Automotive State of The Union

What Dealers Should Do About Tariffs Today with Brian Kramer, TikTok Sale Deadline Looms

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Episode #1006: We’re joined by Brian Kramer, EVP of Cars Commerce to talk about the upcoming auto tariffs and how Tesla’s market share is declining. Plus, as the deadline to sell TikTok nears, some surprising potential buyers have emerged.


Show Notes with links:

  • As auto tariffs are set to go into effect (and potentially stick this time) on April 3, automakers have sent representatives to Washington to lobby directly with the Trump administration, arguing that tariffs on parts will drive up costs by billions of dollars.
    • Meanwhile OEMs are warning dealers that vehicle pricing could change, with Hyundai telling its dealers “current vehicle pricing is not guaranteed and may be subject to change for units wholesaled after April 2.”
    • Here to talk tariffs and how dealers should be approaching the next weeks and month is our good friend Brian Kramer, EVP of Cars Commerce and GM of Accutrade.



  • With an April 5 deadline looming, ByteDance must sell TikTok’s U.S. segment or face a full ban. President Trump is optimistic that a deal is on the horizon.
    • The app, with 170M U.S. users, was deemed a national security risk over data-sharing concerns and was originally set to be shut down on January 19.
    • A wide range of potential buyers includes Blackstone, Perplexity, MrBeast, and Project Liberty.
    • Project Liberty claims it has $20B in investor commitments for a deal and made an offer ahead of the January deadline.
    • “There’s tremendous interest in TikTok,” said President Trump.

Hosts: Paul J Daly and Kyle Mountsier

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Paul J Daly:

Good morning. It is Tuesday, April 1, but this isn't an April Fool's joke. We actually have Brian Kramer on the show. This is the automotive State of the Union. I'm Paul Jay Daly. This is Kyle Mountsier. And pretty soon the non April Fool's joke is showing up. Og troublemaker, Brian Kramer's

Kyle Mountsier:

commerce, but originally from the block, because I bet you, Brian Kramer has pulled off some of the most ridiculous April. April, 1 in automotive, like legitimately in automotive, we can see him off screen, just so you know, he is smiling so cheaply, it's scary.

Paul J Daly:

Oh my goodness, that's so true. Well, it's April fool. You know? I don't, I don't even know if our team had anything teed up for April 1 day we went all in the last last year. Nathan, do we have anything going? Are we just too busy for April Fools? You can't tell if you have something going. That's me. How that works. I kind of, you know it, or you don't. Paul,

Nathan Southwick:

if we did have something going, I would probably be trying to pull the wool over your eyes. So why would I tell you that would

Paul J Daly:

not be difficult to do at all. That's the lowest barrier of entry for an April Fool's joke. Although, although

Nathan Southwick:

someone sort of randomly kind of associated with the ASOTU community dropped a really great one today, will gadera release a new book unreasonable hospitality, hospitality. How robots are better at hospitality than humans? That's really good. That was really powerful.

Kyle Mountsier:

I wish he should actually do the GPT prompt that he put in yes in the post, because it would be really interesting to see what GPT comes back with, like, you know how to be unreasonably hospitable. You know, robots

Paul J Daly:

pretty good. I'm not gonna lie to robots. How would be a lot of things coming up? First of all, obviously, you know what's coming. So do comp, presented by Reynolds and Reynolds and Google is coming in so hot. We're almost, Are we under 40 days? Not yet. Almost there. Almost pitch tank, startup booths. Do we have any startup booths left? I think

Kyle Mountsier:

we got two left. That's it. And on pitch tank, you got to get your pitches in. We've only got a few days left. If you are looking to pitch at ASOTU CON and you want to be have your name in the hat to try and get there ASOTU con.com, forward slash. Pitch tank, you can submit your video right there. Yeah.

Paul J Daly:

So all right, I think, I think we need to bring Brian Kramer in. Let's before we because we're obviously going to talk about tariffs, because that's the thing. Why? Not everybody's talking about tariffs, and Brian has a little insight. But Brian, come on in. Bring him in. Brian Kramer, Brian, you're such an OG part of this community, I don't think people even know, like,

Brian Kramer:

we go way back, like to the beginning. You guys were even together,

Paul J Daly:

absolutely, oh yeah. He just pulled, he just pulled that one. Kyle, what a jerk.

