S4E20 - Dealership Profitability & Disruption: What’s Ahead in 2026
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Term
MSRP
MSRP is the price that the car manufacturer suggests you should pay for a new vehicle. It's like a starting point for how much a car should cost, but the actual price can be higher or lower depending on the dealership.
Term
negative equity
Negative equity means you owe more money on your car loan than what your car is currently worth. This can happen if the car loses value quickly or if you bought it for more than its market price.
Concept
autonomous vehicles
Autonomous vehicles are cars that can drive themselves without needing a person to control them. They use technology to see and understand the road, so they can drive safely on their own.
Company
Waymo
Waymo is a company that makes self-driving cars. They are working on technology that allows cars to drive themselves without a human driver.
Term
autonomy
Autonomy means that a car can drive itself without needing a person to control it. It's a technology that uses computers and sensors to navigate and make decisions on the road.
Brand
Volkswagen
Volkswagen is a well-known car company from Germany that makes many different types of cars, like the Beetle and Golf.
Car
Afila
Afila is a new car being made by Honda and Sony together, focusing on technology and entertainment for drivers.
Concept
franchise dealer model
The franchise dealer model is how most car companies sell their cars through local dealerships instead of selling directly to customers. It helps customers get service and support nearby.
Term
fixed operations
Fixed operations are the services that car dealerships provide, like repairs and maintenance. This part of the business can make a lot of money for dealerships, especially as cars need more work over time.
Term
sensors
Sensors are small devices in cars that check how different parts are working. They help the car know when something needs to be fixed or checked, making it easier to keep the car running well.
Term
service bay
A service bay is a special area in a car dealership or repair shop where cars are fixed or checked. It's where mechanics work on cars to keep them in good shape.
Brand
Kia
Kia is another car company from South Korea, similar to Hyundai. They make a variety of cars and are known for their good designs and prices.
Brand
Hyundai
Hyundai is a car company from South Korea that makes many types of cars, including sedans and SUVs. They are known for being affordable and reliable.
LIVE
Heather, it's not quite the wind studio, but that doesn't mean it's any less impactful
at conversation.
No, and it's really because of guests like Steve Greenfield.
If you don't know, it would be hard to know anyone in the automotive industry that is not
aware of Steve Greenfield.
But in case you're not, he is the author of two books, The Future of Mobility, The Future
of Automotive Retail.
He is the founder of Automotive Ventures.
Anything related to technology, innovation, consumer behavior, OEMs, investments, he is
tracking it all.
We had the opportunity to talk to him today, and he gave us some really sound advice when
you think about all of the factors that are impacting in dynamic business that we're in
with Automotive.
What do you agree?
Oh, most definitely.
Affordability, really looking at the economic outlook going out two, three, five years, what
opportunities there are for dealers in the different departments.
It was a very exciting discussion.
And he's got a thing for cats.
He has a little bit of a thing for cats, and we learned a little bit more about that.
That's right.
We're going to find out about that in a lot more.
We hope you enjoy it.
Let's take a walk around with Steve Greenfield.
Welcome to the Walk Around podcast, and Steve Greenfield is with us.
Steve, there's so many terms we could say about your knowledge, prognosticator, soothsayer.
What do you consider yourself primarily in the auto business?
Well, I'm an investor.
My day job is investing.
I mean, thanks for having me on today.
I do get to have a lot of conversations like this one about the future and what things
are going to hold.
But I think part of our investment thesis is be able to look around corners, anticipate
what things are going to happen and what things aren't going to happen, and then invest appropriately.
No, I'm very appreciative of being here today and looking forward to with you looking into
the future and having a little bit of a peek into the future.
Yeah, that's primarily what we're interested in, and Heather and I were really excited when
you agreed to join us.
We thought we would jump right in on an issue that all of us are talking about in the industry,
and that is affordability, for sure.
Of course, we are seeing that tighten.
We are seeing monthly payments near the 1,000 monthly amount, which is just mind-boggling.
I've been in what consumers financing their vehicles for 84 months has become in the new
year.
Yeah, and fewer and fewer cars are priced, new cars are priced under $30,000.
So what's your outlook on affordability?
