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Welcome to Daily Drive for Monday, February 2nd, 2026. I'm Kellan Walker in Las Vegas,
today on The Show. Bosch cuts thousands of jobs and delays its profit target
after a painful year. Stellantis tells U.S. employees to get back to the office full time,
and most dealers still haven't recovered their EV investments. Plus, automotive news retail
reporter Paige Hodder joins the show to break down the 2026 dealer outlook survey and how
dealers are planning to navigate economic uncertainty this year. Let's run through
all the news you need to know to keep up in the auto industry.
Bosch is pushing back its profit target after a painful 2025. The world's largest auto supplier
saw its return on sales drop to 2% from 3.5% the previous year. That forced the company to delay
its 7% margin goal until at least 2027. The German giant is cutting 13,000 jobs in its mobility
division. That's about 3% of that workforce. Bosch is booking nearly $3 billion in severance
provisions. Despite the pain, Bosch says it's positioned for long-term growth in software-driven
mobility and automated driving. Stellantis is ending remote work flexibility. The automaker
is telling U.S. employees they need to be back in the office five days a week by the end of March.
The company says in-person collaboration is key as it works to regain lost U.S. market share.
The policy applies to all U.S. employees who have an office to report to. This marks a major
shift from Stellantis' pandemic era, new era of agility strategy, where employees worked remotely
70% of the time. It also goes further than competitors. Ford requires four days in office
while GM mandates Tuesday through Thursday. And most dealers haven't recovered from their EV
investments. And it's not hard to see why. More than half of dealers in Automotive News'
dealer outlook survey said customers simply aren't interested in buying electric vehicles.
That numbers up 8 percentage points from last year. The end of the $7,500 federal tax credit in
September made things worse, adding another affordability barrier to already pricey EVs.
We'll have more on the Automotive News' dealer outlook survey in just a minute with Automotive
News' page hotter. But first, it's NADA week here in Las Vegas. Our own Molly Boygon caught up with
Automotive News' retail tech reporter Mark Homer ahead of the show to talk about what
dealers can expect this week, especially when it comes to AI. They spoke on the Automotive News
shift podcast. Hi, Mark. Hey.
Great to see you. So you are gearing up for a big trip to Las Vegas for NADA,
and you've been writing about how AI will be at the center of the show. Why do you think that
dealers are so interested in learning about AI and using AI to improve operations at the dealership?
I think it applies because AI is going into everything. AI is everywhere. Everybody's talking
about it in every industry at work, at home, in movies and cinema. It's everywhere. Because
it's everywhere, it's coming to all the technology that they've used to sell cars, to balance their
books, to reach customers. So they want to know more and they want to know how to use it right.
And what do you expect will be on display at NADA? Are exhibitors going to make good on that
promise? Are they going to be providing meaningful technology for dealers to streamline operations,
or is it hype at this point? It's somewhere in between. The hype is still there. For example,
there's going to be companies debuting the use of avatars in relations with customers. And so we'll
see how that works. But AI is also being applied practically. It's being used for finance and
insurance in the back office. It's being used to communicate with customers through something called
AI agents. It's being used other ways that no one will see, but they'll appreciate because it'll
help them boost their business and it'll help them increase their efficiency. It's also,
this is very important, it's becoming an increasingly big part of cybersecurity.
Cybersecurity is important in dealerships and by law they have to make sure that customer
information is protected and take all kinds of measures to make sure their information is safe
from cyber intruders. And now AI is helping to boost cybersecurity tools to fight cyber attacks
that are also being driven by AI. So AI is everywhere and they need to know where and why
and what matters. It's AI versus AI. Exactly. And on the agent's point, I think this is a really
interesting one because if it's successful, it would appear to save dealerships a lot of time
and money and energy. And at the same time, I know when I'm prompted by an AI chat bot,
I can tell pretty much immediately and don't really like it that much as a consumer. So
obviously you don't have a crystal ball, but do you have a sense that consumers are open to this
technology and that it's actually going to sort of pan out in delivering that benefit for dealers?
I think they're open to it if it's done well. For example, in the retail space,
some AI agents are so well developed that they're conversational like people and they have
information about why your order is late and they can get you things 10 times faster than waiting for
a live person on the phone. And so if it's done well in the retail space,
customers are going to love it and that's the key. And that's what they're going to be looking for
at NADA is to see products that do this right. And Mark, a little bit off topic, but I seem to
remember that there's a musical artist that performs at NADA this year. So are you going
to the Nellie and Fat Joe concert? I'm hoping to because everybody likes to relive the 90s,
especially those of us who are baby boomers and millennials.
Yes, absolutely. As a millennial myself, it would be hard for me to pass up that
partnership, that iconic pairing of Nellie and Fat Joe.
Oh my God, yes.
Make sure to check out the full episode of this week's Automotive News Shift podcast.
