In dealership economics, “service and parts” refers to revenue from vehicle maintenance/repairs and replacement components sold through the dealer network. This is often a steadier, higher-margin profit source than new-car sales because it’s tied to the existing vehicle fleet on the road.
AutoNation is a big company that owns lots of car dealerships. The hosts mention it to show how dealership groups make money, especially from service and parts.
Carvana is a company that sells used cars, often with an online-first buying experience. The hosts mention it to compare growth patterns in car retail.
The service department is the dealership’s repair and maintenance shop. It matters because customers come back for routine work, and that ongoing relationship can lead to buying another car later.
Recurring revenue means customers keep coming back and spending money regularly. At a dealership, that often comes from routine service and repairs, not just buying a car once.
Upsells are extra things the shop suggests you do while your car is already there—like additional maintenance. Dealerships rely on this to make more money from each visit.
A tech bay is one of the garage spots in a dealership service shop where a technician works on a car. More bays usually means more cars can be serviced at the same time.
Recon is the work done to get a used car ready to be sold—like cleaning it up and fixing small issues. The segment suggests doing some of that work at night to keep the daytime shop focused on service.
CarMax is a U.S. used-car retailer known for a large, process-driven dealership model. Here, it’s referenced as an example of using a “night crew” approach to extend operating capacity without immediately expanding the physical footprint.
A forged purchase order means the deal paperwork may have been falsified. If true, it could mean the agreement wasn’t real or wasn’t approved by the customer.
An acquisition fee is a dealership’s extra charge for handling the paperwork and setting up your purchase. It’s usually listed as its own item on the contract.
“Line-itemed fees” means the paperwork shows each extra charge separately. That makes it easier to spot what was added and whether it was clearly disclosed.
An inland freight charge is an extra cost tied to moving the car to the dealership. It’s usually listed separately on the paperwork so you can see it as its own line item.
The FTC is a U.S. consumer-protection agency. Here, it’s mentioned because it’s pressuring companies to be clearer about the real costs and terms in car deals.
Your monthly payment is what you pay each month to finance the car. The discussion suggests people often focus on that number instead of the full cost of the deal.
“96 months” means the loan is stretched out for about 8 years. That can make the monthly payment smaller, but you usually pay more money over the life of the loan.
N8n is a software tool that helps automate and connect different online services. The idea is that it can act like a “bridge” so other systems can work together.
Mercedes-Benz is the car company being talked about. They’re trying to make their software systems easier to connect so dealerships and internal teams can use tools more smoothly.
It’s software that helps different computer tasks work together in the right sequence. Think of it like a manager that makes sure each step happens at the right time across different apps.
The Hyundai Palisade is a large family SUV made to carry people and cargo, usually with three rows of seats. It’s the kind of car many families choose because it has room for kids and passengers. The podcast mention is about a tragic incident involving this vehicle.
Seat weight sensors are sensors in the seat that detect whether someone is sitting there (and roughly how much weight is present). They can be used to help prevent safety features from activating at the wrong time.
Power folding seats are seats that fold automatically with a motor. The concern here is that if the car doesn’t detect an obstacle, the seat can keep moving and crush whatever is in the way.
The Cadillac Escalade is a big luxury SUV designed to be comfortable and roomy. The podcast mention is about people putting items in the seats and how that can lead to problems. It’s essentially a conversation about what can happen to the interior in real life.
OEMs are the companies that make the cars in the first place. Here it’s used to talk about whether different car makers build safety features in different ways.
One-touch features are things you can start with one press. The hosts are comparing that to systems where you have to keep holding the button, because that changes whether the car stops if you let go.
Backup cameras show you what’s behind your car on a screen when you’re reversing. The hosts say they help prevent accidents, especially involving kids or pedestrians.
A recall is when a car company fixes a safety problem in certain vehicles. The speaker is saying they’ve worked on recalls before and hopes other brands will add safety fixes too.
Concept
cyber trucks
The Cybertruck is a Tesla pickup. The hosts mention it because people have tried putting items in its folding storage area to see what happens, like whether it could hurt someone.
LIVE
Chris J. Martinez: All right, welcome back everyone. My name is Chris Martinez and you guys know Zach. We are the automotive informants. We give you headlines, we go through them, give you real operator opinions, insights, especially from people who've lived it from the ground up. Been in automotive 23 years. Zach has been in automotive for how long now, Zach?
