Does your dealership have a ‘what if’ strategy?

Tariffs may come and go, but dealer preparedness for change must remain steady. Dealers need to build and continuously update their ‘what if’ strategies to navigate economic fluctuations, inventory challenges, and whatever else the future may hold.

In this episode of Dealer Confidential, host Ilana Shabtay talks with Michael Cirillo of ASOTU, FlexDealers, and The Dealer Playbook Podcast about the impact of tariffs on the automotive industry. They highlight the importance of developing proactive response plans, discuss political influences on the market, underscore the value of exceptional customer service, and emphasize the need to anticipate changes to succeed in uncertain times.

Here’s what one anonymous dealer had to say:

Dear Ilana,

Tariffs are on everyone’s mind. Despite the tariffs being all over the news, discussed in conferences, and in my inbox, I’m still not sure what I should or shouldn’t be doing to prepare my dealership. With all of the uncertainty, I’m not sure what I should be saying to my staff. 

Sincerely,

A Concerned Dealer

Ilana and Michael dive into:

• Why dealerships must prepare for the impact of tariffs, or other industry changes;
• How politics influences the automotive industry;
• Why anticipating market changes is essential for a successful dealership. 

Michael Cirillo is the Co-founder and CEO of FlexDealer, a company that helps retail auto dealers turn traffic into revenue with strategies and technologies that lead to car purchases. . Michael is also the host of The Dealer Playbook podcast and Chief of Staff at ASOTU.

Resources mentioned:

• Ilana Shabtay
• Michael Cirillo
• FlexDealer
• ASOTU
• The Dealer Playbook

Episode Transcript:

Michael Cirillo (00:00)

There are customers out there right now, Ilana who are so happy to see the dealer squirm as almost a retribution or a payback of like, yeah, you should, you should really take an inward look.

I’m going

Ilana Shabtay (00:38)

Welcome

another episode of Dealer Confidential. This is our new podcast where we interview experts in the industry and we go through some anonymous hot takes that we get about anything that we can do to make this industry better. Awesome guest today. One of the best hosts in the industry, Michael Cirillo. How you doing, Michael? Last time I saw him, just for those last time I saw him at NADA, someone literally stopped and basically asked for your autograph.

Michael Cirillo (00:58)

⁓ shucks.

Ilana Shabtay (01:05)

So it’s not like, I’m not trying to hype you up, dude. Like this, it’s true. Best host.

Michael Cirillo (01:10)

⁓

Well, I’m flattered. I’m blushing a little. I’m sweating under the, under the brim a little bit, but thank you. That’s very, that’s very kind. I’m excited to be here. It’s always good to connect with you, buddy. How are you?

Ilana Shabtay (01:14)

you

Yeah, always

good. I’m good. I’m good. I’m excited to have you. So obviously look Michael up if you’re not familiar with him just quickly. Flex Dealer, Chief of Staff at a ASOTU, host of Dealer Playbook podcast. Honestly, you started podcasts way before they were cool. So kudos to you. And he’s at ASOTU Con right now. So A, thank you for taking time out. B, awesome background. And C, if the audio is a little wonky, we forgive you because you

you’re at a hotel and you’re at a conference and we just want to hear from you. Love it. Love it.

Michael Cirillo (01:50)

There’s people going around, they’re setting stuff up, you know, all the last minute

stuff, so thank you.

Ilana Shabtay (01:56)

Yeah, I’m excited to hear about it too, because I have massive FOMO right now. And maybe we’ll talk a little bit at the end if we have time, but here’s the hot take today. We got a hot take from a dealer that wanted to understand more about how they can prepare their dealership for impact of tariffs. What should they be doing? What should they not be doing? How should they be talking to their staff? This obviously came in at the end of March, so it’s a bit outdated, but that’s okay, because today we’ll talk about

Michael Cirillo (02:08)

Thank you.

Ilana Shabtay (02:20)

first of all, there’s still things that are relevant to talk about in terms of how tariffs would potentially impact dealers. But also, traditionally and historically, I think the automotive industry has such a direct impact from politics, whether that’s labor law or regulations when it comes to all the different political fluctuations that we see. So

Michael Cirillo (02:40)

Right.

Ilana Shabtay (02:41)

I would love to know what’s your stance on this? What do you think? And then you can start with your experience, it’s so fresh. How are dealers prepping for this? And should they prep for another surprise, or not?

Michael Cirillo (02:48)

you

Yes. Okay, so, I mean, here’s the thing, right? I think that people are, there’s two sides to the fence here. People are either happy with what the American administration is doing or they’re like super against it. And I mean, controversial opinion of the day. The ASOTU team knows I’m allowed at least one. I’m going to use it on this and it’ll probably carry on through the rest of this episode. Like, here’s the thing we have to think about. First is,

Ilana Shabtay (03:13)

Okay.

