Auto Care ON AIR

Navigating EV Adoption and Other Aftermarket Opportunities

• Auto Care Association • Season 1 • Episode 36

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Discover the dynamic shifts reshaping the automotive industry with Carlos Thimann and Akshay Singh from Strategy& as they provide expert insights into the future of electric vehicle (EV) adoption and its impact on the market. With a forward-thinking lens, we promise you'll gain an understanding of how traditional internal combustion engine vehicles still offer growth opportunities for aftermarket suppliers, even as they prepare for an electrified future. Akshay shares invaluable advice on the necessary strategic investments for small to medium-sized shops transitioning to support EVs, underlining the critical balance between seizing present opportunities and gearing up for future challenges.

As we navigate the path towards 2045, we dissect the myriad factors influencing EV penetration. From vehicle economics and regulatory pressures to evolving consumer preferences and the development of charging infrastructure, our conversation integrates both quantitative data and qualitative insights. By investigating input from consumer surveys and industry stalwarts like S&P Global and IMR, we craft a holistic view of future EV trends. This episode equips automotive executives with the tools to project market dynamics, fostering informed decision-making in this rapidly evolving landscape.

The resilient and innovative spirit of the automotive aftermarket sector takes center stage, especially in the realm of EV repairs. While traditional components like brakes and suspensions remain the primary focus, there's a pivotal need for training technicians in high-voltage systems. Industry experts emphasize the importance of participation in events like AAPEX to stay abreast of emerging technologies. 

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Mike Chung:

Welcome to AutoCare OnAir, a candid podcast for a curious industry. I'm Mike Chung, senior Director of Market Intelligence at the AutoCare Association, and this is Indicators, where we identify and explore data that will help you monitor and forecast industry performance. This includes global economic data, industry indicators and new data that will help you monitor and forecast industry performance. This includes global economic data, industry indicators and new data sources. Well, welcome everybody to another edition of the Indicators Podcast. I'm very happy to have with me Carlos Timon and Akshay Singh of Strategy part of the PricewaterhouseCoopers group. Carlos, welcome to the show.

Carlos Thimann:

Thank you. Thanks for having us, Mike. Yes, we're excited to talk with you today and, you know, happy to be here.

Mike Chung:

Great, and Carlos, tell us a little bit about your role and what you do at Strategy.

Carlos Thimann:

Sure, yeah. So I'm a partner based out of our office in Detroit. In our automotive strategy and operations team. I work exclusively with auto clients across the value chain OEMs supply base, but I also help lead our aftermarket efforts for the US firm in many different functions right, both from sort of a growth type of projects, but also strategic cost reduction.

Mike Chung:

Terrific Thanks for sharing that with us. And, akshay, welcome to the show. Yeah, thanks for having us here, mike, absolutely, and tell us a little bit about yourself and what you do at StrategyN.

Akshay Singh:

Yeah, so I'm a partner within our automotive practice at StrategyN. I've been with the firm for around 13 years and before that I was in the automotive industry, so pretty much I spent my entire career in the automotive. I work with OEMs, ta1 suppliers and also a lot of the aftermarket players on strategy and operations-related projects, also work on large scale cost transformation, you know deal related projects and also product strategy, so you know across. So whatever you can think of across the value chain. Right, that's kind of you know we work on like, but exclusively in automotive or automotive space. I also lead our firm's effort in the new technology space within automotive. That is the case technologies. It's connected, autonomous, shared and electric and obviously a lot more on electric and now a little bit more on autonomous, actually in the last I would say five or six years.

Mike Chung:

Oh, thanks for that background. And, akshay, if you don't mind me asking, does a lot of your work require you to go to manufacturing facilities and kind of tour around and see products as they're being made?

Akshay Singh:

Yes, I mean we do a lot of work within the manufacturing space as well, so that requires going to the OEM plants and supplier plants and help them really optimize manufacturing operations or digitize their manufacturing operations.

Mike Chung:

And I think just seeing it in person just makes a big difference in terms of understanding, looking, seeing, touching and thinking about implementing strategies. Designing strategies just makes it become more real, if you will.

