Spradlin on Acquisition, Darji on Response Speed, Spiegl on Chinese Cars | Daily Dealer Live

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Hey everybody, welcome back to another episode of the Daily Dealer Live.

I'm your host, Sam Darkin.

Thanks for choosing to be here this Monday, the 9th of March.

Today, we're talking about something that could fundamentally reshape the global auto industry.

China's auto industry has gone from being an afterthought in automotive to becoming

the fastest growing automotive manufacturing force on planet Earth.

Companies like BYD, they're now producing millions of vehicles a year and they're

expanding aggressively across Europe, South America, and Asia.

If you've traveled abroad, you've seen them.

The question everyone in the industry is asking, well, will Chinese vehicles

eventually enter the United States markets?

Senators, pundits, and even some dealers have been on this show and they've said no.

But President Trump and others, they've said maybe they've left the door open.

And if China does come here, what does it mean for franchise dealers?

Well, today, we're joined by two guests who've seen the Chinese auto industry up close.

One's a dealer principle who recently toured the BYD factory in China.

The other is a leading global expert on China's automotive industry.

Plus, and we're going to talk about how advanced Chinese manufacturing actually is,

whether Chinese brands will attempt US entry, what this means for US dealers

and how the US auto industry competes going forward.

That's later in the show.

Before that, we'll talk speed, delete, and automotive,

something on everyone's mind this March of 2026,

as well as growing F&I PVR through used car acquisition,

but first today's auto industry headlines.

And by the way, a reminder, we're streaming across all CDG social media platforms.

Post your comments into today's show.

We'll bring them in as we go.

First up today, we're starting with something a little outside the usual beat,

but definitely worth paying attention to.

The world is disruption around the Strait of Hormuz,

the waterway carrying roughly one-fifth of the world's oil shipments

is starting to raise flags for US car dealerships.

Per an advisory from Spine AI, effects will hit dealers in phases.

We all know gas prices are already moving,

but parts available and recon disruptions could follow within weeks

with manufacturing cost pressures taking months to reach the retail level.

Still, this is not to say dealers need to overhaul operations just yet,

but stocking up on fuel efficient and hybrid cars might be too late at this point,

but staying in touch with OEMs about inventory and delivery times

can help stay ahead of the curve as this develops and unfolds.

Also last week, Corvana, yes, they closed on their sixth Stellantis dealership.

They picked up Colonial Dodge Chrysler Jeep Ram in Hudson, Massachusetts.

That transaction finalizing March 3rd.

For context, that's about 30 miles west of Boston,

and it brings Carvana's Stellantis footprint to five states.

Timing-wise, the deal landed right around the time Stellantis rolled out new guidelines

limiting how many stores a single dealer can acquire within a rolling 12-month window,

and it's unlikely the deal was in the works.

But it is likely the deal was in the works before Stellantis' rule.

Either way, it'll be interesting to see where Carvana's footprint goes from here.

In other overseas news this Monday, the European Union is pushing a plan

called the Industrial Accelerator Act, which could require 70% of an EV's parts

cost to be manufactured within the block for the vehicle to qualify for EU subsidies.

They say the goal here is to protect Europe's auto industry from Chinese competition

and US tariff pressure, but critics say it collides with deeply integrated cross-border supply chains.

Ford's European president, for example, warned that excluding partners like the UK and Turkey

would actually hurt EU production.

What's the bottom line here?

Well, the deals are still being worked out, but OEMs and suppliers are already watching this one very closely.

And on a stronger note, BMW led all automakers in the United States' vehicle exports by value in 2025,

shipping nearly 200,000 vehicles worth $9 billion,

mostly out of its Spartansburg, South Carolina facility.

More than half the vehicles BMW sold in the US last year were also built there,

making Spartanburg one of the most important auto plants in the country right now.

Even so, it's worth noting that BMW isn't immune to global trade headwinds.

The company is actively negotiating with the EU over tariffs, see the previous article,

on its Chinese-made mini EVs, and has already walked back its 2030 EV targets as ice demand in North America holds firm.

Well, that's a wrap on today's auto industry headlines.

Diving straight into the comments, Patrick Block says Chinese Zika are already working with Waymo.

It's inevitable, so that's a comment kind of supporting, you know, some have come on here and said it'll never happen.

Others have said there's a door open, and there's probably a whole subset that says it's farther down the road than we may even think.

That'll be a phenomenal conversation today as we have the two Michaels.

Michael Spiegel being one of them joining the show.

But first, let's go to Charlie Spradlin, return guest sales director, Art Mean Auto Group.

Charlie, welcome to the show.

Thanks for having me back, man.

Appreciate it.

Hey, it's great to have you back.

You were on, I think, back in October.

We talked about a bunch of different things, used cars included.

You've done some things, Q4 of 2026, to push your PVR and FNI over 2K.

What changed operationally to make that happen, Charlie?

You know, it's funny because we're celebrating 2K and I know there's plenty of people across the country.

Passive.

They're all over the place, you know.

Yeah, it's just a number.

It's just a number.

We sell and we've come from a long, a long way down.

But we also sell cars that are $1,000 all the way up to $110,000.

Nothing is off limits for our dealership.

And, you know, for a long time, we let that be an out, you know.

Well, we sell these types of cars so they're, you know, you can't count those.

You can't count those.

That was the excuse, right?

You had a better reason for not doing it than doing it.

Yeah, I like that.

Yeah, 100%.

And I think the biggest change we made in our process was throwing out the excuses,

throwing out the option to fail just because a car isn't a good car for FNI.

And by doing that, all of a sudden, we see an immediate lift in our PVR.

We stop excusing these deals and that deal.

And a car deal is a car deal.

It should always be like that.

And I just, I think that that difference mentally just changes the game.

Charlie, what was the economic pressure that made you relook at FNI in 2026

and say, you know what?

We need to ask more of ourselves, our teams, our customers of the marketplace.

What was the economic pressure that pushed you to change your mindset?

Yeah, I don't know if you've heard.

There's a used car shortage, you know?

I'm aware, yes.

Yeah, yeah.

And you know, really, we kind of have a new car shortage as well.

It'd be compared to what we're used to.

And so you have no option other than paying more, being more aggressive,

buying everything you possibly can.

If a car runs, I'm getting it.

I'm getting it.

I don't care if I'm going to sell it for $9.98.

