[upbeat music] Good morning. It is Monday, July 27th. This is the Automotive State of the Union. I'm Paul Jay Daly. It's Kyle Mounts here. We're ready to get things fired up for the week.
We're talking about buying stores, selling software, and, uh, giving robotaxis parking tickets. Here I go. The people know- Sign me up for that... who I is and who I be. Got 'em Stop the stealing, just repeat.
Can't wait till robots are giving robotaxis tickets. Run up on me, boy, I'm gonna shoot. Oh, my goodness. You know it. When I clap- It's robot inception. [laughs] Dude, can you believe this is the last week of July? No.
Wait a second. Saturday, Saturday is August 1st. Oh, my goodness. Oh, oh. You know what that means, Paul. Saturday start of a month? What? Saturday start- Wild... five Saturday month. Oh. All in for August.
Hopes and dreams. [laughs] Oh, my goodness. All right, but first we gotta- It's just like I- No, we gotta end the month strong first... I feel like so- No, we have to end the month strong. Ugh.
We have to end the month strong. Okay, you gotta end the month strong. Do not let the end- Except for the people who know they're gonna have a weak month-... of this month wait for us...
and they're just gonna push as many deals as they can into August 1st [laughs] No, no, no, no, no, don't have a weak month this July, baby. Don't do it. Come on. Don't do it. Help the whole industry out.
Hey, we have- You know what's up... [laughs] we have a lot of stuff coming this week, but if, uh, you wanna keep track of it the most, the best way to do it is to get subscribed to our daily email, daily- Sorry...
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And, uh, we got some fun stuff coming on, up, including us heading to Columbus, Ohio to hang with our friends- Yes... at the Ohio Auto Dealer Association to put on their Concert for a Cause with Zach Dorr.
It's gonna be amazing. So get the email. Yeah. Get the email. You're gonna wanna be on the email list, 'cause we got some tricks up our sleeves this fall. Me too. You're gonna wanna be on it. Oh, man.
Uh, August is- Yes... big announcement August, I think is what we're gonna call it. There you go. This big announcement August. I like that. We have, uh, several things about to drop in August.
People start dropping their little things and this and that, but- Yeah... we got some announcements- Back into school year, yeah... that are bigger than LeBron going to Philly. Did you see that?
[sighs] I, I don't understand. I, I'm not a big NBA fan anyway, and I'm def- Why you gotta do that, bro? I'm definitely not a LeBron fan. I mean- And now I'm so conflicted [laughs]... it's so bad.
It's like, just retire, bro. This is like Aaron Rodgers going to the Jets or whatever he did. I mean, maybe he just wa- Like- I mean, listen- No, it's not like Aaron Rodgers going to the Jets.
Aaron Rodgers is wash, is washed up. Oh, snap. LeBron w- LeBron's still putting up the stats- Oh, snap. That's true... if he stays healthy.
But listen, listen, I gotta say, if you're an athlete and you see Philly sports from a distance or as a competitor, I think everyw- everybody's like, "It'd actually be really cool to be on a Philly team," just to experience that, like,
love-hate. There's a, there's a certain grit. There's a certain love. There's a thing. There's a, the, yeah, all of that. Hey, he's been on the west. It's been a little time, you know, a little closer to the East Coast.
He's fine. Yeah, he's coming back to the East Coast. Uh, let's talk about some news today. Buy/sell activity has picked up 23% year over year, showing dealers remain confident in the long-term value of retail auto.
Presidio's latest reports suggest operators are playing the long game, buying strategically, pruning down their portfolios, and betting on execution over peak earning. 64% of dealers want to buy a store in the next year.
Yeah, they do. That's real strong.
While the share looking to sell is also up to a record 18%, buyers are getting more selective, looking at brand strength, market position, facility cost, and long-term, um, kind of values, portfolio optimization.
And not exits are driving many of the sales right now. Blue sky multiples are up for Lexus, BMW, Toyota, Chevy, and GMC. Wow.
Presidio, Presidio removed valuation guidance, however, for Volvo, Infiniti, and Volkswagen due to their current troubles and weak profitability. Whoops. [laughs] It's, I mean, they're like, "I don't know.
It, it's gotta be strategic." Profits remain below last year, but are stabilizing. Fixed ops up 5.02%. F&I hit a record $1,769 per retail unit in both new and used vehicle grosses improved sequentially.
