Just when your head was reeling with the information from one speaker, another bounced on stage and delivered more insights and information.
The well choreographed CADA Summit 2024 went off without a hitch on Wednesday, and the dealers Canadian auto dealer talked with had rave reviews. “I think I’ve been to every one of these. Today’s was the best ever,” said one dealer, echoing the sentiment heard from many at the sold-out event.
Organizers pulled together an agenda that brought speakers from Canada, the United States and the United Kingdom to dive deep into the forces that are impacting dealers in their operations now, and with a glimpse at what is coming next.
In Wednesday’s e-news, Canadian auto dealer published our coverage of the morning sessions, but here’s a snapshot of what transpired the rest of the day.
Futurist Doug Stephens, making his second CADA Summit appearance, took dealers through a thought-provoking exploration of the impact of artificial intelligence and machine learning on their operations.
Stephens urged dealers to keep an open mind, and advised them about the many ways these technologies are being embraced by a broad range of industries, including retailers. For example, he said Walmart was experimenting with using AI tech to negotiate with some of their suppliers that they purchase services from. Stephens said the results to date show that the vendors actually prefer negotiating with AI than they do with actual Walmart employees.
It was just one example of many cited by Stephens to showcase the different ways AI is creeping into day-to-day business operations. In terms of the dealership world, Stephens said AI could be a very powerful tool to help dealers and OEMs better manage their inventory allocations. “The way we manage inventory is still pretty parochial,” said Stephens. “It’s still a finger to the wind calculation.”
But he said AI tools will be a better predictor of consumer demand and preferences and can calculate a wide variety of factors for which vehicles will be in demand in any given market. “This technology has the capacity to go through mountains of data. As long as that data is relevant to what we are doing to get more accurate outcomes,” said Stephens. “You will be much more accurate in predicting what people are looking for.”
He said AI tech can assist with things like showroom design and layout because it can assess the traffic and activity patterns in showrooms, and then make recommendations on where to locate information or engage with customers.
AI tech will also filter down to the marketing and advertising world, enabling dealerships to be much more accurate in targeting consumers with greater personalization. “We will be able to break this right down to the individual,” said Stephens.
And one key thing to consider with AI, is that humans can be embarrassed when they make a mistake and are more apt to cover it up than admit to it. Not so with AI. “AI actually learns from its mistakes. Every time it makes a mistake it adapts and adjusts,” said Stephens. “All of this happens automatically.”
But Stephens also cautioned dealers and business leaders to not get completely overwhelmed by AI and blindly follow opportunists in the space. “Be wary of anyone who says your business needs to be entirely AI driven. Bad idea,” said Stephens. “Instead we should be AI informed. We need to consider whether it is preferable that we adopt this technology? We need to assess the risks.”
CEOs and business leaders of the future will need to have a much better understanding of AI, and those that will be most successful will have a practical understanding of AI along with a really good imagination.
Jason Stein, journalist and host of the popular Cars & Culture radio show on SiriusXM then led a panel discussion with three OEM leaders: Bev Goodman, President and CEO, Ford Motor Company of Canada; Vito Paladino, President and CEO, Volkswagen Group Canada; and Don Romano, President and CEO, Hyundai Auto Canada Corp.
In terms of business outlook for 2024, all three were bullish about the year ahead. “I’m very optimistic about this year,” said Goodman.
“We’re pretty excited about the year. We have a record amount of product launches,” said Paladino, though adding that he doesn’t think the market has “fully revealed itself.”
For his part, Romano was feeling upbeat. “People are buying cars, they want to buy cars, demand is high. I think it’s going to be a good year,” said Romano. “We are resilient. The economy is doing great.”
The leaders talked about challenges the industry faced, such as supply being constrained at the ports of entry, inflation, and vehicle affordability. “I think affordability is a big challenge,” said Goodman. “Right now our highest demand product is the Maverick and we can’t build them fast enough.”
When asked about the possible, and likely inevitable arrival of Chinese manufacturers to Canada, Romano said it’s hard to say exactly how that will unfold. “We don’t know, that’s the answer. Most of the Chinese vehicles coming in are EV vehicles,” he said, adding that many of the OEMs already doing business in Canada offer a broad product line across segments and powertrains. “The biggest challenge to overcome any competition is to provide a higher level of customer service,” he said.