Brian Kramer:

So watch the initial intro of the two of you. It was the digital dealer, I think, right, yeah.

Kyle Mountsier:

First time we did something together was at that digital dealer. You were there on that, on that little stage in the round, and everything happened that that place got sideways real fast. Tiffany was pointing fingers. Glen Lundy was telling everyone they were gonna, they weren't gonna exist anymore. It was wild. It was wild. Yeah,

Brian Kramer:

jerk Kyle way he said, he goes, he goes, You just he goes, there's something going on there. Because I wouldn't be surprised if those two spin something up. Yep, better.

Paul J Daly:

Here it is, and here we are, and you're working for corporate America. Now, who would have thought? Right? I know, I know. I know the PR department is probably close by with their tasers on just right and left side of you on the camera right now, I'm just kidding. They're not. They're the best people ever. Okay, here we're tariffs. We're talking about it non stop. You can't escape a tariff conversation if you're in the auto industry, whether it's on social media, reading a newsletter, whatever they're set to go into effect and potentially stick this time on April 3, right? So two days, two days from now. So Thursday, automakers sent representatives to Washington to lobby directly now, with the Trump administration arguing the tariffs on parts will drive up costs by billions, billions of dollars. Meanwhile, OEMs are warning dealers that vehicle pricing could change. Hyundai telling its dealers quote current vehicle pricing is not guaranteed and may be subject to change for units wholesaled after April 2. Wow, it's tomorrow. No April Fools joke here to talk tariffs and how dealers should be approaching the next weeks and months. Is our good friend Brian Kramer.

Brian Kramer:

Today would have been the day to roll out a tariff program. I think that at least that would

Kyle Mountsier:

have been messed up. I mean, that

Paul J Daly:

would have been a thing, but now Executive Vice President of car commerce and GM of Accu trade, your phone is probably blowing up with dealers asking you the questions, how much should I pay for this trade in Yeah, and

Brian Kramer:

it's already been happening probably five times this morning, but it was all even, you know, I passed out last night. It did. I wake up this morning. You. Yeah,

Paul J Daly:

all right. So like you're dialed in. You know all about what's happening at wholesale values. You spend a lot of time on the ground with dealers. You have a lot of thoughts about this. You've been publishing, and are about to publish some more pieces on tariffs and comparing it to other situations where kind of buying frenzies or fear has started to drive the market. So give us your overview.

Brian Kramer:

So what kind of like you and I talked about, as you were thinking about selling your vehicle, I compared it to tulip mania. Tool mania back in the 1600s is when tulips were selling for, you know, certain bulbs, if you could propagate a certain strain of tulips in Holland, they were going for more than houses work, because everybody was going in this, you know, by toilet paper during COVID, but every as everybody's doing addendums and all that stuff. A lot of the things that are going on right now, at this current moment, are psychological, because there's a lot of vehicles that aren't even going to be affected, but I will say that what's up to consumer behavior? I just thought, I just was talking to Brian Burton from Jermaine Toyota. They just had a 21 cars Sunday, which is in 20 cars on a Sunday, used only, and 2222 yesterday. So then those days are, they're pacing on an all time record used car month. Problem is with that sales velocity, everybody's not back filling at the same rate in order to fill it. So what are they doing? Well, we gotta get cars. We need inventory. I don't know what what what the deal is, but we can't have an empty lot. So now you're seeing these values go up and up and up unreasonably. I mean, right now a 2023 Forerunner is at the auction, is going for more than it did for MSRP in 2023 with 20,000 miles on it, what? Oh, yeah. And you're seeing this, right? My daughter's rev four has gone up $3,200 in the last 90 days in value on a 220 22 rev four. So there, at some point this is going to pop, and there's going to have to be some sort of, you know, affordability piece in the bubble. So I would, I would tell every single dealer that you can't control what happens in all this many but what you can control is how many trades you get on your transactions. So 70% of consumers have a trade in, but the average for dealers new and used is like 35% 43% on new, 28% on used. They got to make sure that they're asking about the trade. Only 26% of our leads and everybody's leads have a trade in attached to the initial lead. So instead of just going for the appointment, hey, do you have a trade that you'd also like this to add to? Yeah, and we can that way, you can work payments and that sort of thing. I think a lot of people don't ask that question,