Where do you see this heading in the next year, year plus, and what's your advice to
dealers about it?
Yeah, and great question.
The one thing I would add to that data point is that the default rate on deep subprime
continues to ratchet up every month.
So while prime customers, the default rate doesn't seem troublesome, we are seeing this
increase in default rate for the deep subprime customers, and some are anticipating the repo
rate as a result is going to go up, and we're going to see more of these repos coming back
to the auctions.
But there's a bit of a self-inflicted wound.
I think that during COVID, when we had supply chain glitches, the automaker sort of said,
well, if we're going to have to be limited with the cars we're going to build, we're
going to have microchips where we can get more profit margin, and we've seen this pretty
dramatic step up in an average price.
The Cox Automotive reports that just last month, the average vehicle transaction price
for new vehicles was over $50,000 for the first time.
And we've left this big gap to your point, like a sub-30,000 car, which a few years ago
was kind of a sweet spot, and now even on the used car side, it's hard to find cars
of high quality and low mileage with $30,000 or less sticker price.
So I think it is challenging.
The other thing that isn't talked about a lot is that we continue to see cars coming
back three, four years after COVID that were sold far above MSRP, where consumers are
shocked at just how dramatically underwater they are.
I have all this negative equity that when they buy a new car, they've got to roll into
the new car.
So it is a challenging environment right now, especially for deep subprime.
I think we do have this kind of what they're saying, like a K-shaped economy right now.
Those with prime credit, no worries, things are good, spending is great, credit's good,
credit's flowing, et cetera.
But I think for those folks that are more subprime, it is a challenging environment right now,
with prices being higher, default rates being up, et cetera.
So I think for those dealers out there, it's really a challenge.
You've got to sort of stratify and segment your customers differently.
I think those prime customers, probably you're selling to them in the same way, with the subprime
customers, it's just a dramatic different experience for them.
And you're going to, I think, increasingly have a hard time getting some of these people
financed.
Yeah.
Steve, one of the things you mentioned as we're talking about affordability and the
prime consumers are continuing to be able to take on these payments is you mentioned
the chip shortage.
And lately we've been hearing in the news coming up that we may see some similar supply chain
opportunities that we saw in 2022 coming out of COVID.
Can you talk a little bit about what you know and what you've heard about the pending challenges
we may see in the microchips?
Yeah.
It just shows you the fragility and the interconnectedness of the supply chain.
When you have a chip maker over in Holland, they're potentially going through bankruptcy
and their absence could really, really disrupt new car vehicle supply here in the US.
It's kind of like chaos theory when you've got a butterfly's wing and halfway across
the world there's a hurricane as a result of that or something.
But I think that the beauty of the American economy is we've dialed in the supply chain
so tightly that everything, you know, Amazon or whatever is just in time delivery and we've
got local stock of these things, et cetera.
But as we saw during COVID with microchips, it doesn't take much of a disruption in the
supply chain.
So I think that this is just one example.
I don't suspect this is going to amount to too much in the short term, but just another
example that we've dialed in this supply chain so tightly that any disruption whatsoever
is a challenge.
And the implications are that, you know, the automakers for a multitude of reasons are
under pressure.
They're under pressure for a lot of reasons, not the least of which is just the supply chain.
And they're going to share the pain with tier one suppliers, those suppliers that supply
them the products they assemble together into vehicles.
And the automakers operated a pretty thin margin, but the tier one suppliers really
operate a thin margin.
So, you know, any disruptions of these tier one suppliers, as we've heard about in Europe,
could threaten bankruptcy.
And again, just shows you the fragility of the supply chain overall and hard to anticipate
how this will play out.
But I suspect that there will continue to be disruptions because we've dialed this thing
in so tightly.
How do you feel or what would be your advice, Steve, to dealers regarding affordability?
Yeah.
So I like to tell dealers like, you know, worry about the things that you can control,
the things that are beyond your control, you can't really help, right?
So your automakers, for example, are going to build certain cars.
Steve, I need to take that advice in my own life situation.
We all share it.
Yeah, yeah.
We're continuing.
We often wake up at 3 a.m. about the things we can't control anyway, but I think that
the dealers can't control.
