Big Trucks Eject the Battery, Auto Stocks Take One On The Chin, Creepy Tracking Survey

The Automotive Troublemaker w/ Paul J Daly and Kyle Mountsier

Welcome to the first full week of making trouble in Q4. Today we talk about why big truck ICE engines aren’t going anywhere. We also discuss last week's big stock hit to automakers and sellers, as well as a survey that goes deep on sentiment toward ad tracking.

• Big news for big trucks…they aren’t going anywhere. As EV mania continues to envelop the retail automotive industry, heavy duty trucks are the only segment whose gas and diesel powered engine investment continues by Detroit’s big three.
  • This is a hugely profitable segment. According to Automotive News, “Ford Motor Co. says it gets more revenue from Super Duty sales alone than Southwest Airlines, Marriott International and many other Fortune 500 companies generate.”
  • Ford, Chevy, and Dodge all have new technology rolling out in their biggest baddest trucks over the next year with everything from more powerful engines, built-in 5G for over the air updates, and back up cameras that work with the tailgate down
  • These are the true “work trucks” which are used in construction, mining, emergency and utility work and there isn’t much interest in EV technology due to demanding conditions and reliability for such heavy use
  • During a media reveal of their new Super Duty line at Churchill Downs, Ford CEO Jim Farley said, "If you're pulling 10,000 pounds, an electric truck is not the right solution. And 95 percent of our customers tow more than 10,000 pounds… This is a really important segment for our country and it will probably go hydrogen fuel cell before it goes pure electric."

• Auto stocks took a formative blow late last week with Carmax leading the way with a 25% drop in its share price due to a big miss on earnings forecasts and a turbulent outlook for the used car market.
  • Revenue of $8.1 billion was up 2% over YoY but below the analyst estimate of $8.5 billion. Earnings per share were $0.79, down from $1.72 a year ago.
  • CarMax shares down 49% year to date
  • CEO William Nash said, "Macro factors, including vehicle affordability that stem from persistent and broad inflation, climbing interest rates, and low consumer confidence, all led to a marketwide decline in used auto sales."
  • "Obviously, consumers are having to make decisions ... I just think they are prioritizing their spend a little differently," Chief Executive Officer William Nash told analysts
  • Carmax has gained market share over competitors such as Carvana
  • Shares of GM and Ford were down about 5% in morning trade, while AutoNation Inc , Lithia & Driveway and Group 1 Automotive fell between 7% and 10%.
    
• A new Cheetah Digital survey across 5,404 consumers across Australia, France, Japan, Spain, U.K., Ireland and the U.S. ”finds targeted ads and personalized emails make consumers feel “creepy,” but more so with Boomers than younger generations. In comparison to a 2021 survey, more members of younger generations also found such marketing techniques to be “cool.” as reported by Retail Wire.
  • Included are: Ads that follow you across devices,

Hosts: Paul J Daly and Kyle Mountsier
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