Welcome to the How to sell more cars in 2020 to mid year review is the town hall meeting, which means everyone has to chime in. I'm just your host Terry Lancaster. I'm the author of those of you who don't know me, the author of the book, How to Sell more guards. Got my face there you can visit. I've been helping dealers sell more cars for well, it was just telling lives for about 40 some odd years since I was in college and started writing radio commercials for car dealers. My first automotive radio commercial just wore a Pontiac Fiero. America's premier mid engine sports cars. So that's, that hasn't been around in a while. I mean, maybe Pontiacs in a while. So I've been doing this a while. What I wanted to talk about the day was where we are where we are now. Halfway through 2022 Seems crazy that is halfway between 2020 and I want to start this by trying to figure out by talking about how we got here, and then we're gonna talk about how where we are and what kind of adjustments will be made. I'm gonna start this. I've never done this before. I'm gonna start with an Albert Einstein quote, said Albert Einstein, he wrote people like us who believe in physics, know that distinct distinction between past present and future is only a stubbornly persistent illusion. Now, I kind of intellectually understood what he was talking about for years and years. years but I told my daughter these last two years that that really sits home to me because time over the last two years doesn't seem like it doesn't seem like it's working. The way you get used to the to the last two years has been all over the map. Starting March 13 to 2020 2020 20 when whenever everything what the hell in a handbasket in America and Canada basically got shut down what car dealers got shut down anything that's the end of the world with it, boom, out of the gate of the government started flooding money in there. Everyone had extra money. Everyone had time on demand and car sales. Just shot right back to where they were because like they like the stores were closed for a week. And then immediately they'd moved. They moved back, moved back up. And I was telling my brother in law at Christmas that this was the first time in forever everybody in America has a $1,200 down payment so calling the core business was great. For those who are open they could actually some parts of our business was great. So I'm sorry to say again, under couch like the devil. Yeah. So if you ever I was just yeah, she's like, What did she say? I'm like who needs to make they are two benches that are balanced by that couch. That is essential, potentially. Count. Yeah, there we go. So, so 2020, the 2020. The Congress this was going along smoothly, even in the 2021 and then the supply prices kind of hit and 1000 people didn't have cars to sell. And it didn't. Thanks. So things started kind of tumbling about halfway through last year. And now we're halfway through this year and the sales numbers just came out. So the sales numbers across the board are down. Car sales in the United States. Were down about 20% in the first half of the year now 20% from the first half of 2021. We're still running and being high from all the all the government money.

So So, sales are down and forward. You don't want to pull out a number that was that was squeaking through. So I've been looking at the advertising and the marketing that I've been doing with dealers and the biggest thing the biggest change I've noticed over the last few months coming into this is I think that everyone has finally decided that this is the normal this is the way things are going to be for a long time. A lot of dealers were kind of a lot of salespeople were trying to ride it out. We're gonna sit back and wait to the boys as soon as soon as the cars start getting back in. We're going to be back to the races. Just just like 2020 soon as the cars start coming back in, boom, we're gonna go back to where we were before and easy peasy lemon squeezy. And the money was easy. But it's not coming back. We've been in this situation now for for about a year. And I think the realization what has is that it's probably not going to go back to the way it was and maybe ever, but definitely probably for a long time. But you know, back when the you know a new car dealer had six 700 cars on the lot. And everyone walked in and bought what they wanted. And they were blowing money advertising, every which direction. The Good Old Days is I like to call them those days are probably not going back to where we're getting to where the people and the salespeople realize I was having a conversation yesterday with a dealer that I was working on a regular spot for him. And he said hey, I need to come up with a spot on pre ordering vehicles he had he had resisted doing that before but he ordered a spot 100% on pre orders vehicles, because he's a dealer in Canada. And he said Hyundai is totally um, they're probably not going to do that if he wants to sell any new Hyundai's this year. For the rest of this year. It has to be done through a pre ordered there's not going to be any inventory to sell from for at least the next six months. And that's that's pretty pervasive. I know. Dealers are starting to build websites strictly now for the pre ordering things. And so for a long time. I know dealers who have built websites specifically for the buying a car if I were buying cars on the street to do that for about a year now. So that's starting to settle in as the new and so when I was looking at was changing I was thinking of the which areas that the advertising and marketing is changing the boats and that says that there's a lot more emphasis on the service and fixed ops because the cars that are out there, they're all wearing out. And if they can't get a new car, they definitely need to fix the car that they had. And so that's that's it people are dealers are starting to spend a little more money a little bit more time, a little more attention into the service. And fixed off into things that are definitely spending more time on used cars because most car dealers are mostly in the used car business these days that's that use cars are outselling because you can't get near the new car so use cars values are through the roof. The pre ordering and purchasing cars up and hopefully at long last, there's gonna be a little more attention to the retention side of things to do building those relationships for the long term. So I mean, we've said I don't expect things to come back to the way things were pre 2020 I think it's going to be a long time before we see that again, but there's gonna be more cars coming in. They're starting to be more cars coming in. Now. I didn't work out on an on a direct mail piece last month for the first time in two years for an off site sale, where a dealer got all their inventory and took it to a third project location on the Mall they're having this and put up the big 10 is again just like the good old days. Of course this was a dealer group and they had 10 stores to get the inventory to get there together but they got all their inventory together and had a big old giant offside sale. Just like the good old days. So my contention is that this is the way things are and the biggest change now is that people are starting to accept this is the way things are and they're moving forward. As it is, so who who has something to contribute to that hoo hoo hoo. Who agrees when he disagrees or sees something else? That is the biggest change that's going on when buddy welcome aboard what uh what's what's going on down in Texas? Well,