They can't control what cars their manufacturers are building and whether or not consumers
are going to like those cars.
They can't control much about what front end gross profit they're going to be able to generate
off the sale of new cars.
What they can control, they can control which used cars they stock on their lot.
They can control how much they focus on F&I in terms of attach rate and back end profitability
on the car deal.
They can control how well they're absorbing market share for fixed operations, parts and
service in the local market.
They can control how well they're nurturing their customer database to make sure that
all three of us buy our next car from the dealer and they drive loyalty and make sure
we come back and service our car at the dealership.
So I do think that dealers just increasingly need to focus on the areas of the dealership
that they can control and specifically those areas like F&I and fixed operations that
drive the most profit and then spend an undue amount of attention to those things that
will drive profit and create the economic health, the buffer for their business, especially
in these times of uncertainty.
Don't worry too much about the things you just can't control.
It's getting me thinking about the term I've heard many times in the financial world.
Control the controllables and your business will thrive.
So one of the other pieces that you've mentioned early in our conversations and it's a slight
pivot in what we're talking about is disruption.
And as we know, we have seen, we are seeing disruption in the DMS space and the retail
technology space, the tech yons of the world, the pine wood, et cetera.
And so, you know, we'd really like to know what your thoughts are on the DMS space, Steve,
and the new entrance that I mentioned, tech yon and pie wood and what should dealers be
looking for before making a change, whether it's a DMS technology or any type of investment
that could impact the customer experience.
What should dealers be thinking about?
Well, yeah, taking a step back, I would say, you know, competition is one of the things
the attributes that makes America great, right?
Competition makes the incumbents smarter, forces them to be faster, more agile, et cetera.
And then clearly, competition is good for the end customer, in this case, the dealer
who has more choice.
So I do think, well, it would be nice to have, you know, a rigid fixed market share amongst
a couple of players.
Competition makes the whole pool much smarter, more aggressive, and everyone benefits.
You know, I think the dealers have more choice now, right?
So they do have the upstarts, the tech yons and the pine woods and others who are smaller,
but growing quite fast, are on a probably a more agile software base, don't have the
legacy technology debt that some of the big players have, therefore they can innovate
faster, et cetera.
But the flip side is, you know, at a dealership, there's this notion of change management,
especially with a DMS.
You know, I may have employees that have used that same DMS for 20 or 30 years and trying
to get them to change is very, very painful at times, right?
So that creates more stickiness with the legacy players overall, even if there are features
that some of these new players have that these legacy players don't have.
So I think any dealer that is wanting to evaluate a technology shift from what I understand
from dealers, a lot of it is the change management.
It might be, hey, we're really enamored with this new interface or our employees look at
it and say, wow, this would unlock our ability to do a lot of things that we're not doing
now for the benefit of the consumer.
But then you run headlong into, but now we've got 300 employees and they all need to be
trained and they're all used to doing things.
But we're all this way, right?
We're all sort of cognitively lazy.
We get into our ruts.
We like doing things the way that we do them.
Change often is perceived to be a threat.
So there is a bit of, you know, they say it's technology, people and process.
And I think in many cases, it's not just a new technology.
You really need to think about how many of our processes we need to change.
And as an impact of the impact on our employees, because at the end of the day, our
employees are the ones that are really doing the work to generate revenue and
profitability and provide that customer experience.
And you want to be able to bring the employees along with you on the journey as
you make these kind of dramatic technology decisions.
I'm curious, Steve, on the topic of technology decisions, you know,
you mentioned earlier, you're an investor.
That's your business.
That's where you're spending a lot of your time.
So when you think about automotive technology, where is that trend going?
What are you seeing in the market?
What are what are dealers or what should dealers be curious about based on what
you're seeing and where technology is evolving?
Yeah, it's a great question.
And you can't look at any news outlet today without seeing something about AI.
You know, across all industries, something like 63 percent of all venture capital
money is being invested into AI companies now.
So it's definitely hot.
Some some say it's too hot and too frothy when you see these five hundred
billion dollar valuations for startups like Open AI that didn't exist two or
three years ago, but that's another topic free for another day.