Kyle Mountsier:

yeah. I think the the poignant part here is, is for dealers that are struggling to find that inventory, they're going to race to the auction, because it's the lowest barrier of entry, right? It's like high volume, quick purchase, but paying up for that, if you can focus on trades and street purchases, you have the opportunity to find the right vehicle the right price, and to have that vehicle quickly on the lot so that you can turn it around while the frenzy is still hot, right? Because we don't know if all the sudden, tariffs don't happen on Thursday, all of this energy is now moot, and you've overpaid for cars too high. Also, if anything changes, right? You know, maybe the tariffs aren't so high, or maybe there's more, you know, incentive for certain manufacturers or things like that, we just, we don't know. And so consumer Frenzy is actually demanding us be more resolved in our purchasing behavior, I think is what I talked

Brian Kramer:

to somebody yesterday that purchased 150 used cars in one shop, and that's what I would highly advise not to do, because they were worried that, you know, cars are going to run out. I can buy them at today's prices versus future prices and hoard them all, and there's holding costs, there's going to be depreciation, maybe there's parts availability, but that's another thing, right? And so every single this is gonna affect auto makers, and I'm sure it will, but I think that the ones that are really going to be affected, and you might not see it for a minute, but it depends on how long this thing runs out for. I don't see it going for more than 90 days personally, but that's just, that's my complete gut assumption. No data to back that up, but at the end of the day, the tier two suppliers, and the part suppliers, there's so many that are like Chinese and and Korean aftermarket parts. That's what's really going to disrupt us. On the used car side, speed to market. You're not gonna be able to get cars from the shop, but get reasonably, you know, reasonable prices. And there's going to be, you know, when you're looking for certain parts, or there's open recalls, knowing all that data you're taking that car in. Can I even retail this car? Am I going to, am I going to step all over this car and then find out that it's going to be three months before I can actually get the repair done knowing, knowing those pieces? And then I would say, I'm going to do a shameless plug here. We should have everybody should be using the cars.com and I've been sending it to everybody. Cars.com American made in this and that ranks the most American built cars to the least American built cars. And that way you can at least and a bunch of dealers have been working with they got that and they've got it laminated right at the sales stuff, so they can sit there and look to see, am I going to discount this car? Wow, right? Because if you Yeah, was with some Solanas dealers that are really dialed in out in LA and. They're looking at, and they go, Look, there's they have the owner if they're going to discount a car that's not American made, because they know the supply is about to dry up. The

Paul J Daly:

supply is going to dry up. And they also, and they know that like reconditioning that car, do they like? Are they fixed percentage it right? Like, hey, if reconditioning costs are this, I can estimate it's probably gonna be another 25% of my reconditioning costs, and using that to inform their discount,

Brian Kramer:

not yet. That's first I've heard of that. That's pretty interesting. Yeah, why

Kyle Mountsier:

wouldn't? Why wouldn't you go I was just my thought your IMS dashboard and your value in your valuation metrics, and instead of changing where you value the vehicle, change where you price your reconditioning costs, and bump those 25% because parts are going to be the quickest affected item in the list, right? Yeah, some of the manufacturers going to start wholesale bumps on new cars, but that's only going to trickle down to used cars over 60 to 90 days. But you'll see the immediate impact, because time to time, from like port to in stock to on a car in in your like recon process is way quicker than the retail process, and so why not start thinking about that? Like, if that happens on Wednesday, think about how your RE con process is going to change. I think is going to help you buy smarter. You guys just

Brian Kramer:

gave me an idea. I mean, we've been, I've been talking to, you know, our analyst team and our valuation team three times a day, multiple times a day, all I mean, they were pricing cars all weekend, Saturday, Sunday, because the market just as soon as we and we're adjusting them up for the most part, right? There's still a few that are not in that space, but our manual adjusting to the most that I've ever seen. And typically it's just on exotics, 100,000 mile cars. EVs, you know, after Elon Musk changes, MSRP is $10,000 but now everything's happening so quickly. And the interesting thing is that you can't look at market day supply right now. Market Day supplies a 45 day look back. We're actually going back and manually trying to see what the what's the last seven days sales velocity, and in using a blend of the two to then look forward, and then also days on market, because we see the days on market, or days since last sale is going down at the fastest road I've ever seen, while the market day, supply is remaining steady, right? So when that happens, the prices, I mean, that's literally the recipe for when prices are going to go up even more.

