Paying Tribute to Peterson, Dealer v. Direct, More Luxury Please

It’s the last Friday of the month as we pay tribute to a Ford leader who broke the mold. We also talk about a hot debate over legacy OEMs flirting with DTC models as well as consumer luxury purchases going on the rise. 

This morning we pay tribute to Don Petersen, a transformative leader who guided Ford through a critical phase in the 1980s.

• Petersen, who passed away at 97 on Wednesday was at his home near Detroit in Bloomfield Hills, Mich., his niece Laura Peterson told Automotive News in an email., was celebrated for prioritizing quality and innovation, dramatically boosting Ford's market share and profitability.
• Under his leadership, Ford introduced influential designs like the aerodynamic Taurus and Mercury Sable, shifting industry standards towards more customer-focused products.
• He was known for fostering a collaborative workplace, which contrasted sharply with the autocratic styles of previous Ford executives. But at times was also said to have had some passionate outbursts. 
• Petersen also spearheaded strategic acquisitions, notably purchasing a controlling stake in Hertz and increasing Ford's investment in Mazda, which significantly expanded Ford's global footprint and technological capabilities.
• "He insisted on teamwork and excellence in the name of customers and guided Ford through a period of revitalization," stated Ford Motor Co.

A recent Automotive News editorial is highliging a hot topic we’ll be discussing with the President’s of NADA and several State ATA’s on the main stage at ASOTU CON. 

• Dealer associations are lobbying against direct sales models for new brands like VW Group’s Scout and Honda’s Afeela, pushing for adherence to traditional franchise systems amidst a slowdown in EV market growth.
• Tensions rise as dealers threaten to withhold service and parts for brands pursuing direct sales, fearing the impacts on their business model and the established relationships with legacy automakers.
• The advertisement by state dealer associations in Automotive News underscores a significant industry rift, as they urge legacy automakers to reconsider direct sales strategies that could bypass traditional dealerships.
• "We believe there is a difference between a brand recently born and one seeded, nourished and grown under the protective arm of a legacy automaker," emphasizes the importance of maintaining traditional retail models for established brands.

Despite economic inflation, the U.S. luxury goods market has seen a substantial 86% increase in purchase intent from 2021 to 2024, according to YouGov's latest survey.

• The survey reveals that 26% of respondents are likely to buy luxury items within the next year, a significant rise from 14% three years prior.
• Notably, 15% of Americans have actually purchased luxury goods over the past year, marking a 9% increase since 2021, with shoes, accessories, and beauty products leading the purchase categories.
• Shoppers between 35-44 were willing to shell out over $1,000 on their c

Hosts: Paul J Daly and Kyle Mountsier

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Transcript

Paul J Daly: 0:20

First, actually last Friday of April 26. Today we're paying tribute to kind of an icon, maybe a little gin. I know we're going to talk about is going to talk about dealers versus direct and more luxury please. The people. Everybody needed more luxury in a lifetime stay when they see me. Repeat. Excited. Last week of April, everybody crushed in March, April was kind of pretty strong as well. And, you know, here Yeah, so I know we're running it and we have helped prep calls nonstop. The last few days, Kyle and I have been on them. So Kyle's gonna bounce out to panel prep call, I'm gonna wrap up the show. But that's how it is like two weeks to go until ASOTU CON all of a sudden ever our schedules are, you know, just scheduled by the second and I had a little problem with my well this morning, so I'm a little late

Kyle Mountsier: 1:15

so you need water to flush toilet cannot imagine I can't imagine what that's like like, I mean, I've never had like a water main pipe. I've always been residential but to like have to manage your own wealth thing. Like that's a whole different story. Not

Paul J Daly: 1:27

not not a fan. Not a fan. But you take what you can get, hey, soda con agenda is firing up. We've been on panel prep calls with so many dealers over the last few days. We're doing them more over the next few days. Everybody's on fire and ready to have an a

Kyle Mountsier: 1:42

soda con Kyle. Yes, it's it's getting wild. Like I was on all things used cars just a minute ago and everybody is pumped up about it. I call it a fever pitch because I think every third post that I see on LinkedIn right now is like I'm going to ASOTU CON right and maybe that's just my little bubble but feels ridiculous.

Paul J Daly: 2:00

Right? And Ben stock called me this morning, just out of nowhere when he pops up like oh, what do you got to talk about? He was just telling me about how fired up he is to deliver his keynote. He was like, what are you gonna have you on stage? See, you know, back in the back hallway? He's joking. Yeah, we're gonna put you right before lunch. No, he's gonna be on the main stage. And boy is he fired up. He was telling me some of the results they're getting right now and what he's seeing and you need to hear this and siphon from a little bit of that Brian benstock energy and success. What else out? Let's talk about some news before you go.

Kyle Mountsier: 2:36

Do it. Let's get into it. i

Paul J Daly: 2:37

This morning we're paying tribute. So if you haven't checked it out, or you don't know, go to a soda con.com Grab it, check out social media. The billboards are everywhere. You should be there, you really should. But this morning, we're paying tribute to Don Peterson, who was a transformative leader who guided for through a critical phase in the 1980s. So he passed away on Wednesday at age 97. God bless him in his home, Detroit. His nice leader Peterson told Automotive News in an email that that he had passed away basically, if you don't recognize the name, he was basically celebrated for prioritizing quality and innovation and boosting Ford's market share profitability very dramatically. Under his leadership for introduced designs that you're going to remember, it was very aerodynamic and different at the time. The old Ford Taurus, the Mercury Sable, the pointy nose, Taurus and Sable. Yes,