I'm going to get that car.

I'm going to put it on my lot as long as it's safe.

And then we're going to sell it.

And if we're doing that, if that's our strategy, if acquisition is the way that we,

I mean, it is the way we grow.

But if it's the name of the game, you have to make it up on the back.

Because it's crazy to think that I'm going to make gross while being more

aggressive on buying cars.

So I want to turn to politics just briefly, and then we'll go back to use cars.

So yes, shortage a little bit.

We've seen some fluctuation in use cars.

A lot of the industry believes that there's

going to be a surge in use car sales coming into the tax season,

as people get larger than anticipated tax refunds.

But there's the counter issue right now going on in Iran,

including the news item we led with today, the Strait of Hormuz,

being a little blocked up.

That's going to create some part shortages potentially, which

could increase challenges in new cars.

But then also, we've had some reporting

that maybe use car values on gas guzzling vehicles are declining.

Have you seen any of that?

And how do you think about some of these geopolitical things

that are going on this past week

and how they could potentially impact the marketplace?

I don't know if this is going to be a popular viewpoint.

But I think adapting to different economic issues is important.

And you have to move quickly.

But I think you can overthink and fear your way

into a bad place.

And I think car dealerships are guilty of it all the time.

We sell, use cars.

And I'm going to buy what's in demand.

I'm going to buy if I'm going to do everything

I can to buy cars in general, because there is a shortage.

And if that means buying used EVs,

I'm going to buy used EVs.

We just took in a Tesla for good money.

There's nothing wrong with it.

It's going to sell.

It'll probably sell faster than most of my other cars.

I'll buy all the depreciating used EVs from GM

that they're taking a bath on off lease.

But people are still buying them.

And I don't think $0.70, $1.50 is going to change the fact.

They'd rather pay that at the pump

than spend an extra $5, $10,000 on their monthly payment.

Yeah.

But you are in Michigan, right?

You are in Michigan.

So Michigan has not historically

been a high EV adoption state.

You mentioned you're buying some EVs post rebates.

Do you think EVs come back and gain a little bit of traction

with increased gas prices?

Because you say, hey, we don't adapt to politics.

But politics do create an environment

where we can talk different things.

And EVs might present an opportunity

in our current marketplace.

Yeah.

I think when I first started the business,

my old used car manager said more graphically,

but there's a butt forever seat.

Yeah.

I've heard that.

In Michigan, we sold a ton of new EVs last year.

And so whether we like it or not,

that changed the landscape of new cars and new Chevrolets

in Michigan.

And there's a demand.

And there's been overall, I think

there's been a pretty positive feedback for people who

took advantage of those lease prices.

And so there's less fear.

And it's like an affordable car is an affordable car.

There's a lot of ways in which an EV is more affordable

than a gas car.

And right now, affordability being the most important thing,

I'm not going to shift my inventory to have 50% EVs.

But I'm going to have five.

I'll have 7%.

I will stock it like any other car because they will sell.

Yeah.

So last time you were on the show in October,

transitioning to the used car market.

So you've had success in F&I.

Part of that success was mindset.

And you said, hey, we're going to make less excuses.

We're just going to meet the customer where they want

to be in your PVRs increased as a result.

Last time you were on the show, you

talked about used car acquisition in the service lane

as a source of acquiring used vehicles.

I think you said you're getting 20 to 30 cars a month out

of the service lane.

Would love to follow up.

Is that still successful?

Is it still happening?

And then I think you created an internal acquisition

department.

What prompted that starting with the service lane?

I mean, the service lane is or was that holy grail

that everybody talked about wishing

that they were good at and never did anything with it

because it's hard.

And there's ups and downs.

We had the worst month of acquisition of the service lane

in January.

But we were off to a killer start in February.

We're off to a great start with it in March.

It's one of those things that you just have to be steady

with.

You can't take 60 days of results and be like,

it's not working.

I'm tossing it out.

Yeah, you got to do it over time.

You have to do it over time.

And you have to commit to it and trust

that you have the right people in place to do so.

But it's continuing to grow for us.

And it's also changing the mindset of the store

that it's acquisition, acquisition, acquisition.

So yes, I am creating an internal acquisition department

inside of sales that has its own manager.

We're building that out.

A gentleman named Frank Knox, I just signed a contract

with him to help me grow in a way that I'm not

the smartest guy on the planet.

I don't know everything.

It's important to get people around you

that will help you build this kind of stuff out.

And if we're going to go to a place

where we're acquiring outside of auctions,

100, 150, 200 cars a month, which is the end goal,

you need to have a department dedicated to it.

You can't just have one guy.

You can't have one person work in the service drive.

It has to be a culture of acquisition.

So it's interesting because now in March of 26,

you're creating a department that rivals sales.

So you have your sales department

that are selling the cars.

You've got an acquisition that's buying them.

As you ideate on this, how many people

will be in this department?

How are you compensating?

And then you mentioned your vehicle goal.

How quickly do you think you'll achieve that acquisition goal?

I mean, if we're already acquiring, in just acquisition,

we're acquiring roughly 100 to 150 cars

based on the month outside of trade ins, which

was out of just pure demand because our new car supply

has dropped.

We're not getting as many trade ins as we used to.

There are more competitors out there.

We've missed some trades here and there

because it's tough sometimes to put 101% into a car.

But we have currently two buyers,

one private party buyer, one service lane specialist.

And I plan to take that to about a team of 10.

I think if we're going to really commit

to making it a true department in and of itself.

So you have two Chevy stores and a Honda store,

so three facilities all together.

How many vehicles, how many new and used

do you sell a month from all three combined?

The last three months have been the lowest Chevy sales

we've had in quite some time.

Traditionally, we sell in the Chevy store.

We'll do 70 to 80 new Chevy's a month.

And Honda will do 25 to 45 depending on the month.

The other Chevy store is about 15 miles away.

Quite a bit smaller.

20 Chevy's, 40 used somewhere around there.

And then out of the Chevy store in Jackson,

we do 170 used these days.

Is that lower new on the Chevy side?

Is that because of suppliers that just demand?

I think it's mostly supply of the right vehicles.

I have a lot of expensive Chevrolet's and stock,

but affordability continues to be a problem.

So supply, but also affordability.

So during NADA, we had the head of GM on the show,

and he talked about discipline in production.

