The Auto Market Brief

How are tariffs, global competition, and shifting profit models changing the rules of automotive?

In this episode of The Auto Market Brief, Erin Keating and Cox Automotive Chief Economist Jeremy Robb break down the latest economic data, dealer and automaker earnings, and the broader forces reshaping the automotive industry. While inflation showed signs of easing and the automotive market remains resilient, new challenges are emerging across the global landscape.

Dealer profitability continues to evolve
Public dealer groups reported resilient results, but profitability continues shifting toward fixed operations, parts, service, and F&I as front-end vehicle margins normalize.

Consumer affordability pressures remain a concern
Inflation has moderated, but household budgets continue to face pressure from higher costs, declining savings rates, and increasing reliance on credit.

Global competition is reshaping the industry
While North America remains a critical source of profitability for many manufacturers, Chinese automakers continue to gain influence globally, creating new competitive challenges across international markets.
 
Tariffs are becoming a permanent business consideration
Automakers are increasingly planning around tariffs, supply chain requirements, and trade policy realities rather than treating them as temporary disruptions.

The discussion also explores automaker earnings, fixed operations growth, trade policy, connected vehicle security, supply chain strategy, and the growing role geopolitics plays in shaping the future of automotive competition

The Auto Market Brief delivers timely data, clear context, and practical insight to help industry leaders make smarter decisions—what's happening now, and what's coming next.

The Auto Market Brief is powered by Cox Automotive. For more industry insights and expert perspectives, visit our Insights Hub at Cox Automotive Insights.

Creators and Guests

Host
Erin Keating
Erin Keating is an Executive Analyst and Senior Director of Economic and Industry Insights at Cox Automotive. She brings 30 years of professional experience, including 14 years in the automotive industry, providing analysis on market conditions, automaker performance, and consumer demand shaping the economics of the new-vehicle market. Erin spent 10 years with Audi of America, including leading Audi Motorsport North America, informing her perspective on both commercial strategy and competitive dynamics.
Guest
Jeremy Robb
As chief economist at Cox Automotive, Jeremy Robb oversees the enterprise-level economic outlook, monthly forecasts, client advisory, media briefings and the strategic integration of data from the company’s extensive retail and wholesale platforms. Jeremy leads Cox Automotive's Economic and Industry Insights team, working directly with clients and executive leaders in sales, strategy and finance. He draws on his background helping companies consume data and insights to make better business decisions. He has been focused on finance and strategy for large corporations in the financial services and automotive industry for the past 20 years. Jeremy joined Cox Automotive in 2018 after spending 6 years at Nissan where he led functions in finance and remarketing.

What is The Auto Market Brief?

The Auto Market Brief, powered by Cox Automotive, breaks down the latest trends and forecasts shaping the automotive industry. The show is hosted by Cox Automotive Executive Analyst Erin Keating, coupling years of experience translating data and trends with the data and industry insights of the largest automotive services and technology provider.

Joined by other Cox Automotive experts and outside guests, you’ll get data-driven insights and industry outlooks from some of the industry’s leading voices.​

Erin Keating:

Welcome to The Auto Market Brief from Cox Automotive. Each episode, our experts and special guests break down the latest trends, insights, and news shaping the automotive market. We'll give you the information that truly matters so you can make smarter decisions and drive your business forward. Hello. Welcome back to The Auto Market Brief.

Erin Keating:

I'm Erin Keating, your host and industry executive analyst here at Cox Automotive. And I am once again with our chief economist, Jeremy Robb. Hey, Jeremy.

Jeremy Robb:

Hey. Good afternoon. Good to see you.

Erin Keating:

Good to see you. I know you've had some travels this week and it's been very very hot, I think everywhere. Probably really hot. You were just in Texas. Right?

Jeremy Robb:

Yeah. I got to stand on the asphalt for about twenty minutes as, I was leaving Tesla's Gigafactory and they shift change happened right when we were getting out of the meeting.

Erin Keating:

Oh, yeah.

Jeremy Robb:

Yeah. It's nice and hot.