Unknown Speaker 8:43
same old same old basically just what you were talking about. That's all we're seeing. I mean, on the new car side of things, we've got like nine and we've got a Hyundai store in a GM store and we've got like nine total it's it's getting to be kind of a pressure cooker down here, man. And by the way, that's a joke. People that are in Texas because it's hotter. Anyway. Use our site where we're building an inventory on your site, because of the fact that we're not getting any trades and things are getting kind of I don't know the basket and nickel. Yeah, the bad news

Terry Lancaster 9:27
is is that people are starting to

barren if you got a microphone Pop Pop. Yeah, feel free to pop in.

Unknown Speaker 9:40
Well, I definitely agree. I think the manufacturers have been waiting a long time for this scenario.

Terry Lancaster 9:46
Oh, yeah. That's yeah, the manufacturers the third party things I don't want to see all suspicious and tinfoil hat that they created this but they are definitely. Marriage over there talking about Ford. Ford has eaten this up. Ford is all in on bioprocess. And they've done it they there it's there. They they definitely liked it right.

Unknown Speaker 10:08
Absolutely. I think Ford is probably leading the way or started leading the way. They might not have created the situation but they're certainly sitting in the catbird seat so to speak. And as far as new inventory goes, and yeah, you've seen it. You know, it wasn't long ago that I saw the first television commercial pop out where we're now talking about come in and special order your vehicle, right. So it is getting it is getting tough. My my specialty over the last probably five years has been an acquisition side trying to source inventory. And we started leaning into it three, four years ago and said just prior to the COVID situation. Let's buy as many as we can. And that whole idea of buying off the street is now you see the V auto guys. They're talking all about it. If everybody's doing the same thing, have we come up with something else. I think the next thing is probably the lean into getting into your own customer base buying from your service drive. We're looking at all aspects of it. Yeah.

Terry Lancaster 11:30
I can't turn on the TV without seeing the carbonic commercial and it's been like that for years now probably about a year they're bleeding money and and the stocks the stock screener, but somehow they still got money to buy every TV spot does on the year and but they're not talking about selling cars anymore. They're 100% Because they're buying cars. Baron barons of Kent parents Kansas City that's right here in Washington Jr. in Kansas City says board can't keep up with all the orders. That the gap board is one of the ones like some leading the way on on the pre order thing. They get your Ford your way. I know they're doing they're doing national export. You're doing regional ads in a bunch of places. And they're they're pushing all the all pre orders, but they can't deliver the cars that they got to work. They can't get them to that. So how are you guys dealing with that?

Unknown Speaker 12:26
Yeah, so basically, you gotta be pretty good at fielding phone calls. Right now. Just keeping the customer apprised of the situation. The good thing is that they are keeping up with them via email. So they get updates when we get updates, but it still sucks just because we're we're a society this used to happen. No, it's a reversal of that. You know, not being able to get parts or waiting on chips, you know? All the new you know, the Mavericks, the Broncos, all those things. It's just has been kind of a cluster. Fortunately for us, we're not heavily in the new car market. We're mostly a premium store, but we do have to get our numbers and hit our numbers for for being a franchise. So just navigating the waters you know, trying to figure things out.

Terry Lancaster 13:31
Yeah, let me ask you this about four because I every almost like Carvana and every time I turn on the TV and I see an ad for amount of time we're buying cars. Every time I read the news, the automotive industry news, I see something new from the Ford CEO Jim Farley, who's talking about who's talking about dealers and he's talking about evey electric vehicles and he's talking about the Brunner and Grace says, I can't make heads or tails of why he's actually trying to accomplish at the store level. What do you guys think about all the stuff he say?