Goodman said one strong factor that favours OEMs like Ford against new market entrants is the strength of their dealership network, and the strong connection that dealerships have to their communities. “We have all of you. We have to partner with our dealers from coast to coast,” said Goodman.
CADA Summit is also the place the association grants the Dealer Satisfaction Index (DSI) awards to OEMs who have shown excellence in three categories: Highest Overall Satisfaction, Most Effective Dealer Communications, and Most Improved. The 2023 DSI Award Winners are:
Highest Overall Satisfaction and Most Effective Dealer Communications:
- 101 Dealers or Less: Subaru Canada Inc.
- 100 Dealers or More: Mazda Canada Inc.
Most Improved Overall Satisfaction:
- 101 Dealers or More: Volkswagen Canada
- 100 Dealers or Less: Mitsubishi Motor Sales of Canada
Next up was the industry’s ultimate insider Cliff Banks, who had a lively chat with moderator Niel Hiscox. In rapid fire succession, Hiscox threw questions to Banks and he responded back with his thoughts. Banks is President & Founder at The Banks Report & AUTOVATE.org.
What does he expect in the coming year? “More of the same for 2024,” said Banks, adding that he doesn’t expect the EV picture to be sorted out for a few years as the industry and consumers grapple with challenges on several fronts.
Banks weighed in on topics such as consumers and EVs, the U.S. election, mergers and acquisitions activity levels, vehicle affordability, legacy OEMs vs. upstarts, tech stacks used by dealerships, and where certain OEMs are headed.
In terms of people and companies to watch, Banks told dealers to “watch Tekion very closely.” Banks said a large-scale implementation of Tekion’s integrated cloud-native tech stack at Asbury Automotive Group, one of the largest U.S. dealership groups, will be important to watch as it gets implemented.
Banks also gave a nod to Canadian DMS provider PBS Systems who he said is making inroads in the U.S. market and has created some “challenges for some of the bigger players.”
Hiscox then moderated a panel tackling EV infrastructure gaps and the work that is going on, or in some cases not going on, to prepare Canadians EV owners for the EV experience. Panelists were Josie Erzetic, President and CEO, Electrical Safety Authority; Andrea Nusser, Director, Customer Strategy & Experience, Hydro One; and Simon Ouellette, CEO of Charge Hub.
While panelists each described the EV charging challenges through their particular lens, the audience was left with as many questions as answers.
Some of the suggestions about training consumers to chart the best times to charge their vehicle to lower costs and ease the pressure on the grid, or for “garage orphans” to try to locate curbside chargers located close to their home for example, really suggested a level of complexity and inconvenience that will no doubt hamper widespread adoption of EVs unless the gaps they discussed are addressed more vigorously.
Hiscox also moderated the Dealer Panel session that for the time featured the three most recently named CADA Laureates: Hughes Carle, Peter MacDonald and Andrew Ojamae. Hiscox didn’t talk to them about their Laureate awards, but instead about business issues and outlooks facing dealers.
All three expressed optimism for the year ahead: “We expect a return to pre-pandemic levels,” said MacDonald.
“We were going pedal to the medal until COVID hit. We expect a big year,” said Carle. “January has been incredible for us.”
“Retail resilience is my go-to- word,” said Ojamae. “In 2023 we hit 80 per cent of our peak-pandemic earnings levels.”
On the topic of affordability, the dealers recognized the challenge. “I think there will be some affordability adjustments this year. Inventories are building and day’s supply is building,” said Ojamae.
For Carle, he said 70 per cent of his business is based on customer renewals, so with incentives coming back his dealership will have to actively mine their customer database to drum up business.
On the topic of EVs, dealers had a range of views on where we are on the customer adoption journey. Ojamae urged dealers to get and own an EV to truly understand the good and the bad parts of the experience so they can be a more useful resource.
“We need to be prepared and our sales consultants need to be well trained about EVs. EVs at their best are better than an ICE engine,” he said, adding that if you charge at home, you wake up every morning with a “full tank” and you are ready for a great driving experience. “But at their worst, they are much worse,” he said, citing range anxiety, unavailable, and unreliable public chargers.
But he said the industry and dealers need to help people understand that EVs are at their best 99 times out of 100.