Erin Keating:

Nice and hot. Well, I know that speaking of hot, the news has been pretty hot this week with a lot of economic data. The stock market, obviously, we have our quarterly earnings that were coming out both for dealers, automakers, and then, of course, all of the major stocks. So a couple interesting things happening there. We had q two GDP come out, some inflation numbers, and, of course, Kevin Walsh is second and pretty much only speaking to the public as the new, Fed governor.

Erin Keating:

We know that he doesn't like to say much, so interested to hear on what your interpretation of, what he came out with to hear about that. And of course, then the current state of the consumer health. So a lot of things on the macro side of things, specific to the industry beyond the quarterly earnings that we'll be chatting about. There's also been some news on tariffs, some connected vehicles. So I'll cover those at the end of the show.

Erin Keating:

But right now, it feels like we should hop into macroeconomics. Tell us what you're hearing.

Jeremy Robb:

Yeah. So we had, a litany of data drop literally just today. When I was going through it, you know, a lot of it was, like, okay. And then I kinda thought it's all in the rearview mirror. You know, it's all it's older, like, this is the first read on q two, which would be in April through June, the GDP growth.

Jeremy Robb:

And the number was positive, the advanced reading, think what they call it, it's up one and a half percent. The the rate is one and a half percent. That's down from q one was 2.1, and a little bit weaker than people expected it to be. It's expected to be about 2% overall. We saw consumer spending rebound.

Jeremy Robb:

Consumer spending was a bit weaker in q one. That surprised me a little bit because some of the readings I've been seeing lately on consumer spending is showing that it's actually a bit weaker, but then I had to remind myself, oh, this is this is from q two. Right. Or you know? And part of it really may be driven by some of those things in the World Cup.

Jeremy Robb:

You know, we saw, like, consumer spending was hotter. We saw, like, services were up 2.2%. That's where food service accommodations and things like that would be applicable to the World Cup came in. You know, automotive spending, showed a pretty good gain there too. So those parts were positive.

Jeremy Robb:

The investment spend, you think about AI, we're hearing from there, still pretty strong in in in the q two data. Part of me thinks that maybe kinda peaking from the things like a lot of the the big players are saying right now with what's going on with AI. I mean, they're all gonna keep spending, but it's the rate of growth, right, kind of thing, like the margin, what's happening. And so that may have, like, kind of showed us that. And then and then we saw a exports declined relative to q one.

Jeremy Robb:

That was a factor of the drug down GDP. Government was mildly negative. So, you know, all in, a little bit better consumer reading for q two driving the number, but it wasn't quite as positive as people thought it was gonna be.

Erin Keating:

For the audience to know, GDP typically gets revised what? I think it's three times total before it's sort of And I think last quarter we went up, then we went way down, and then we came back up again. Right? And so is there what's being calculated through that time? Like, why the lag?

Erin Keating:

Why three readings?

Jeremy Robb:

Well, it's it's just so complicated. You know, they're making so many estimates about different factors in the economy and the data that they receive and, you know, that data gets like a lot of the monthly data we see gets revised.

Erin Keating:

Sure.

Jeremy Robb:

This is this is like the broadest measure of what they're trying to compute. Right. And so it just gets really complicated and all. And and so, you know, it's it's a it's a really important reading, but when it when we get it

Erin Keating:

Yeah.

Jeremy Robb:

It feels a little bit old. You know? I guess I'll I'll think it like that. Now people may disagree with me, but, you know, we we monitor so many things here weekly or biweekly or monthly, you know, that, like, looking at something that's a quarter behind is does feel a little bit old. Although Sure.

Jeremy Robb:

It is the broadest measure of activity in the economy.

Erin Keating:

Sure. Yeah. No. That makes sense. And again, I think last, I remember looking at the advanced reading and then I think it went down by like half a percent and then it went back up to over what do where do we end q one?

Erin Keating:

2.1%. Right? Is that right?

Jeremy Robb:

I believe 2.1. Yeah.

Erin Keating:

Yeah. That's where we're And then we'll run up. Maybe things still come in there and and we'll see. But definitely quarterly earnings calls were quite interesting and even especially if you're paying attention to overseas markets that got really interesting. Korea was one of the ones that I'm kind of intrigued by.