Presidio President George Karalis said, quote, "The M&A market remains robust, but buyers are much more selective about what they want to own." Yeah, I mean, this is...
I, I think what this also is, is a settling of the market a bit that allows the buyer and the seller to, uh, be in a better transactional state.
We, we saw buy/sell activity massively grow at the end of kinda like coming off the pandemic, then level off, and it's growing back again.
The reality is, is, is centralization for efficiency is still a long-term goal a lot, uh, of, a lot of these, uh, groups.
And as you see manufacturers start to press in and say, "Hey, look, if, if you're not a great operator, we're gonna start moving you on," and I think some of those conversations are probably the underlings of, uh, of many of these moves, just because OEMs understand what it takes to demand greatness out of each of their retailers.
Yes. Uh, and I think we're gonna conu- continue to see these moves until the market has kinda compressed to its, to its point of what it can handle, uh, from a centralization.
And, um, hey, if you're looking to buy a store, go get you one- Yeah... because there's people selling, you know? Heck yeah.
Can you imagine that if OEMs put that in the requirements doc, like, "We expect greatness from our operators"? Think any of them say that? I feel like the Subaru one says that. Okay. I f- I feel that. You know? Yeah.
Oh, I was gonna... I was hoping you said GM. I knew you weren't- Oh... gonna say GM. That's, I, I doubt it. Because it would've been a great segue- I mean, I'd love them, but I doubt that's happening...
to the next story that's about GM. But speaking of GM. What's up? It's about time. All right, we had a... I needed to start, I needed to- I'm sorry... I needed a segue. That wasn't gonna be the one. On a Monday morning.
As vehicle profits are normalizing, GM says software and subscriptions, like OnStar and Super Cruise- Are becoming major growth engines, bringing in this recurring high margin revenue and keeping customers connected past delivery.
GM's software business keeps about 70 cents of revenue for every dollar. That's a great software business. There it is. Far higher than the typical 40%, 4 to 10% margins on the vehicle itself.
OnStar generated $800 million in Q2 revenue alone, with GM expecting nearly 13 million subscribers by the end of this year. Super Cruise revenue jumped 70%, with more than 850,000 subscribers expected this year.
Between 30 and 40% of all eligible owners keep paying after their three-year free trial. That's the strategy they had at the beginning. It's starting to show that it's paying off. Here's a quote- Yeah...
from Mary Barra, CEO. She says, "We do think we have tremendous levers, multiple layers of growth. We definitely think there's a lot of opportunity at GM to grow, improve margins, and become less cyclical." Oh. Mm.
See, that's the, that's what all of them want. 70 cents on the dollar is... Well, and, and I wonder if that's net or gross rev- uh, uh, gross on cogs, which if it's gross on cogs, that's actually light.
It should be closer to 90 cents on, on every dollar. Uh-huh. But I'm sure they'll grow that. Yeah. If it's net, that's absolutely ridiculous, uh, what they're earning there.
But, um, software obviously, it takes a lot more scale to get there, but from a resolution at, at a business level, and, and probably at a, at a stock price level, allows you to kind of, like, keep customers coming back.
It keeps your revenue and your gross on, on, on tap.
And, and the, the lever of, like, "Hey, i- if we're constantly communicating with you through your app, we get the opportunity to bring you right back in," I think this is something that dealers have to figure out when it comes to, like, maintenance intervals and things like that.
Mm. Um, it'll be interesting to see, as everybody's trying to figure out the recurring revenue game, who gets the share of voice there, whether it's the OEM or the dealer. Uh, but kudos to GM. I mean, you know, the...
I, I don't know. What, uh... Do you know what Super Cruise costs? I literally was looking that up. Super Cruise costs 40 bucks a month. See, that's, the- Still a little heavy...
Tesla got me with the, like, you know, you can turn your car off and on, see all the stuff about your car. It doesn't have Super Cruise, but for 10 bucks a month, it was a no-brainer. 10 bucks a month- Yeah...
is a no-brainer. BlueCruise, which is Ford's, is 50 bucks a month. Craziness. Starts to get a little tight. I'll never pay that.
Um, I, I can see, though, if Super Cruise is really good and you do a lot of drivi- Wait, can... Super Cruise is only highway, though. Only highway. It's not like, it's not like Tesla.
