Franchise Law “Holy War?”, Stellantis Scraps Hydrogen, Popular Pop-Ups

Episode #1097: In today’s episode, we dig into why the Alliance for Automotive Innovation and NADA are in disagreement on state franchise laws, Stellantis’ quiet hydrogen retreat, and why pop-up shops are punching above their weight in modern retail strategy.

• The Alliance for Automotive Innovation has called on the DOJ to review state franchise laws, sparking a fierce response from NADA and highlighting long-standing tensions between OEMs and dealers.
  • The Alliance argues some franchise laws create unnecessary costs, ultimately hurting consumers and competitiveness.
  • The letter targets laws restricting new dealership locations and third-party time guides for warranty work.
  • NADA President Mike Stanton labeled it a “broadside attack” and called for a unified defense of the franchise model.
  • Don Hall, CEO of VADA, said: “If there is such a thing as a holy war in the franchise world, it’s a holy war.”
  • In response to backlash, John Bozzella, President of the Alliance clarified: “We support the dealership franchise model. Period. Full stop.”

• Stellantis is backing away from hydrogen-powered vehicles, shelving its fuel-cell van program as infrastructure and economic realities dim the tech’s near-term future.
  • The automaker will no longer launch its hydrogen-powered Pro One vans originally planned for France and Poland.
  • Stellantis cited poor infrastructure, high costs, and low midterm viability for light-duty hydrogen vehicles.
  • R&D resources will be redirected toward electric and hybrid vehicle development.
  • Staff at impacted plants will be reassigned, and the company is reassessing its stake in hydrogen joint venture Symbio.
  • “The hydrogen market remains a niche segment, with no prospects of midterm economic sustainability,” said COO Jean-Philippe Imparato.

• Pop-up retail is evolving from a buzzy trend to a proven strategy, with brands large and small embracing short-term storefronts to build awareness, test products, and drive limited-time sales.
  • U.S. pop-up shops generate ~$80B annually, with projections hitting $95B by 2026.
  • 80% of retailers who've opened a pop-up call it a success; most spend under $5,000 to launch.
  • Goals include building brand awareness (66%), deepening customer connection (63%), and launching products (46%).
  • Retailers range from e-commerce-only to full brick-and-mortar operations.
  • As Sarah Rudge wrote: “Pop-up shops have become more than just a retail trend — they’re now a strategic tool.”

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Transcript

Paul J Daly: 0:00

Good morning. It is Thursday, July 17. This is the automotive State of the Union. I'm Paul Jay Daly. It's Kyle mounts here today. We're talking about the franchise law, holy war. I don't know what that is, the Lantus scraps, hydrogen and really interesting pop up concept that we think all retail dealers should be paying attention to.

Kyle Mountsier: 0:18

Everybody should be thinking about. I know, wow. Thursday, hang in there for the third story. First two stories, we're gonna try and get in and out. We'll just tell you about them. Third story, leaning in today. You know what I

Paul J Daly: 0:29

mean. All right. First, we do have a new auto Collabs episode out how to be your own CDP with Nick askew, um, available now on podcast platform, streaming on social media at 1230 this afternoon. So if you want to check this out, let me just say this conversation, Nick is one of the smartest people I know. And when Kyle is like, Nick is one of the smartest people he knows. That's what I know. I really know.

Kyle Mountsier: 0:52

There is a there's a whole element of this podcast that is like, so

Paul J Daly: 0:57

floating above the stratosphere, it's almost and even the pre conversation and post conversation where, like, even the next level up things that he kept about publicly. Nick, oh, my God. And I mean, if just show up, the accent alone is worth showing up for. I can accent alone is worth the price of admission. I need, I need an accent. You can just, you can Midwest, brutal, yeah. So you can just search auto Collabs on your favorite podcast platform, or just check out you know,