But I do think that now taking that and applying it to dealers overall,
you know, dealers, I think, are already starting to get a little numb to the
number of vendors that are pitching AI enabled AI powered solutions overall.
And I think that that's only going to get worse.
You know, we're going to be walking into NADA here in a month or two in Las Vegas.
And, you know, every booth is going to have some mention of AI,
some new feature that's powered by AI, et cetera.
But I think on the flip side of it,
your dealer should be very excited, very excited.
And they're there by my calculations,
a dealer's cost structure is about 60 percent human capital.
So about 60 percent of their cost structure every month is human capital.
And even, you know, light AI that helps all of your employees become more productive
should naturally move all your metrics in the right direction.
For example, you know, the average dealer
salesperson sells 10 cars per month.
I've got to imagine that with AI we're going to unlock productivity gains.
For example, in selling cars where that salesperson that uses
10 cars a month may start selling 12 or may start selling 15.
I'm curious, how do you see AI impacting that ability to make a car
sales process more efficient today?
And it just to tag on that, all three of us know we've been at an average
of eight to 10 cars since probably the early 1980s.
And I keep sharing this about AI impacting car sales.
And here we are 2025.
We're still selling an average of eight to 10 cars.
So if I'm a dealer and I'm listening or a salesperson or sales manager listening
to this, how do you identify out of these tools and technologies that we see?
What's going to move that needle to cars per month on average for salespeople?
Yeah, I agree.
And I'm a bit of a donor too.
So I hear you, Apple, you're
like, what have you had a magic?
I know I was hoping that deals was like, OK, make sure you're tuning in right now.
This is going to be our headlight.
I do give these things a lot of thought.
So listen, this is how I would characterize it.
If you and I went out and we found the most productive, the 10 most productive
salespeople in the country, I got to assume that they sell consistently 30,
40, maybe 50 cars a month or something and look at what they do.
I've got to imagine it's something like this.
I've never sold a car, but I'm assuming it's something like this.
They really focus on being very attentive to their customers.
So when they look at a customer, they're like, I'm not going to sell this person
one car, but over their lifetime, I'm going to sell them five cars.
I'm going to sell their spouses cars or kids cars or neighbors cars, etc.
And they build up that network.
Well, how do they do that?
They probably are very attentive to the customer.
So every year I get a reminder like, hey, congratulations, Steve, on your birthday.
I hope you still are enjoying that Toyota.
You know, on kids' birthdays, they probably get a handwritten card that goes
out to those folks, etc.
And they're probably very attentive to their customers.
So, you know, their customers, I'm never going to buy from anyone else.
I love dealing with Steve.
He's such a great salesperson.
He knows me, he knows my kids' names.
He knows their birthdays.
He knows that their favorite sports are and he sends me things, etc.
All of that is scalable and AI should be able to help with that.
Like, who, who will he better to track birthdays and, you know, anniversaries
and kids' names, etc. than AI?
Imagine this, imagine, you know, I walk into a dealership and up on the salesperson's
screen goes, hey, we just use facial recognition to recognize Steve just walked in.
As a reminder, his spouse's name is X. His kids' names are Y.
And by the way, he's got two golden retrievers right now.
And he loves those things to death.
And their names are Mary and Jane or something.
And all of that should be able to be done real time with AI.
So you could have this, this very
powerful, successful salesperson that has a photographic memory or you could have
AI that augments, you know, the average salesperson and brings them up.
It's kind of like the rising tide, rising all boats.
Like the average salesperson now should be as effective as the most effective
salesperson on earth, just because AI is sitting
persistently on every single device they're using and just reminding them,
like nurturing them, giving them an easy button they can press to make them much
more effective, even for brand new employees.
So I do think that AI has this promise.
We'll see if it is able to fulfill that promise.
But we may see this huge breakthrough with productivity, no matter which role it is
at the dealership, we could describe back office automations and accounting
automations and fixed operations automations.
And how do we drive more throughput per technician when they're under a car
using augmented glasses to help diagnose problems?
I mean, I do think we're on the cusp of maybe some big breakthroughs that are
really going to drive productivity.
And by the way, you know, when a dealer's employees are more productive,
they're able to do more work and that means more revenue per head.