And they're not flooding the marketplace with vehicles.

What's your take on that?

Do you agree with that as a strategy

before you go back to used cars?

Or would you like more inventory, the right inventory

as you say?

Yeah, if GM is listening, I love their strategy.

And everything they do is fantastic.

They are, by the way.

Selfishly, yeah.

Selfishly, I'd like to have more opportunity on the ground.

The tough part is we don't have the inventory,

the day supply of inventory that we need.

For example, we're a big leasing state.

The 2FL is Chevrolet's focused lease model.

And they've just come out recently and said,

hey, we're not really going to be producing that.

There's supply issues.

Whatever else goes into that, we're

shifting to the RST Select.

And that's going to be what you have,

and it's more of a buy truck.

And it's like, all right, well, you know.

So would you rather thinking about those two tales, right?

There are OEMs.

Everybody coming in out of COVID

said, hey, we'll never overproduce

supply into the marketplace.

And there are OEMs that have absolutely over supplied.

And it's been a race to the bottom

with stair step incentives.

And then there have been the more discipline.

GM is disciplined, right?

I would say.

There are OEMs that are disciplined.

I know the middle is where you want it.

But if you had to pick between the two,

which would you choose, Charlie?

I'd choose volume over everything.

Oh, would you really?

OK, I would.

OK, OK.

Because I think that we've already

been shown that it's a race to the bottom anyways.

You can still make money off of value and customer

experience.

But I would rather have the opportunity

than I would worry about making a bunch of money

per car.

Everybody wins when volume is your play.

OK, all right.

I like that.

You know what?

That's an interesting perspective.

I'd love to get you on a show with a round table

with some other dealers to talk about that.

Because there are differing opinions on that.

And volume is definitely one side of that.

Final question before we have to go here.

You know what?

That question just come.

I got a note from the director.

He's like, hey, let's go.

I completely lost the question of my mind.

Oh my goodness.

I apologize.

You know what?

Oh, I know.

What would you say?

So you're creating this buy center.

And you're buying vehicles out of this buy center

for three stores.

And I assume you have GMs at each store.

And they're probably accountable for the results

at that store.

What would you say to a group that's

similar to you in size that says, hey, we can't do a buy

center because we want each store to buy their own inventory

so they compete against each other so they sell as best

they can in the marketplace?

What is the economic reality that's

pushing you to do a buy center

and buy for multiple stores?

And then how do you decide who gets what

so it doesn't turn into a crazy competition

among your multiple stores?

Yeah.

So, and everybody has different ways to do things.

I am in control of the sales processes of the stores.

So that being said, it takes away

a little bit of that GM ego competition.

This is what we're doing.

And we're doing it as a group.

And it is what it is.

We also have the benefit and it can

be a con of proximity.

We're very close to each other.

Yeah, you are close.

I wouldn't do this.

I wouldn't do it this way.

I don't think if my stores were all over the place.

You'd have to shift locations.

That would be tough, right?

You'd have to shift.

And I mean, you do.

There are certain cars that perform better

in different areas and all that stuff.

But for us, I want someone to have the exact same

experience when they go from one store to the next.

They should be treated the same way.

They should be offered the same deals.

And I will sell my cars to any customer

wherever they want to buy the car.

So why would I be any different in the way

that I distribute used cars?

Why would I price them any differently?

Why would I do?

I want the experience to be the same.

That's what we're trying to create because of our proximity.

I think it does vary if you are spread out quite a bit.

Charlie Spradlin, sales director,

Art Main Auto Group, back for the second time.

We absolutely appreciate you coming on.

Sharing your perspective on used car acquisition,

the bison you're creating.

We'd love to have you back after your little bit farther down

the road.

You can talk to us a little bit about some of the economics

as you seek to consolidate into that.

But congrats on the number of vehicles you're purchasing

already and your success in F&I, Charlie.

Thanks for being here.

Thanks, man.

Appreciate it.

Thank you.

I got to tell you, this is the part I love about this show.

So people are like, why do you do this show?

I do this show because I learn so much every single episode

about why people do what they do, how they do it.

Daniel Meehan comes into the comments

and says, we need more inventory.

I agree.

GM stores, we need more inventory.

But it is a fascinating conversation.

What's that balance between supply and demand?

All right, let's talk Experian Automotive.

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And 75% say it's already impacting operations.

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And we at our auto group, I think,

had a little bit of a hand in developing that.

But in fact, it's interesting to me

as you think about that, 90% of dealers say

fraud is rising, 75% say it's already impacting operations.

It's either there or it's not.

And if it's not at you yet, it soon will be.

So props to Experian Automotive

for supporting today's content,

including this conversation with Charlie

on use car acquisition and F&I success

and the coming up conversation on China

and Chinese vehicles.

So props to Experian Automotive.

Thanks for supporting the content of today's show.

And let's go straight into this,

into a conversation with Yagesh Darje

founder and CEO of Agent Dynamics.

Yagesh, welcome to the show.

Hey, Sam, thanks for having me.

Yagesh, you're a first timer on this show.

Tell us a little bit about for our audience

that doesn't know you,

who you are and what you do in the world.

Sure, definitely.

So my background is in building

large scale communications infrastructure.

I spent years at Twilio and Amazon web services

processing billions of transactions per day.

And after that, I ran a venture backed AI startup

where we trained large language models.

And I saw firsthand how fast these models were improving.

That's when I saw the opportunity in automotive.

We are building agent dynamics.

It's an AI VDC that responds to every single lead

under 60 seconds across various channels, voice, SMS, email.

And we are live with dealerships,

zero turn and growing purely through world of mouth.

So Yagesh, you have said the biggest problem

in automotive today is speed to lead.

Why is speed to lead still broken

in this day of automation and technology, Yagesh?

Definitely, this was really an interesting experience

that I had when we started building this product is,

dealerships are losing sales

because they can't respond fast enough.

A customer submits an inquiry

to five to six dealerships at once

and a dealer who responds first

with the most accurate information is going to win.

We've seen that industry average is around over two hours

and what we do is we respond under 60 seconds

with actual inventory, a live pricing

and an appointment booked on the spot.

Yeah, the deeper issue.

Yeah, so go ahead.

What is preventing most dealers

from responding more quickly?

If you say the average is two hours,

I would argue that most people lose focus,

attention and interest at two hours.

