48 Hours To Full CDK, EV Prices Below Tesla, Dealership ‘Office’ Parody

The second half of 2024 is rolling and we’re talking about CDK’s race to fully restore services in teh next 48 hours. We’re also covering the drop in average EV prices below Tesla's for the first time in over a year as well as how our friends at Mohawk Chevrolet's "The Office"-inspired TikToks are taking the internet by storm.

• CDK Global expects its DMS to be fully restored by July 4 following cyberattacks that disrupted operations starting on July 19th for thousands of dealerships across North America.
  • CDK has been restoring services in phases, with many dealers already back online as of July 1.
  • Beyer Auto Group's CDK system came back online unexpectedly on July 1, which helped ease some anxiety among the staff about the indefinite outage.
  • Despite the restoration of the core system, their customer relationship management system and third-party integrations are still not functional, causing ongoing operational challenges.
  • Employees are now focused on the monumental task of recording all deals and service orders manually entered during the outage into the system, as explained by COO John Altman.
  • "There is some exasperation. I can see on their faces that they are just looking at this monumental task. But at least they know where they are at this point." - Said Altman
  • The disruption is expected to cause a 10% drop in Q2 earnings per share for major U.S. dealership groups, potentially costing nearly $1 billion.

• Automakers have cut electric vehicle prices to a level below Tesla's average for the first time since early last year, driven by increased competition and market dynamics.
  • The average transaction price of an EV, including Tesla, was $55,235 in April, $433 less than Tesla's average price.
  • The trend continued in May, with the industry average EV price being $56,648, $721 less than Tesla's.
  • Tesla's pricing cuts have influenced the market, pushing competitors to reduce prices or offer discounts, leading to an average discount of 12.4% on EVs in May.
  • Despite price cuts, new Tesla registrations fell 17% in April, while EV registrations excluding Tesla grew 69%.
  • Used EV sales have surged, growing 84% in May, as declining prices and federal tax credits make them more affordable for consumers.

• Mohawk Chevrolet in upstate New York has gained viral fame with a mockumentary-style TikTok series inspired by "The Office," featuring real-life dealership antics.
  • The series, starring digital branding creators Grace Kerber and Ben Bushen, began with a video about hiding tiny ducks around the office, which went viral with nearly 2 million views for the fifth episode.
  • The videos are created quickly, with Kerber and Bushen writing, shooting, and editing each episode in a day, leading to significant engagement and a rethink of the dealership’s social strategy to focus more on TikTok.
  • "There are probably some big and funny personalities that you work with so just wing it and see what happens." - Gr

Hosts: Paul J Daly and Kyle Mountsier

Get the Daily Push Back email at https://www.asotu.com/

JOIN the conversation on LinkedIn at: https://www.linkedin.com/company/asotu/

Read our most recent email at: https://www.asotu.com/media/push-back-email

Transcript

Paul J Daly: 0:07

All right. The new year is officially or the second half of the year is officially rolling in the second now, but today we're talking about 48 hours they say to full functioning CDK Evie prices below Tesla and in office parity that everybody's talking about the industry. Some old friends of ours and outside. Yeah. The marketing industry is talking about the ad industry is talking about not though dealership auto industry. Yeah. It's fun. It's fun to celebrate a winner. We'll talk about it a little bit later in the show. But I mean, hey, dude, welcome to the second half of the year started yesterday. You and I were both in like different cities and started the second half of the year on the we

Kyle Mountsier: 0:49

were moving. Yeah, I did. Yeah, speaking of not winning, I got to I had the unfortunate disputation of having to watch the US Men's National Team that soccer for those that don't know, fall to Uruguay get kicked out of Copa America, the ref was trash. That's the only way that I have to describe that. And

Paul J Daly: 1:07

that's how you really feel. Yeah, so I'm

Kyle Mountsier: 1:09

here, you know, welcome back to the industry

Paul J Daly: 1:12

this morning. This morning. I looked up, I looked up. I looked up the game this morning, just to see like what kind of demeanor Kyle would be in. So you know, pretty good. Not considering considering all things considering myself in a hotel room. Yeah,