Chris J. Martinez: 16. Okay, it's been a long time. actually, probably whole life, right? Because your dad ⁓ was automotive pervert ever. ⁓
Zach Fritz: Yeah, I mean, I'm trying to think when did I first get a paycheck that was correlated to doing the work?
Chris J. Martinez: Yeah, so you've been there a while, but let's get right into it. So we've got bunch of topics to kind of discuss. Let's roll into the first one that I read from the Detroit Free Press, basically saying the automotive industry may be looking at the biggest disruption since the rise of Japanese imports from the 1970s.
So now what they're alluding to is the Chinese OEMs trying to come into the US ⁓ and just market share. And right now, when you think about China, they already control the EV battery supply chain, accounts, accounts for over 60 % of EV sales worldwide.
And so come in the US, could they overtake Tesla and everyone else that's the marketplace like Rivian, who's just trying to get started and Lucid and all these other EV type companies. What do think?
Zach Fritz: All right. I think absolutely. It's a very scary proposition. I'll go off on a little bit of a tangent here with it, but I've seen out of China, China really worked hard to capture the micro mobility space.
Think like e-bikes and small electric vehicles, know, personal transport. And I think that a lot of that, yes, while it may have been profitable for them, I think a lot of it was also figuring out the logistics because if you look at it, That's an insane model where you can hop on Amazon, you can go online, you can get it shipped over to you.
They've got warehouses and distribution hubs. mean, it's very similar to like the CarMax model, for example, know, hub and spoke, I that they would crush it if we allow them to. And, you for a lot of automakers that charge a premium price for their cars that also, ⁓ face it, built in America.
Chris J. Martinez: Yeah, there's something to be said, right? You think about labor specifically. look, average income for Chinese what do you think their average income is for the year, annual income? What do think?
Zach Fritz: Oh gee I'd say I mean, I don't know 50-60 thousand a year
Chris J. Martinez: Just take a guess. Just throw a number out there. Uh, 1500 a year. That's, that's the average income in for Chinese citizen. Now, what is it for a U S citizen? You wonder, right?
Zach Fritz: Wow. at this point, I mean with inflation, you're probably 60, 65.
Chris J. Martinez: Yeah, 65 to 67,000. So think about how much cheaper you can build a vehicle. You can't compete in those economics. You know what saying? So it's a real threat. You think about how much cheaper they could price a car. It's already happening in the UK where they've actually basically told the Chinese that, you got to raise your prices before you sell them here.
Chris J. Martinez: So it's not necessarily a tariff, but just basically say, Hey, you need to make more margin on those cars. So it's happening already there. If they were to do it in the U S could see something ⁓ translating here in the U S. ⁓ but you know, it could be some ⁓ big disruption, you know, not only because the, you know, the cost to build is so much less expensive, but they own the infrastructure. You know what mean? When you ⁓
Chris J. Martinez: the batteries, the minerals, you own the whole logistics. You can, can literally just build it cheaper. So you think about these $10,000 cars that are out there, but you think, I think it's in like, brought it the other day where Cuba prices have gone so high. They just have these old cars, right? Venezuela, same thing. Now the Chinese, you can in and buy like a really inexpensive car.
Chris J. Martinez: that's electric, and it would be new. So would you want to have this old car? people the United States, because the prices of cars have gone so high for a new car, they're opting to look at pre-owned vehicles or keeping their vehicle longer. They're not keeping the, you used to trade in their car every two, three years. Now people are just hanging on to them longer. So that's where service departments and things like that. ⁓
Chris J. Martinez: can really capitalize, but then there's a lot of dealers that aren't doing that either. So what do you think?
Zach Fritz: That almost makes me think about that report we were talking about earlier with the top dealerships and who's actually focusing on service.
Chris J. Martinez: Yes. There's, there's a lot of that, you know, top, uh, 100 came out. Uh, we can jump right into that, but I don't know if you had any more to add on the Chinese. think it's a, a big topic that I don't think people.
Understand from a consumer standpoint, I understand it like, Hey, look, you know, I'm going to be buying three kids, uh, cars, um, at some point and they're all back to back. So Wouldn't I like to have a less affordable or a better affordable option for children to get them in a vehicle?
Zach Fritz: My thought here, little controversial, right? Do you remember whenever Ford was going to ⁓ 15 billion or something ridiculous into a plant in China? And everybody got all up in arms about it and then complain before it still spent all this money and then send basically all their patents and equipment and everything over there.
