your three initials in and there's a
leaderboard. What's the highscore? Right now,
Kyle Mountsier (05:45):
the high score is high scores,
Nathan Southwick (05:46):
like, 800 something. I might even notice
13 coins. I might need to, like,refresh the leaderboard, just so
that we can start fresh. Yeah,look at this. And also, also, I
will say this to like, the musicis clutch. Like, if you are not
playing it with sound on, it issound on,
Paul J Daly (06:05):
sound on, lot of throwback. So Nathan's been
working on that, maybe not evenlow key. There's a time when I
walked in the editing room andall three of them were playing
the game, which is a testamentto is it's a dig. And whereas we
beta tested this around withfriends, like, I think Nathan's
whole family now is in a deadlyfight for
Kyle Mountsier (06:23):
Patrick, a bad Patrick, a bad yesterday
afternoon, spent way too muchtime. Oh, did he? Oh, yeah, it
got great that didn't serve itspurpose. He fell in like, four
coins and, like, immediatelyhit, start game again. He's
like, Oh no, I'm on competitive.
I'm gonna give it to his son,Parker. So all right, we should,
we should do some stories today.
(06:43):
But jumper dot ASOTU CON com,you can, you can find it all
day. Yeah, we'll
Paul J Daly (06:46):
launch in things like that. All right, let's talk
about some news. The autoindustry still squarely in the
tariff crosshairs, even asPresident Trump backs off his
broader reciprocal tariff plan,while a new 10% base tariff
replaces most of the globalduties, the 25% tariff on
vehicles and key materials likesteel aluminum are sector
specific, not reciprocalspecific. Yeah, and they're
(07:09):
still active despite ongoingtariffs. Markets surged on the
pause. News, Tesla jumped 22.7%GM was up almost 8% Ford up over
9% industry leaders are pushingfor relief from mish autos, Glen
Stevens Jr, advocating forprotecting international supply
chain. So what's, what's Mitchauto? Is that their Ada,
(07:31):
probably, yeah, yeah, they work.
They work close, because they're
Nathan Southwick (07:35):
Michigan. They work closely with a lot of
Canadian suppliers and stufflike that. Got it. Thanks for
that
Paul J Daly (07:40):
context. He's calling the fragmentation
harmful to competitiveness. It'shard to Yeah, President Trump
said he would consider exemptingspecific companies from tariffs,
saying, quote, we're going totake a look at that, whatever.
Kyle Mountsier (07:52):
Yeah, just last week. Well, I think it may have
been announced this morning, butNvidia got some, some particular
kind of all of theirs. They gotsome considerations for, you
know, bargaining against, like,Hey, we're going to invest in,
you know, North American us. Oh,right, hey, we'll cut you on the
(08:13):
tariffs, as long as you investlocally as well. So we're going
to see a lot of these kind ofnegotiations. Yeah, everything's
not off the hook. But a lot ofmanufacturers are already
starting to press in. We gotsome information that Mazda
yesterday is saying, hey, look,we're going to make sure that,
you know, that we're going tobalance some of the changes
across the board, across parts,across inventory. You won't, you
(08:35):
won't really feel the impact.
You know, the manufacturers onthat side of trying to mitigate
the impact of the consumer andto the dealer. But don't let
your guard down quite yet. Butthere's definitely good news. It
seems like there's a lot ofcountries that are willing to
negotiate, willing to kind offigure it out, and then Yes,
yesterday, just to see the Dow,the S and P take some of its
(08:57):
biggest increases in many years,right? We've seen it take some
massive decreases now, a massiveincrease. Everything's volatile.
Don't let your guard down, butdon't, don't pay attention too
close, because you can controlwhat you can control right in
front
Paul J Daly (09:12):
of you. Yeah. And you know, you and I have been
having conversations with a lotof people, and some of the
savviest operators are like,we're going to keep doing what
we're doing and what we alwaysdo, yep. And right, like we're
not going to let tariffs get inour way. Basically, is just
That's it, just like we're notgonna let a pandemic get in our
way, just like we're not gonnalet a recession get in our way.
Same story from the from thedealers who are really making
(09:33):
it, speaking of really making itor not making it. Not surprising
news. More more new vehiclebuyers are turning to 84 month
loans more than ever,highlighting just how
financially stretched today'scar shoppers remain. According
to Edmonds, 20% of q1 newvehicle loans were for 84
(09:55):
months, 20% up from 16% in 2024it's a significant increase.
Increase and 13% in 2019 soalmost doubling in five years.
The average amount financed alsojumped to over 41,000 compared
to 32,000 in 2019 on the useside, 12% of loans ran 84
months, more than double the5.3% seen in 2019 with an
(10:19):
average of 28,000 finance dealerMichael Cummings of i 10 Toyota,
said, quote, I really, reallydon't like going 84 months. It's
not healthy for the customers inthe long run. It's not healthy
for us dealers in the long run.
Kyle Mountsier (10:32):
Yeah, this is, this is clearly an issue when it
comes to trade cycle managementand getting people out of these
vehicles. Obviously, when pricesgo so high, people are still
trying to maintain a payment,and lease rates and residuals
have not kept pace with theability to get that low payment,
so you still don't have theability there. And then, when
you look at anyone that can'tqualify for subvented leases,
(10:53):
you know you kind of have to go84 we'll see if you know, the
market may just change, right?