Like if I'm researching something,

I think about like, I think about Amazon,

I think about Instacart,

I think about anything you wanna buy online.

If it's gonna take that long,

I'm done and moved on to the next thing two hours later.

Same for automotive.

Yeah, so that's exactly right.

So the deeper issue is that the fragmentation, right?

So dealerships, they use eight to 10 different systems

that don't talk to each other, right?

So they use different systems.

It's a mess, yeah.

Yes, they're opening like 10 different tabs

and trying to answer queries

and look up a vehicle, features and all of that, right?

So what we have seen is,

because these all this data,

which is living in all these different systems,

that doesn't communicate with each other,

customer communication falls through cracks, right?

So what you need to do is

you need to connect all the systems together

and build a seamless communications experience

to handle these conversations.

So think of it as in,

what we do is like an AI BDC that works alongside your team.

It handles all this repetitive, high volume work.

We make your team more productive

so they can spend more time on the floor

having real conversations with the customer

and delighting them.

Okay, so talk to us about this.

Your AI platform, you said in the intake,

it responds in under 60 seconds.

So you go from two hours to 60 seconds.

What does that interaction actually look like?

How does that work?

Exactly.

So, as soon as customer submits a lead instantly,

because the data hits the system as quickly as possible.

So there are different channels

with which you can interact with the customer, right?

So there is SMS email,

if we have their phone number,

we send them a text message asking about the vehicle

or if leaders have enabled our bond calling,

we also call the customer and tell them

that you inquired about this car

and how can we help you?

And answer any questions

and book an appointment on the spot, right?

So those are some of the things that we do.

And with respect to, let's say if they don't pick up the phone,

we leave them a voicemail and SMS and an email.

So the customers can pick up whatever channel

that they want to communicate with, right?

They can get back to you as quickly as within a minute

or one hour or two or whatever, right?

So the communication is never fallen through crack.

So Yagesh, we talked in the green room

how there's so many AI driven tools out there.

Everybody's got a tool

and everybody's trying to sell that tool into dealerships.

What are dealers to think about that?

And when you think about,

you've got a strong opinion about what makes great AI

that actually delivers on promises.

How should dealers think about buying the best AI tools

and finding the best AI tools in March of 2026?

Very, very great question, Sam.

So this is really important.

And I see this very often when we visit dealers.

One thing is education, right?

You need to do your due diligence really well

with the vendors that you're signing up with.

One thing I recommend.

So what does due diligence look like?

What am I looking for?

I'm talking to the CEO of an AI company.

What do I need to ask for?

Exactly, so basically,

so one thing is you want to ask them

what current customers,

how are they using their systems?

And then ask them how their system

will integrate with their dealership, right?

So tell them, we have these 10 different systems.

How are they going to communicate with each other?

What vendor certifications and partnerships

you have with these different integrations

that we need to do?

Secondly, don't sign up an annual contract.

I can't emphasize this a lot,

is like AI is only three,

like LLM concept of LLM is only three years old, right?

Like the chat GPT moment about three years ago, right?

The open AI and the anthropics of the world

are still innovating.

They are moving fast.

They still don't know what the AGI is going to look like.

So my point is you need to understand

that vendors who are claiming

that they are number one automotive AI companies,

I would be very skeptical of them.

You need to ask them the right questions,

look at their backgrounds of the founder,

the team, engineering team,

how their support is going to look like.

So I want to latch on to something you said.

So obviously check out their background,

check out how they interact and engage.

Do not, you said, sign a 12 month contract.

Why do AI companies in 2026 go for the 12 month contract?

And what should be the reply of every dealer

presented with the term contract like that, you guess?

Yeah, so what I would encourage is

when you're signing up on a new tool,

we encourage that you start with one rooftop,

one lead source and do a pilot or D-Day pilot.

Let them integrate with all your different systems,

see how they communicate, how they respond,

how they educate, right?

And how are they going to ask the right questions

to be able to get all the right information

so that you are successful, right?

But if all of that is falling through cracks,

then you know that you have a way to,

like because then you're not bound by the contract

and you know how it performs, how the AI performs, right?

So you look at all these metrics,

ask them for dashboards, metrics.

So we do this on weekly basis.

Every single week, we are looking at the dashboards

and metrics together.

We send them a report of what went well,

what is not working well with the AI,

what do we need to configure?

Because there are like 100 different configurations

that we have to do.

And that just, you know,

iteratively just becomes better over time.

So you need to ensure that they are proactive

and they don't make you create like a support ticket

which is sitting in a queue for like 15 days

and nobody responding.

Yeah, yeah.

So in support of what you're saying,

Allie Pinyin marketing comes on, says facts,

do not sign a 12 month contract.

So, you know, you're giving us great tips

on how to buy automotive AI in March of 2026.

What's your response to the AI tech company

that comes back and says,

we have to have a 12 month contracted.

That's how we allay all of our fixed expenses.

If we don't have that long of a commitment,

we can't make it work.

It's not gonna learn your systems and processes well enough.

What's your response to that as our last question today?

I think that I would be very skeptical people

who say that because unless you are one of the,

like, so my background,

I've done AI infrastructure startups before

and I've trained these large language models

and I know how they work,

how the models improve over time.

There is no perfect system out there.

So you would have to improve it over time

and that cannot just happen

by signing a 12 month contract.

You need to give it time.

You need to give 30 days, 60 days to do pilots

to see how the AI is improving for your store.

See what kind of models they are using.

I was talking to a dealer last week

and they said, you know, they are talking to a vendor

but they said that they only support these four APIs

even though there are like additional APIs available.

They wouldn't make them available.

They wouldn't add them

because most of the customers don't need it.

That's not the correct answer

because when you're dealing with a technology

that's so new,

you would have to support, you know,

as many different integrations and APIs as possible

so that your AI has richer context

to have better communications with your customers.

Yeah, Gash,

it's an absolutely fascinating argument and automotive today.

I love your conversation on speed to lead.

As an industry,

we've got to reduce that speed to lead time

from two hours to seconds and minutes.

Technology is a great way to do that.

It doesn't replace,

it enhances, I think,

the user experience in dealership

but also to the end user.

And your rally cry on the 12 month contracts,

I think is fascinating as well,

especially from ahead of an AI company.