Kyle Mountsier: 1:31

I eat. I slept and I got coffee, you know, things are better a little

Paul J Daly: 1:35

bit. Another day, another day. Hey, we released a great episode of our Auto Collabs podcast yesterday or two days ago with John Fitzpatrick. I was on a road trip yesterday. So I was listening through some of the like, ASOTU CON sessions. And I gotta tell you, this is such a fun podcast episode to listen to. Because we talk a lot about coaching youth sports and how it like kind of pulls into the industry. And John's passion really came through. So if you've never checked out that podcast, you showed it to myself, Kyle, Michael Cirillo. And we invited guests talking about the what makes them tick. And then like some topics that are really clutched to the industry get it by searching a

Kyle Mountsier: 2:11

really good one. Apps auto. Yeah,

Paul J Daly: 2:13

I look we're about to start a new sports podcast after that one.

Kyle Mountsier: 2:16

Right that right after that? Yeah. mucker baseball.

Paul J Daly: 2:20

Yeah, no baseball, just soccer. All right, let's talk about some news. Good news coming out of CDK. Global, they expect their DMS to be fully restored their words, not ours by July 4. So that's between tomorrow and the next day, following the cyber attacks. Obviously, that disrupted operations starting way back on July 19. That's not that far ago. But it feels like forever ago, because it's been a long couple of weeks. They basically have been restoring service in phases with a lot of dealers already back online. As of yesterday, buyer auto groups CDK system came back online unexpectedly. So I guess I was just trying to log in, and they're like, oh, who works, which, which helped ease some anxiety. But obviously, the core systems restored. Their CRM and third party integrations are still not functional, causing, you know, some continual challenges. But now, employees are starting to focus on the monumental task of recording all the deals, and the service orders that were manually entered during the outage. Here's a quote from from the GM. What is his first name? That's not in here. But John Allman, John John, John Altman, he said, there's some exasperation, I can see it on their faces. They're just as they're just looking at this monumental task, but at least they know where we are at. At this point. Basically, the disruption expected to cause a 10% drop in q2 earnings per share for some major auto dealer groups, adding up to about a billion dollars. CBK has also said though, they've restored all their customer care channels, working to bring other applications like the CRM back online, but they said customers can call chat, submit cases and everybody everything's firing and online for that kind of stuff. So yeah,

Kyle Mountsier: 3:59

almost, I got an email forwarded to me yesterday, it looked like they were basically turning on 50 dealers per hour. So you know, you do the math, that's like 3600, dealers by by Thursday. So they're definitely going to have to pace that up. Over the next couple of days. I also got a text yesterday morning, from actually a BDC manager at a Mercedes store that was like, this is this is the Monday that I've always wanted, right? Like, that type of joy, like being able to walk in and log in to the floor and all that do appreciation. That's pretty fun. Yeah. You never know what you lost until it's gone. Absolutely. Kudos, kudos to CDK for getting that stuff back online. You know, I think by the end of the week, it'll be it'll be a distant memory. You know, they're at some level you know, there's there's definitely some there's some legal cases starting to get sprinkled.

Paul J Daly: 4:57

A couple reminders of this one yeah. Without a doubt, speaking to reminders. Segway, Kelly's gonna do this back in 2023. This is the first time this has happened since then, but automakers have cut electric vehicle prices to a level below Tesla's average. So now all the other EV makers, you know, you take the average together cheaper than Tesla's, this is driven obviously, by increased competition and market demands. Our average transaction of an Eevee including Tesla was$55,235 in April, which is $433. Less than Tesla's average price. The trend continued in May, with the industry average Evie price being 56 648. So it is on its way down. Tesla's price cuts obviously influencing the market leading to an average discount of 12.4% on EVs in May, despite all the prices and lower prices, Tesla registrations have still keep falling fell 17% In April, while Evie registrations excluding Tesla grew 69% up into the right yes, yes, incredible. Use Evie sales also very, very busy. We know a lot of people that are just in the US the V business growing at 4%. In May, as declining prices, the federal tax credit on us EVs are kicking in. Here's a quote from Jeremy Robb, Senior Director of Economic and Industry Insights for Cox automotive says there are a lot of consumers that are willing to go out there and try an Eevee now because it's an affordable vehicle