Akshay Singh:

Yeah, absolutely. And, as I said, like I spent around you know, 13 years in the automotive industry. I started my career as a process engineer within at an automotive OEM. So, yeah, obviously that helps right. If you can actually see what the processes are, how the product is being made, right, it helps you, you know, with some of the things actually you do right.

Mike Chung:

Absolutely, it's not just theoretical. You've had the hands-on application. Absolutely, that certainly builds your credibility. And, carlos, you mentioned some of the types of strategic planning and studies that you support and I would imagine, similarly, you're able to visit clients, but also their manufacturing facilities, but there's probably a lot of modeling and analytical work that goes along with it.

Carlos Thimann:

Yeah, absolutely. I mean, when we deal in the automotive space, even if it's a strategy project or purely growth, you have to understand the operations right. You can't disassociate the two. So we're always at the plants. I also grew up in plants, as a manufacturing engineer also. But yeah, there's a lot of analytics and it's getting more and more sophisticated these days with some nice tools that we have within the firm to help analyze the data and provide a quicker insight, get the client quicker to the insights based on the data that we're analyzing, that we're analyzing.

Mike Chung:

Well, that's really helpful to know your background. So thanks for sharing that with us and thinking about where we're meeting. So, for the audience's benefit, we're here at Apex and your team unveiled the results of the EV adoption forecast and trends outlook, and so, just thinking about that study for a few minutes, what are some of the most interesting things? And I'll start with you, carlos, in terms of that you took away from this year's study. What kind of things stuck out, whether it was what you expected or this was a big you know. Turn to the right or to the left. Tell us about some of those things.

Carlos Thimann:

Yeah, so I think I'll speak about it from a maybe from an aftermarket growth perspective. I think a lot of it and and having been doing this study now for the last five years, right, I can, we can, kind of we're expecting the same trend. So there is growth in the aftermarket, which is great, right? I think one of the things that was continues to be surprising is the fact that in the US, the car park is still very much of a nice car park today, so there's a lot of room for those let's quote unquote traditional aftermarket suppliers and independent shop owners to have a space for growth. But at the same time which is one of the bigger insights that we have they have to start making some strategic decisions about the future, because the future at some point will be electric, right? So they have to sort of hatch their bets a little bit and start thinking about an investment into an electrified future that will be coming, you know, over the next decade.

Mike Chung:

Right, and actually I'll turn to you because I remember in the presentation yesterday you highlighted some of those investment costs and that shops small, medium shops would be needing to make, and could you just describe a little bit of that for us and then after that maybe describe other things that were kind of takeaways for you from this year's study?

Akshay Singh:

Yeah, I think so from the investment perspective. So number one is obviously, you know, working on EVs, you know're not actually now actually dealing with 400 volt, 800 volt systems like high voltage systems, right. So you really need trained technicians who actually work on, who can actually work on this high voltage systems, right? So so you know, technician training is very, very important and that's where you know, a lot of the investments will be made. You know, we still are short of technicians. So I think this is one area probably large shop owners and also small shop owners have to start making investment and making sure that they have trained technicians. Second, this is like associated PPE. I wouldn't say that its investment is as high, but I would say still, you need some of the PPEs because you are working on high voltage systems, and then some investment in charging infrastructure. So if you have vehicles then you bring in, you still need to charge them.

Akshay Singh:

Obviously, the level of investment will be dependent on what kind of charger you deploy. I mean, right now you can probably get away with a level two charger and that's not very expensive. $1,000, a level two charger and that's not very expensive, right? $1,000 to $1,500, right, that's not very expensive. That may work for most of the shop owners, but later on, if the volume increases, you may need to see whether a fast charger is needed. If you need a fast charger, then obviously DC fast charger. Then it's much higher investment. You're looking at, you know, $50,000 to $100,000, right, and maybe that may not be needed for most of the shops, right, but certainly for some shops, depending on the volume, they may need it, right. So those are some of the investments I think the repair shops probably will have to make.

