Brian Benstock's unfiltered thoughts on the Honda-Nissan merger Here's where he sees the opportunity: With all the news swirling around Honda and Nissan in the past week, we had to grab time with our favorite Honda dealer to get his thoughts. For Brian, this is an opportunity for Honda to -Learn from Nissan -Teach and mentor Nissan -Challenge the Chinese OEMs Plus we get his side of the story on his recent trip to Kazakhstan with Steve Greenfield and Chip Perry and hear how retail auto is growing in other parts of the world. What do you see as the opportunity in the Honda-Nissan merger? #dealership #automotiveindustry #automotive #brianbenstock
Brian Benstock on Honda-Nissan and His Trip To Kazakhstan
Transcript
Alright, we're here with, you know, him, you love him. Brian Benstock always has some thoughts on what's going on in the auto industry and beyond. Brian, thanks for giving us a little time today. Would love to talk about this Nissan Honda merger. I have a feeling you have a thought or two. Well, I haven't, I haven't heard that it's a done deal, right. It looks like it and it's, if it's a done deal, it's the quickest merger I've ever seen. I mean, they, they talked about it on, you know, Thursday and it's a done deal today. That's a that'd be a surprise. Yeah, I, I guess that that makes a lot of sense, especially since they're saying like, look, if as things come together, you have to pick teams and it won't be till like 2026 where we're actually seeing like the plans and all that. How does, So I've, I've heard some perspectives from some Nissan dealers. I haven't heard any perspectives from some Honda dealers. So what, what are Honda dealers saying and thinking about this potential if it does go through, well, I have to be careful what I say, right? Because this could be my new, my new brothers and sisters over there. But I consider the Honda product of superior product that consider the management that Honda second to none. So, you know, I, I think certainly from a Nissan perspective, it's got to be a godsend. On the other hand, you know, I think we're up against some stiff competition in the battery electric world. I just recently got back from a trip to from Kazakhstan and I saw the impact that the Chinese manufacturers are having. On the Japanese and the Korean manufacturers. So there is strength in unity and and and and perhaps this could be a play for both, a good play for both Honda and Nissan. So do you think like in, in the market, I know so much is speculation right now, right? So right, if Honda strong and Nissan right now is weak, right, like bringing in the the weaker group, you're like is does this only dilute attention on what we're doing right. And then at the same time you're saying, well, you know, this also is a good opportunity to kind of like build the Moat around, you know what you're trying to do with battery electric vehicles. Do you see? Like the technology, manufacturing power, you know, a lot more than I do about Honda's capabilities. Do you see just like a strength in numbers play, right? You just have more engineers, more facilities, more leverage. Yeah, You know, I think that's what you just touched on, more engineers, right. And and I I heard of one of the Chinese manufacturers having 58,000 engineers compared to some of the US counterparts that have a couple of 1000. And so, you know, I think there is strength. When you have additional people working together and sometimes 1 + 1 can equal 3. I, I think that also being an optimist when I'm teaching somebody and let's just say that Honda is going to be teaching and sharing information with Nissan. I get better when I'm teaching. So perhaps there's that. And, and I'm sure that, you know, Nissan's got a very strong history of selling a lot of automobiles. I'm sure there's a lot of things that we can learn from them. Stay away from the stairs. Step, but I'm sure there's a lot of things that we can learn from from Nissan and more importantly, if we could get some critical mass and the battery electric space that could be good for both Nissan and Honda. We we were joking Kyle and I on on the show this morning that, you know, Hondas headquarters is in California and and Nissan is in Nashville. So we're like this Honda going to be like, yeah, can we get over to Nashville too, because a lot of people seem to like it over there. Well, you know, it's it's a state. Tax free zone if I recall correct, is that correct? That could that could work correct? 2 when you have to visit. Yeah, it's not so bad. Nashville has become a a pretty good hub for automotive and technology centers, you know, go figure. I know Nashville, TN used to think of it with a little twang. Absolutely. They've got it going on down there. For sure do. Hey, let me ask you, why have you let me ask you about your trip to Kazakhstan? Talk to Steve Greenfield a little bit. I would love to hear your perspective on what you went out there for and what you feel like was accomplished. Well, there's a gentleman, Mr. Smagula V, who's a. I'll say a dealer, and that's really an understatement, who had been to Paragon a couple of times and liked what he saw and wanted to show me what he had out there in Kazakhstan and also to have us talk about the state of the auto industry and in the future. And I, I have to say I have never had a host as gracious as Mr. Smagula off and his team were to Steve Greenfield, myself and Chip Perry. He has not only does he have facilities, the facilities are the nicest facilities I've seen ever, really ever, ever, ever ever The these were large, impressive customer driven service centers and sales centers that were spectacular and you know, the the size of the facilities was was. Was was impressive to say the least. And they were in a row, so there was separate. And then he had this mall, my my cars mall and the mall. It had to be 300,000 square feet, maybe more with all the brands under one roof, the used cars, all the cars on one side, the trucks on the other. It, it was just would knock you out. But it there's more. If that wasn't enough, he's also a manufacturer. If you see other manufacturers cannot is the Hyundai manufacturer for for all of Kazakhstan and we visited his plant and the plant is a an impressive plant. They're not quite at the volume of some of the plants that I've seen. So some of the work is being done manually, whereas it would be automated and the plans for the team. But that's has nothing to do with the inability to automate. It has to do with the production, right. The production at that Hyundai plant was somewhere around 400 cars A. Today, and they would have to get up to about 50,000 a year annual rate for that to make sense for some of the