Yeah, we've just bought a used hybrid and we're very happy with

it.

Hybrids are booming.

Yep.

And you know, the funny thing about that is we've talked a lot about how used car or gas prices have really driven people towards hybrid and hybrids have absolutely been on a surge this year.

But we do know that there are a lot more hybrids in the market this year, models meaning, you know, and we know that things like the RAV4 went all hybrid this year.

So sort of taking that with a grain of salt that there are more models available.

Are they just short on supply? Are they not available?

Yeah, we just bought a used hybrid, and we're very happy with it.

Hybrids are booming, yep.

And, you know, the funny thing about that is we've talked a lot about how used gas prices have really driven people towards hybrid, and hybrids have absolutely been on a surge this year.

But we do know that there are a lot more hybrids in the market this year, models meaning, you know, and we know that things like the RAV4 went all hybrid this year.

sort of taking that with a grain of salt that there are more models available.

And some of the models like the RAV4, the most popular, is actually only available in hybrid.

But, you know, last year we saw hybrid starting to grow as well.

Are those vehicles just not available?

Uh, how do you see the fixed ops going so far in the first half of this year? Um, and the importance that, that, that playing in the, in the, it's the revenue health of the dealership.

I mean, hands down, it's been one of the most discussed topics of the year.

You know, if affordability is pretty high up there, I think fixed ops is the next thing that everyone's hearing as a frequent word in our, um, And our industry and dealers are later focused on it, not only because they know it's a profit engine, but because they know they've been leaking those customers to the independent shops over the years.

They've just been handing that business away by not paying attention to how to connect sales to service, how to feed that virtuous cycle, getting vehicles in and figuring out how do we be more transparent in the repair and maintenance process.

How do we think more clearly about communicating pricing, length of time, getting people in immediately? And then how do we think about using that client as a potential trade-in? How do we get them introduced to sales? And so, I mean, but the interesting flywheel that service can really behave as.

It shocks me maybe that it hasn't been leveraged more often in dealership business, especially at a time like this, to your point, where we have cars that are significantly older.

And some of those folks may have been feeling, you know, trepidation about coming back into the market because of all these volatile spikes and news headlines and such.

Is this a big deal? Should dealers care about this? Should manufacturers care about whether this gets passed or not gets passed?

What are the biggest trends that you see in the automotive industry right now? What do you see happening?

Yeah.

I mean, so I guess I would frame this up in trends as far as what are we seeing that's really happening with the customers, with the dealers, with the industry as a whole.

And, you know, no figure, go figure.

The K-shaped economy language still sticks around alongside of that.

It's friend affordability, right? So these two things are very tied together.

And it continues to be this case where both the dealers and the manufacturers are trying to figure out what should we be doing in order to make the vehicles less expensive or more attainable by those individuals that we've lost from the new car market specifically.

So which automakers would you say right now are the ones that are thriving and which ones are struggling?

Is it really that much of a panacea to all the kind of the economic doldrums that people kind of feel themselves are in?

Yeah, it's a great question because I do think that our instinct is to say, well, you get a windfall, you want to go spend it.

But we do know we're working with a consumer who has been struggling with affordability.

We also know that most consumers, when they're looking for cars, are typically shopping by monthly payment.

So they're not always actually taking into consideration the total cost of ownership, TCO.

So even though we know insurance and price of gas and everything is continuing to go up, In that moment, when they're looking at that payment, they're typically more focused on what that monthly payment is.

And that has been what's been really stuck because of the interest rates.

How do you think that could factor into what we see in the coming months in, you know, in the showrooms and in sales?

Are they losing the same amount of money as Ford was on their Lightning and Mach-E?

Well, first of all, it's always great to see you, Matt.

Thank you for having me.

Hi, Paul.

As you can tell, I'm one of the sufferers of the cold and illness that came through the holidays.

But yes, I mean, GM does have the breadth and depth of the EV lineup.

So they've been able to diversify the cost across a pretty broad set of vehicles that are available on the market.

What can the industry do, if anything, to address that affordability issue?

It seems as if these tariffs, especially if the so-called reciprocal tariffs go back into place in 90 days, there won't be any affordable cars for Americans to buy in this market.

So what I want to just emphasize here, and we were just talking about this as a team this morning, the costs that we're seeing that are coming in are cost and cost only.

So when we're looking at a tariff, we're saying the automaker or the importer of record, which is typically the automaker, is going to get hit with this 25%, 27.5% tariff.

How that shows up for the customer, completely different story.

And honestly, I'm not sure how quickly automakers are going to jump in to jack up the prices on individual models.

In fact, I would bet almost all of them will look across their entire portfolio.

And, you know, the vehicles that you guys are a lot of the times focused on luxury are going to get the bump because profitability is there to be able to absorb some of that tariff so that they can keep competitive at the entry level models and or just the vehicles that are available for lower price.

confusing and chaotic, or is it a question of no one actually knows what they're doing? And I mean, is this completely deliberate or is this a case of the people in charge making the rules are sort of learning as they go and figuring out as they go along? You know, it's a great question.

Are we closer than we think or farther than we think from it?

I think the interesting thing is technology is there, and I think this is across anything, whether we're thinking about being able to sell a vehicle completely online, autonomous technology in the vehicles of today, EV batteries.

All of these things have been in play for decades, honestly.

I was with Audi of America for 10 years, and back in 2017, I was riding in a vehicle that was pilotless.

The technology is there.

I think the bigger thing that everyone needs to really consider is one, how is it advancing similar to EV battery technology and really the level of adoption and more for autonomous.

You just in my humble opinion, I believe you'd need near 100% adoption in the US with infrastructure catching up with that in order to quote unquote solve for stupid right like if robots and humans driving together you're still open to a lot of challenges uh with building that into the infrastructure in any given metro area so we're seeing a lot of inroads with waymo and other robo taxi you know quote unquote companies if you think about it but i still think that's going to be highly you know regionalized to areas that are able to handle it within inner cities and things like that

In the current environment, if we do see a little bit of softness in the economy slash recession, do stocks like Carvana or the used car market perform a little bit better here?

Can you run down for our listeners what goes into the pricing structure of why a car is priced a certain way?

Absolutely.

And, you know, you mentioned, Matt, about COVID and how the costs went up.

Yes, there was a supply and demand crisis.

challenge within the market that did help increase prices.

So some of that pricing did go up based on a supply and demand, you know, pure economics.

But over the course of the years, and I think what a lot of consumers don't necessarily understand or want to face about themselves as consumers, especially in the U.S., is that we're very picky in the U.S.

Is that what you're seeing? Yes.