But Ford wants to bitch and complain that, you know, the U S doesn't do enough for them. So funny how works. Irony. But the side makes me think, What if this was kind of the plan all along? So we see China tightened down on Taiwan, right?
Some geopolitics thrown in here because why not? Let's make it spicy. And then you look at that causing the cost of chips, control modules and everything else to go up. Then you look at everybody manufacturing all of their small parts in China.
kind of seems really damn convenient that that's now the country that's saying, well, we can make everything cheaper than you can. And by the way, we control your prices otherwise. So that's my conspiracy.
Chris J. Martinez: Yes. Well, who knows? We'll see what happens this meeting. Trump went to China this week with 30 of the most powerful CEOs in the country. Collectively, they're combined networked as like $20 trillion or something crazy like that. So we'll see. I think there was reports. forgot. I don't know what article I read where they said,
Chris J. Martinez: automotive sectors begging Trump not to, forgot I don't want to misquote what I read, but it's something the fact like, hey, look, don't throw the automotive manufacturing under the bus. Keep the automotive division in US strong. So I don't know. We'll see. I don't know. ⁓
Zach Fritz: But... It's a bad ex-girlfriend in a toxic relationship. It is. The automotive industry here, you know, it's toxic and it just continues to hurt everybody and hurt itself and hurt the relationship between consumers and auto manufacturers. But then it just says, no, I won't mistreat you again anytime the US starts looking elsewhere. So which one is it?
Chris J. Martinez: Yeah, who knows? And of course there's the, look, you know what they did with Tik Tok, right? That, you know, the Chinese can't own it because they're listening to your conversations and you're like, well, the who's worse, you know, cause last I checked, they listen to everybody's conversation in the U S too. you know what I'm saying?
Zach Fritz: Yeah. Right. it matter what expectation of privacy do we have at this point? Come on now.
Chris J. Martinez: How many leaks have been out there with all these major credit companies? mean, hard say. mean, everyone's basically their information is out there in the public. What was interesting some bills that are to get passed to ⁓ add more security. They it security,
Chris J. Martinez: more optics on the American people by adding more cameras because you look at what's going on in China with as many cameras that they have. It's super clean, super tight. But at what cost?
you you move something a certain way and they immediately text you saying, Hey, look, you got a fine for $40 or $100 because you did this or we saw you jaywalk and this is a fine and send you a direct text as you're doing whatever you're doing.
And So has crime dropped? Absolutely. At what cost? Like, can't do it. The feeling you get that someone's looking at your every move would not be something I'd want to do.
Zach Fritz: Yeah. I tell you about what they're doing here in Colorado?
Zach Fritz: So, yeah, we now have cameras. So you remember the old days where they used to put a plane up and they would track how fast you traveled from point A to point B and your speed to give you a ticket with a trooper on the ground. Now they're doing this with cameras, where if you pass through one toll booth, but then the next toll booth, if they estimate your speed and you're more than six miles an hour over, then you automatically get a ticket.
Zach Fritz: And the camera is your witness, which is my biggest legal, you know, that's not that doesn't qualify as a, you know, eyewitness.
Chris J. Martinez: You know, in Texas, they had a lot of that at some point here, but they've taken up the majority of them down. Like you used to, you know, if you ran a red light, there was cameras there, they'd find you and they'd send you a ticket.
Zach Fritz: It was found to be illegal because there is no witness to the crime and a crime requires a witness. A camera does not qualify as a witness.
Chris J. Martinez: Yeah, they took them all. I remember it being a big thing here and they took them all down. So, well, hopefully that doesn't become something normal, but you kind of talked about this. One of these topics the real profit engine and automotive, what is that? You service, right? So service and parts, they just announced the top 100 dealer groups in the country. Now.
Chris J. Martinez: They say top 100 dealer groups that reported. Because there's some dealer groups that didn't report, or they don't just include. Who knows? So AutoNation came in at almost $5 billion in revenue in 2025. So $4.84 billion.
Chris J. Martinez: And the number two spot was about a billion dollars away at 3.91 billion. So you think if you're a dealer and last I checked, Lithia has more stores and auto nation, right? And they got them by, they got them by a billion dollars. And Lithia, think has more luxury stores. If I'm not mistaken. Let me.