Erin Keating:

But I know you were listening in on a bunch of the public dealers, which of course is important for our business. I I listened in on a lot of the automakers. So what did you make of the dealer, quarterly earnings?

Jeremy Robb:

Yeah. I, I download the transcripts and look through them. I've been compiling data from the dealer groups for five or six years.

Erin Keating:

Mhmm.

Jeremy Robb:

You know, like, they're front end grosses on the new and used side and adding to that. I would say as a highlight, we still got one more company to report tomorrow. AutoNation's not out yet. You know, new vehicle grosses, not great. Yeah.

Jeremy Robb:

Most of them are down a bit. Right. Maybe kinda flat is, like, good, but pretty much everybody looks like they're down. I think a lot of people wanna defend kinda where they are at this point. You know, that's something we've seen in our own data is really the compression of the average transaction price on the new vehicle side versus the invoice price.

Jeremy Robb:

It's been coming down over the last couple of years, but really it's just moving back to where it was prior to the pandemic. Really it's pretty normal.

Erin Keating:

Right.

Jeremy Robb:

You know, back like before the pandemic and we had all the craziness with prices, there were, you know, quite a few new car OEMs and dealers where you weren't making almost anything on the front end, right? It's all came to the back end.

Erin Keating:

So Absolutely.

Jeremy Robb:

And I think I read something today where something like parts and service and f and I were driving like 75% of the profit or gross profit Yeah. Overall. So so pretty pretty, you know, your front end grosses are are limited on the new car side. On the used side, they they look overall, like, a little bit better there So so that's good. You know, there are several of the public cited more discipline in in trying to protect that used front end gross and what that means to them is mainly maybe they bought fewer cars, right?

Jeremy Robb:

So that they could, protect that and and keep those margins, rolling. But a lot of them cited as we have before, right, this off lease supply is picking up. It'll pick up in the second half as well, and they're anticipating that. So they're saying it might be a area of opportunity for them to get more cars

Erin Keating:

Sure.

Jeremy Robb:

Moving into. And then the the other thing, almost everyone of them highlighted were fixed ops so far.

Erin Keating:

Yeah. It was

Jeremy Robb:

pretty massive. Yeah. And we see we see things like, you know, revenue growth and and for some of them profitability being a little bit better. But Sonic came out and I think said directly, like, were overpriced relative to independents, and trying to fix some of that. And and so I think some of these things like we've talked about for the last year, we know are important for dealer groups.

Jeremy Robb:

You know, I think, what is the group one, introduced a 1776 oil change.

Erin Keating:

Mhmm.

Jeremy Robb:

To like a play on you know the two hundred fifty anniversary, highlighting that it's a loss leader but trying to get some people to come in the door to fix you know have high repairs. Right. So you know these are these are like actions and tactics and strategies that the big publics are taking to counteract, you know, keep that business that really you know brings a lot of money in the door to them.

Erin Keating:

Sure. And it matches with a lot of what we've, you know, we've done some studies on the ownership study recently. I certainly have met with, quite a few automakers and some dealers, for sure where fixed ops has continued to be, the main driver of conversation when it comes to profitability and revenue and a lot of automakers also, you know, we've got a lot of stuff in politics right now, one being right to repair, but knowing that automakers do make money, on the manufactured vehicle, but they also do make money on genuine parts and so there's also some, desire for them to continue to see the parts, genuine parts sales grow, keeping it in the family, etcetera, etcetera, especially because we've seen relative discipline in inventory and we're pretty far behind on new model years being released this year. So inventory generally for the new vehicle side has been kind of an interesting ride through the summer. So I wonder how much that might be impacting, the new car sales profitability at least because the the sexy newest product is not just quite hitting those showrooms as quickly as usual.

Jeremy Robb:

Totally. Yeah. We're we're definitely behind on that new model year. I think, you know, I think that leads into the pricing component too when we talk about why pricing is not growing. You can't price old product up, you know.

Erin Keating:

Right.