So we appreciate you giving us some tips today

on buying and installing

and then using automotive AI in BDCs and elsewhere.

You guessed, Dari, founder and CEO, Agent Dynamics.

Thanks for being on the show today.

Thanks, Sam, for having me.

Couple of, well, of course,

Ally said, Ally, opinion marketing said facts,

don't sign that 12 month contract.

Just don't do it.

And just logically, when you think about it,

there may be some vendors

that have a different perspective than me.

I'd love to hear it in the comments.

When you think about it,

you've got the expense of developing the technology

and technology is developing so quickly.

How do I know six months down the road

you went from being a leader to the laggard, right?

We want the best in tech

and we want to be equally yoked together

in us implementing and using it

and then you upgrading, keeping it great

and keeping it relevant.

So when somebody comes to me

and looks for a long-term contract like that,

I'm kind of of the same opinion.

You know, a 12 month contract

doesn't show equal commitment.

So I don't know.

Anybody in the vendor world,

I'd love to hear your thoughts on that.

But we've got China to talk about.

We go from our first conversation, Charlie,

about, hey, would you like more discipline supply

coming out of COVID with GM?

Or do you want bigger supply?

Well, there's an automaker,

there's an OEM globally

that is producing a ton of vehicles.

And it is in China.

So next up today, we've got Michael Spiegel,

dealer principle, We Auto.

And Michael Dunn, CEO of Dunn Insights,

joining the show today to talk all things China.

Welcome gentlemen to the show

and just give us a little bit of background on you.

Yeah, my name is Michael Spiegel.

I'm the dealer principle of We Auto.

Appreciate you guys having us on.

Recently last year,

I got an opportunity to go

to the YPO Global Auto Summit,

which was in Guangzhou, China.

We get to visit the GAC headquarters,

DYD headquarters, X-Ping headquarters

and speak with a number of other executives

from Chinese OEMs

as well as dealers around the world

who are currently either representing Chinese OEMs

or competing with Chinese OEMs.

So it's just a tremendous learning experience

and appreciate you having me on.

And I'm even more excited to be with Michael Dunn,

who is the foremost expert on this subject

in the United States.

And so I'm excited to learn

just the same as you are saying.

You went overseas and saw the product.

We've had senators on the show.

We've had politicians.

We've had industry punts who've said,

hey, Chinese vehicles will never make it

to the U.S. marketplace.

It's a security, it's a privacy issue.

You went over and saw it.

First of all, why did you go over there?

And do you believe that they'll never come here

to the U.S.?

Yeah, well, I was really excited to go over there

as a person who looks to have a 30 or 40 year career

in the future in autos in the United States.

I see this as one of the biggest existential threats

that we're gonna face over the next decade or so.

And when somebody says they're never coming,

never is a long time.

And I'm certainly not in the camp

that they are never gonna come.

I think there would actually be certain pros

for them to come in a regulated orchestrated fashion.

However, I certainly see other countries

like France and Australia

who are suffering deeply from unregulated Chinese entrance

and what that's done to their auto-economy

and broader economy.

So certainly wanna be a part of the conversation.

I wanna be educated on what was happening over there.

And I think that the event really did that.

It was a great learning experience.

And I learned a ton.

So before we talk about facilities,

because I wanna get your sense of the quality

of the product, you mentioned Australia.

So I think the Australia experiment is fascinating.

They signed up a bunch of dealers

in Australia's franchise dealers,

much very similar to the franchise network here in the US.

They pumped a ton of vehicles in

and then they didn't really like

how the franchise dealers were operating.

So as I understand it,

some of those franchise dealers were turned direct.

They just went in and said, we're taking over these stores.

Is that your understanding?

And could that happen here in the US?

Yeah, Australia certainly has a lot of differences

between the United States,

one is scale and scope,

but also it's proximity to China.

It could not possibly create trade restrictions with China

because it relies on China for so many things

that are vital to that small little island.

Certainly, however, there's no doubt

that it had some adverse effects

based on the Australian dealers

who both compete against the Chinese OEMs,

but also Australian dealers

who represented some of the Chinese OEMs.

So the story that you spoke of,

I heard firsthand from dealers

and manufacturers in China

about going to Australia

and it was almost their speed to market

was almost a sense of pride for the Chinese OEMs.

Not necessarily that that was a con

that they would flip business models,

but it was a competitive advantage for them.

Now, could that happen in the United States?

Certainly we have really strong franchise laws.

I don't wanna compare us to Australia

and say that that would be day one

exactly how they would operate here.

However, I do think that this is a subject

that I don't think enough US dealers are educated

on some of the threats and possibilities

if we do let an unchecked Chinese auto industry

into the United States.

Whenever I'm in a pool of dealers

or I've even seen some polls where dealers are asked,

would you represent Chinese OEMs?

And everybody immediately goes to,

well, this must be just like doing business

with Toyota 60 years ago.

I missed it 60 years ago

and I don't wanna miss it now.

And I would caution dealers to get a little more educated.

I don't think that this is exactly

what that opportunity was then.

I'm not saying there's not an opportunity here,

but there's some major differences

that I think dealers need to be more educated on

before they just blankly raise their hand and say,

bring them in, I wanna sign up

and I wanna be a dealer representing

name the Chinese OEM.

And another one of those issues is

five years ago, there were 500 Chinese OEMs.

I don't know if you, United States OEMs,

you can count them on one hand,

maybe two hands if we're getting real creative.

But there were 500 Chinese OEMs five years ago.

Now there are 100.

Imagine if you were representing

one of the 400 Chinese OEMs

who were all the next latest greatest Chinese tech

that were coming to market

and then all of a sudden you weren't representing them.

Imagine if you were a customer who just spent money

and it might have been very affordable for you,

but a year later that OEM doesn't exist anymore

and there's no way to service it.

And as soon as one part goes bad,

you have to scrap the entire vehicle

and buy a whole another vehicle all over again.

So there's just a lot to think through

when we talk about our market that is very established

and what it would take for Chinese OEMs to make it safer

for them and be a great partnership

for whether it's the OEMs we already represent

and creating a joint venture with them

or just to service our customers and our constituents.

So I would, you brought up a bunch of different points.

The first point I wanna bring up is you talk about

how in the US we have franchise protection.

I think that's the interesting part about this attempt

by Scout to go direct to consumer.

So there's an established Volkswagen network.