Zach Fritz: Yeah, I believe so. I thought Lithia was mostly luxury dealers.
Chris J. Martinez: do a quick fact check. Lithia store account versus AutoNation store account. So AutoNation as right now has... It say. So store account Lithia, 459 stores. AutoNation comes in 400 compared to Lithia's...
No, no, it didn't say that. Well... It's not saying it for whatever reason. So 450 for Lithia. Let's ask it a different question. So AutoNation comes in at 322. So 450 cars, Lithia has. AutoNation has 320.
So that's the real story. I don't even know why I mention that in the post I did. I'm going have to do a post story on that one. Think about it.
Zach Fritz: It's alright. Wow. I hope. Is this another CarMax in Carvana?
Chris J. Martinez: Unbelievable. Think about that. Lithia, 450 stores and most of them are high line. AutoNation, 322. So almost 130 more stores. And AutoNation got them by almost a billion dollars. What's that tell you? Do you think someone needs to tighten up their process?
Zach Fritz: Absolutely, because on the highline dealers, we both know there's usually more margin. There's usually a lot more margin.
Chris J. Martinez: Yeah, well, you get them from overseas and all of that.
Chris J. Martinez: Yeah, yeah, they also AutoNation also makes more in the back end too. think they beat them substantially there too. So AutoNation, you they've got some ⁓ better...
Chris J. Martinez: you know, process it sounds like or they have a way of, you know, minimizing certain losses, maybe I don't know. It's it's interesting, almost 130 more stores versus automation and put up automation put up a billion dollars more almost.
Zach Fritz: Yeah. One thing I did notice whenever I worked for auto nation dealer, was a clean process. And I think that kind of alludes more towards why service is so important. I feel like in sales, either kind of, of whether you get the sale or not, it's not really a long-term relationship.
because it just isn't compared to how often you're going to come in and get your car serviced or the oil changed or tires. not building that long-term rapport until they're ready for another car versus service.
It's really a lot more about that relationship build and that customer to come back and the recurring revenue and driving that. because then it turns them back into sales. Because if they don't like your service department, they're not coming back in for sales.
And I think AutoNation really does a good job of capturing that, especially in their training.
Chris J. Martinez: You know what I'm thinking is I think you made some valid points, especially on their training, right? But then I started thinking about the recap to that story that I'm going have to, you know, the headline is, did, how did Lithia or how did AutoNation spank Lithia in, service revenue? And, you know, they have, and Lithia has 137 more stores.
Chris J. Martinez: I may not use those exact terms, but it's a big that's a big I mean, damn, excuse my language, like, wow, that's a lot. Like, that's not, you know, just a little bit. You know, what does that math come out to 137 stores? So, so what was that? So
Zach Fritz: Okay. No. Yeah. cross multiply and divide.
Chris J. Martinez: What is that? So 4.8 minus 3.9, right? So 4.8 minus 3.9. That's almost $900 million, right? So 900 million, that's just even the sound of that, right? 900 million divided by 137 cars. That's every store's averaging or, no, no, no. I'm messing that whole math up.
Zach Fritz: Dude, I just work on cars. I don't math Yeah.
Chris J. Martinez: Just to tie, they wanted to tie AutoNation, every of those stores would have to make an additional $6.5 million. That's not an easy way. That's not easy, sir. I mean, I'm just thinking about my stores that I've ran.
And if you were to come in and tap me on the shoulder and say, hey, Chris, you've got to do $6.5 million more this year. you need to figure that out. How would you take that in service? And I'm not talking sales.
I'm saying you need to do this in service. What would you do? That's an extra $550,000 month. ⁓
Zach Fritz: You scared us? You mean, okay, first off, you need more tax. I can't, which that's, that's its own issue right now with hiring. The other side too is how do you, how do you drive that business in the door, right? Without your, you know, you know, tires, right? Oil changes a service that's, you know, cheap and affordable for the dealer to do to get people in. Cause trust me, I mean, that's when people come in when they have a coupon, let's face it. And then we get the upsells, but.
Chris J. Martinez: That's not easy. So think about it. if think about it, right, like so on a tech bay, what's each tech bay supposed to generate, depending on the store, obviously, ⁓ manufacturer that, but just say like an average tech bay, like ⁓ every bay.
