Welcome to The Morning Dump, bite-sized stories corralled into a single article for your morning perusal. If your morning coffee’s working a little too well, pull up a throne and have a gander at the best of the rest of yesterday.
Dealership Turnover Lowest In A Decade
Since 2011, the National Automobile Dealers Association (NADA) has been studying dealership employees to watch employment trends in the industry. This year’s survey is out, showing that in 2021 salaries rose and turnover dropped by a large amount. I haven’t seen the study, but the data was shared with Automotive News: That’s still a fairly high turnover. By comparison, the construction industry has an average turnover of 9.2%. Doing a little math, Automotive News also determined that the average employee made $103,000 a year in 2021, a 27% increase over 2020 when the industry was in the throes of the pandemic. Obviously, that average includes higher paying jobs (sales/service managers) as well as lower paying positions. All this makes sense given that, in a pandemic, you’re not likely to jump into another job (even with hiring up). It’ll be interesting to see how this changes next year, but good for Toyota Jan!
Lyft Cancelling Argo AI-Backed Taxis In Austin
With Ford’s announcement that they will essentially implode Argo AI we see the rest of the chips are starting to fall. Back in 2021, Ford, Lyft, and Argo made a big splash with a plan to add something like 1,000 new robo taxis to Lyft’s fleet. You can guess how that plan is going. Lyft announced it was immediately suspending self-driving taxis in its trial markets of Miami and Austin. From Fast Company: Life comes at you fast.
VW Pairing Up With Mobileye
The collapse of Argo AI was a surprise, but it’s not much of a shock that Volkswagen is going with Intel-backed Mobileye to pick up where Argo left off, especially since Mobileye and Volkswagen are already working together. What I am curious about are the details from this Reuters report, which adds a little more info to my query about the actual composition of Ford and Volkswagen’s investment: Hmm… While Ford took a $2.7 billion non-cash pre-tax impairment on Argo, VW might have to write down more than one billion euros ($1.00 billion), a source familiar with the company said. We know Volkswagen put in at least $1.0 billion and then had another $1.6 billion as some sort of on-paper supporting investment. We don’t know how much each company ended up with, but what sounds like happened to me is that Ford split the company with Volkswagen, got Volkswagen to say it would put in $1.6 billion worth of ::waves hands meekly over valuation of VW’s existing autonomous cars unit:: to pump up the value of the company. Ford then counted that increased value as income. At some point Lyft got 2.5% of the company in exchange for data, though at what value is not clear. What I’m curious about is how much more money Volkswagen or Ford actually put in. There’s an interesting detail in this old Forbes article: This is pure conjecture, but I wonder if that private funding round didn’t go as well as they hoped and that created a chain reaction that led to this. However, it does appear that just as Cruise has supplanted Maven as GM’s brand for mobility services, Argo AI may be taking on a similar role for Ford. Given that Argo is currently pursuing a new private funding round ahead of a potential IPO in 2022, it may be that investors are more inclined to put money into a dedicated AV business like Argo than to provide Ford with the capital required to launch an entirely new line of business. This is likely part of the reason why Ford delayed its originally planned 2021 launch into 2022.
Nissan May Take A Stake In Renault’s EV Unit
I do not regularly read the Kyodo News, but thankfully someone at Reuters does and they had this little tidbit from the ongoing work that Nissan and Renault (and I suppose Mitsubishi) are doing to repair their relationship: Ford has essentially done this with Ford Blue so Renault establishing its own EV-focused endeavor seems sensible. That Nissan would want a piece of this also makes sense.
The Flush
Have you ever worked at a dealership? If so, what was your experience?
Photo credits: Toyota, Lyft, Volkswagen, Renault
Now… Im infurtiated by people who are oblivious… specially women.
P.S. It’s really true, don’t get into auto sales if you’re an auto enthusiast. Most customers don’t care and you’ll become quickly disillusioned that it doesn’t make one iota of difference. Yeah, I’m still a little salty about it.
Maybe I’m just an asshole (distinct possibility!) but in my experience it actually seems to hurt to be a more qualified buyer. Like I’ve said, salespeople get frustrated with me almost immediately when I can tell them everything about the car, and as soon as dealerships have run my info and seen my credit/gotten an idea of what my finances are and discovered I usually buy well under my budget they usually stop caring about the sale and more or less say “take it or leave it, we don’t care”.
I will say it was a little different when I bought the Kona N though, they understood it was a special car compared to what else was on the lot and were pretty respectful once I showed I was serious. Maybe it depends on what you’re looking at as well…I basically got laughed out of a BMW dealership when I said I was looking to spend 40 grand ish lol.
No salesperson wants to sit and BS with someone for hours about every color option, then see that person drive a hard bargain for a minimum commission, or worse leave and go down the street. The fortunate side effect of knowing more than the sales guy about the vehicle is that I know what I want before I even set foot inside. The sooner he can get on to his next mark, and I can go home in my new vehicle, the better for us both. If the sales guy isn’t willing to play my way, well, there’s a lot of dealerships out there who are.