Michael Cirillo (03:18)

why are we actually upset? Are we actually upset because we wish our own country’s administrations would be more like pro-country and like doing what’s right? Like, you know, we tend to be, and I’m sorry if that’s a lot, but we tend to be against anything we know we don’t have. That’s like my controversial take. And it’s like, dang, like, is Trump kind of a dick sometimes? Yeah. Does he say like super dicky things sometimes? Yes. But at the end of the day, nobody can argue that he is trying to like…

do what he believes and what his cabinet and everybody believes is right for the country. And I mean, the track record over the last hundred days kind of speaks for itself. You’ve got trillions of dollars of investment. You have automakers who were going to make, you know, manufacturer vehicles in other countries now doubling down and bringing those investment dollars back into the country. And so, you know, being a Canadian,

Ilana Shabtay (04:06)

also have manufacturers like Ford that responded really well and basically gave employee pricing to every single person, meaning there were other perks as well on the consumer side that I think are incredible.

Michael Cirillo (04:14)

Right.

And I think, you know, I guess where the rubber meets the road, that’s kind of the level I would say most of us are on. Like we’re kind of ground floor in the grand scheme of how big this industry is. Like we would we would be foolish to believe that the most powerful decision makers in an industry and in governments and in countries are not talking constantly about these things. Like

I would not be surprised if Trump’s phone is not blowing up constantly

with CEOs from the automakers, Ford, and all of them reaching out and being like, okay, hold on, we gotta talk about this. There is a dialogue that’s happening.

I don’t believe, being a media guy, what the media professes. They have to get ratings, because ratings bring in ad dollars, and ad dollars allow them to keep reporting the news. So when you look at the track record and how many billions and trillions of dollars

Ilana Shabtay (05:03)

Two,

Michael Cirillo (05:09)

Now I’m starting to sound like him. Billions and trillions of dollars. Now having said that, is there an impact? It’s like, yes, there is an impact. But do things ever end up where we think they will? No, never. mean, look, it’s a matter of just a few weeks with the Chinese, you know, trade war and all of these sorts of things.

Ilana Shabtay (05:13)

Love it!

That was a good impression.

Michael Cirillo (05:32)

People panic and they go to the news and they’re like, my business, can’t afford to pay for my stuff. And then all of a sudden it’s like, trade deal. Nevermind, we’re gonna pause those. So for me it’s like…

Ilana Shabtay (05:42)

Trade

deals, stock markets, back up. And then also just so you know, we also looked at like, I had our data team look at car sites yesterday and I’m like, okay, what’s happening? Traffic spiked by 15% in one day. Incredible!

Michael Cirillo (05:51)

Right.

Yeah. Yeah.

It shows a couple of things. First, are things volatile? Yes. There are those people that are going to be on the side of the argument that say, well, he didn’t have to do any of this anyway. Like, why did he cause such a stir? Well, he caused such a stir because he saw how much money was leaving the country and how bad the deals from his perspective are. At the end of the day, like, love the guy or hate the guy, he’s probably better at working a deal than I am.

You know, like he probably understands a little bit more of the globalist view of those sorts of things. And having said that, so are other world leaders. Are you telling me Netanyahu and new Prime Minister of Canada, Mark Carney and the French president and, you know, the Prime Minister of Britain, they all panicked in front of the media, you know, well Netanyahu didn’t, he was the first one to come over. He was like, screw this. I’m just gonna… He’s just gonna come over. Like, you know, like it just didn’t…

Ilana Shabtay (06:43)

Well, you know we’re speed, that’s not fair.

He’s like, Trump, talk

to me. No, he didn’t.

Michael Cirillo (06:49)

Yeah, come, come,

exactly. He was the first one to come over and be like, okay, let’s just talk about it because that’s what men do. The others panicked in front of the media. And then, you know, look at look at the prime minister of Britain six weeks ago, you know, and we have to stand up to try and next thing you know, they’re the first one like second ones through the pipe to sign a deal and be like, I have to applaud how magnificent the American negotiating. So what’s my point?

I’m not here to poke jabs and throw punches and I’m not like some pro, you know, like we’re doing everything right. No. But if you’re on the side of the fence that says, well, none of this had to happen anyways, it kind of did because without pressure, humans just don’t take action, right? We really like our comfort zones.

Ilana Shabtay (07:31)

If you look at the past 100 days, is a lot of the strategy. Apply pressure, deal with the consequences, and figure out how you’re gonna get what you want. Like, I’m sensing a pattern. Yeah. ⁓

Michael Cirillo (07:38)

And like, dude, this is the auto industry. If we can’t sniff

a strategy from 10 miles away, then we need to go work in some other business. This is a flawlessly executed strategy from the talking points to sometimes the blabbering on the news to sometimes saying the stupid thing on, you know, wherever or that it’s all part of like stirring people up to get action to happen. And I can’t really knock the guy for that. That’s his mode of operation. I have a different mode of operation, but

but it is what it is. Now, there is the other side of this, is, well, wait a minute. If historically things never end up where we think they will, then this is really a call to action to all of us who are paying attention that we need to have a better anticipatory strategy. If that happens, how will we respond? But if that happens, how will we respond?

Ilana Shabtay (08:27)

Yes.

Michael Cirillo (08:29)

instead of reacting. We’ve just watched the whole world react. Boy boy, what would happen if we had a response plan, not a reaction plan? You know what I mean? And so.