I think there's a lot of dealers out there

that aren't taking the Scout attempt seriously enough

because it does test the franchise model

when you already have a dealer network,

Volkswagen in the market.

If Scouts allowed to go direct,

that does set up a troubling pattern

that China could eventually capitalize on, Michael.

Yeah, I would agree.

When you look at Polestar,

when you look at Honda Sony,

when you look at Scout,

there are a lot of people that are testing

the franchise laws that are already currently partners

with United States dealers

as sort of a canary in a coal mine.

And I think that we certainly need to get more educated.

And one thing that I took away from China,

my trip to China was that I believe

dealers need to do a better job of advocating

with their local government officials,

with the federal government officials

where we can go to Washington,

we can work with our OEMs

and we can represent and educate our local communities

and our broader state and national communities

on what these opportunities and threats are.

Because right now, I think that in Washington,

it's fast moving.

There are a lot of hurdles coming at them

and some are important or some seem important,

but this is a very, very large industry

and the protections that we offer

through the franchise system

are there not to degrade what customers are afforded

or what they could get from an affordability perspective,

they're there to protect the customer

and the customer experience,

not just in the three months,

but in the six months, the 12 months,

the five years, the 10 years.

And I think some of those protections

aren't really being paid attention to enough

by local, state and federal government agencies.

So Michael, you talk about the protections

in the comments, we're getting a lot of posts.

Paul Salisman's example says,

haven't we seen this abandonment with Daihatsu?

Someone else mentioned Hugo.

It's interesting because you talk about this being

a moment some dealers are comparing to Toyota

and Honda, maybe even Hyundai

where the U.S. franchise system

brought those brands to better quality

and they evolved together.

That's one of the arguments made by some

to keep China out is the quality is inferior.

Do you agree that the quality of the Chinese product

is inferior or is it a threat to the U.S. auto market

because it is good quality?

Yeah, I think that anybody who says

that the Chinese quality is inferior

when you're talking about overarching,

just as not educated or hasn't seen the product

or hasn't been around the product,

certainly there may be some OEMs

that are scraping to hang on

that maybe have quality.

And also there are U.S. regulations

that would prohibit current existing models

of Chinese produced cars

to make it into the United States.

So there would need to be some manufacturing changes

but their quality is certainly there.

And in some instances, their quality,

I would say is even a little bit better

than some of the quality we have in the United States.

So the quality to me is parody

and in certain instances,

even better than what we have in the United States.

So, and I wish we're having

a little bit of challenge with Michael Dunn.

It worked to get him back through the show

or we'll have him back.

He's an expert.

You were there.

I've actually heard, tell me this.

I've heard in many cases, the technology is better.

It's superior to what we have here in the U.S.

And one of the challenges with it

is because it's so heavily subsidized

by the Chinese government,

they can afford to bring it into the U.S.

and other markets, flood the market,

crush other competitors,

and then it's just the Chinese OEMs left.

Is that a threat to the U.S. auto market?

Yeah, I think that, you know,

there's a lot of differences

between China and the United States.

When you talk about EPA regulations,

when you talk about NHTSA concerns,

so for instance,

one of the cool things that I loved was

they have these big dashes

where you can watch movies in the center,

you can do social media over the right.

While you're driving.

Yeah.

While you're driving.

I don't think NHTSA's gonna sign up

for that anytime soon.

You know, call me a skeptic,

but I think that there are regulations

here in the United States that are just,

that's not gonna fly with.

And so some of the nice cool technology

that they have just isn't gonna work here.

You know, some of it's evolving as well.

You know, when they talk about

their electric battery infrastructure,

a lot of their brands went different ways.

So for instance, two years ago,

Neo was really, really complimented

for this revolutionary battery swapping technology

where you could pull up to almost like a gas station,

it ripped the battery out of your car

and load in a fresh battery in five to 10 minutes.

And you could have a brand new battery,

avoid the two hour charging and just roll on.

And that was revolutionary at the time.

Well, now you're seeing solid state batteries

are getting closer, you know,

BYD the news today or over the last week or two

or they're really close on the nine minute charge.

You know, Toyota has been rumored

to have some sort of lead on that as well.

And so when you get to a nine minute charge,

suddenly that battery swapping technology

is gonna go away as well.

So it's just such an evolving space

that you can't really tell where it's gonna land.

But I would just say that the current regulations we have

won't allow some of that technology.

You know, another point on that is

we met with X-Pang and the co-founder of X-Pang

was great and really hospitable.

And we asked, you know,

when are you guys coming to the United States?

And he said, the number one challenge we have

with coming to the United States are both tariffs,

but also Chinese technology bands.

And he used TikTok and Huawei as the best examples.

You know, we recently, you know,

had a lot of news around, you know,

Huawei and TikTok exiting the United States

due to Chinese technology.

And I think there would have to be some security changes

and technology changes that would get

the United States government more comfortable

with this technology coming to the United States

that I don't know that the Chinese OEMs

or the Chinese government is willing

to make those concessions.

Because that also drives

and makes some of the technology work.

So for instance, you know, the in China,

these Chinese vehicles have access

to Chinese infrastructure for stop signs,

stop lights, all of those sort of things.

Are we gonna give Chinese government agencies access

to all of the traffic infrastructure we have

in the United States?

I don't know the answer to that.

I'm probably not qualified, but you know,

my bet would be probably not today.

Probably not today, but it is an interesting argument

that people usually in the end get what they want here.

And it's a compelling argument

that if these are heavily subsidized

and less expensive from a cost standpoint,

if the technology is equal to and a little bit better,

and then if some of the tech pushes

the margin of what's allowed here in the US,

at the end of the day, will people get what they want?

Which you think about TikTok banned,

but still here and very successful, Michael.

So TikTok is a great example

of what I think it could look like

in a best case scenario, if you say.

You know, when the United States OEMs

went to China 20 years ago,

they were all forced government mandate to do a JV,

where a Chinese entity owned 51%.

And the United States entity,

whether it was General Motors or Ford

would own a minority position.

I think if that Chinese OEMs came to the United States,

say through Ford, through General Motors,

heck, even through Toyota or Honda or Hyundai or Nissan

or whatever franchise you want to talk about,

if they came through with a joint venture

where Ford owned 51% and China owned 49%,

I think there's a way or a future

we all could get comfortable with what that looks like.