Like, I would pay 40 bucks a month for the Tesla version. Tesla stuff all day. But Tesla's way more expensive. Full self-drive's like, what? How much is full? 100 bucks a month? Let's see. How much is FSD? Um.
Isn't it, like, a one-time cost? You can buy the one-time cost. $99 a month currently. Yeah. So Tesla's like 99. That's probably still worth it, honestly. [laughs] Well, listen.
It's different, it's a different value prop to when I can use this on the highway, and then I can use this, like, once I sit in my car. Everyone I know that uses Tesla Full Self-Driving absolutely loves it.
They swear by it. There are even three aggressive lit-ness levels of driving that you can put, you can put- Yep... like, calm and collected, normal, and then the highest level's called Mad Max, which is fantastic.
[laughs] And so- That's amazing... you know. So I mean, GM, their, their strategy's paying off. I remember originally, probably if you back up three years and actually look at what we were saying- Oh, a few years ago.
We were talking about this, yeah... about this, I think we were saying people aren't gonna do it, 'cause they're not used to it.
They have $800 million in Super Cruise revenues for- Well, in the last three years, though, think about how many things have gone on subscription. You know? That's true. It's pretty wild.
That's- Like, you just, you're just used to it. People are trying to bucket subscriptions together. You know? Yeah. It's, like, a whole- And autonomy and robo-... Speaking of autonomy. Oh, we're- Ah. That's a good segue.
Oh, snap. Let's get a new one. We did it. There we go. That's a good one. That's, that's a good segue. Driving the pump. Robo taxis may be getting better at driving, but parking, that's still a work in progress.
New records show Waymo's autonomous fleet has racked up dozens of parking citations- [laughs]... in Austin, highlighting the real-world growing pains that come with scaling driverless transportation.
Which is so dumb, 'cause it should be the easiest thing for them to navigate a charge for. You would think.
Since launch, launching in Austin in 2024, Waymo vehicles have received 83 parking citations totaling just over $9,000, including fines for tow-away zones, double parking, expired meters, and even, even a disabled parking space.
Come on, fam. The NHTSA recently urged autonomous vehicle developers to improve how vehicles respond to first responders, construction zones, and temporary traffic changes.
Waymo says it pays parking tickets just like any other driver, and uses public parking or an Uber-managed depot between rides to reduce unnecessary traffic.
Waymo spokesperson said, "We do not expect different treatment in regard to ticketing." Okay, I wonder how much of this is, like, "I didn't know I couldn't park there," versus, like, "We're willing to take the ticket."
I don't know. There's probably a little bit- Oh... a little bit of both of that. Um- Yeah... however, it does, like, to your point, it feels like this should be one of the easiest things to navigate.
That should be the ground ball. The, the sign- You know?... says it. Right? Like, they should be able to map it out, like, even map where the parking spaces are- Yeah... where you can and can't park.
It does feel like a ground ball. I'm sure there's a reason it's doing it, or not doing it. I just think it's hilarious that robots are getting tickets. I mean, listen, if s- That's just, it's great... well, listen.
If you're, uh, say you're sitting in your car, and you're in there and the engine's running, or if you're in an EV, it's just quiet, and you're in a spot that says, "No parking." You're in the car.
Somebody comes up, what do you do? You drive away. You pull away. You're not really parking. You're standing, is what they would call that, right?
[laughs] So, but when there's no driver in the car, I think you're parking. You're definitely parking. I don't know. I, I think it- Yeah, I wo-...
And, and I w- yeah, that would be funny if they, like, created this little mechanism that was like, you know- Just creep-... park in the weird spot- Creep forward a little bit... but watch out for a crazy person.
You know? Yeah. [laughs] Watch out for a ticketing. Ticketer comes up, you just creep forward six inches. Just peels out. [laughs] Well, that sounds like a lot of fun, actually. Sounds great.
All right, well, one day there'll be robots ticketing cars either way. Look, we hope you're ready for this week. You're ready to crush last week of the month. You got five days. Go to daily.asoto.com and get the email.
We'll help you on your way. We'll see you here tomorrow morning. Let's go. [upbeat music] Keep driving. Keep driving. Keep driving. And leave a like. Keep driving. Keep driving. Keep driving. And leave a like.