Mike Chung:

Right. So what I'm hearing is technicians, the training, and we're in a period where just keeping up with the technician demand is not an easy thing. But it behooves shop owners to really make that an investment for the training and retention, recruitment of technicians that can do the work. And then, like you said, the physical, the capital expenditures, if you will, for equipment. It's not insignificant, but it is not necessarily insurmountable either.

Akshay Singh:

Yeah, and depending on, like, if you know, like you know, you can still rationalize that investment, depending on what kind of equipment you already have, whether you can reuse some of that equipment to service EVs right, a lot of that you can. So, yeah, I mean, but some investment will be needed, right. But I, you know, as you correctly said, right summarized that your technician is probably one of the most important areas.

Mike Chung:

Good to know. Yeah, I appreciate that insight and other things that sort of stuck out for you from this year's study.

Akshay Singh:

Yeah, so, multiple things.

Akshay Singh:

I would say there are a lot of surprises, uh, in this year's studies, and I would start with, uh number one.

Akshay Singh:

You know, even though the you know ev costs have come down a little bit, um, they haven't come the evs are still, you know, significantly more expensive uh than uh than ice vehicles, right?

Akshay Singh:

So, um, and one of the things we actually looked at this time and did the analysis on the price volume and we kind of looked at, you know, where the market is and what we found out is almost 50% of demand in the market is for the vehicles under $45,000 or so, right, and this is just purely based on price volume analysis. But only 14% of the EV models that are available for the consumers to choose from are under $45,000. And most of the models that are available, there are a lot of models that are over $80,000, and that's only 2% of the total demand, right, sure, so that was one very interesting finding. Second, was that, as I said, even though the transaction prices have gone up significantly in the last few years, or increased almost 20%, our transaction prices are closer to $48,000 or so today, average transaction price of a vehicle. Evs are still, you know, average transaction price of an EV is still very expensive, right.

Akshay Singh:

So, you're looking at 20%, 25%, more, and as a result, you know the TCO, when you look at the TCO and that's total cost, total cost of ownership at three years, evs are still more, more expensive. And this is without incentives, right. If you add incentives, obviously you can get like some level of parity, right. But but you know, without incentives, you know EVs are total. The total cost of ownership of EV is still more expensive than total cost of ownership of an icebreaker, right? So that was another interesting thing we found. And another interesting thing was that in the last couple of years, a lot of the OEMs, in order to move some of their EV vehicles off the dealer lot, they reduced the prices because they were actually going after the market share and that has increased, that has impacted the residual values of the EV vehicle and in turn that really impacts the total cost of ownership, right.

Akshay Singh:

So that's another, you know, I would say, the interesting finding. So again, I mean, and then, of course, we also did some consumer survey and found out that you know consumers still have concerns about electric vehicles. Some of the major concerns are you concerns are high cost of the vehicle, availability of reliable charging infrastructure, charging speeds. So consumers still have not fully accepted EVs right. So there is a lot of investment, a lot of education of consumers is needed before we can see substantial adoption, right?

Mike Chung:

Right, that's very interesting to hear, and from a couple of perspectives, and thanks for sharing those highlights with us. Because, from a research perspective, what I'm hearing is there's some secondary research to say, okay, how many vehicles are there that are ICE, ev, let's put them in buckets of cost? And that was an interesting finding to see how, like you were saying, the EVs tend to be a little bit more pricey. And, just generally speaking, we've seen the average price of vehicles being sold go quite north, and so that's challenging, especially in an economic environment We've had recently, with high interest rates, relatively slightly increasing disposable income but countered by inflation and so forth.

Mike Chung:

Right, and I'm also hearing some consumer surveys, right. So, as well as I would imagine, some interviewing, some research with OEMs to get a sense for what their portfolio of vehicles is looking like, tell me a little bit about as you're collecting the data and I'll start with you, akshay, and then I'll bring it over to you, carlos because tell us a little bit about some of the challenges that you and your team might have encountered when getting to this data, how you combine the data to do a forecast and I know there's a lot of forecasting elements within the study, but can you just tell us a little bit about that journey?