Zach Fritz: now. Well, if we use the boss makes a dollar, I make a dime analogy and the tech's knocking back, let's say, six to eight grand a month for an average tech. I mean, probably 80 to 100,000 a month.
Chris J. Martinez: Yep. you need at least, if you're putting up five, you need to do 550,000 a month, you need how many more techs or how many more tech base.
Zach Fritz: I'd say six more texts and at least, I don't know, seven, eight more bays because you're double stacking. Yeah.
Chris J. Martinez: ⁓ for sure. Yeah. So that's the math. You heard it here first. You need a, you need at least, you need at least six or seven more bays. means you need to break down a wall, expand, and need to generate that, that extra, or another way to do it is you more techs and you do a night crew. You move your, ⁓ yeah, move used car.
Zach Fritz: Yeah. Yeah, you can do a night crew, yeah.
Chris J. Martinez: business night to that recon and open up the room for store during the day. So if you don't want to spend the money to expand, break down a wall, that's the other way you could do it. We did that CarMax.
Zach Fritz: or but that also then requires parts too.
Chris J. Martinez: Yes, does. Yes, it does, sir. So it's, that's some food for thought. So hopefully, you know, some of our, our, listeners get some value out of that. So let's move on to the next one. So the next one, this one's a little bit more controversial. and this one is coming out of Atlantic. It's this a store called Atlantic Kia lawsuit, which ⁓
Chris J. Martinez: It's a key a store that according to the lawsuit, the customer alleges the dealership added 55.85 and additional charges. The suit claims that were not properly disclosed across the deal paperwork.
The lawsuit also alleges that there were unsigned and forged purchase orders tied to the transaction. Now here's where it got complicated. Were these actual added after the negotiated deal or was it just how it was explained the contract?
Because a lot of times when you look at the ⁓ retail slumming contract, things appear to look a little different. The whole $55.85, if they negotiated that, which the customer did, if you read the article, it basically said that they negotiated the price and they agreed to the price the customer negotiated.
But then when it went on to the contract, was, I guess, line-itemed those different fees. And it was a $6.95 acquisition fee, $29.95 inland freight charge, and an $18.95 reconditioning fee. And the fees are one thing.
Chris J. Martinez: Who knows when this lawsuit or when this victim transaction took. this could have very well been done before the FTC sent out letters and all that, because this will go away at some point because the FTC is cracking down. We talked about it here a couple of weeks ago. But the real thing is the forgery claim. ⁓
Chris J. Martinez: The dealer did try to make the customer whole. They tried to unwind the deal, offered to give the customer their money back. And I've seen both sides of this, you know, and I hate to, you know, immediately call bloody murder and say, hey, this guy's guilty. Because I've seen the other side where customers, they embellish a little bit on certain things. you it sounds me, the customer, the dealer tried to make it right and the customer wanted more.
Chris J. Martinez: And that's just by me reading the statement, reading what happened, and the customer basically feels like they can get a new car out of this deal. So what do you think?
Zach Fritz: Unfortunately, I think you're right. Just, ⁓ mean, it's, man, I'm trying really hard not to use the pop culture terminology for this type of customer right now, but I think you can probably guess the vibe going for. Now, I definitely that it is a customer, it's somebody who's trying to get something, you know, they see these McDonald's hot coffee stories or whatever we've had happen in the past and they think, can, here's the,
Zach Fritz: my life event, right? I've been waiting my whole life for this moment.
Chris J. Martinez: I'm gonna retire. Yeah. My neck, my back, you know? Yes.
Zach Fritz: Hey, yeah It sucks, at the same time if the forgery claims are true, that's a problem. That's that's a pretty big issue and
Chris J. Martinez: I don't just, you know, someone commented on social media and say, Chris, you're really going to go there. And I'm like, look, I'm not saying that any of that's right. If it's true, then, you know, obviously they're going to have their time in court, but I'm not, I'm not one to say, Hey, these people are guilty right out the gate just because.
know, dealers in general do have a reputation. and it's, it's, it's valid to have that because they have. There have been bad actors in this industry for very long time. And it's just part of the nature of what we do.
unfortunately, I know I'm not that type of dealer. I try to do people right and all of that. But in Texas here specifically, every store has big addendums. And now with the FTC pushing that to make sure that transparency is there, keep your big addendums.
Chris J. Martinez: but you gotta put it online now. So that's just the difference.