And that means more profit overall at the end of the year.
So I think dealers should be embracing this new frontier.
And we'll see how this all plays out.
Steve, I knew you were making up that bio about yourself because you don't have
golden retrievers. I heard you're a cat person at heart.
I am. I'm embarrassed to tell you how many cat or cat house we share.
Best bet? Is it six? Is it eight?
Over or under six?
I'm going to take the all your.
It's the it's over six.
How many are we talking, Steve?
It is over six. I can't tell you, Brian.
We don't want to reveal it. OK.
All right, OK.
It's dramatically over six.
You're madly over.
Why are you talking 12?
Are we in double digits or, you know, cats kind of cats can kind of,
you know, they live on their own.
They have their own like, do you really know how many you have at a certain time?
Are they in and out of the house?
Yes, it's a part time job.
No, I've taken since covid to rescuing cats and
at some point I'll scale it into an actual nonprofit.
But for the time being, yes, I'm getting a lot of experience rescuing cats from the street.
That's awesome. Oh, my gosh.
Well, you know, on the topic a little bit of AI in the future,
we wanted to ask your future outlook.
You know, you have published a book on the future of automotive and looking out
into 2050, which is always fun and interesting to hear
expert takes on what does the automotive industry look like?
From where you are today, based on when you made those predictions about 2050,
are any of them feeling more likely, less likely?
Have you have you gone back and thought about
some of those things that you're predicting for 2050 and what have has there been a change or a affirmation?
A little bit of all of the above in that book, I'm almost embarrassed.
That was, you know, three years ago, four years ago.
You know, I was pretty declarative that, you know, a level five autonomy was never going to happen.
And it's amazing.
I don't know if both of you have been in a waymo yet.
I haven't, but we've had some colleagues that just came back from the Salesforce conference
and they are incredibly amazed at the progression with Waymo because
in the early stages of Waymo, you know, it wasn't as smooth.
There was there was friction in the in the driving experience.
But now their comparison is it's made incredible strides.
Yeah, I mean, if you get a chance, whether you're in Arizona, San Francisco,
it's popping up in a number of cities hits here in Atlanta, Austin, Texas, Austin, Texas.
That's right. Yeah. So I mean, you'll start to see a wave of new cities being announced.
I think every quarter, which is great.
You know, this isn't going to replace for for mainstream America.
This isn't going to replace, you know, having a car in the driveway.
But in dense urban areas, you could foresee, you know, this being a substitute as
the cost per mile comes down dramatically, this being a substitute for maybe owning a
second car, right? Or definitely for business travel.
You look at, you know, Uber drivers today like, well, these Uber drivers may not need
to exist in five or 10 years and they may need to get repurposed and reskilled
as some other labor force.
But so the autonomous thing is interesting.
I'm not threatened that it's going to replace car ownership and like everyone's
going to go to autonomous ride, hailing and no one's going to own a car.
But I do think if you're in a dense urban area and the cost per mile does come
down dramatically, you might say, look, I don't need to own the extra car or, you
know, I'm going to substitute rather than driving downtown and worrying about
finding a parking spot and paying $20 an hour.
I'm just going to hop in one of these autonomous vehicles powered by Waymo or
whomever and it may start to substitute a significant proportion of the miles
driven per year. And I think that's good.
I think I think this is a good thing.
We should welcome it.
The opportunity here is that someone's going to need to service these cars.
So every day they're going to need to get charged.
They're going to need to get clean because people are going to leave french fries
in the back seat.
I'm on the other face.
Or are you okay?
And I think dealers are kind of ideally positioned in their local markets to
potentially have a new business line where, you know, now I'm servicing.
You know, I'm doing fluid changes.
I'm servicing, changing tires, et cetera.
But also I'm detrashing these cars.
I'm cleaning the exterior of the cars and charging them up overnight.
That could be a nice profitable new revenue stream.
For example, one of the benefits of as we move more towards autonomy.
So autonomy is one that I was a doubter, but now I'm a believer having sat in some
of these Waymo's. It's like it's really unbelievable technology.
And it's like it's a little space age to get your head around it overall.
But it's amazing.