Jeremy Robb:

So if you've got less if you're new new, it's gonna hurt you also. The the one other thing I was gonna say too, it just is because it's real it's pretty interesting was that Avis Budget Group reported this week too. One of the things they said was that the World Cup wasn't quite as beneficial to them as they had thought it was, which is something we've talked about in some of the other data that's come through, you know, I know we mentioned it with q two GDP, maybe it's driving a portion of it also. But I'm I'm always really keen to see like the something that big, you know, is is somebody calling it out on the upside or the downside. That So was kind of an interesting one.

Erin Keating:

Yeah. I mean, I guess, you know, if people were spending all that money on those tickets, they were looking for every way to pinch pinch those pennies when they're actually in the cities and maybe Right. Gap prices being expensive and I guess choosing public transportation, who knows?

Jeremy Robb:

My friend's couch, but I gotta take Exactly.

Erin Keating:

Exactly. Finding a way to, you know, get into the game at any at any saving cost that they could possibly manage given how expensive the tickets were. Well, so we also had inflation readings and of course, we did have Fed Chairman, Worsch, come out yesterday, and we're not doing anything with rates. So what was your initial reaction with all of this?

Jeremy Robb:

Yeah. The the inflation data came out this morning, you know, I I'm I'm pretty sure, like, the peep the the people, the FOMC is seeing at least early read of of this, you would think. Right? GDP and all that. It it fell 0.1% in June against May, so a month over month.

Jeremy Robb:

Well, you know, it's good good to see. Overall, it's still running higher by 3.7%, so clearly nowhere close to the 2% range. If you look at core PCE, it rose only 0.1%. That was better than a lot of people expected. You know, we all knew energy prices declined in June, so that was gonna factor into that.

Jeremy Robb:

They're also rising in July, so this number is going to go up in July, but that's kind of where that's playing out to. You know, we still saw pretty high increases in airfare, public transit cost, continued inflation in maintenance and repair cost measured in those services segments. So that, you know, down still has a way to go. And that and that's really what I think, you know, a lot of people were thinking about when they watched the, you know, wars talk about, like, everything yesterday. So I I watched that on the plane last night coming home.

Jeremy Robb:

I had I had some interesting thoughts about it. Like, you know, we've had like, I was a trader in the great financial crisis and and like worked in the investment industry when the great the financial crisis hit and they first started QE, you know, where the the Fed would basically just come in and and buy everything for everybody and that, you know, clearly lowered rates and you went through a Bernanke and then Yellen and then Powell all kind of doing somewhat of derivative of this. But before then, like, no one was telling everybody what they were gonna do and what they would expect. And markets like financial markets are really like price discovery mechanisms where people are trying to figure out what what are things worth. And Right.

Jeremy Robb:

You know that's really been, curtailed a lot over the past two decades. So a lot of people that are in the financial markets aren't used to what this was but that that's what we're going back to is really the norm prior to this but what I was thinking about, and I haven't seen anyone really talk about it yet was that well you know I watched that press release or you know announcement when he was talking and and we've had the thirty year treasury go up to levels that had not been out in in about twenty years.

Erin Keating:

Right.

Jeremy Robb:

The ten years been more volatile. It's going up again today. It went up yesterday when he was talking. You know, they didn't raise interest rates but market interest rates are going higher and especially long interest rates are going higher. What does that do if like that is in by and of itself, it's going to slow the economy down some.

Jeremy Robb:

So, it almost tells you what they're not telling you. We're not going to we we didn't raise rates now. Maybe we raised rates in September. The market thinks rate like, rates are gonna be higher in September. But by pulling back and not talking about it much, they're adding to the risk premium in the marketplace for bonds that is making the yields rise and then likely will slow some economic activity.

Jeremy Robb:

And all of that actually could lead into bringing inflation down over some time.

Erin Keating:

So a

Jeremy Robb:

lot of tea leaves to read there, but you know, I've been like paying attention to this stuff for almost thirty years and listening to it and trying to like decipher what it means and I just something that kind of dawned on me last night. Just talked about in a meeting internally about an hour ago too with some of this stuff. So it may be that like they're gonna end up helping us by doing some things that a lot of people think are pretty crazy right now.