Kyle Mountsier: 6:26

for them. Yeah, for sure. Well, and I mean, you look at even just some of our friends like Jimmy Douglas, John Foley, you know, Alex Lawrence, they're out there in the market broadly, you know, recurrent is on Capitol Hill, talking about these the use DVDs and the viability of them. Like there is a pop cultural narrative, that it's still very, very present toward EVs. And, and when you look at just the volume of EVs coming into the used car market, especially from like the Hertz stuff, where they're offloading a whole bunch of these vehicles, it just puts a vehicle at an extremely affordable price point that you haven't seen in the past. And you know, it might look like a high price point at$36,000 average for the EVS. But that means that they're balanced on either side of that

Paul J Daly: 7:14

because there's some really expensive ones out there. Exactly. Yep. Like cybertruck Model X is loose. It's like there's a lot of expensive EVs 8090 $100,000 EVs. There are $35,000 movies out there.

Kyle Mountsier: 7:26

Yep. Let's get it going to be an out there. Segue this one just warms my heart our wonderful friends have captured the hearts and attention of millions Mohawk Chevrolet in upstate New York has gained viral fame recently with a mockumentary tick tock series inspired by none other than the office. They're calling it the dealership. No, no doubt featuring a bit of real life dealership antics. The series is started by creators Grace Kerber and Ben Bhushan, and it began with a video about hiding tiny ducks around the office, which went viral with nearly 2 million views. For the fifth episode, and now all of the episodes are getting a whole bunch of views. They're created pretty quickly, with like a very fast writing, shooting, editing. You know, trying to just turn around like the quick ideas. We know, the team leader, they're Nathaniel Grek. Like, and they they have just had a whole bunch of fun and grace I think is actually absolutely headed for Hollywood at some point. Her quote is, there are probably some big and funny personalities that you work with. So just wing it and see what happens is her point is like, hey, look, if people are probably all around, you just gotta know where to look. We've actually got a clip of one that we wanted to share because it's just too good. Not too All right, let's see it.

Unknown: 8:50

Great. Here's a list of vehicles we got to shoot. Oh, sweet. I can drive the 2500 the Camry that the truck was invented. Just so I could drive it. This girl 1500s 2500s 3500s Sylvia's Colorado's all the Rados

Paul J Daly: 9:21

now, she's struggling to

Unknown: 9:26

keep going. Today we're going off location shooting some cars for some commercials coming up this month and I will get the list I see. 2500 And I'm like, yep, dabs. That's great. That's fine. You got like, a lot of room. I don't know. I think I'm gonna hit that truck.

Paul J Daly: 9:48

So the line to this is at the end. She's like, I think I'm gonna get a truck. It's typical Michael Scott. It's unbelievable. It's Michael skies. For Saturday, she's heading for SNL. I think one of the one of the biggest things in life because this story has been picked up by Business Insider as an Ad Age display, right? So a lot of people are looking, there are a lot of people in automotive doing, doing creative marketing. And Mohawk has been on the hunt for a long time. Like this is not one of those stories where they just got lucky. If you look in the video, Greco has been leading this team for a long time. And they put out an insane amount of content, they've tried a measurable amount of things and they just keep swinging. And they weren't even expecting this to like be right just another another day, the office no pun intended for them. Right. But to script shoot, edit this all in one day, is kind of like how people in the car business know how to do it, right? Like you get a crappy,

Kyle Mountsier: 10:42

but like this is what we have to remember is like this is a consistent pursuit over years. I mean, four or five years, I absolutely think that this team has been pushing out content, trying new things. And I think that like anything worth doing is worth doing over a long amount of time. And so kudos to the team there. Kudos to Andy and the leadership at giving this team just the freedom runway and the runway. It's amazing. Yeah,

Paul J Daly: 11:11

and we're excited. We're still wrapping up the episode but just turns out that more than cars episode four if you don't know about go to more than cars.tv. It's our Docu series about dealerships. Episode Four is actually at Mohawk Chevrolet. So the timing of that couldn't have been any better. Thank you so much for spending a few minutes with us here today. But look at the at the end of the day. The car business is the people business, the ones you work with the ones you serve. So go out there invest in the people, and just watch what happens