LinkedIn live 12: 1:24

30pm and you can watch it live and say a few things. We have a new also, ASOTU Edge webinar coming up with connected dealer services on August 6 at 2pm a few weeks away from that, talking about driving loyalty with data, how connected vehicle tech is powering the Service Drive. This is a topic that more and more service drives are going to be paying attention to. How you get real time data on what's happening in your consumers car, so you don't send them that little mailer that says your oil changes do and it's not due and they think you're trying to rip them off. Let's try to avoid those things. So you can go to asotu.com and just right there toward the top of the page. You can sign up to be there live or get the recording and all that stuff. All right, this first story is the kind of the thing where, like, two of your good friends, like, have a little beef with one another all of a sudden, you don't know where it came from. So surprise us a little bit. I know the Alliance for automotive innovation has called on the on the Department of Justice to review state franchise laws, sparking a fierce response from nada and highlighting long standing tensions between OEMs and dealers. The Alliance is arguing that some franchise laws create unnecessary costs, ultimately hurting consumers and competitiveness. The letters targeting laws restricting new dealership locations, like when dealers push back on new points in their market and third party time guides for warranty work, so basically, how long it takes or how long a service department can bill out for a warranty job. Nada. President Mike Stanton labeled it a quote broadside attack and called for an un unified defense of the franchise model. Don Hall, our friend, CEO of Virginia Auto Dealer Association said, quote, if there is such a thing as a holy war in the franchise world, it's a holy war. In response to the backlash, our other friend, John bazzella, president of the Alliance, clarified, quote, we support the dealership franchise model, period, full stop. Sounds like we need to have a conversation together. It sounds

Kyle Mountsier: 3:23

like we just need to get everyone in a room over a cup of coffee or tea and just hash this thing out, because maybe bourbon. I've had enough conversation with all of all of these parties to know like everybody believes in the franchise model, everyone wants to make sure the OEMs are supported and loved across consumers and dealers. Dealers are not fighting, you know, and so it all sounds like a big misunderstanding or positioning to make sure that your constituents feel good. Obviously, the Alliance for automotive innovation is probably in talks with the OEMs a bit more in and nada is, you know, but, like, it's a very interesting I just can't imagine. And I to be, to be clear, I haven't read the letter. I want to read the letter at this point, but I will say, like any franchise system introduces costs. That's why direct to consumer is attractive, right? The question is, is, does? Is there a cost benefit for consumers? And I would state that there is because the dealer is closer to the consumer.

Paul J Daly: 4:28

So there, there are a lot of dynamics to this. I read, I didn't read the letter. I read the whole article, though, there's an element of the Alliance. Is an advocate of the OEMs. Nada is an advocate of, as we know, the retail dealer network. So the Alliance does have a pressure and obligation to represent some of the things the OEMs are saying, hey, we need to, we need to do this. We need to deal with this warranty, right? Cutting warranty costs is a big part, right? But retail dealers are saying, actually, they should pay this. Warranty hour rate like the job doesn't get shorter because a retail customer isn't paying for it, so things like that. So there's obviously pressure coming from both sides we don't understand. Brian Moz is also California auto dealer association president, also our friend. He said in there, the franchise auto dealer system has proven, just through basic capitalism, that it is the best way to serve the retail consumer. And he cites examples like Vin fast and Paul star, originally thinking direct to consumer, and saying, You know what? Actually the best way to deliver this in the way consumers want it is through the franchise model. So you know Scout, also, additional context, Scout, you know them, they sent a letter to the same DOJ, you know, office. So they're trying to, like, do the same thing. So there's, like, yeah, there's, there's a little bit of things going on. So I'm thankful that John bazzella, and I'm very thankful for Mike Stan and how, like, they lead, and hopefully they can come to terms on this and understand,

Kyle Mountsier: 6:03

like, have we had these guys don't hate each other, right? We literally had them standing in an interview next to each other a few months ago, and they were talking for like, half an hour before that. They're working together. I think that they're just making sure that they're protecting all sides. And this is the balance of power that I think auto needs from that type of perspective and the balance of power that will still keep scout from getting into this. Man, I'm just ready for Scout to answer a call. You know, from someone sounds like they won't even pick Come on. Come on. Do it. You can do it. Just come hang out. It'll happen.