Erin Keating:

Right. Yeah. The market speaks, as you said. Yeah. We do live in a market economy, and, and yeah.

Erin Keating:

And and was pretty, direct about that, just saying, it seems like the the yields are doing it for us right now. We don't necessarily need to step in at the moment. So Yeah. We shall see. Because as you know, it is inflation is still hurting, across the country and doesn't yeah.

Erin Keating:

Stopping spending, slowing spending maybe but not necessarily stopping it. And the automotive market, I mean, we just put forward our SAR for July at sixteen seven. So Yeah. The automotive market's still rolling ahead. Remains to be

Jeremy Robb:

is definitely doing pretty well. Hybrids are helping, you know Yeah. Even with, and and maybe to a certain extent, the not you know, price is not going up quite as fast. It's helping the automotive market too.

Erin Keating:

Exactly right. Well, anything else you have for us on the on the big look at the economy and the market?

Jeremy Robb:

You know, the only other thing I would say, and I'll I'll keep it really brief, is that we also got the all the data on personal income and expense we just talked about. We we just now very briefly. Those those two aren't keeping up with each other still. But what you're also seeing is, you know, and and some people talk about personal savings and, you know, doesn't matter when the stock market's so high, but it got revised down and then went down again in June to like 2.7%. And I think that's just telling you like, you know, your average consumer just that's how they're making ends meet.

Jeremy Robb:

And we don't have those tax refunds anymore.

Erin Keating:

Right. So digging into Yeah.

Jeremy Robb:

Yeah.

Erin Keating:

And credit cards are going higher, right? Credit card debts moving a little bit higher, savings moving

Jeremy Robb:

The last yeah. Last we've seen from that. So yeah. Yeah. Yeah.

Erin Keating:

Well, as always, a lot of information to cover and a lot of it, like you say, tea leaves to read. So look forward to seeing what can happen in the next two weeks. I'm sure there'll be something new that we're talking about in the next two weeks. Yeah.

Jeremy Robb:

Moving into August, back to school. Yeah. See what happens.

Erin Keating:

Exactly right. And a Grand Prix in the in the in the capital of The United States. So we'll see what we have to talk about.

Jeremy Robb:

Oh, okay. Yeah. That one was not on my card.

Erin Keating:

Oh, yeah. Well, we'll still we'll see if it still happens. But supposedly, they're gonna be racing around the streets of DC. So they got a lot of work to do before they get that done. But, yeah, we can see what that means for the what does it do for the economy in in DC, especially at a time when DC is typically a ghost town.

Erin Keating:

So it should be interesting.

Jeremy Robb:

Yeah. Probably a reason they're having it there in August.

Erin Keating:

Yeah. Exactly. Well, thanks Jeremy. Appreciate you being here as always.

Jeremy Robb:

See you next time.

Erin Keating:

Take care. So good discussion about the economy and where everything is going right now. As mentioned in the conversation with Jeremy, there was of course we're smack in the middle of earning seasons and, we had a lot of automakers, report so far. So let's start with what picture that's really giving us of the industry right now. And I'd say that the biggest takeaway isn't really that demand is collapsing or that tariffs are crushing profitability.

Erin Keating:

It's actually that the gap between the winners and the losers is is getting wider. General Motors and Ford both turned in surprisingly strong quarters actually. GM raised guidance again while Ford also increased, its outlook thanks to a strong truck demand and a resilient commercial business. They also took in, more tariff refunds than they anticipated this year. I think they said about 500,000,000 this year and they'll get the remainder in 2027.

Erin Keating:

And of course, their production's coming back online now that they're having the Novelis, plant replenish and production starting to get back to normal. They've also had to stockpile a lot of aluminum, in case of any more shortages there. And so that that was weighing on their business and they had the big write down from the SK business, but they're starting to control their cost on EVs. Stellantis is a little bit of a different story. They're just in a complete different mode right now.

Erin Keating:

I like to say it's a turnaround mode showing meaningful improvement in their North American business with Ram. Jeeps, you know, beginning to regain some momentum as well. But overall, the d three had a decently, good second quarter, if you will. Where things become really interesting is when you compare that with the European automakers. You know, we know that we don't get the Japanese and the Korean automakers until at least next week starting.

