My last publisher’s note of the year. Another year in which it’s been my great pleasure to work in and contribute to this amazing industry. So what’s on my radar at year end?
I’m just back from the Los Angeles Auto Show. I love auto shows, and the LA show is a very good one. Congrats to Terri, David and their team for putting together a strong event at a time when shows are still nurturing some OEMs back to pre-pandemic participation levels.
Consumers are there. OEMs should be too. And we have the data to prove it. Happy to chat further on that if you wish.
It was interesting to see the messaging coming from OEMs on LA’s media day. Variations on “Assembled right here in the U.S.” were common as OEMs of all stripes work to emphasize that they are on the right side of the walls they see going up around U.S. trade and foreign policy. As much as product announcements, I heard manufacturers announcing investments in U.S.-based manufacturing, including Jose Munoz speaking to Hyundai’s deepening roots in Georgia. Kia and others did too.
As we enter the runway to the re-negotiation of the USMCA, Canada will have to make its case that “Made in the U.S.” really means “Made in the U.S. with a few trips back and forth across the Canadian border.” We’ll need allies inside the States to help with that. Historically, State Governors have been valuable allies in the fight, as they fully understand how valuable Canada is to them as a trading partner.
Will they be this time? We’ll see.
How much of this is just aggressive negotiating on Trump’s part? We’ll see.
From a product perspective, the key messaging emphasized flexibility in powertrain. At one point in Jose Munoz’s presentation in Los Angeles, the massive screen behind him went completely black apart from the acronyms ICE/Hybrid/PHEV/BEV/EREV. Similarly, Ford emphasized giving consumers “The Freedom of Choice.” There were other variations on this theme.
As manufacturers face the challenge of uncertain migration of consumer demand to new powertrains, and of course an uncertain regulatory environment, what choice do they have? It’s the right business choice for those OEMs that have the scale and resources to do it. But most don’t. Expect to see new alliances, collaborations and even mergers as the combination of regulatory and demand uncertainty spar with massive capital requirements. Not everyone will be left standing, and yes, there will be new faces at the dance. Tavares won’t be the only casualty.
The cost of making the wrong choices can be very dire. Ask a Canadian Stellantis dealer how it feels to steer their businesses with a vehicle line-up that has exited many of their most important product segments.
A few thoughts on AI: It will be even more impactful than we realize. It will transform many, many things. But a word of advice for now. Let it act in a co-pilot role, but don’t let it be the pilot. Remember that underneath large learning models are math and probabilities. That is not always the path to the best answer.
Consider the example of a journalist in the States who handed a week’s worth of decisions to AI. From dinner choices to her haircut and more, the AI drove to the average. In her words, clothing choices made her look like a Gap mannequin.
We don’t want “faster” to become the enemy of “better.” As retailers you live in the world of building relationships that matter to your customers. You need to find ways to stand apart, not drive to the average.
All that said, in your hiring and your training, look at how employees and candidates are developing their AI skills in supporting their own decision-making. Do they use ChatGPT, Perplexity and others in their day-to-day life? They should be.
My year end prediction?
Expect autonomous driving to become a big part of the conversation in 2025. Why is Elon Musk so intent on being Trump’s best bro? Musk is betting Tesla’s future on robotaxis. Right now autonomous vehicle regulations exist at the state level. Getting that moved to the federal level, in the hands of a President he has real influence over, could be transformative for Tesla. I’m not saying it will work, but I expect that is the game being played.
Last thought: Thank you to all the friends and partners I have in this industry. From dealers, to OEMs, to vendors and association folk, I am blessed to work with all of you. I appreciate you more than you know. I wish you and everyone a happy, healthy and prosperous 2025. Let’s never forget that kindness is a key ingredient that makes it all possible.