Akshay Singh:

Yeah. So again, I mean you know, if you look at the study right, and you know this year's study was focused on the key drivers that drive electric vehicle penetration, right, and how each of those drivers are trending right. So the key drivers are total vehicle economics, that includes total cost of ownership. Regulations play a huge role because regulations kind of impact that vehicle economics to a certain extent. Then consumer choices consumer behavior, number economics to a certain extent. Then consumer choices you know consumer behavior, number of models that are available for the consumers to choose from, availability of charging, infrastructure, right.

Akshay Singh:

So there are a lot of drivers, right, and you really need to look at each driver and you know, make an educated guess, right, because this is both art and science to actually estimate what the penetration. You know, both art and science to actually estimate what the penetration. You know expected penetration is going to be 5, 10, 15 years out, right. So so we had to actually go to various data sources. One thing, one good thing about automotive industry is that there's heaps and heaps of data that's available for for you to sure to analyze. You just need to take, to make sure that you take the noise out of the data, of course. So again we were able to get the data on vehicle prices, vehicle volume that's readily available.

Akshay Singh:

Right, we obviously did a consumer survey so a very extensive consumer survey and so a very extensive consumer survey, and it's part of our. There's another study. We call it e-readiness study. We, you know I think, surveyed over 10,000 people, right, oh wow.

Mike Chung:

That's a big study.

Akshay Singh:

Yeah, and that took a long time right. That took almost six months or so to survey. So we've used some of that data. And then also, you know, because of the work I and Carlos do, right, I mean you know we kind of talk to a lot of the players in the industry, right, you know, talking to the OEMs, talking to the suppliers, and really understand you know where are they making the investment, what investments they are making, right. What's their product plan, right? So you know there are multiple sources of data, right?

Mike Chung:

Thanks for sharing that, because you touch on so many interesting things and I really love how you put it as an art as much of a science. Right, because the data side of me thinks about continuous variables. Yes, no variables, survey data how do you weight this all together? Regulatory, we just had the election, and when you're looking at multiple decades, it is so hard to what is the right methodology. So, carlos, if I can ask you, just anything you'd like to add to?

Carlos Thimann:

that, yeah, so in a complimentary fashion to what actually just mentioned, as you know, the study, we're asked to look at this over the next two decades, right, so we're forecasting what's happening in the next five years, but also all the way out to 2045, right, so that's where the art and science comes into play.

Carlos Thimann:

The short-term, or, let's say, mid-term, forecast view is a little bit more dependent on the data and then a lot of the you know, beyond, I would say, the 2030 timeframe. That's when it's getting a little bit of the you know, industry expertise that we can bring into it. Some of that, maybe consumer sentiment that we also get into, plays a little bit more into that long-term forecast. But to bring it back to the data, we also, as you know, we partner with several other firms to acquire some of the inputs into our study, like S&P Global. Imr also is super helpful in providing the replacement rates, which is a big part of the study as to which component areas are going to be growing versus shrinking. Sure, and that is also some sort of a survey of about 100,000 independent shops and what are the type of replacements Vehicle owners.

Mike Chung:

And vehicles Service, yeah.

Carlos Thimann:

Right, they're getting service right. So those are all inputs into our study. We have a bottoms up build of the car park and we know exactly what vehicles are in what vehicle age range and what are the type of services that are that they're getting. You know they're getting executed within that range, Right? So, and that's kind of all the inputs that go into the long-term forecast.

Mike Chung:

Yeah, I really appreciate that and I know that there are kind of low adoption base case, high adoption forecasts, and I think, akshay, you also mentioned just sort of that truthing of. Does this sound right? You know we're reading the results. We're getting these really interesting insights at the qualitative level from surveys, from interviews, but also from an executive standpoint when we stand back and look, does this?

Akshay Singh:

make sense.