I think that, you know, dealers have a very resilient business model.
I articulated that in the book and I think that's shown through COVID now.
It's shown through after COVID that they're going to have to move the shells
around on the playing board a little bit.
Like we said, don't worry too much about whether you're under pressure in certain
departments because they have plenty of levers to pull, very, very profitable
levers to pull across different departments in the dealership.
So I suspect that the franchise dealer model will continue to be profitable
and it'll be durable.
And we saw so many automakers during COVID that wanted to potentially sell
directly, looking at more of a Tesla like model and almost all of them have backed
off now. Yes, we still hear Scout, which is owned by Volkswagen, launching their
new vehicle and their intent is to sell directly.
We have this Afila car, which is the joint venture between Honda and Sony.
They intend to sell directly as well.
But I think even those brands will eventually realize that going through
the franchise dealer model is just the most effective way to sell and service
cars in their local communities.
So I think the dealers can rest assured that their business model is
defensible, very profitable, not as profitable maybe as it was in the peak
of COVID in 2022, but continues to be a very profitable, attractive business model
that's defensible and durable for the long term.
So I don't think that there's any scenario that when we look at 10 or 20
years that dealers don't exist.
And as you outlined in your book, Future of Automotive Retail,
have the reliance on the fixed operations area of your dealership.
And I think that's why it's so critically important to take care of that
customer experience, because they are going to rely more and more on that dealer
to continue to service and take care of their vehicle.
It was a great book and I enjoyed reading it.
You want to move on to the breast beds?
Let's do it.
So, Steve, Rick, we're going to close out our segment with you with a little
game that we like to play called Bed-It or Forgeza.
And typically, Steve, and hopefully at NADA in 2026, we can catch you.
We're in our serious XM booth at the WAN Hotel.
We will be back doing live interviews and be able to indulge Mark's gambling habit.
But for now, to mention it, sorry.
But for now, we'll do Bed-It or Forgeza.
Here we go. Bed-It or Forgeza.
So you mentioned profitability, which was actually
one of the things that we had on our list here.
So here it is.
By 2030, average dealership net profit margins will drop below pre-pandemic levels.
Bed-It or Forgeza.
Forgeza.
Forget it. Tell us why.
I mean, Glenn Mercer, who if you haven't talked to you is just a great industry
expert, you know, has this chart going back 50 years to showing the average
dealer profit margin and how stable it's been.
And I do think there are some unique opportunities to unlock additional
profitability, especially in fixed operations.
For example, as the cars get more sensors on them or able to diagnose when a
critical component needs to be serviced or is going to fail.
And on the dash, the car recommends going to a service bay to get that work done.
They're not going to recommend independent repair shops.
They're going to recommend the franchise dealer, probably where you bought it from.
And I think as a result, you're going to drive tremendous loyalty back to dealerships.
So they're going to actually have increased loyalty of their local vehicles
and operations in the future, driving more revenue and profitably through fixed
stops as an example.
So I think that the the automakers will figure out ways to ensure the dealer
channel continues to make really good, healthy profits.
Dealers will be very intuitive and creative in terms of working with their vendors.
And I actually think that the dealer, the dealer profit margins will be
sustainably healthy into the future.
Well, with those sustainably healthy profit margins, that it are forget it.
Dealership valuations will continue to rise over the next 12 to 18 months,
even with margin pressure, that it are forget it.
I'm going to bet I'm going to forget that one.
I think that I don't think there's anything
on this little cliff we're going to drive off of, but I only see a lot of
indications that multiples are going to increase.
So you think we're going to be in a period of stability or then not
one to two years when we think about valuations.
Exactly. Right.
I think it's going to be primarily driven on the attractiveness of the vehicles
of their OEMs are producing.
For example, Nissan's gotten beat up recently because the products are producing
just like there isn't a lot of consumer demand.
If they turn around and start creating hot product, you're going to see a bump up
in valuations for that brand.
So I think some of the individual brands will move around.
But overall, I wouldn't suspect we're going to see any spikes or any dramatic declines.
So, Steve, on this next one, you touched on a little bit in your
your thoughts on 2050, but
direct to consumer brand launches will fail to meaningfully displace the franchise
dealer model at it or forget it.
