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Episode #1127: We’re diving into major tariff relief for EU carmakers, Sonic Automotive’s EchoPark outpacing expectations, and how generative AI is rewriting the rules for online retail traffic.

Show Notes with links:

• The automotive industry is watching closely as the U.S. and EU hammer out a framework deal that could bring massive tariff relief for European automaker. The fine print could mean big savings and new market access.
  • The EU and U.S. announced a new trade framework aiming to reduce U.S. auto tariffs from 27.5% to 15%.
  • Relief would be retroactive to August 1 if the EU introduces enabling legislation this month.
  • In exchange, the EU pledged to cut tariffs on U.S. industrial goods and increase access for American agricultural products.
  • The deal may expand to include mutual recognition of auto safety standards and influence future U.S. agreements with Japan and South Korea.
  • EU Trade Commissioner Maros Sefcovic emphasized urgency: “It is the European Commission’s firm intention to make proposals by the end of this month.”
    
    
    
• Sonic Automotive just dropped its Q2 2025 earnings, and while a hefty impairment charge dented the bottom line, EchoPark's performance made sure the story stayed bullish.
  • Total revenue reached a record $3.7B, up 6% YoY.
  • Despite a $172.4M impairment charge, adjusted EPS surged 49% to $2.19, beating expectations.
  • EchoPark led the charge with $62.1M in gross profit (+22%) and a 679% increase in adjusted segment income.
  • Segment income rose from $3.9M to $11.7M — a 200% leap.
  • “EchoPark is just on fire,” said Sonic President Jeff Dyke.
    
    
    
• Adobe reports a massive 4,700% YoY increase in U.S. retail site traffic driven by generative AI platforms like ChatGPT and Gemini — a clear signal that AI is transforming the online shopping journey.
  • Traffic from gen-AI sources has grown monthly since the 2024 holiday season.
  • 90% of users trust gen-AI recommendations; bounce rates are down 27%.
  • Visits from AI referrals are 10% more engaged, with 32% longer durations.
  • The conversion gap between AI and non-AI traffic has shrunk from 49% in January to 23% in July.
  • “It’s allowing a very optimized, urgent, efficient journey,” said Adobe’s Vivek Pandya.

0:00 Intro with Paul J Daly and Kyle Mountsier
1:35 Next week, Paul and Erroll Bomar III will be at NAMAD next week
2:38 EU-US Finalizing New Trade Deal
4:35 EchoPark Boosts Sonic's Q2 Earnings
6:52 4700% Increase In Retail Traffic From GenAI Sites

Join Paul J Daly and Kyle Mountsier every morning for the Automotive State of the Union podcast as they connect the dots across car dealerships, retail trends, emerging tech like AI, and cultural shifts—bringing clarity, speed, and people-first insight to automotive leaders navigating a rapidly changing industry.

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