Akshay Singh:

So I think there's a healthy check and balances, it seems like, right, and I think you know, when we present the study, right, I mean, obviously, you know this is a joint, you know this is an EV forecast, right? So we actually have to come up with a number on where we think the market is heading right and what the expected ev penetration or hybrid penetration is in 2030, 2035. But whenever we are actually presenting the study to you know, automotive executives, um, we always say that, hey, just you, let's just look at the drivers, like how different drivers are trending. Right, I talked about four or five drivers and you know, I just tell them like, hey, let's see how the drivers are trending, what kind of investment is being made, for example, if the driver is charging infrastructure, what do the economics look like? Like what the growth looks like, and then you can be the judge, right, I mean you can actually based on how you feel and how you see different drivers are turning.

Akshay Singh:

I mean you can come up with your own number, right? Sure, because it's more of an art than a science, right, and that's what we tend to focus on. Right, and then you can make up your own mind, because there's a lot of uncertainty, right, I mean still trying to project what's going to happen 15 years. You know it's extremely difficult and 90 percent of times you are going to be going to be wrong, right? I mean, if I can predict, like, what's going to happen in in 15 years. You know I probably, you know, chose the wrong profession I should have been somewhere else, right?

Akshay Singh:

so, um, so, but again, I mean, that's what we kind of we tend to focus more on, like how the different drivers are trialing versus, you know, talking about one number, right, and that's what we wanted to do in this year's studies. In the past years we have always kind of focused on okay, this is where we expect the penetration, and then this is what you can expect in terms of aftermarket growth. But this year we said dig deeper into each of the drivers, because every time we present this study to the executives right and you know you have accompanied us in many places, mike, right, I mean they always ask hey, what about this driver? What about this driver? Like, how are they trending Right? So we've thought that this year we want to actually focus on how the different drivers are trending right.

Mike Chung:

I appreciate that and I guess one thing I'm thinking about too is without giving away secret sauce, but you've done this study for several years. If you were to advise other groups on doing forecasting studies, what are some of the sort of things that you've learned through over the years that you might, if you're mentoring somebody, things to sort of double down on or be careful of running your head into the wall on this too much. Can you share anything like that, akshay?

Akshay Singh:

I think one thing is that you know you actually have to really look at the data and keep the sentiments out right.

Mike Chung:

When you say sentiments, are you talking about your own?

Akshay Singh:

Your own or what you are hearing in terms of you know, sometimes you know, for example, there was a lot of hype around EVs, right, in the last couple of years, right, and obviously EV growth has declined, right, everyone expected to be 50-year growth every year, right, so you need to keep those sentiments out.

Akshay Singh:

But really look at really, you know really the data, you know how different drivers are trending, or data is trending, what data is really telling you and, based on that, actually make a call on where you think you know, whatever you are working on, like you know where do you think it's going to end up, right, so I think that's the most important, right, because sometimes, like at times, we also felt, right, hey, you know, because, as you know, like we have been very conservative in terms of our forecast, right, and we haven't really changed our forecast, right, many firms actually came up with forecast five years ago and then two years ago and, and, and now and they have like completely changed their forecast, like we haven't really changed our forecast, because we always believe that there will be initial adoption in electrification and then, later on, if the cost does not come down, then we are not going to see significant adoption.

Akshay Singh:

So again, that's why you have to really keep the sentiments out and really look at the data and then make a call on like where do you think the market?

Mike Chung:

is at. I appreciate hearing that, because it could be something like well, on Tuesday I might feel this way, but on Thursday I might feel another way. So being careful to not be influenced by whichever way the wind is blowing that day, and then there's always a hype cycle right.

Akshay Singh:

There's a curve like the hype cycle curve, right, and I would say that with the same sentiments that we had in the market around about autonomous vehicles, right In 2017, right when we saw, like sky-high valuations for some of the companies that were working on autonomous technology, right, and same thing happened a couple of years ago, like every stock was really you know going through the roof, yeah, going through the roof, right, so really not.

Akshay Singh:

You know, keep the hype out, right, I mean, that's the most important. Or even like sometimes people are not very bullish on something right and versus data is telling you something else, right?

Mike Chung:

I appreciate you sharing that. And, carlos, how about yourself?