Ilana Shabtay (08:39)

So I’m so happy that

you brought that up. I’m happy. Sorry. I didn’t mean to cut you off, but I’m happy you brought that up because that was going to be my next sort of segue is it. Yes. It’s a politically influenced industry. Yes. It depends what parties empower it. Yes. And what safety regulations, laws, et cetera, but almost doesn’t matter as long as you know how to lead the business and you know how to have a response team and you know how to properly, you know,  engage so that you can make the best out of whatever regulation is, is upon you.

Michael Cirillo (09:04)

Right. Right.

Ilana Shabtay (09:06)

I agree and I think that again, this Ford dealer that I went to that had such a different perspective on tariffs than some of the other clients I was speaking to, super positive, super excited, like talked about how he spoke to his staff and how he got an opportunity. It was awesome.

Michael Cirillo (09:21)

Yeah, you

have to think about this too. look at it from the customer’s perspective. Tariffs are not going to change the need for a vehicle. So in that regard, it’s like, hey, to your point, Ilana it’s like, figure out your response plan and how you’re going to best serve the market. It is important to understand, though. second controversial opinion.

Ilana Shabtay (09:40)

Yes, we get two. love it.

Michael Cirillo (09:42)

We might get more. now that I’m ripping here. There are very guys, and I will die on the hill of being pro dealer. I am pro dealer. Like I believe this industry. I love it. I understand how critical local business is in the grand scheme of the economy and what moves it. But we would be foolish

to not recognize that there are a bunch of customers out there who are so negative in their vehicles because they were so taken advantage of during the pandemic that they’re happy to see you guys burn. You know what I mean? that’s, hey, here’s your payback. Some of them are out there and it’s important to understand that because well, guess what? And nobody’s blaming, and I’m not pointing fingers by the way, you made a great profit during that three or four year period and it was unprecedented.

Ilana Shabtay (10:16)

⁓ Yeah.

Michael Cirillo (10:29)

Mazel Tov, but, but during that time, I was also one of the few voices that was like, we should really consider what’s gonna happen a few years down the road when people are so negative. And

so There are customers out there right now, Ilana who are so happy to see the dealer squirm as almost a retribution or a payback of like, yeah, you should, you should really take an inward look.

But it’s regardless, it’s all about a response point. Well.

They’re doing sound checks. So, so.

Ilana Shabtay (10:55)

testing. Love it.

But yeah, no,

it’s also just a good reminder for dealers that customer service, everyone’s gonna need a car, customer service, number one, doesn’t matter what’s happening, figure out how to bring your customer first. Like it’s true.

Michael Cirillo (11:12)

In 2019, I’ll never forget this, it almost played out in such a prophetic way, which sounds super douchey, but I was one of the keynote speakers at Canada’s Used Car Week. And I used the analogy in my keynote about these books I used to read as a kid. They were like, choose your own adventure books. So you would basically read the, was mostly sci-fi, some sort of hero story, but you would read the book as first person.

And periodically when faced with a decision, it would be like, if you want to slay the dragon, turn to page 64. If you want to, you remember those? was like, choose your own adventure. Yeah, like Bear Grylls now does this on Netflix. see Netflix has kind of gamified his show where it’s like, if you want me to jump off this cliff to my ultimate demise, hit the forward arrow. If you want me to drink my own piss, you know, it’s like he.

Ilana Shabtay (11:45)

Why would you do that?

Eight. Yeah.

Michael Cirillo (12:05)

Well, I used to read those books and I said, you I learned in those stories that I was not a great decision maker because I usually would follow the decision that puffed up my ego and ultimately would always get eaten by the monster on page 63. And I use that analogy to suggest that you don’t have to always get eaten by the monster on page 63. In fact, it is a very avoidable thing to do as long as you are anticipating, hey,

What’s the government doing? What’s the legislative assembly doing? What are the decisions they’re making? And should they make that decision, what will my response be? You can be months and months and months ahead of these things. Why I say it was kind of prophetic, none of us knew, but I’m talking about how no matter what happens, your business can thrive, you can make good decisions, et cetera, et cetera. And like nine months later, a pandemic hit and shut everybody down. And it’s like, hey,

Ilana Shabtay (12:59)

and you had

probably had a response plan.

Michael Cirillo (13:01)

Have a response plan to the most catastrophic thing that can happen. And when that thing happens, you won’t be surprised and you won’t panic. You will flawlessly execute. And look, we did see some dealers during the pandemic. We did see some deal. We are seeing dealers now, like you said, Ford dealers are coming out and saying, hey, let’s embrace this thing with a warm hug. Because if it happens, I’m going to know what to do. And I’m going to know my message to the market. And I’m going to know how to handle that.

So one, two, two.

Ilana Shabtay (13:30)

Well, we’re getting kicked off anyway, but this was awesome. You’re awesome. I’m so happy you came on. And when I say that I need guests who are raw and unfiltered, you set a new standard. So thank you, Michael, for joining. Enjoy the conference. And for those who enjoyed this episode, Dealer Confidential you can find us on all your streaming sites. Thanks, Michael, for joining.

Michael Cirillo (13:43)

Thank you.

Thank you, it’s great to see you.