Waiting on ups all day was a great way to spend 3 hours with a tire kicker or someone fishing for a number to take across town and buy from them because they beat your price by $50.
Like others here, I only did it for a few months. I had some referral business already coming in. I didn’t hate it, but definitely wouldn’t want to be doing that today to make sure I can pay my mortgage.
Too many variables outside of your control. You can do your job perfectly and not sell a car all week. Management can suck. Your product can suck. Your service department can ruin a chance at referrals because who wants to deal with your dealership even if the sales guy is great?
And no, product knowledge didn’t seem to matter. One of the old timers I worked with didn’t even know how many cylinders the car had. Still sold a bunch of cars.
Lee Iacocca came from a dealership and made his money there in marketing…
That’s why I’m becoming an electrician. Pretty much all electricians (who aren’t complete fuck-ups) make good money right from the jump, job security is excellent, and if you’re really that ambitious there’s still the possibility of rising to great heights at the top of some major contracting company—maybe even one you start yourself.
That’s the kind of career to look for, in my opinion. Go for something where even the people on the bottom are doing pretty well for themselves. The possibility to do extremely well indeed exists just about everywhere, but plain ol’ arithmetic will tell you that almost nobody rises that high. By all means shoot for the stars, but make sure you’re gonna be covered in any case.
I do wonder how sales compensation has possibly changed with the current market. When I sold cars, we made a flat rate off new cars, escalating as you sold more. So volume with new cars is how you made money. Used cars, we made a percentage of the profit, so you could make more off one used car than 4 new cars.
With inventory down, the ability to sell 15 new cars in a month might be a challenge for even the best…the cars simply aren’t available.
For a former Marine that was a gut wrenching decision but turned out to be one of the smartest things I ever did. Turns out the Army kinda likes former Marines as NCO’s. I was enlisted as a Corporal and made Acting Sergeant when I finished my advanced training as a Surveyor. Many sea stories hide in this single paragraph!
Great news reader! On average you, I, and Bill Gates are all billionaires!
Having done a little bit of everything and seen a little bit of everything, I can say that this industry kind of sucks, but there is money to be made and you can find a place or position you can be happy with. I was very unhappy where I was but I’m very happy with where I am now, and that has less to do with the automaker than the dealership itself. Growing up I never thought I’d be working at a parts counter, it’s not exactly a dream job, really I wanted to do product planning at GM but I’m not a big school guy, and with the way the industry has turned I think I would have been disappointed with that anyway.
I committed to the three months, but after a week I already knew that selling cars is miserable.
Everyone that came through the door already hated me even before they met me. And I learned that 98% of the people who buy cars, are not enthusiasts and don’t really care about cars too much. I hated what I had to do to make sales. I hated the entire process of the bullshit back and forth. After 90 days, all I had to do was come up with a new plan for my life. I’ll add, that the idea of selling exotics for a living to the kinds of people who, on average, buy exotics, sounds to me like a special kind of hell.
I sure learned a LOT about the business of selling cars though, but mostly about myself. It wasn’t all bad, but for certain one of the defining experiences of my young life at that point.
Also… who goes to the desk to ask what you have for X?
Just sucked, made me nauscious and vomiting daily.
Say it with me Everyone: An average without a standard deviation is meaningless. Even with a standard deviation, it doesn’t tell you a lot, necessarily. Was the average $130K +/- a standard deviation of $10K or $50K or $100K?
Also, while the median is slightly better than the average, since the median is the central value in the distribution, it’s still meaningless without a standard deviation.
If you want to go with the best indicator of central tendency for something like salaries, what you really want is the mode (the most commonly repeated value in the distribution). For example, the average of this set of numbers below is 103, and the median is 90, but the mode is 25, so most employees in this small model earned 25K: 25 25 25 25 25 90 90 140 150 240 300
That being said…hmmmmm. I might take a small pay cut if I could still take home 100+ and get to be around cars all day ????
Speaking of which, have y’all seen the pricing on the new Civic Type R? It’s $44,000 with destination. For a CIVIC, and that’s before the inevitable markups. Honda and VW are absolutely gouging enthusiasts with their R prices. You’d be nuts to pay $45k for either.
it does have a 310 hp V6 though (only engine available) and it is very fast.
I’ve never worked in auto sales, but I have worked in other commissioned sales, and the income distribution was pretty uneven to say the least.
Also, my understanding is the hours are pretty brutal (6 day weeks expected, long shifts). 30-40% turnover seems high for a 6 figure job, so I don’t think it’s really as good as they are making it sound.
The only reason ANYONE who isn’t a vet does this is because they have connections and contacts and they want to be one of the lifers who get spoon fed a majority of the business. That’s where the real money is. By and large, though, it’s as much of a scam for most sales people as it is for the “ups” walking through the door to buy.