Carlos Thimann:

Yeah, I mean very similar sort of insights. Right, if you're going to be doing a forecast, it's very easy to get stimulated by a lot of the biases or the more recent news, right, so there was a lot of push this year around what's happening with EV demand coming down, our hybrids going to be the new thing, right, so we saw hybrids almost in every single you know storyline and all the automotive reports. But you know you have to, as I actually mentioned you know, look at the trends, be confident and objective in the data that you have, in the data set that you're putting forth for the study, and then make your insights or base your insights based on that factual data, versus the hearsay of the newest hype which there was a lot of that around hybrids. Right, right, right.

Mike Chung:

Yeah, it sounds like you've just Thank you for sharing everything, because it sounds like the planning the sort of let's not bang our head against the wall too much, let's kind of leave the sentiments out, because there's a lot of opportunity for challenges in a study like this. Yeah, for sure, like you've covered a lot of a lot of ground there. So thank you for that. And you know I mentioned that we're at Apex and I know you've come here a few times before. But, carlos, I'll start with you. What are some of the favorite things about Apex that you, that you what about Apex, I guess, resonates with you? Or things Are there things that you look forward to, or there are parts of Las Vegas that you enjoy.

Carlos Thimann:

I enjoy coming here every year and connecting with a group of people that maybe I don't get the opportunity to work with throughout the year and, you know, just catching up on how their companies are progressing or the investments that they're deciding to make. So, you know, any networking opportunity is great. You know just from understanding how the industry is evolving right, not just as a consultant, right, but more you know. Okay, talk to an independent shop owner. I learned a lot, you know, from just listening to a gentleman that owns like six different shops, right, like in the Northeast yesterday. So things like that, moments like that, are really valuable if you want to be, you know, a person that works in this type of industry, and obviously all the booths are pretty to be. You know a person that that works in in this type of industry and, uh, obviously all the booths are pretty impressive, you know. So we do take time to walk around and see the products and talk to the folks.

Mike Chung:

So it's always, it's always great and something that I look forward to doing every time I come and if you don't mind me asking, uh, the, the gentleman or the individual you met with the six shops. Is there anything about that conversation that stuck out?

Carlos Thimann:

yeah, I mean he, he mentioned something about repairs right of electric vehicles which resonated a lot with the two of us, uh, and that was actually that a lot of the repairs are have nothing to do with repairing the battery, right. It's like looking at suspensions, repairing the brakes on the vehicle, the lights and things that really all their technicians are already very well prepared to do, right. So a lot of the volume of ev repairs are the more traditional repairs, right.

Carlos Thimann:

So sure uh, you know, when we think about repairing an electric vehicle, the, the default is like okay, what's going to happen with the high voltage battery or the electric drives, right, but the reality is that the wear and tear components are still there, and you know, that's the majority of the repairs actually.

Mike Chung:

So that's pretty good. And you mentioned your process engineering, I think, or mechanical engineering. Industrial, industrial engineering. So being able to pick up a part and just think about the fabrication, the quality control, I know that's valuable for me as well, because just working on reports and data sometimes it's easy. It's just healthy for me to at least come out and touch a part, feel a part and just think about everything that goes along with the production and maintenance and repair of that part.

Carlos Thimann:

Things are getting put together so that you understand sort of the repairability of those same components at the same time.

Mike Chung:

Right and, as we talked about at the top of our conversation, the consulting work that you do for your clients. This just helps you keep in touch with it, that much more.

Carlos Thimann:

It seems like.

Mike Chung:

And how about you actually? What about Apex really makes you keep coming back, that you look forward to Anything really exciting that you saw or heard or learned while you were?

Akshay Singh:

in town this week, similar to what Carlo just mentioned. Right, that you know it gives you an opportunity to one is meet with your clients right, sometimes in formal setting and sometimes in informal setting. That's very helpful. You meet, obviously, you know a lot of new people and you can actually learn a lot, right. As I mentioned to you right that you know, even for our study we talked to you know a lot of people to actually gather input, right, and then you really, you know, have to actually reach out to them and you really schedule some time and find time on the calendars, right. I mean a lot of those conversations you can have here at Apex, right, you just go to the booth and have some discussions. Obviously those are not half an hour discussions, but in five and ten minutes you can learn a lot.