Unknown:

You know, the comparison,

Kyle Mountsier:

actually. And Brian, I'll give you another one, and the one that I used during COVID, which was super important, both on the downturn and the upswing, was a 14 to seven day Delta comparison, right? So instead of just looking at the seven day, look at your 14 day market, day supply. Look at your 14 day price to market. Seven Day price to market and day supply, look at the delta between and that's how you can tell how quickly the market is doing. Going gives you a Saturday and a Saturday to compare, basically, how the market is moving, and how fast those, those those day supply and valuations are changing.

Brian Kramer:

And if dealers do that, I think they'll realize that, because I've also there's two there's two boats, right? There's the panic, the tulip mania type thing, where I need cars. I want to go buy 150 cars yesterday and bring them all in on one truck load, where you're jamming up your speed to market, your internal recon team, your sales people, you don't have the BDC to handle that many calls and all the things that come along with that. But then you got the other side that I see almost more people falling into that are it's almost like the Tories in the hair. Hey, I'm not worried about that. We'll figure that out when it happens. We got plenty there's plenty of inventory. There's no shortage of inventory. And that's true based on a 45 day look back. But that is absolutely not true based on what you're talking about on

Paul J Daly:

a seven day, absolutely right? You know. And there's a whole other side of this conversation that, you know, obviously, the things that we're talking about are on the sales side, but on the fixed operations side, there's a whole other gamut of things that, and they're actually more consumer facing immediately, because there are many more transactions, many more people walking into a service department now potentially going to be surprised by higher costs, because parts are going to be costs higher. So how do, how did you have, I mean, you were a GM for a long time. You're on the acquisition side. Now. You're GM for a long time. How are you approaching the service department communication with customers as prices potentially are going up because parts are going up. So

Brian Kramer:

I would say, just like this morning, I got a text message, you know, and it would be on the repair order, right? So, so I always look outside the car business for things like that. And this morning my the person that that handles my pool just sent me a text, hey, by the way, chlorine supplies went up. The price just went up. And he sat and he sat there and gave me a whole synopsuck, what's going on in the market. And I just sent it to my wife, like, what do you want to do? She goes, what choice do we have? Yeah, and right, I think that you just have to educate people as to what's going on. It's not like somebody hasn't heard of that. Get ahead of it. Yep, yeah. And just have it on your ROS have it on, you know, everything so and make sure the other thing too is not just with fix, with the whole tariff situation, I would be communicating with the parts department, which most gyms don't only go back there. That's only a forbidden area

Unknown:

longer than the building. I don't talk to him, right, right?

Brian Kramer:

What are you going to talk about? What's your thoughts on gravity fed battery racks? And I want to talk to this about some really fast moving parts, but as as you're going back there, you know, making sure to communicate with them as to so you're controlling narratives so their imagination is not running wild on whatever it is that they're thinking about. Right? And pick your parts managers brain and say, Hey, what am I not thinking about? What should we I'm talking out of marriage yesterday, he was, you know, we went from a normal 60 day, uh, parts run on, on everything, we took it up to 120 days. And then I think one of the one of Adam's, uh, OEMs cut him off and said, No, you can't go loading up on every sort of load up on parts, right? And so how many dealers are are doing that? They

Unknown:

just become the wholesaler, get the benefit of the market rate up, bump up. Which

Brian Kramer:

is, which is what I did during, you know, nine with Cadillac. I took everything, and then when they, they turn, you know, turned off a bunch of dealers. I was wholesaling them. You had all the parts. Oh, yeah, well, all the cars we're doing on new cars. I took all the, all the declined inventory, and then ended up wholesaling it later, which, you know, that could work or not work, you know, could have blown my face, but with service and parts, I would be more worried about the aftermarket parts effect, because now people can't go to an independent service provider. The aftermarket parts that are typically a lot cheaper, yeah, are not going to be readily available, and they might not be getting billed. They're going to be taxed, if it's a reciprocal tax, they'll be taxed 100% out of China. So now that's going to com, that's going to complete, that's going to be the probably one of the most disruptive things about this tariffs