One session that several dealers we talked to said they could have seen go on longer was a lively chat between two of North America’s top journalists and pundits, Andrew Coyne, Columnist at The Globe and Mail, and David Frum, Author and Staff Writer at The Atlantic. The session was moderated by Huw Williams, CADA’s Director of Public Affairs.
When asked to make a prediction on the popularity of Canadian Prime Minister Justin Trudeau, Coyne jokingly started the session with the comment: “I am not in the prediction business. I’m in the finger pointing, backbiting and recrimination business.”
He said that although even a week in politics can be a long time, it does look like the poll results showing the federal Liberals trailing in the polls, “sure looks baked in.”
“A portion of the public has tuned Justin Trudeau out. He has gone from being the party’s major asset to its major liability,” said Coyne.
For his part, Frum opined that during the last global economic crisis, Canada fared much better than most global economies. “But this time, Canada has fared much worse,” he said. “Canada used to be the least dirty shirt in the bag of laundry. Today, Canada has the (dirtiest) shirt.”
Coyne said one problem he sees is that there has been over the years growing and excessive concentration of power in the Prime Minister’s Office. “When you are trying to run everything through two or three people in the Prime Minister’s Office you see these bottlenecks. You get bad policy, stasis and inertia,” said Coyne.
One concern flagged by Frum, is the rise of extremism around the world, and he questioned whether Canada would be able to remain immune from it. “What is the future outlook for Canada? Will we see the rise of extremism? If people don’t get answers from reasonable people, they turn to unreasonable people because they want answers,” said Frum. “What we have seen in the 21st century across the world is politicians speaking to the irrational. Canadians have resisted this.”
Frum said Canada has always been a difficult country to manage because of all of the divides, east and west, French and English, regional tribalism and economic disparity. “I compare Canada to a bank built on top of a dynamite factory. There is faultline after faultline. The job of a Canadian politician is to manage that and get things done even with all the potential for danger. The challenge is to keep things calm, and soothe people,” said Frum. “What has changed is that this government has lost sight of the wisdom of calming people.”
Williams then asked the panelists if Canada’s government was too “woke”, and Coyne said the kryptonite for the current Liberal government is the “arrogance of virtue.”
Frum said politicians need to be careful they don’t go too far in walking back what is the country’s history. He said leaders need to remain proud of their country, while acknowledging past mistakes and keep in mind that what’s always at stake is how great a country Canada is. Canadians should remain proud of that. “The Prime Minister of the country should not be in the recrimination business, he should be in the affirmation business,” said Frum. “It’s made Canadians more inflamed and it’s really dangerous.”
Turning their attention south of the border, the analysts offered comments on the likelihood of another Donald Trump presidency. “Donald Trump is one of the two most likely people to become President of the United States. He is the slightly less likely of the two,” said Frum, adding, “there are a lot of reasons to think Trump is not going to make it.”
Frum said a combination of Trump’s toxic personality, and other issues with the Republican Party, such as their inability to connect on the issue of abortion with voters will hurt his chances in a general election.
But Frum said if Trump does become U.S. President, it will be much different this time. “The first time he was there to bask in adulation,” said Frum. “This time he wants revenge on a lot of people he thinks have wronged him.”
Frum predicted it will be “chaos” if Trump is elected again, and expects him to try to use federal powers to shut down the civil and criminal cases he is facing.“The results are chaos. He will be impeached again. The government is not going to function, you are going to be in chaos.”
He added that one thing Trump taught us is that a certain percentage of the population are ready for “crackpot” ideas.
For his part, Coyne said while Canada is not immune to the chaos in the United States, “we have a few protective mechanisms. We have a little more willingness to defer to authority than you do in the United States.”
The final speaker of the event was Richard Hammond, a global media personality and former host of the popular BBC program Top Gear and the Grand Tour.
Hammond talked about various adventures filming episodes of the programs in Canada, including a time he took a dogsled team in a race to reach the magnetic pole. He entertained the crowd with his humour and wit, telling behind the scenes stories of what went on during his many years of producing television shows for auto enthusiasts and others.
“We’ve always had great fun filming here in Canada,” said Hammond. “We always said you don’t have to be a car nerd to watch the show. They had a massive audience. A passion for cars was at the heart of everything we did.”
“Cars move us physically and therefore they move us emotionally,” said Hammond. “We all have a passion and enthusiasm for the things that move us.”
TD Auto Finance is the event’s exclusive sponsor and has been since its inception more than a decade ago.