And you may just see tradecycles be become a little bit
longer, although, you know, oneof the things that that I'm
talking to dealers about isyou're still seeing used car
valuations pretty high, andwe're going to see that through
the through this year. So, youknow, there's kind of a
balancing act between, like,trade cycle management being a
(11:14):
little bit worse because ofhigh, you know, high interest,
high term loans, and trade valuestill being high enough to be
able to trade these people out.
So I think the market isbalanced, but still kind of a
scary thing to look at, almostdoubling on new cars and and
doubling on used cars. Theamount of 84 month loans, like I
remember, you know, if we weregoing 84 months, you know, in
(11:37):
like 2013 2014 we werestretching like we had two banks
that would do it, right? It was
Paul J Daly (11:42):
a totally, yeah, I think that definitely increases
the value of it after marketservice contract at the point of
sale first, right, to make surethat that vehicle is Gap
coverage, right? Gap coverage,mechanical, major mechanical,
even the small stuff. I do thinkthe human nature of the desire
for change still kicks in, rightthat 3634, years in, a lot of
(12:05):
people just start looking. Thereal point is, obviously, how
likely are they to get out ofthat vehicle, even, even so
they're not rolling a bunch ofnegative, negative equity. Who
the heck knows what the marketconditions going to be in three
years? We don't even know what'sgoing to be in three minutes.
You know, we have no clue, butyeah, just like a little sign of
the time speaking assignment,the Times stop. Segway,
Kyle Mountsier (12:30):
a new report from research firm retail touch
points, cites Forrester's 2024UX usdx index and reveals that
customer service is at its worstlevel since 2016 Yikes, despite
access to advanced tech, only 3%of brands are said to be truly
customer focused, and shoppersare losing their patience. 70%
(12:52):
of customers are saying it'shard to find in store help. 83%
of associates say their jobs aretoo complex. Shoppers are
prioritizing speed over flare.
19% say, quick item, locationdrives, return visits, so the
ability to just get in thereattraction AI is gaining
traction. 84% of customerservice managers plan to deploy
(13:13):
AI agents in 2025 up from 42% in2023 so people leaning on AI
agents as a and, and it seemslike increasing the complexity,
even still, of of individuals,jobs, reducing staff, making it
less possible. I think that thisis, this is an interesting kind
(13:34):
of move when we feel like wehave all of the technology at
our fingertips, yet customerservice seems to be waning
because we're probably focusingless on training our people to
be great. We're
Paul J Daly (13:46):
gonna pull Nathan in for some personal context on
this before come on in. Nathan,yeah, I have a really, I mean, I
guess the data is the data Ihaven't looked at. I have a
really hard time believing thatcustomer service is worse than
it was during COVID, I'd belike, a really hard time. Oh
(14:07):
yeah, yeah. I mean, it was
Kyle Mountsier (14:08):
pretty terrible, well, but this was Since 2016
Well, I guess I know that's mypoint. Well, but I mean, you
know, we got, especially in theretail business, we got lazy
during COVID. And there was alittle it was a little bit
slower, you know, you could slowdown, take your time with
people, you know. And now it'slike, there's, there's a retail
(14:29):
that's insane. It's hard to findstaff. Nathan,
Paul J Daly (14:31):
what's, what's your context?
Nathan Southwick (14:33):
Well, so I was, I was out last night with a
couple of friends. We were atthe mall, and one of my friends
wanted to go to Dick's to tryand some shoes. He's a runner,
and he's looking for some newrace shoes. Kyle, you and I can
geek about that later. But hegoes in and he wants to try on
two separate pairs. And so helets them know, like, here's
what I'm looking for, and here'swhat it is. And and they've got
(14:54):
all their stuff that's like,this is Josh, and these are the
shoes that he wants to go lookfor. And like, it pulls. The
thing on their app, the guycomes out with one pair of
shoes. And my friend is like,hey, is there? Is there another?
And the guy just sort of like,gave him a blank stare. Like,
like, No. And Jess is like, yousure? Like, and the guy just
sort of like, shook his head andhe walked away. And Josh like,
(15:14):
there's definitely another pairof shoes back there. He just
didn't look and like, twominutes later, another associate
comes out with the second pairof shoes, right? But just, how
Paul J Daly (15:24):
does this work? You you open the app and you, like,
summon shoes from the back.
Nathan Southwick (15:30):
I'm not sure if he did that, or if you just
let them know that, like, he'swanted to try on two pairs of
shoes, and then it like,
Kyle Mountsier (15:37):
well, and I think what this is, is like, it
just points to and us in autoretail, I think this is
something that we can focus on.
It's like, No, you have to go tothe end of the road with every
single customer interaction. Andso if customers are what an
opportunity right now, ifcustomers are experiencing
lackluster service acrossretail, right and they could
walk into a dealership and likethe variable between great
(16:00):
service and lackluster servicecan be so very one side to the
other, and you can literally,like, we have an opportunity
right now to lead the pack andother people to look and retail
it like, Why? Why does everybodylove shopping for a car? You
know, it's a great opportunity.
Nathan Southwick (16:19):
We were talking about will gadera
earlier, and if you remember histhe interview that you guys did
with him last year, he said,like in an industry where where
the expectation is bad, all ittakes is carrying a little bit
more and trying a little bitharder, and it'll put you up
over that. That's that topgreat,
Paul J Daly (16:34):
great point. Well, great personal context as well.
So look a little bit more.
That's all you need just try alittle bit more today. Focus on
that customer service. Focus onserving your team, and I think
the other things will fall inline. Thanks for being with us
here today. Go to what is it?
Jumper, dot ASOTU con.com,
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