It also includes an explainer about what vehicle architecture is and what it means for the future
of the industry with SBD Automotive's Alex Euler. That's available now wherever you get
your podcast. Coming up, Automotive News or Retail Reporter Paige Hodder breaks down the
2026 dealer outlook survey and how dealers are planning to stay profitable this year.
That's next on Daily Drive.
If you're an automotive supplier and you know your team is building the next big thing,
prove it on the industry's biggest innovation stage. Automotive News is now accepting
applications for the 2026 PACE program. PACE awards recognize traditional and non-traditional
suppliers worldwide for new product, process and business model innovation, and entries must be
innovations already commercialized through a sale to an automaker. Still pre-commercial,
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Welcome back to Daily Drive. I'm Kellan Walker. Automotive News just released its 2026
dealer outlook survey and it reveals an industry bracing for economic headwinds while finding
new ways to stay profitable. Automotive News retail reporter Paige Hodder helped lead the project
and spoke with her own Jake Nier ahead of this week's NADA show in Las Vegas.
Paige Hodder, welcome back to Daily Drive. Thanks so much for having me.
So we're talking about the 2026 Automotive News dealer outlook survey very timely heading into
NADA. First of all, talk a little bit about what's different this year about the survey in terms of
how we conducted it, the questions we asked, that sort of thing.
Yeah. So as we do every year, our data team puts together this survey to really get the pulse on
a lot of the current topics that are on dealer's minds. And so the questions reflect that. I really
think some of the biggest changes came in how we approached the survey after we asked the dealers
the questions. So in past years, we've really done pretty in-depth breakdowns of the results
walking our audience through how they responded to different issues.
But this year, we decided to push a little bit deeper. Okay, this is what dealers are feeling,
but what does that mean and how are they acting on it? And so in my main story for the project,
I really took a deeper dive at some of the pain points that came up in the survey
and some of the opportunities. There's challenges, but as dealers like to say,
they're an adaptable bunch, and they're not going to go down without a fight. So I'm really
interested in looking at what are their strategies, what changes are they making,
how are they thinking about being as profitable as possible in 2026. And for the folks who are
looking for some of that deeper data analysis, they can actually see all the survey results
and some dealer insights in our research and data center.
Exactly. So without giving too much away, if you had to choose like a top line here,
what was maybe the thing that stood out to you?
Dealers are worried about the economy. That came out definitely more than they were last year. I
think last year when we did the survey, a lot of people were coming off of a high after the
election. They had a lot of hopes. That's been tempered a bit. But the other thing that really
stood out is, again, they're not going down without a fight. Dealers think new vehicle profits
are probably going to be flat this year or maybe even go down a little. But they also think their
stores will still be more profitable than they were last year. And that was kind of the top line
idea as I approached this story was, I guess, that contrast. And if you're thinking new vehicles
are maybe not my area for growth, the core question in my investigation of this survey was
really where else are you making that money? Speaking again about that sort of macroeconomic
level, the survey showed 87% of dealers. That's 87%. Big number are now moderately or extremely
concerned about an economic downturn. That's a huge jump from the 46% last year. It seems like
there could be a lot of factors driving that anxiety. Are we talking mainly tariffs? Is it
mainly affordability pressures? Just the state of the US economy or all the above something else?
Well, first, I will say a lot of dealers contributed to the survey, but we also
extended the invitation to dealership leaders. It's salespeople, it's execs, it's CFOs. There's
the biggest issue they were identifying was affordability, which is kind of bringing in this
pressure on the consumer side, tighter budgets. And then on the other side, a lot of dealers are
worried about rising expenses internally. And I spoke to an analyst at McKinsey about this issue
in Gamora, and she had a lot to say about this squeeze. The cost I have to sell a retail unit
is actually growing. And then at the same time, consumer affordability is challenged. And so
it creates this squeeze where kind of the dealer sometimes finds himself at the center of it.
So Paige, how are dealers navigating that? Like I said, a lot of them identified the new vehicle
department as a place where they're facing a lot of challenges. They identified service and parts
and used vehicles as places where they see the most opportunity. And from the experts I spoke to,
they really emphasized the idea that we've all seen new vehicle profits really fluctuate over
the past couple of years. Obviously, things were really good during the inventory shortages, but
that wasn't going to last forever. And I think what's top of mind for a lot of stores right now
is reliability and sort of long-term planning. So how can we restructure some of our processes
and reallocate some of our resources to build in consistent profit that will create a strong
foundation for the store to support it through difficult economic times and then just be an
extra boost when maybe things are better in a couple of years? Yeah. Right on that note,
you write that dealers are sort of shifting from new vehicle sales to focus more on used cars and
service. And you also write that smart dealers are really aligning people processes and technology
together. So walk us through what that actually looks like at the dealership level. Like how
are the best stores pulling that off? I think data is at the heart of a lot of it. You know,
dealers aren't making, dealers and salespeople, I'll say, aren't making decision based on their
guts anymore. They're really using this depth of data that they could get from their stores or
from vendors about their markets, about their customers, about their service customers to
really make more informed decisions and more strategic decisions than they ever have before.