And it could be a benefit to the United States consumer

both from a quality perspective,

from an affordability perspective,

covering a lot of the government regulations

that are important to us, privacy regulations,

NHTSA safety, et cetera.

I think that there is a future where that can happen.

That's gonna take some time

and it's gonna take some work for both our government

and China's government to see what that looks like

or at least these state owned and even private entities

to work with our government to make that happen.

So is there a future?

That's why I say never is a long time.

But to Senator Moreno's point,

I don't think it's happening in the next six months.

Even Gile, who was at CES talking about

we're gonna be there in the next two or three years,

that seems really aggressive.

And I don't know what it looks like for them

to get here in the next two or three years,

but there certainly are some hurdles for that to happen.

So your Ford thinking and going overseas

to look at other operations

and learn about those operations,

BYD in this case, Chinese automotive,

Brian Benstock was on the show,

he shared how he goes, travels,

tries to learn things to bring back here to the US.

Obviously, you're taking that knowledge

and you're trying to make decisions, business decisions today.

As you come back home, what is your takeaway?

What is your action today in March of 2026

to either prepare for Chinese vehicles

or to prevent it or to learn from it?

What are you doing today, Michael?

Well, a couple of things I'll say.

One is all of us dealers

need to be a part of the conversation.

Again, we need to get involved

with our state and federal regulators,

our congressmen and senators,

make sure they're educated

and make sure they're hearing our voice

because this could come really, really quickly.

Change of administration or if this administration

wouldn't have come on and the previous administration

or a different administration

would have different stance on China and regulations,

who knows where we'd be right now

and things can go really, really quickly.

So one, we need to be and do a better job

working with our OEMs

and working with our state

and federal congressmen and senators.

Secondly is none of us want to end up like blockbuster.

We all want to continue to evolve.

And I don't think we can take a closed mind stance

and say, well, we're just going to keep China out

and it's never going to be a thing

and we don't even need to know about it.

We need to evolve it.

And in a certain way,

that's why I've heard some people say,

let China in because it's just going to make us all better.

We're going to be forced to.

And I think there's some truth to that.

Competition is a good thing

and it does drive the best.

I love a free market

and certainly I love capitalism

and the way that that works and drives cost down.

And I do think that would help.

And you've heard Jim Farley talk about

how it's really helped Ford as a company

for their leadership team to go over

and see some of these Chinese vehicles

and to see some of the manufacturing

and it's helped them push them

and motivate them in ways

that they were not previously motivated.

That's the competition that can be good for all of us.

We just need to do it in a thoughtful way.

Yeah.

Yeah, it is.

So your takeaways from today,

it's to get involved with,

which by the way, you echo Paul Salisman saying online,

get involved with your state auto dealer association.

Here in Washington state,

we have a strong association,

strong association.

Eager K. Michael says, I was in China last year.

They already have EVs.

They get five to 600 miles in range

and charge in under 20 minutes.

And some EV brands got EV battery exchange stations,

no charge needed.

So that's to what you were talking about earlier

about this swap out concept,

which definitely sounds different

from what we have available here in the US.

And Michael, I agree with you.

Competition creates a better product for us,

but it does have to sort of be some sort of even competition.

Can tariffs level the playing field

in the US auto industry

so that cheaply made Chinese products

don't kill our existing OEMs,

who in some cases are struggling already, Michael?

I do believe that tariffs

are gonna play a portion in that.

And I think they should play a portion in that

to level the playing field.

But more importantly, I think forced joint ventures

would be an equalizer.

That's the better path, yeah.

And it's a path for us to work together,

truly work together.

When you go visit some of these factories in China,

they're just different than United States.

There are no labor unions in China.

There are no, the factories as we know them and exist,

that's not what is happening over there.

And so some of the things I applaud though,

when you look at BYD and their vertical integration,

they've done a great job of owning most of the supplier base.

And I think there are things that we could learn there as well

when we talk about manufacturing,

but certainly too many differences for us to really compare

and say it's apples for apples today

or what that future could look like.

Cause I just think there's so much work to be done

between where we are today

and what it would really look like

if it came through in a positive way.

And my fear is that we take the lazier, quick approach

and we don't come through in a thoughtful way

and we don't really plan the steps out and we just rush in

like has happened in some of these other countries.

And now both the consumers are harmed,

the industry is harmed and the country is harmed itself.

So there's a lot to think through and a lot at stake

in such a big auto industry in the United States.

Paul Salisman comes in says force joint ventures

is what built the Chinese auto industry

because it was required for outside brands

to be in their marketplace, right?

So they forced that Buick,

one of the biggest automakers

was required to do that.

I believe you could fact check me on that

but there's a similar deal there.

This is different from Toyota, Honda

and some of those other OEMs coming into the US

in the 90s because those were less developed brands,

less developed products.

This is, you were there

and you were sending into the CDG circles chat group,

Michael, pictures and videos while you were there live

and you were asking people for questions.

What was the conversation within circles

and what's the conversation been with other dealers

in response to the pictures and the videos

and your experience there?

What feedback have you gotten from other dealers?

Yes, so when you look at some of the pictures

that you're seeing scroll now,

they had everything from $150,000 sports cars

to $13,000 SUVs that you saw

and then you're seeing some of these personal aviation

and I would say that one of the things

that I also took away was

that the OEMs there are all focused on goals

much bigger than just producing a Ford Bronco

to produce a result or a net profit or a quarterly earnings.

They truly were working on mobility as a solution

for people to really open up and expand what life could be.

And when I left, I really felt in a different

in a positive way towards the Chinese OEMs thinking,

man, I hope that they accomplished some of those things.

I hope that they can really democratize personal mobility,

whether that is flying or what that looks like.

And so those were some of the conversations.

I also had a chance to go to the Guangzhou Automotive Show

which you saw some of the pictures there

and it was just amazing the size and scale

of the auto sector there.

One I mentioned there are so many

or hundreds of OEMs there,

but just the grandiose nature of the boost they have

and the whole setup there,

it was truly something to behold.

And I have not been to anything like that here.

Certainly we have the Detroit Auto Show,

the New York Auto Show, the LA Auto Show.

I would say that the scale of what I saw in China

was much more significant

than what we have here in the United States.

So thinking about the Chinese-American relationship,

the tension between the two countries

was part of what you saw.