Paul J Daly: 6:39

It'll happen. Yeah, speaking of it'll happen. Stop segue times like that. Let's just get out loud. Let's get out solantis is backing away from hydrogen powered vehicles, shelving its full fuel cell Van Program as infrastructure and economic realities dim the Tech's near term future, the automaker is no longer going to launch its hydrogen powered pro one vans originally planned for France and Poland. Stellantis cited poor infrastructure, high costs and low midterm viability for light duty hydrogen vehicles, R and D resources are going to be redirected toward electric and hybrid vehicle development. No surprise, there staff at impacted plants will be reassigned, and the company is reassessing its stake in hydrogen joint venture, Symbio. There you have a joint venture with a company called Symbio. Here's a quote from Here's a quote from coo Jean Philippe imparato. It's a great name. Quote, The hydrogen market remains a niche segment with no prospects of midterm economic sustainability. Imagine if they said that about EVs.

Kyle Mountsier: 7:37

I just imagine, like all of the Toyota executives, just like, over there, just like, you know, like in a corner, because they're, they're looking at these alternative power trains in the long term. Play, you know, it, you know, if you're in Europe and stellantis, is that you have to reposition to electric and hybrid right now because of Chinese manufacturers coming in in droves, right? They're just getting your lunch. So this is a, this is something, you know, it's sad, because I love these alternative power chains, and I think us still investigating them, broad scale is extremely important. But for stellantis and in a brand that's that's losing momentum in the US to be able to reposition themselves toward EV and electric hybrid vehicles, it makes total sense, totally

Paul J Daly: 8:27

get it. Speaking of something that makes total sense, makes total sense, total sense.

Kyle Mountsier: 8:35

Thank goodness. Pop Up. Retail is proving to evolve from a buzzy trend to a proven strategy with brands, large and small, embracing short term storefronts to build awareness, test products and drive limited time sales. US pops up shops generate $80 billion annually, annually, with projections hitting 95 billion by 2026 80% of retailers who have opened a pop up call it a success. And here's the thing, most spend under $5,000 to launch. Goals include building brand awareness, deepening customer connection and launching products. Retailers range from E commerce only to full brick and mortar operations. Sarah Rudge, one of the researchers, wrote, pop up shops have become more than just a retail trend. They're now a strategic tool. We've been telling the fan this, Paul, give it to him straight, well,

Paul J Daly: 9:24

there's, like, there's, is there a, I don't know if it was in this article or another one, kind of, like an Airbnb, like app for retail space. So basically, right? You say, Okay, I'm looking for 5000 square feet of space in this kind of market, and you can list your retail space, so someone who has a bigger space or a smaller space can lease out a part of that space on a temporary basis. And we've said this many times, what an opportunity for retail auto dealers to build something special that's in front of consumers, where the consumers are on a regular basis, when they're in retail mode, and you. Can kind of meet them where they are. There's so many examples of this working, and now this pop up mentality with this Airbnb, like, I can try something. Get started for as little as five grand, you can try it. And you don't have to, like, throw a big investment or a lot of staff behind it, you can try it. So I can't see any reason why. Where this is available, an auto dealer who's looking for a more efficient spend of their marketing and community outreach dollars.

Kyle Mountsier: 10:22

Wouldn't do something like this, yeah, go find a high traffic area that has a low, low rent factor that's looking for a two to three month, you know, constituent and and build it out for, I don't know, probably 2030 grand. You could build out something really nice, really special, put a couple of vehicles in there, put people in there that can, that can be a high level of education. Maybe host some test drives, if you can, if you can, quickly build a brand around it, especially for regionally focused groups, right? That are, that, are, you know, let's say you got five or six stores in a city. Bring all those brands together in a single in a single element, who cares about Co Op, like swim in the stream, be where people are.

Unknown: 11:05

He's a who cares about Co Op. That's one name of this show.

Kyle Mountsier: 11:10

Who cares about Co

Paul J Daly: 11:11

Op make us want to just go and get out of here. We hope you have an amazing day today. Look, whatever it is, there's conflict out there, but you can do one thing, pay attention to the people, serve the needs of the people, and I think things will be a lot better. We'll see you tomorrow.

Unknown: 11:37

You.