Erin Keating:

And so what we're really looking at right now is domestic versus European, and Mercedes, BMW, and Volkswagen all continue to point towards China as their biggest challenge. I mean, for years, China was a significant growth engine and profit center for the for the global industry, but very specifically for the German manufacturers. And it's becoming their largest headwind. Just Chinese domestic brands, they just continue to take share. They continue to move into Europe.

Erin Keating:

You know, we heard of the Ford Geely tie up this week where Ford will be doing a joint venture, with Geely to let allow them to use their factory. This has been going on across multiple factories in, Europe where, you know, even VW has talked about it, Mercedes, where they're opening up capacity to Chinese automakers who want to build in Europe to sell into Europe. And so, Chinese brands just continue to really put pressure on pricing in the European market. So if I'd, summarize all of this, at least so far as what we know with these two markets reporting, North America is still funding the global automotive industry, and China's, really becoming the dividing line between the companies that are outperforming and those that are struggling. Again, we'll wait to hear from Toyota, Honda, Nissan, Hyundai, Kia, etcetera.

Erin Keating:

Certainly a little shout out to the Japanese manufacturers right now, they did suffer a rather large earthquake there. So we know that Lexus had to shut down some production, Nissan's had to shut down some production, and their supply chain partners in that region are also suffering. So certainly lifting up prayers for everyone in that region, but we know that that might, further impact what we might hear from them next week, given, the proximity to the time when they would be announcing their earnings for the season. So moving on to something that was actually talked about a lot in the various earnings calls was tariffs. And interestingly enough, the earnings calls really, they weren't talking about tariffs anymore as like this temporary disruption.

Erin Keating:

They weren't talking about them as if they might go away. They're rather talking about them now as just operating, you know, costs that they have to be managed. And it really says that the industry is no longer waiting for a trade policy to return to normal. I sort of made a joke to myself earlier that maybe this should start being called the auto geopolitical market brief because now more than ever, automotive companies are really having to think way more broadly than just putting out beautiful cars and producing highly technologically advanced vehicles and having the best marketing, etcetera. They've got to be thinking about their supply chains and their shifting production and, you know, how governments are looking at them.

Erin Keating:

What we did hear specifically related to tariffs is that, within the last couple of weeks, Trump did announce that he was going to put 50% on a specific number of imports from Canada. Now, it should be told that the section two thirty two, so section two thirty two is what covers automotive and automotive parts, vehicles and automotive parts, largely any tariff news that you've heard over the last year since Liberation Day haven't impacted those tariffs. So Section two thirty two tariffs are still in play, and they're not getting stacked upon, and they're not being mitigated right now. So when we talk about tariffs, we're really talking about ones that broadly impact the larger global economy. So, right now, the 50% is, and it was really in retaliation according to Trump for Canada putting a lot of barriers around US manufacturers selling into Canada, and specifically even in the automotive industry.

Erin Keating:

So we'll wait to see what happens here as we know the USMCA conversations continue to go on. The other tariffs that were in the news were that the Section 122 tariffs actually expired last week. And so instead of simply extending them, the administration did replace them with a new trade framework tied to the forced labor enforcement. Now we knew they were investigating about 60 different economies, and markets, and they have in fact gone ahead and put, tariffs against those, I think it was I'm actually not going to quote the number that they ultimately landed with, but it was less than the total of 60. But they have put those tariffs into place.

Erin Keating:

And so the impact isn't again, it's not gonna impact the section two thirty two auto tariffs. It's not gonna directly be a big hit to vehicle prices overnight. But the bigger story is really gonna be what's happening deeper into the supply chain, batteries, electronics, castings, wiring harnesses, countless other components now face additional scrutiny, especially because this is related to forced labor enforcement. So documentation requirements, in some cases there will be additional duties depending on where these parts are sourced. So just again, talking about the windmill of geopolitical tensions, trade barriers, etc, these are really causing some long term investment decisions, that are tough, but are finally at least crystallizing for most manufacturers because they're realizing that this is no longer something you would quote unquote see through, that they are going to be there for the long haul.