Did you get a sense you were being sold

or it was propaganda

or do you think it was you were experiencing

something everyone else would experience who went there?

No, because there were very few people

from the United States in our group.

We probably only had 15 or so people from the United States.

Everybody else was from other parts of the world

and there were very few people

that spoke real English there.

So it felt very authentic.

In a way it was a little nerve-wracking

where it was hard for me

to get into the Guangzhou Automotive Show.

The security was so tight.

I probably had to walk about a mile

to three different entrances

before somebody could finally understand

what I was saying to let me in

because it was press day

and I couldn't show my credentials

or they couldn't understand the credentials I had

and I couldn't get in.

So it felt very authentic

and really, really fascinating, interesting to see.

Did you feel from a political

and kind of a social standpoint,

was there distrust of American automotive

or for you as an auto dealer in the US

what was their approach to you

as a franchise dealer seeing a BYD product there?

Yeah, when we went to the BYD headquarters

there were certainly things

that they were not willing to show us

and that makes sense.

It's probably for every OEM.

So I don't know that's unique to China.

But I would just say by and large

it wasn't really advertised that I was American

and so I don't know that that really came out

too many times.

I mean, clearly you could tell that I'm American

when I was in China

but it wasn't the show we were at

and a lot of the events were for people from Asia

and so I kind of just tried to blend in the best I could.

Yeah, very good.

We appreciate you sharing your perspectives.

I guess the big question is coming out of that experience

done in the right way

would you be a Chinese OEM retailer here in the US?

Again, never say never.

I certainly don't think

that we would want to be the very first,

you know, like look at what happened with VinFast

and they're not Chinese, they're Korean

but certainly, you know, the first always has a lot

to figure out and a lot to learn

and I don't know that we would want to be the first.

As that matured, would we entertain an opportunity?

Certainly through some joint ventures.

Heck, you know, we represent Toyota

and Ford and Subaru and other OEMs.

Maybe one of our OEMs would join one

of those joint ventures

and we automatically would have it.

So I don't know what that looks like

and I certainly cannot say never.

In its early form, if ex-Chinese manufacturer

came to the United States and approached us

I don't think we would have early interest.

Got it, very good.

Well, again, Michael, appreciate you being

on the show, sharing your perspectives.

Michael Spiegel, dealer principle of we auto

here in Michigan, we share a state in geography.

Thanks for being back on the show.

Thanks for sharing your perspectives.

Appreciate it.

Hey, Sam, I just want to encourage you

please get Michael Dunn back on

because whatever he gave you,

he's going to give you times 10.

He's just an incredibly insightful person.

His history is amazing.

You know, he grew up in the business

and kind of spent a ton of time in China

and he has insights that, you know,

I just scratched the surface,

but and I've seen him speak a few times

and he's just a fascinating speaker.

I encourage and look forward to him getting back on.

And Michael, you actually gave some context to him

maybe before as you wrap.

He right now, I think automotive

in the US OEMs here are super curious

about everything going on in China,

what they need to learn, how they can interact and engage.

There are OEMs here in the US

that are thinking about to your point, Farley,

what they need to learn, how they need to prepare

and he's sort of a conduit for that, right?

Yeah, he is.

He is a consultant that deals with OEMs

and tier one, tier two suppliers

to help facilitate those conversations

and educate our local OEMs and suppliers

on what it's like to do business with China.

And he's just well respected throughout the industry

and as China becomes a more important conversation

globally and in the United States,

Michael is only gonna grow, you know,

his presence as well.

So excited to learn from him

as he truly is the industry expert.

Michael Spiegel, we auto, thanks for being with us.

Thanks, Sam, appreciate it.

And as Michael mentioned, Michael Dunn,

he had some tech issues

and then he had an airplane ride.

There were a bunch of things going on.

We really tried to get him on

to have this crucial conversation today

because, you know, it is interesting

all these things that are culminating,

you know, economic pressures.

We see all the geopolitical global conflicts

that are coming along.

I actually believe from my own personal standpoint

we'll be encountering tough decisions

as it relates to Chinese EVs,

you know, probably sooner than later.

And, you know, I'm of the mind a little bit

that competition sooner than later is probably better.

It'll help our own auto industry compete

and develop more quickly, I think,

as we compete competition makes us all better.

But I agree with Michael Spiegel in that

it needs to be done in the right framework

with thoughtfulness for data protection

and also, you know, protection of copyright

and some of the other things that come into play

in that world.

So Michael Dunn, CEO of Dunn Insights,

we're gonna get him back on the show.

Thanks to our loyal listening audience

for all your comments.

Igor Kay says, Chinese EV market is huge.

Asia, Middle East, Eastern Europe,

they don't need America.

They'd like to have it but they don't need it.

I actually do get that sense.

Igor also says, China's a way ahead of the US

with tech innovation and EV technology.

I think this is one moment in time

where we benefit from trying to understand

it a little bit better and maybe competing

with it in super careful ways

because it is not going away.

But to all of our guests today

we appreciate you being here with us

and to you, our loyal listening audience.

Thanks for watching Daily Dealer Live

where we break down the biggest moves

in the car business as they happen.

To Michael Spiegel, thanks for being here.

Don't forget everybody, we're here live every Monday,

Wednesday, Friday, 1 p.m. Eastern.

Coming up next episode Wednesday,

we've got a broker counter perspective

to our franchise auto distribution

that we talked about a couple of weeks ago.

So if this is your world automotive,

hit like, hit subscribe, turn on those notifications.

And I'll see you never, ever miss a beat.

And we'll see you next episode.

Wednesday, 1 p.m, thanks for being here.

Rrrr.

You

Spradlin on Acquisition, Darji on Response Speed, Spiegl on Chinese Cars | Daily Dealer Live

About this episode

Chinese automotive industry expansion

BYD

franchise dealers

Chinese auto industry

disruption around the Strait of Hormuz

Dodge Ram

BMW

mini EVs

tariffs

ICE demand

new car shortage

GM

Chevrolet

EV

Honda

Chinese OEMs

franchise protection

direct to consumer

Volkswagen

dealer network

NHTSA

General Motors

Toyota

Hyundai

Nissan

range

charging time

Ford Bronco

Guangzhou Automotive Show

LA Auto Show

Detroit Auto Show

New York Auto Show

Subaru

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