automation. So, and, and, and he's very concerned with keeping people employed. An absolute patriot. But he has a plant that he's building that's 80% complete. That was, again, I, I couldn't tell you the square footage. It was spectacular. And he's going to be manufacturing under 1 rooftop, 3 Chinese auto brands. Never seen that anywhere on the planet where three imagine Toyota, Nissan and Honda being produced in one plant. It's you couldn't imagine that. And you know, again, he's really got that horizontal integration down better than anybody I've ever seen. So he's a manufacturer, he's a distributor and he's a dealer. And the Astana group that he represents and owns sells nearly 50% of the cars and all of Kazakhstan. So I went out there. To share my thoughts and ideas, you know, I went out there, quote UN quote, as a teacher and again, I, I got the lesson again, I was a student and I was wildly impressed with what, what he was doing. And you know, the flight, the flight is about 20 hours away. It was worth every second of it. What, what an incredible education and new friends across the world that we, we all made. And by the way, Steve, Steve and Chip, they gave a presentation. You know, I'm sitting in the audience and I'm a new audience and I found myself in the teapot position about 500 things to the presentation, leaning forward and, and, and, and then recording this magnificent presentation on the state of the industry. And I, I'll give you the punch line. And the good news is Steve Greenfield talked about all the interruptions and disruptions that we've had in the industry, all the times that they have written us off from 2000 and. Eight to the cars direct to car, car auto by Tel to the, the, the, the public's taking over. And he says during the worst of those times, the sales return on sales number as an industry here in US never went below 2%. And, and so I thought that was encouraging you said, and we'll get through this as well. Some of the data that they had on service for EV's was also very, very encouraging. It was it was an excellent, excellent presentation given by these two veterans. And I again was a student with the colleagues that I went there with was a student of the colleagues that even after the 20 hour flight, they were still dropping bombs on you. Dropping bomb no problem. Well, they they they didn't tip their hand before him. We have right. You would think they were like, hey, what are you talking about? They're like, let's see if we could get Ben stock on. No, no, no, no. They want to make sure I was impressed and surprised by the audience, but I have to tell you the. The hospitality provided we, we landed I think about 3:00 in the morning and there were cut Cossacks, 7 foot tall guys in fur with Spears and hatchets to greet us. And Oh my God, it, it was, it was real. And, and you know, I, I, we could not have been treated any better. You know, if we were royalty, we'd have not been treated better. And so really fantastic. That's amazing. It sounds like they have it right. Question for you before you go ahead. No, it's, you know, I'm looking forward to collaborating with the group out there. You know, this is coming to NDA's, do you know? Yeah. Yeah. They'll be there. Yeah. And you definitely want to get together with Mr. Mr. Schulhoff. He's definitely, Yeah. He's a imagine this, right? He started in 1992. And I I've got to share a story with you. He he started out. Someone told them they have a program. He wanted to buy Russian cars. You know, the Soviet Union leaves Kazakhstan. He wants to buy cars because he never had a car in his life. And the Soviet cars are going to take two years to get. So he was told about a program. We can buy some cars directly from Toyota. So he flies to Japan and he contracts to buy 20 Toyotas. And when he's there, someone says, you know, how, how are we paying for these? This is why, you know, I got a loan and I have a check. And they asked them, what interest rate are you paying? I think he said it's either 300 or 400%. And for the story, it doesn't matter because if it's 300 or 400%, it's crazy. And, and the person telling us the story said they laughed at him. They said we'll never see him again. And 30 days later he's back, but this time to buy 50 cars. And they said we we don't understand how how did this happen? And it says you don't understand. In my country, inflations at 1000%. So my 3 or 400% for interest, the cars are going up in value is I'm selling the cars and there was immediate demand. And that was how he got his start. Wow, that sounds like. Car dealer story, like 3:00. Well, it, it's, it's, it's an entrepreneur story. It's somebody who is, you know, new to capitalism, his country's new to capitalism and he's embracing it. And I sat there and said, Gee, what have I done since 1992? I've done something, but not that, you know, and, and because again, sometimes you can take this freedom that we have and this capitalism that we have and these access to capital that we have and you can take all that. For granted so he he had me lean in a little bit on my own patriotism and my own sense of what's possible. That's amazing. Well that that's a perfect segue did the question I was gonna ask you I was gonna ask you how it's going in White Plains opened a new or like took over a store seeing a lot about it on social media. You put together a really unique team and you know so give us the the end of the year end of year one in White Plains. It's yeah it's a year and a half closed on May of 2020. It just feels like, well, first full year anyway. Yeah. And it's it's great. I mean, Jason Graciano is doing a spectacular job up there. Great. Jason and I worked together at Paragon for, you know, better than 13 years. And so he he and I, you know, I, if I'm in the quarterback and I throw the ball, he knows exactly where to be or vice versa. So that that really helped. It's an excellent market. The deal is a Honda dealers up there, you know, Yonkers and New Rochelle and and Mahwah and. They're very good dealers and I like an environment with good dealers. You know what good dealers are healthy for the market. It's a very Honda rich market. I think Honda has 20 plus percent share market share there and that's great. And I'm proud to say our stores got 24% market share in our ASAP. So the team is doing a very good job and and I'm cautiously optimistic for the future. Well, Brian, thank you. I'm sure this is likely the last time we're going to get you on in 2024. It is best way. Yeah. You're like definitely, 100% only because it's you. Best wishes to you and your lovely family. You can't wait. You're Merry Christmas. Merry Christmas and we will see you in 2025. Yes, Sir.To view or add a comment, sign in