Zach Fritz: Yeah, and I think a lot of the fault here, issue is almost twofold. I think a lot of consumers are way too trusting and they don't really understand the breakdown of the numbers as they come to them.
They almost block it out when they walk into the dealer. It's like, okay, well, the only two numbers that really matter is the overall purchase price, but even more so is what's my monthly payment? How much can I afford?
That's really what people focus on. which is why people wind up with these crazy asinine payments, right? That are financed out 96 months. But I mean, yeah, I've had it happen in a dealer where a deal looks great.
We get all the way up to signing, right? And the right before I'm legally locked in, it's, hey, something's not right. Like, I mean, this, big one happened at Toyota Plano, which by the way, still not a fan of those guys, don't go there.
But yeah, they completely screwed up a deal for me. And I'll never go back there because it was pretty shady.
Chris J. Martinez: Well, you know, and, I, I agree there, there are some dealers I'm not, you know, calling out any specific dealers, but personally I've been in positions where customers tell you, you know, they didn't tell me about this, this and that. like stone cold, like lying to your face, telling you that this never happened. And luckily we used to record all those transactions. And so I would.
Chris J. Martinez: I wouldn't say anything, I'd apologize, say let me look into it and then we'd go look at the tape and guess what? You can clearly see a finance manager saying, hey, this this warranty, this will take care of that, this is how much it is, discussing everything about the warranty they bought.
And then I go and I show them what happened and then the customer's like, well. don't remember that, but can I cancel it? And I'm just like, ⁓ mean, all you had to do was just say, Hey, look, I don't want this.
I'm not gonna, you don't have to come in here and lie. And I've had customers hold it over me, like saying, like, I'll give you one specific example, had a customer, and is probably the only time I had to tell a customer never to come back.
And I felt terrible doing it, because I always feel like I can take care of anybody, like, I'm going to try to make any bad situation right.
Chris J. Martinez: And in this scenario, the customer basically said, hey, Chris, you guys owe me an oil change. I go, no, ma'am. We it in writing. We owed you two oil changes. You're done. And she trying to get a fourth one out of me. So the third one, she came back. I wasn't there, and someone approved it. And I was like, OK, that's fine. Then she tried to do it again ⁓ for the time.
Chris J. Martinez: But we only promised her two, and it was in writing. so she's like, well, look, if you don't take care of this oil change, I'm just going to write a bad review about you. And I go, ma'am, here's we're going to do.
I'm going to take care of this oil change, but don't ever come back here again. And don't use our services again. And the fact that she tried to blackmail me and do something that was just crazy to me.
I was looking at her like, ⁓ my god. you're really you're really going down this path. Right. And so to me, seen both sides. I don't I'm not trying to say these people are guilty. I'm not trying to defend them.
I'm just trying to I'm just saying there's two sides and based on what I've read, ⁓ it like a money grab.
Zach Fritz: No. Yeah, it does. It looks like a grift in my opinion. it's people these days. I think the bigger thing is the lack of respect in the world. know, people just aren't truthful. Your word doesn't mean anything. And don't realize that the things they say and the words they use, I mean, they really do matter and people just take it for granted.
Chris J. Martinez: you Yes, well, on another note, we got a Mercedes-Benz rolled out the ⁓ workflow infrastructure ⁓ not that they're bringing out AI, but they've made it easier to integrate certain models in their workflow or in their whole ecosystem. they're allowing a company called N8M to integrate with every part of their ⁓ it's logistics, accounting, sales, service, everywhere in their workflow or in their ecosystem, allowing not necessarily dealers, but allowing themselves to ⁓
Chris J. Martinez: plug in certain AI models in different parts of their workflow using a company called N8n. And I'm very familiar with I've used it personally for different things. But what do you think with ⁓ Mercedes-Benz out this, do you think other companies will follow suit?
Is N8n the model that, you know, because from what I've seen, I've seen Google come out with some stuff that seemed a little bit stronger, but N8N has probably doing it longer. ⁓ I don't know. What are your thoughts?
Zach Fritz: Mmm. Is this AI as far as internal systems for?
Chris J. Martinez: Well, it's really just so N8n is basically for workflow orchestration. So you basically can plug in different APIs and different parts to be almost like a connector. it can literally connect. It helps and be that bridge for workflows.