Unknown Speaker 14:03
So my ownership is really forward thinking. They love the UV stuff. So when it was available to do a few years ago, they signed up and you know, you have to build a couple of the charging stations at the dealership, get evey certified. They love the maverick you know and everything about or not the maverick but the maki in the lighting, the way that things are coming down the pike and you know, in the future I don't see that. It will be you know people I think like you when I got into Ford, you know, back in 2013 You know, hybrids were kind of like, you know, aliens people, you know, we're kind of iffy on them. I mean, people used to go to the gas station and put gas in their car and you know, going on about their business, they're not really into charging, you know, most of them don't get very far into full charge, first of all, and then, you know, who knows, I mean, it's if there's big push to go fully electric you know, starts to gain momentum. I think it's gonna be hard, just because, you know, she they have blackouts now, you know, on the grids and things and people that have tried to charge their vehicles. I mean, I don't know it's just kind of weird, personally, but you know, my owner. He loves it. So

Terry Lancaster 15:42
we got folks here from from Texas and, and California, and those are the blackout capitals of America. So I understand that. You know, I think you're right the the Ford f150 Definitely 50 Lightning. I've been telling everyone if that when that comes out, and people see the performance and what this truck can do that that that could be the tipping point that makes America really reconsider electric vehicles has you know, America was a big old truck and they live in f150 biggest of all and in that now if you got an electric truck and you don't have gas and you still tow your boat and your motorhome and shoot guns off of it. I think that's a selling point. The problem is you got Jim Farley saying, for dealers aren't able to sell those cars, then you're gonna have to have an entirely separate dealership. You know that you guys have invested money that they're going to split them up. And we're gonna take all this goodwill that we built for 100 years selling that point to these dealerships. And now we're going to now we're going to sell these cars direct to consumer through Ford and the dealers aren't going to get a cut so I don't see that going over very

Unknown Speaker 16:48
well. No, no, I

Unknown Speaker 16:51
don't still rely on the dealer for for the service aspect, right. The worst thing for the market is for the manufacturer gets into the selling side.

Terry Lancaster 17:03
Yeah, well and that's that's my hope. I hope this has been my conversation for 14 years and I've been saying that I've been saying for 10 to 12 years that everything that's happening digitally and now everything is happening we pretty Where is I don't know if it's designed to get the dealer out but it's definitely making it possible to cut the dealer out and cut cut the dealer's margins and make they're really just there to deliver and service the vehicles but the dealers are the one with the boots on the ground. The dealers and the salespeople are the one building the relationships in the community. So so the manufacturer is never going to have that they're going to be sitting in Detroit or I'm in Nashville and Mitsubishi is based in Nashville. Nissan is based in Nashville, so they're all sitting Nissan headquarters is about three miles from my house as a matter of fact, so they're all sitting there plotting what's going on around the world, and they don't have any idea what's going on in Walla Walla, Washington. And how to sell cars in Walla Walla, Washington.

Unknown Speaker 18:03
Well, it's the it's the dealerships that maintain the customer relationships like you said, If If Ford wants to get into the marketing side and sell direct to the customer, and think they're going to cut their own net they can't possibly, like Baron says, you know, we were selling Chevrolet's and promised the car in two months and then it was three months and then it was six months. And then now it's seven or eight months. They've made four payments on a vehicle that for all intents purposes, you still don't have an ETA on oh, by the way, all the options that you ordered with are now being you know their construction. It's yeah, I don't know what the end answer the end result will be but surely trying to start their own use. Card with car Bravo. Come on now. You believe ours will take care of

Terry Lancaster 18:59
me I think I think the silver lining in all of this is exactly what you were just talking about Aaron that that went and Baron saying alright. So we're sending out all these emails into the cars gonna be here on Tuesday. Now it's going to be here three weeks from Tuesday. Now it's going to be here on the second Tuesday of the third month from now and obviously, the silver lining is and it never seems like this. But Linda's going back to where we're talking about radio. When I was selling radio. My favorite thing in the world favorite thing in the world was when we screwed up on a radio spot and got got got the name of the something wrong or got the price wrong or got the address wrong. And there's something wrong in the spot because as soon as it's wrong, the client starts calling. And if you've been in sales anytime and you know you know every problem is an opportunity. And so if you've got if you got to you got to constantly be reaching out to people, you know, trying to massage this situation then their cars on here. There's more and more opportunity for you to be there, building the relationships, making sure you're sure you're the one that's on their side that's on their side

Unknown Speaker 20:10
I'm trying to follow the lead from from Elon Musk because what they're trying to do Yeah. Not realizing that the buying process with Tesla I swear to God if they didn't have you know the quality vehicle yeah and then of all the new tech and all the good stuff and they were the first big major brands really pulled out all of these available options for a fully Eevee car. Not only one that's fully Eevee but they actually did better with their with their distance that you've been traveling on a full charge then the most did outside of that if you've ever been through their buying process or tried to explore their buying is terrible. It's absolutely terrible.