Akshay Singh:

There are so many people here with different backgrounds, different technologies, so you can get a lot of input. So we always do that whenever we go to shows like Apex. So we try to actually meet a lot of input. So we always do that Whenever we go to a show. It's like Apex, right, so we try to actually meet people and get input right. Also, I learn a lot about new companies, right, and there's so many aftermarket companies we have never heard of, right. So I just came across one company yesterday. I won't name names, but I had never heard of the company and I realized that it's a $2 billion aftermarket company.

Akshay Singh:

So you come to know about those companies and then really make connections. But I think the most important for me is that amount of knowledge you actually collect by talking to people at Apex. It's just staggering.

Mike Chung:

Anything particularly noteworthy come to mind that you're able to.

Akshay Singh:

Yeah, that's one.

Akshay Singh:

As Carlos mentioned, we talked to this gentleman who owns six shops and, given that our focus of study was electric vehicles and aftermarket and repairs, and he mentioned that and we talked about that that some of the shops need to make investment in technicians and make sure the technicians get the training to work on high voltage systems, right, sure, not every technician in your shop needs to be trained to work on high voltage system, right, so you, just if you have 10 technicians, maybe a couple, right, because you're going to get only so many vehicles where you actually need to actually, you know, work on batteries, right?

Akshay Singh:

So, so it's not, yes, I mean, you, you need to make those investments, right, but, and we learned that, hey, yeah, but, but you can really prepare yourself by optimizing the investment you are making, right, right, that's, that's very, very important, right, it's, uh, uh, because, I mean, there's a there is a consumption misconception in the market that, once EVs become a substantial portion of the total part, a lot of the independent repair shops are just going to go away because of the investment they have to make. That's not necessarily the case. Right, there is a place for independent repair shops, small independent repair shops, right and they can really optimize the investment they are making and still be ready to actually service.

Mike Chung:

EVs. Sure, I think it goes hand in hand with what, carlos, you mentioned, kind of that phased gradually getting into it, because it's not like going to be a light switch type of a thing.

Mike Chung:

Right, and I think to your point actually just being here in person, being able to walk the floors, meet, see new companies, and it's just a reminder of how dynamic the environment in the industry is. And with that in mind, um, you cover a lot in terms of the automotive, after automotive industry, the aftermarket, broad, open-ended question actually like what's the state of the industry, either automotive, aftermarket? Tell us your kind of give us an overview on how the industry is doing.

Akshay Singh:

So again, aftermarket industry is still very resilient, you know. It has, you know, always been resilient. I would say, like, the good thing about the automotive aftermarket industry is that, you know, even if the new vehicle sales go up or down, right, it has only so much impact on the total vehicle part right. There are almost 290 million vehicles on the road right on the road and we sell around 16 million vehicles every year, right? So so there is a big vehicle park, right?

Mike Chung:

It's not going to perturb the system that much.

Akshay Singh:

So that's why it's a lot more stable, I would say, than the new vehicle market, right, and obviously you know, depending on how the economy is doing and you know consumer spending, all of that kind of impact automotive aftermarket. But where we are, I think we are in a pretty decent spot. I would say I wouldn't say like we are in a great spot, but I think we are in a very decent spot right now in the automotive aftermarket.

Mike Chung:

That makes a lot of sense. We talk about the resilience of the industries you highlighted, fairly recession-proof. Certainly certain parts, categories, have some seasonality, but on the whole it's not subject to seasonality, like, say, retail or construction. And I guess, carlos, anything that you look at in terms of just kind of a gauge on the industry indicators that you look at, I mean, the great thing about being a consultant in the auto industry is that it's an industry in the middle of significant disruption, right?

Carlos Thimann:

So electric vehicles is one of those, autonomous vehicles is another one. Other propulsion systems that keep coming up, like hydrogen, other things like that keep coming up, and it's not just getting disrupted from that change in propulsion technology, but also from a supply chain perspective. Since COVID, I think, we've witnessed significant changes in how the supply chain is composed, from threats of war to ports closing, to localization strategies, but at the same time, having to fight through all these disruptions keeps it. It's always a very dynamic environment, right? So those are some of the type of things that we deal with on a daily basis with our clients, right? And it's very exciting at the same time.