Chris J. Martinez: And it's easy because once you standardize certain things, you can just plug everything in and then you just kind of make it work. It's almost like a switch, right? Think about it like one of those switches. have to plug in different USB cords for different places. And all of a sudden now everything works. You know I'm saying? So.
Zach Fritz: Yeah. Yeah, I'm actually really excited about this now. so the company is NAM, right?
Zach Fritz: okay. All right. I thought you were saying it's nom or name. I'm like, what? was first off, that's going to be really fun in the Mercedes dealerships. guarantee you all the employees will be making references, but on other hand, it's actually really exciting to see Mercedes get with the times.
you've probably experienced this yourself. I know I did the technician side, trying to navigate StarTech or WIS or anything. It is. ⁓ technology and absolutely horrible to navigate. So the fact that they're focused on trying to make things a little bit more streamlined and better integrated.
Chris J. Martinez: Yeah, you know what I think about too is, you know, could they, you know, let this orchestration play out in on a dealer level? then because the NA and basically standardizes API synchronization and things like that, you know, where a dealer could plug in their systems and stuff to kind of create their own workflow. That would be something even more special in my mind. I think.
Chris J. Martinez: you'll see other companies maybe follow this direction. But I don't know that N8N would be the one that they choose. think it is the one that's been around the longest. And Google just created something ⁓ respond to that. And I think even OpenAI and these other models have. also created different companies that do something almost identical to what N8N does. And I'm curious why they chose N8N over other systems.
Zach Fritz: Yeah, that is interesting. mean, one with Google is we know that sometimes that can't be the most secure thing out there. So there it's also, ⁓ I wonder it's some sort of just amazing pricing, right? So they can roll it out to the rest of the industry or roll it out to other manufacturers or see who they can't piggyback onto. And then also what's the majority breakout of, you know, dealer groups. has the most Mercedes dealers? That might be the play there too.
Chris J. Martinez: There's that too. Well, I think we've got time for one more, Zach. ⁓ And I think told me about this story. We've discussed this in the past, but you've got some new information on the story. What was that about? ⁓
Zach Fritz: and Yeah. So do you remember the little girl who was crushed by the Hyundai Palisade?
Chris J. Martinez: super sad story. got a lot, I got pushback on it when I posted it and just they said this has no place. go look, as a father you want to have that awareness because you just, know, so sad how this, you know, little girl, ⁓ know, got crushed by that third row.
Chris J. Martinez: And as a parent, could see how that could happen, especially if you got more than one. If you got one child, you're their remove. But if this is the fourth child, maybe you've got another toddler or baby in your hand, and your two-year-old is jumping in the backseat, and you've got kids running around, and you're trying to lower the third row.
And then all of a sudden, you press the button and it's crushing and it's hard for them to say anything or scream or you can't hear them. I could see how this happens, you know? And so you've got to be super aware that this can even happen.
But now you said that this kind of translated to other OEMs.
Zach Fritz: It does. this sparked a bunch of people online and I can text you over some videos, but this is I did a video that kind of went into depth on, you know, seat weight sensors and how this could all work and what Hyundai's proposed software fix could be.
But then when you break it down further, this is just pure oversight that I don't understand it. But Other people started putting basketballs, watermelons in the seats of their cars and it getting crushed by the seat folding.
Then people tested it on Teslas which I know you'll like this, the Teslas actually stopped they didn't crush. But then they took it to GMs, so Taho's, Yukon's, Escalade's, Suburban's, Yukon XL's, Escalade ESV's, they all fall into it with the power folding seats, they will crush and it is violent.
how much they will crush, like a full case of water absorbed into a folded seed.
Chris J. Martinez: Yeah, hindsight's always 20-20, right? Someone could argue, hey, they should have tested that. if that's not your focus, and you just think, hey, look, if you're closing something, because it's not like you can press a button and it automatically goes. And maybe some OEMs are different than others. But most of the time, you actually have to hold the button down.
Chris J. Martinez: You know what saying? And when you hold it down, then it closes. if you let go, ⁓ just literally just stops. But maybe there are some that you press a button and it just automatically goes down and you don't have to hold it. So I don't know. ⁓
Zach Fritz: Mm-hmm. It's a four-foot. Right. Yeah, there's one touch features, but my bigger thing is then who does it?
Chris J. Martinez: But even thinking about backup cameras, In hindsight, you could say, they should have done that from the beginning. But how many kids had to die before they decided to make that mandatory across the board? That was a lot. A lot of people got run over backing up into them. Backup cameras now have saved a lot of people. It's actually kind of scary when you go in a car that doesn't have backup cameras.