Kyle Mountsier: 3:32

they were pointy nose, you know exactly brings

Paul J Daly: 3:34

me right back. When I think of that that cloth interior, it's Vaizey. I

Kyle Mountsier: 3:39

can smell it right now, you know, better

Paul J Daly: 3:41

for worse. But basically Peter, she was known for fostering a collaborative workspace that is a term that's very common now not as much back then it contrasted really sharply with autocratic styles of previous 40 executives. He also notably purchased a controlling stake member for purchase a big part of Hertz. And also Mazda, Kyle, you have a little history with Mazda. But back then at Ford has a

Kyle Mountsier: 4:04

relationship but 2008 was kind of when that when that one came to be and was about a five or six year relationship. So yeah, like just just for Ford to do that. And, you know, there's a lot of people that talk about, you know, Ford dealers, or people that have been around the industry for a long time, like the glory days of Don Peterson and his leadership. So, you know, definitely a legacy. And a lot of people that remember her the way that he led and grew forward in the time that it did and the patience and kindness that he had. So, yeah, so

Paul J Daly: 4:35

our prayers going out to the family for sure. Hopefully, they they're comforted and celebrate a life well lived in a pretty sizable impact on the 9070 in the like, get after it, I want to get I want to get the 97 I want to get to the 97 All right, moving on. So this this conversation came up yesterday. But basically this is an editorial and highlighting a really hot topic that we will be discussing on stage at a Otakon with both Mike Stanton, president of NADA, as well as several state, ata presidents. And it's about dealer associations really being a lobby being kind of influentially minded to lobby against direct sales models for these brands that we were talking about VW Scout, Sony's collaboration with Honda, and a feeler. So tensions are definitely rising as like we're getting closer to a vehicle being released a lot of conversation that I had in the panel prep call had to do with kind of these brands Honda, and VW building these other models on the backs of the dealership model sharing resources and executives and best practices. And, you know, they've actually taken out an advertisement in automotive news, you may have seen it, asking them to reconsider not going direct sales model, here's a quote, We believe there is a difference between brand a brand recently born and Once seated, nourished and grown under the protective arm of a legacy automaker. So that's gonna be a continued hot topic. And we'll definitely be talking about it in a couple weeks.

Kyle Mountsier: 6:05

Yeah, I mean, this is this is something that we've been talking about for the last two years. And I think, you know, as as things go, when other things take the importance of the, you know, the thing right in front of us, other stuff moves to the background, and this is a conversation that has just moved to the background. You know, it's obviously still clearly in the sights of the OTAs. And NADA, and actually, I was on the phone with a dealer, or, or a rep from a dealer at a large group yesterday that was just highlighting some of the things that they're dealing with coming down the pipe with OEMs kind of mandating a lot more in the digital space and mandating a lot more that is kind of leading to this idea that there may still be this direct sales model, not just from people like scout and a feeler that the other manufacturers, there's still undertones of that happening. So

Paul J Daly: 6:59

interesting yesterday, so we were on with John Devlin and Pennsylvania Don Hall, Virginia, Mike Stanton. This was their trip smarts. Peter Kitzmiller. Basically, the bottom line is this. They're like, we want them to look at the other direct sales. brands that have come out and not working and just get a little little mic check there. Finally, and Kyle, if you have to bounce you got about you gotta go.

Kyle Mountsier: 7:23

No. Well, Jordan Jordan is hanging on to the crew over there for the live show. This

Paul J Daly: 7:28

is how we handle prep. Is it by the way? Oh, man,

Kyle Mountsier: 7:31

it's a good one. We've got effective and Claire Foy and Joe bossom at Easterns talking about the future of cookieless and and addressable markets, right, like, what authorized or addressable markets are out there for advertising and it's a big conversation. Like it's a bold conversation. I can't I'm just like itching to get in there. It's gonna be on the prep call.

Paul J Daly: 7:57

So I wonder if they're gonna be nerds at a soda con. We've just confirmed there surely will be despite, oh, this is your store story. Kyle hit it. Yeah,

Kyle Mountsier: 8:05

despite some economic inflation, the US luxury goods market has been seeing a substantial 86% increase in purchase intent, from 2021 to 2024, and two, according to a Hugo's survey, the survey reveals that 26% of respondents are likely to buy luxury items within the next year, a significant rise from 14% Three years prior. Couple more stats. 15% of Americans have actually purchased luxury goods over the past year, marking a 9% increase since 2021. Specifically, shoppers between the age of 35 to 44. We know a couple of those are willing to shell out over $1,000 on their coveted luxury purchases. Chris Melchiorre, the SVP at YouGov. America's had luxury demand continues to skyrocket, skyrocket to sprite inflationary fluctuations. I mean, we're hearing I'm not really cool on the $1,000 on my love, on my coveted luxury purchases, maybe these people don't have children running around.

Paul J Daly: 9:10

I know right? Yeah, you probably are benchmarking. I mean, I hate how I'm excluded from this now at 45 years old. Oh, no one cares what I think you're spending my money on anymore. But I think this highlights a very important part of the conversation that's happening happening macro economically, is where we were all thought we were heading in for a soft landing that is actually changing as we speak because people keep spending money, Kyle, consumers keep spending money, meaning inflation is going to be really stubborn. This just as another layer of it were this attractiveness of luxury goods and luxury companies leaning in to like kind of court this new broader base of luxury buyers. These $1,000 items are keeping interest rates up.

Kyle Mountsier: 9:54

I keep hearing a year and a half. Go get out of here. Let's go we'll talk Talking about work and I'm obviously we're

Paul J Daly: 10:01

running flat out. It's so fun to be loved for years. Let's go to koat.com we'll build on it