Mike Chung:

You bring up so many good ideas and we didn't go into this. But as we were talking, I was also thinking about, with prices of vehicles, whether Bev or otherwise, there's that opportunity for alternative financing too, and whether it's battery, electric vehicles for, say, uber and Lyft drivers in certain parts of the countries being able to have leasing financing programs. There's just so much opportunity for innovation and while it is a large industry, it is not so static that we cannot have disruption or innovation. So I think I agree with you both that there's just so much exciting going on. So, as we wrap up here, I just want to have a couple of fun questions here. I mentioned we're in Las Vegas. What are some of your favorite travel destinations, carlos, and why?

Carlos Thimann:

Outside of Vegas, you mean, or when I'm here.

Mike Chung:

Just in general, like where do you like to travel? When you have a trip come up, are you like, oh, I'm glad I'm going here again, or oh, I really don't want to go there. Yeah.

Carlos Thimann:

I, oh, I'm glad I'm going here again, or, oh, I really don't want to go there. Yeah, I mean I'm a little biased because I grew up on the Caribbean, right, so I always had the beach very accessible to me. So when we travel as a family, we typically go to a warm destination, typically, you know, ocean or some sort of a lake, some sort of a water sport is involved. Yeah, my wife and kids, they love the water and water activities, okay, skiing, snorkeling, all those type of things, right. So those are the typical destinations that I pick.

Mike Chung:

That's great Thanks for sharing that. And, akshay, are there favorite business or, I guess, family vacation spots that you have?

Akshay Singh:

Yeah, I would say I mean couple say one is, you know, I grew up in india so always love going back to india, okay, family, right. So that is always on on, you know, I would say on top of the list every year and then, um, you know, really love history. So you know, that's why I like like with it in europe and, you know, going to a lot of the historical places within europe. Right, we are trying to actually me and my family are trying to go, and, you know, with it all the wonders of the world, right?

Akshay Singh:

so that's on the list, right so nice, so we have checked few of them so far wonderful. Wonderful, so a few of them are left.

Mike Chung:

That's great, and I'll just have one last question for each of you and Akshay. I'll start with you. Imagine you're having the EV study team over to your house on Saturday for dinner. What kind of food would you serve?

Akshay Singh:

Oh, that's a tough one. I can tell you that my EV team that's actually you know worked on the study. They definitely like it's a very diverse group, sure, and what I have realized is that they love Asian cuisine right.

Mike Chung:

Oh, okay.

Akshay Singh:

So, and we have had a couple of Asian cuisines already, right, yeah, good as a part of the show, right. So I would say probably we'll have to actually serve them. You know Asian.

Mike Chung:

And there's so much variety you can have within that genre or cuisine. How about you, Carlos? You're hosting the team over for dinner.

Carlos Thimann:

If they're coming to my house, yeah, there's probably going to be some sort of steak. You know grill and steaks on the grill and some sort of Venezuelan food, right. So arepas is typically the one thing that I try to have my team provide Akshay, and I actually took Akshay to one of the Venezuelan restaurants here in Vegas. Oh, fantastic. For a quick meal. But you know it's something along those lines, right, typically some sort of a meat, and you know rice or potatoes, fantastic.

Mike Chung:

Well, I'll bring a bottle of wine and look forward to the gathering. But, in all seriousness, it was such a pleasure to have you both on the show and it's always such a treat to collaborate with you, and I look forward to more collaboration over the years. Thanks again for being part of the show. Thanks for tuning in to another episode of Auto Care On Air. Make sure to subscribe to our podcast so that you never miss an episode. Don't forget to leave us a rating and review. It helps others discover our show. Auto Care On Air is proud to be a production of the AutoCare Association, dedicated to advancing the auto care industry and supporting professionals like you. To learn more about the association and its initiatives, visit autocareorg.

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Behzad Rassuli

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Michael Chung

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Stacey Miller

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