And used vehicles is a real opportunity. Those vehicles aren't cheap, just like new vehicles
aren't cheap. A lot of people have been priced out of the new vehicle market and are looking at
some of those late model, low mileage used vehicles as what their budget can make happen
this year. And so I think a lot of strategic dealerships are really interested in capturing
those customers and making sure that that's not a segment that's just completely left out of the
market. And you know, I spoke to Fleming Ford from NCM Associates. She told me how those used
vehicle processes are really being streamlined, but also some stores are even adding artificial
intelligence tools to that process to make them even more efficient and effective.
They're really using the AI to really hone in quickly on what's going on in each market to
make the best decisions on what will turn fast and where they'll be able to kind of have the
right inventory to meet the market needs of affordability. So another page that you spoke
about with Fleming Ford was sort of like the customer relationship between when you sell the
car and the future relationship with that customer. So what did she say about that and sort of
dealer's approach to service in 2026? Yeah, so I think the big picture is this long term
thinking. You know, we're not looking to get a customer one and done with a new car, which
you know, I know dealers are never looking to do that, but you know, and during the inventory
shortage, when things were great, I don't know that that was at the top of mind. And now it really
is and service is a place to really establish that relationship and find a way to really build in
customer experience to like really engender yourself to the customer, make them excited to
come to the store, make them feel good about the service. So that maybe when they are looking to
trade in their car, they think of you. And you know, the experts really emphasized some people
have been priced out of the new vehicle market, but that probably won't last forever. So maybe
you get them into a late model use vehicle today. And then their next purchase, they might think of
you and come back when they're looking for a new car. And so that type of long term thinking
instead of like new vehicle buyer right here right now versus like, how can I really
establish a long term relationship that often starts or you know, is really fortified in the
service lane to get this customer to keep coming back. You mentioned AI earlier. AI adoption in
the survey jumped significantly. 58% of dealers are already using AI. Another 26% are planning to.
So that's a vast majority. But you emphasize that they're not replacing employees with AI.
They're making better decisions is what they say. So can you give us some concrete examples of how
dealers are using AI beyond just phone scheduling? I think this is going to be a huge topic at the
NADA show. I think the sense we're getting from dealers is that they're really excited about AI.
They want to use it. They are using it. But we are still in the beginning stages. You know,
we are not to a place where they have perfected all of these processes and now they can get rid
of someone in the back office. There's a lot of experimentation happening and there's a lot of
scaling happening. So it might be like, okay, the one manager learned how to do this thing.
But how do you get your whole sales team to know how to do that? And how do you get maybe
all the salespeople across your 30 stores to know how to do that process? And so that's
some of the next steps we're seeing in AI. I spoke to one dealer and he walked me through
all the different kinds of uses they're finding for AI. For example, him and his team of managers
built a chat GPT model specifically for them designed to help them out with their daily tasks.
And he said that tool in itself has saved them like thousands of dollars in
kind of random stuff. He was like, we get a lot of offers for marketing opportunities, sponsor
the softball tournament or something like that. And in the past, they've had to then hire an outside
person to create marketing materials for them. And now he can go into these tools and have them
just create something that is either good enough or a good enough start that he can finish it off
without having to hire someone else. So it's kind of saved him some money on these outside
charges that they aren't really consistent, but they do come up and do add up.
So bad news for marketing firms, good news for the dealers in that case. But all right,
well, Paige, anything else that you want to add about the survey this year?
We really wanted to make it a playbook for dealers. If you're a little lost, if you're looking for
direction, or if you're just looking to see how your competitors are thinking about their strategy
for this year, this is the place to look. All right, Paige, well, Safe Travels to Las Vegas,
I will see you there. And we are going to be covering the show front to back this week here
on Daily Drive and in the pages of automotive news. Thanks for talking to us about the dealer
outlook survey for this year. And if anyone else is interested in checking it out, it's at
AutoNews.com. Thanks again, Paige. Thanks so much for having me. That's Daily Drive for today. I'm
Kellan Walker. Thanks to our own Vince Bond Jr., Riley Hodder, and Mark Homer for their reporting
for today's podcast. We also had reporting from Michael Gerster of our sibling publication,
Automobile Volca. You can get the latest news on this week's NADA show in Las Vegas and everything
happening in the auto industry at AutoNews.com. Come back tomorrow for a conversation with Chrysler
brand CEO, Chris Fuel. We're definitely pivoting away from the intention of positioning Chryslers
in all electric brand. It's obvious that customer preferences and needs have shifted. We'd love
to hear from you. Let us know what you think of the show and the topics we cover today. Send us
an email at DailyDrive at AutoNews.com or leave us a voicemail at 313-444-2774. And if you enjoyed
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