Zach Fritz: Yeah. Yeah, that's true, but you know.
Chris J. Martinez: appraising cars recently, like, you know, you go in that car, that old car that doesn't have a backup camera and you're like, ⁓ wow, I actually have to turn around and kind of, you know, do that thing. And you're like, okay. This is, forgot how to do this. You know, let's start crazy. ⁓
Zach Fritz: Yeah. You go, my neck hurts now, yeah. You're like, do I go? I need somebody to get out and spot me. And got somebody back there like they're directing, you know, air traffic.
Chris J. Martinez: Yeah, but it's all it's, unfortunate. I that I did do some recalls. ⁓ I hope the other OEMs do follow and put some safety things in there because one death was just many. And I hope that this doesn't happen in the future to anyone being a father myself.
Chris J. Martinez: you know, would just that would crush me. I couldn't I couldn't even imagine that happening to my children. So but I do think they'll they'll do the right thing and, you know, put some safeguards in there going forward.
Zach Fritz: Yeah. It's wild. Absolutely. think it's really interesting because it kind of started this whole snowball effect of me testing different features in cars and seeing, you know, well, what else bad could happen, right? Like you've probably seen a cyber trucks, for example, where people were putting like the hot dog in the folding trunk and seeing like, ⁓ would it pick off a finger? Similar things to that. And the results are interesting.
Chris J. Martinez: Yeah, they are. Well, I think that's all we have for today. think let's kind of just recap everything. We talked about service. We talked about the Chinese coming into the We talked about the Truth in Lending Act lawsuit. We talked about How does this all kind of tie together if you were to put in a little bow and what would you, how you operate your business differently or how do you learn from it? What are your last two minutes?
Zach Fritz: Wow, this is the easiest tie-in I think we've done to date. We see innate in, connections making it easier to integrate things across your dealership platforms, right? And your OEM platforms.
So that's gonna help out your team. On the same thing with helping out your team, focus on your service department because that's where most of your revenue is gonna be coming from and where you're gonna build those long-term customer relationships.
And if aren't gonna focus on your service department, Understand that your sales department's gonna get wiped out by these cheap Chinese vehicles coming in and being so cheap that people don't need to come in for service, they just buy a new car.
Chris J. Martinez: Well, there is that right. And, I won't take it down that dark of a path, I always. The future looks bright. think that, thinking about the systems, the process, all it leads to is one thing.
Transparency, reducing friction, you really digging into your process to perform at a higher level. When you think about, you know, Lithia just getting crushed by AutoNation and Lithia's got 137 more stores and a billion dollars, something hard to ignore.
Like you can't just say, was like by a little bit, this is, it's a lot. and so really digging in, digging in into your processes today. is there really another $6.5 million in revenue that you're just not tapping into?
I would argue, yes. ⁓ truly believe that every has an opportunity to make more money. And it's about systems process and really finding a way to maximize and optimize your current system. that's my take.
Chris J. Martinez: you on until week you got anything any last word
Zach Fritz: not really. I mean, it's doing the right things for the right reasons.
Chris J. Martinez: All right, well, until next week, thank you guys.
About this episode
Chinese EV makers are framed as a retail disruptor, not just through cheaper cars but through control of the EV battery supply chain and pricing leverage. The discussion then zooms in on dealership economics, where service and parts are described as the “real profit engine,” and store-count math is used to compare AutoNation and Lithia. A lawsuit segment highlights add-on fees, alleged forged paperwork, and how shoppers fixate on monthly payments over long terms like 96 months. Safety and workflow automation examples round things out.
The conversation covers the entry of Chinese OEMs into the US automotive market, the potential impact of Chinese OEMs on the industry, and the significance of service revenue in dealership performance. The conversation covers topics related to dealership lawsuits, transparency, customer trust, AI workflow integration, safety concerns, and OEM recalls. It emphasizes the importance of transparency and process optimization in maximizing revenue and the significance of customer trust and truthfulness in the automotive industry.
Takeaways
Chinese OEMs entering the US automotive market
Impact of Chinese OEMs on the automotive industry
Service revenue and dealership performance Transparency and process optimization are key to maximizing revenue in the dealership business.
Customer trust and truthfulness are essential in the automotive industry.