I'm all in on that one.
I mean, that's exactly I couldn't have articulated that better.
Listen, the scout thing isn't going to work.
This feel of thing isn't going to work.
So I know that the dealers are pushing back pretty hard against those initiatives
from their automakers.
But look, I mean, other than Tesla, who's got significant volume?
Loosen hardly sells any cars, Rivian's been challenged, etc.
It's awfully hard to build a new consumer brand and build consumer awareness
for a brand new vehicle.
They're much better off using the dealer network.
Dealers can sell cars if they can do anything they can sell cars.
So I think that you'll let them try.
But I think that these consumer direct channels are almost inevitably going to fail.
Yeah, Steve, I'm curious your thoughts on VYD.
If that makes it to the American market and you're a dealer, are you lining up
for that franchise or are you not 100 percent?
I would want to be the first VYD dealer in my local market.
If you haven't been in these cars, they're amazing.
The price point is quite reasonable.
The quality, the fit and finish, the quality is amazing.
You talk to drivers, like as you travel around the world, you talk to people who
have these cars, they're like, these are great, great cars, great quality.
The value for the price that you're paying is astronomical.
And, you know, if VYD, if President Trump, for example,
negotiates something with China where some of these brands come in,
I do think dealers should be very open-minded about being first in line
because it's a bad day if your competitor across the street gets the VYD franchise
and you don't.
I'm thinking about when dealers were approached with Hyundai and Kia,
the ones that got in early.
Look at them today.
That's right.
Unlike those brands, I mean, the first iteration of Hyundai's and Kia's in America
were horrible, the quality was horrible.
They were not ready for, you know, the American market,
whereas the VYDs are like really, really good quality cars.
So I agree with you.
I think that you won't have that 10 years while they figure out the quality issues.
You will have a hot product priced right right out of the gate.
Steve, one last bet it or forget it.
Dealers in the US will be selling VYD within five years.
Bet it or forget it?
Bet it.
Bet it.
All right, you heard it here.
Steve, we can't thank you enough.
Where can people find you?
Heather, we mentioned the book, The Future of Automotive Retail.
I'm assuming you can get that on Amazon or anywhere you buy books.
And your latest book, Future of Mobility,
which came out this year as well.
AutomotiveVentures.com.
Is that right?
LinkedIn, you are an amazing industry insider and we can't thank you enough
for sharing your thoughts with us today.
This was a real pleasure and I appreciate both of you for everything you do
for the industry and for having me on today.
So anytime you like me, I've come back.
Just just just give me.
We sure will.
Thank you.
Thank you, Steve.
Thank you.
We really appreciate you joining us today on The Walk Around and we hope you enjoyed
the episode. Please be sure to like, share, subscribe and follow us.
We look forward to seeing you next time on The Walk Around.
About this episode
Steve Greenfield, a prominent figure in the automotive industry, shares insights on dealership profitability and the future landscape of automotive retail. He discusses the challenges of affordability, the impact of supply chain disruptions, and the evolving role of technology, particularly AI, in enhancing dealership operations. Greenfield emphasizes the importance of focusing on controllable factors for dealers and predicts that the franchise dealer model will remain resilient despite emerging direct-to-consumer brands. His unique perspective, combined with anecdotes about his love for cats, makes for an engaging conversation.
Original notes
Steve Greenfield, GP at Automotive Ventures, shares his perspective on affordability challenges, dealership profitability, emerging retail tech, and how AI may shape the future of customer experience and operational efficiency.
For more information about our guest, visit their LinkedIn.
Episode Breakdown
0:00 - Meet Steve of Automotive Ventures!
0:53 - The state of vehicle affordability and consumer credit
4:00 - Supply chain fragility and new chip constraints
6:19 - What dealers can control to protect profitability
8:05 - DMS disruption and evaluating tech investments
11:10 - The surge of AI and where it will actually help
13:20 - How AI can unlock sales productivity & loyalty
18:33 - Autonomous ride-hailing and its real implications
22:20 - The durability of the franchise dealer model
24:08 - Best Bets: Profit margins, valuations, direct sales & BYD
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