Terry Lancaster 20:53
So here's the thing, here's the thing, here, here's the thing that you're trying to follow Tesla and the other one they all want to be is they all want to be Carvana just like said, you know where they're they are honest, you know selling, you know millions of car hundreds of 1000s of cars every year with zero salespeople. The problem with a following Tesla or following Carvanha either what is it Tesla Carvana were never companies designed to sell cars, Tesla and Car Auto 100% from the get go from day one. Were stopped place they were designed to sell stock and they've been manipulating stock prices for every year maybe with an E that's why that's everything you watch everything Elon Musk does is strictly to boost the price history. It's strictly strictly for for Wall Street. How many cars the sales is almost irrelevant. It's got nothing to do with it. He's in the business of selling stock. That's how we got to be so rich. They are the people who started Carvana they were with with drive time or driveway whichever one it was before. They got arrested for securities fraud going way back one of their founders was with the savings and loan deal pack and whenever that happened in the 90s when he was manipulating stocks so they those are auto dealerships. Those are auto manufacturers they are their stock. They don't be leaders who are using vehicles for for the chance to manipulate the stock so that they're definitely not the ones that you want to call up.

Unknown Speaker 22:25
You can only lose money rely on revenue to Jack their stock prices. But every year you look at what $15 million annually current model loss last year. How sustainable business plan is that?

Terry Lancaster 22:44
Yeah. Do you think they'll be in the market? Yeah, because it goes back to like the.com thing the worst. The worst thing that could happen to Carvana is for them to come up because they did they become profitable and people are gonna measure their stock value measure they use for everyone else P E price and Raj earnings and they're you know, they're now they're profitable. They can't go buy smoke and mirrors anymore. I'd 727 21

Unknown Speaker 23:17
I was just gonna say that 100% Correct. I mean in everybody that has done any research on Carvanha most of us in the car business as we all know, what their what their, you know, founders are about and so like it doesn't take a whole lot to put two and two together. And if these companies like Ford, and Ford is making the biggest push to take dealers out of the whole equation of anybody but the thing about it is Ford and GM are such great competitors that GM will follow suit, and you've got all of that going on and they're trying to follow a pattern for somebody that they do they do they research what's going on here because I mean look at the car Honda would be lost if they didn't find new investors all of a sudden, you know what I mean? Like in some way or another they should they should lose another investor and to losing a whole bunch of money and they can show this new valuation and then their stock goes up and then it comes down. It's just the biggest scam I've ever seen. And anybody that pays attention can can tell that

Terry Lancaster 24:17
there's a word for it. There's a word for it. It's all of these games. So, seven 730. I tried to keep the short term remember we're gonna get out of here as close to 730 as possible, but one thing we haven't really talked about is marketing on the service. They don't want to have anything about what's going on in the surface. No, Aaron and Mitch have tried to buy cars off the off off as a service lane. And Clint and I talked about this before about about mining the database for cars, but specifically about the marketing of the service department and in the renewed emphasis is going on there because that's one of the areas that saying that people are adjusting to most recently that anything else anyone wants to chime in before we go

Unknown Speaker 25:02
I think it's your greatest resource as an autumn as a car dealer right now is your service lane, your service department, whether you're trying to acquire vehicles, or you're trying to build customer relationships, that is where you can lock the customer down to yourself as a person whether or not they try and buy it online or they're trying to order whatever they come to you to get them fixed. Yeah. I think there's a lot of fear in the market right now. Recession, recession, recession, people are trying to keep their cars longer. They will and always will need to buy a new vehicle at some point. So they come to you to get them fixed, and that's where you have your greatest strength.

Terry Lancaster 25:44
Well as the sales department sells the first car in the service department sales the next two or three so you know that's that's long term. The money is in the relationship and always has been and that again, every problem whether it's whether it's their car not getting delivered or the you know, or you know, a flat tire every problem is not just for you that you build that relationship more. So go ahead if you haven't put your name or contact over in the chat bar just so I can thank everyone tomorrow for for showing up. If you've got anything else that you want to talk about before we go hop in now raise your hand. I was I'm gonna let you go 731 I appreciate every one of you showing up to tell me what's going on in your world for the first half of 2022 and if there's any way I can help you take the second half any better, don't bother. Don't hesitate to reach out. I got everyone already