Paul J Daly:

is that, speaking

Brian Kramer:

of things out of China,

Kyle Mountsier:

here's a good one after the after the crazy with an April 5 deadline looming, so just a couple days after that, the rest of the world is paying attention to bite dance because they must Sell tick tocks US segment or face a full ban. President Trump is optimistic that a deal is on the horizon. The app, with 170 million US users, was deemed a national security risk over data sharing concerns and was originally set to shut down on January 19, a wide range of potential buyers includes Blackstone's perplexity Mr. Beast and project liberty. Project Liberty claims it has a$20 billion investor commitments for a deal and made an offer ahead of the January deadline. President Trump said there's tremendous interest in Tiktok. Okay,

Paul J Daly:

so, so, I mean, I don't know what Brian Kramer is going to do with the majority of his income stream if Tiktok goes away, I don't know what he's going to do about that. He's going to have to come back to being a dealer or something like that. But this has been coming and going for a very long time. I think that the fact that you could not download Tiktok from the app store for that period, I don't know what it was. Three weeks, four weeks, whatever it was. I think everyone understands that there is a real world where Tiktok could be shut down when before that, I think everyone's like, you can't shut down Tiktok. It's an inalienable right, but it's not so. I think that people are taking this very seriously. I do think a buyer is going to come forward. I think President Trump's position on Tiktok seemed to get very favorable as the election cycle is going and his embrace of new media. So I do think somebody's going to come up and buy this. I don't think it's going to be a big surprise when it happens like I think some of the thing people in this, in this, you know, it talks about Blackstone, Mr. Beast, project, Liberty. I think all these are reasonable acquires for the US business. But I mean the data and the algorithm that comes with this are, you know, at the very top of the pile,

Kyle Mountsier:

I don't know, Brian, do you have tick tock? You got tick tock? I do. I do. He's like, I use it every day for used car acquisitions, people trying to sell their

Unknown:

cars. So, so I'll tell you an

Brian Kramer:

interesting story. George Saliba, you guys know he was ASOTU CON last year, talking about this. Back then, at ASOTU CON 2024 he was, you know, he's the, he's a power user of Accu trade and dealer club as back then he was acquiring, or he was getting, I think, three or 400 leads a month, which I thought was an insane number. And I'm like, Who is this guy, and how is he doing it? And then, and then you told me, Go, yeah, he's big on social media, YouTube, so I started looking into it and befriended him, and started learning, you know, he's reverse mentoring me now on this he but he's getting over 1000 organic leads a month, of will buy your car leads. So he's as as everybody's in this drought of, I can't source enough for cars. He literally has more business than he can handle. And anybody can watch his his his channel, but as you watch it, he doesn't have to agree to everything. He's not begging everything. I need cars, I need to go to the auction. I need to do this. He's like, No, it's not worth that, and I'm not paying that. And he's got our right

Kyle Mountsier:

price, right time, he's he's behind him, yeah,

Unknown:

right. That's, that's a really, that's

Paul J Daly:

a real interesting point. And I think we see that across the board, in social media, in the auto industry, and we can kind of see this getting massive traction in the last, I would even say, call it the last 18 months, as people are waking up to what a lot of the retail world has known for the last five years, which is kind of typical, right? Big industry moves slow. I think we're going to see more of this adoption go forward. I don't think. Talk is going anywhere, actually, after, after we get a US buyer, that might just be what I need

Kyle Mountsier:

to be in. Why? No, I don't know. Maybe we'll do it. I thought

Brian Kramer:

it was going to be Kevin O'Leary, but, but I will say this one last thing. The reason why George is doing so well is because he he's so transparent, you see exactly what you can expect. There's no question as to what that experience is going to be like, right, wrong or indifferent. Right, wrong or indifferent. And that's the magic of his

Paul J Daly:

deal. That is the magic. Brian, thank you so much for sharing some of your time with us. Thanks to our friends at cars commerce for letting you come on and just empower you to help dealers do what they need to do. And tariff is coming. We'll be here talking about it soon. Talk to you later. You

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