Erin Keating:

And lastly, just to talk about the Connected Vehicle Security Act of 2026. So staying on this geopolitical perspective, this was introduced by Senator Bernie Moreno and Senator Elisa Slotkin. So this is a bipartisan effort and it was with the Senate Commerce Committee. They actually approved the bill unanimously on July 22, which is a significant milestone because it means the legislation has cleared its first major hurdle. The bill now waits consideration by the full Senate, and if it passes the Senate, it would still need to pass the House, be reconciled with any House version, and then be signed by the President before becoming law.

Erin Keating:

Though we have heard pretty broad acceptance of this. From the house, we heard there was, multiple, congressmen that actually and women that wrote saying that they are in favor of us looking at this as a national security issue. So we knew that this was a relatively bipartisan issue. We talked about that a couple episodes ago. This one is particularly interesting because the Department of Commerce already had a ruling that codified that barrier to entry for connected hardware and software in the automotive industry.

Erin Keating:

And we heard that Volvo did in fact get an exemption. And then the next news that came out was that Polestar did not, which was interesting because Polestar and Volvo are both owned by Geely. With this bill, what we see is that we have an even stronger enforcement mechanism, which really rests on the ownership stakes. So companies having an ownership stake of at least 15% at a minimum by a foreign entity of concern, so Russia, China, would be impacted by this rule. And guess what?

Erin Keating:

This means that all of a sudden now we've got a pretty big player. Mercedes is in the conversation. They are actually part owned by Geely as well and have, I think it's a 20% ownership stake in Mercedes. And so guess who used to be a Mercedes dealer? Guess who has a son that is still a Mercedes dealer?

Erin Keating:

Senator Moreno. So we know that Mercedes is, on the push to go ahead and get this move. They'd like to see if it would go up to 25% ownership stakes. We've heard Moreno himself say that Mercedes, you know, obviously he wouldn't try to keep them from selling it to The US. So it will be interesting to watch just because obviously this means that we get into, well, where are the exemptions?

Erin Keating:

How far would they go? If you let one exemption, how many more exemptions do you have? There was a lot, you know, running around about what happened with Polestar. So, you know, who knows if that will ever come out as to why Polestar didn't get the exemption, Volvo did. But we'll be carefully watching this.

Erin Keating:

Mercedes, obviously, a big luxury brand that's been selling here for a very long time, and of course, the one that we mentioned earlier, the German brands that are having trouble more broadly globally because of everything in China. So this should be an interesting one to watch. Policymakers just they're really starting to ask different questions. And it's no longer, you know, where was this vehicle built? It's really who owns the company?

Erin Keating:

Where does the software come from? Who supplies the batteries? Where is the data going? Etcetera, etcetera. Those questions are really gonna shape the competitive landscape just as much as product launches over the next decade.

Erin Keating:

So I think all three of these stories are really pointing to the same conclusion. Success in the automotive industry today isn't just about product anymore. It's about where you build it, it's about where you source it, who you partner with, and increasingly, and a little bit worrisome, how much government, views into your business. So those factors are becoming just as important as to what's sitting on your showroom floor, and that could really, stir some things up. I think it still matters in The US.

Erin Keating:

I've continued to say, I'll continue to preach, we are a hardware business here in The US. People still care about brands, people still care about what their car looks like, what it says about them, how it performs, but it, should not be ignored that these types of things are now, really playing much more into the strategic conversations that the automakers are having about what their future product lineups look like and how they bring them, to markets more globally. So thanks for listening in today. Remember to check out all of our insights and updates at coxautoinc.com. Stay tuned in to the Auto Market Brief for all of our high notes on the economy and headlines that pop for us in the industry.

Erin Keating:

Please share, like, subscribe. We appreciate, the following that we've developed here on the podcast and of course if you have any big topics you want us to discuss, give us a shout out. You for joining us and we'll see you next week. Thanks for joining us on this episode of The Auto Market Brief. To stay up to date with all the latest news and perspectives from our team of experts, be sure to visit our insights hub at cox auto inc dot com.