Success Strategies - Forging Ahead in Uncertain Times | CVB Summit Spring 2025 Day One

Summary

In an ever-evolving commercial vehicle landscape, Gregory Skinner, VP of Strategic Insights at Escalant, provides insights into navigating uncertainty and seizing new opportunities. He examines the shift from traditional passenger vehicles to software-defined vehicles, highlighting the potential for enhanced user experiences and technological advancements. The discussion shifts to the commercial vehicle sector, where technological enhancements meet practical efficiency. Despite complexities, opportunities for dealers to engage more deeply in the upfitting market are notably underscored, offering pathways to greater collaboration and innovation within the industry. With a focus on modularity and flexibility, dealers are encouraged to embrace change and become pivotal partners in the evolving ecosystem, fostering a sustainable and integrated future.

Highlights

• Software-defined vehicles prioritize user experience over traditional driving. 🚗💻
• The commercial vehicle space is ripe for modular and flexible innovations. 🔧🚛
• Dealers can transform their roles by engaging in the upfitting and modular workspace. 🤝✨
• Opportunities abound in partnerships and collaboration within the industry. 🤝🔄
• Embracing technology leads to smarter, more efficient vehicles. 🚀🔍

Key Takeaways

• Software-defined vehicles are revolutionizing the user experience! 🚗💻
• Commercial vehicles are evolving, highlighting modularity and flexibility! 🔧🚛
• Dealers have a golden opportunity to engage deeper in upfitting markets. 🤝✨
• The focus is shifting towards technological advancements over traditional vehicle models. 🚀🔍
• Collaboration within the industry is key to future progress! 🤝🔄

Overview

In a captivating presentation at the CVB Summit Spring 2025, Gregory Skinner from Escalant delved into the shifting automotive landscape. Centered around how software-defined vehicles are shaping the future, he illustrated a future where driving transcends into a comprehensive user experience, thanks to cutting-edge technology and smart integrations.

Skinner transitions the dialogue to commercial vehicles, emphasizing the sector's unique challenges and opportunities. While technology offers efficiency and advancement, it also adds complexity for users. However, there's a strong case for embracing modularity, making vehicles adaptable and extending their usefulness, which is critical for dealer engagement in the upfitting market.

The talk underscores pivotal strategies for dealers to thrive amid change, advocating for a collaborative approach. By aligning more closely with OEMs and suppliers, and harnessing the advantages of technological advancements, dealers can expand their reach and play a more influential role in the vehicle's lifecycle, ensuring a more sustainable industry future.

Chapters

• 00:00 - 01:00: Introduction The chapter begins with Gregory Skinner, the VP of strategic insights at Escalant, greeting the audience. He introduces himself and expresses his pleasure to present a session on 'Success Strategies: Forging Ahead in Uncertain Times'. Gregory acknowledges the current chaotic atmosphere, setting the stage for a discussion on navigating challenges effectively.
• 01:00 - 06:00: Comparison of Passenger and Commercial Vehicles The chapter titled 'Comparison of Passenger and Commercial Vehicles' begins by focusing on the strategies and opportunities in the commercial vehicle space. It highlights the potential for success in the future by considering and developing new opportunities in this area. The speaker introduces themselves as a representative of Escalant, a global advisory and consulting firm, setting the stage for further discussion on the topic.
• 06:00 - 10:00: Opportunities in Software-Defined Vehicles The chapter titled 'Opportunities in Software-Defined Vehicles' discusses the narrator's extensive experience in the automotive sector, specifically focusing on commercial and passenger vehicles. The narrator has spent the last four to five years in commercial vehicles, having previously worked with a range of passenger cars from economical models to luxury sports cars. The context is set to explore opportunities in the commercial vehicle segment, leveraging the narrator's diversified automotive background.
• 10:00 - 15:00: Challenges in Commercial Vehicle Technology In this chapter titled 'Challenges in Commercial Vehicle Technology,' the focus is on the differences between commercial vehicles and passenger cars. Passenger cars have been part of society for decades, leading to well-defined and refined relationships between people and their vehicles.
• 15:00 - 25:00: Modularity and Flexibility in Commercial Vehicles Introduction to the topic of modularity and flexibility in commercial vehicles.
• 25:00 - 29:00: Success Strategies for Dealers and Upfitters The chapter discusses the evolution and challenges in the commercial vehicle space, focusing on the concept of software-defined vehicles. It begins with an illustration of how vehicles today, like the Kia Sportage shown, have become difficult to distinguish due to their similar appearances and functionalities. The speaker, who is involved in the commercial vehicle industry, admits to not initially recognizing the vehicle, highlighting a trend towards uniformity in the market. This sets the stage for a deeper examination of software-defined vehicles and their impact on success strategies for dealers and upfitters.
• 29:00 - 40:30: Online Market Opportunities The chapter titled 'Online Market Opportunities' discusses the evolution of vehicles from primarily mechanical machines to software-driven devices. The transformation focuses on enhancing the user experience, shifting from the traditional concept of driving to providing entertainment and convenience for passengers. The modern vehicle emphasizes innovative software to deliver new features and improve overall functionality.
• 40:30 - 43:00: Conclusion The conclusion chapter summarizes the key themes of embedded systems in vehicles, highlighting technologies such as sensors, controls, telemetry, ECUs, controllers, and chips. It emphasizes the importance of occupant safety, vehicle dynamics, software updates, and communication between vehicles and home base.

Success Strategies - Forging Ahead in Uncertain Times | CVB Summit Spring 2025 Day One Transcription

• 00:00 - 00:30 Good morning, good afternoon. Uh, my name is Gregory Skinner. I'm VP of strategic insights here at Escalant. Um, and I'm happy to be here and present success strategies forging ahead in uncertain times. Um, certainly it's a crazy atmosphere and environment out there. So what we're going to talk about
• 00:30 - 01:00 today are some of the ways to think about how to be successful in the future, some of the strategies that underpin that, but more importantly, I think uh opportunities that exist in the commercial vehicle space that perhaps we haven't really considered before or perhaps we have to go and think about developing. So with that, let's uh let me just introduce myself a little bit more formally. So I work at Escalant which is a uh global advisory and consulting firm. Um been here for quite
• 01:00 - 01:30 a while and I've been in the automotive space for quite a bit of time too now. I've been in commercial vehicles for probably the last four or five years and I spent the vast majority of my time prior to that working in passenger car. So that includes everything from sort of the most small minute econo boxes all the way up into pure luxury sports cars. Now the reason I'm telling you that is because um is because I want to talk about the opportunities of commercial
• 01:30 - 02:00 vehicle relative to passenger car. So the thing about passenger is that it's been around forever. I mean passenger cars as you know have been around you know since for for decades for decades. But the thing about that is it's fundamentally um an old model. I mean, our relationship with vehicles um is pretty highly defined and pretty highly refined. So, the way that a um a person, a man, a woman, a boy, a girl,
• 02:00 - 02:30 you know, a child relates to the to the car has not really changed that much over time. So its evolution is now what we're seeing is its evolution is being underpinned or um driven by what we're calling softwaredefined vehicles which is really what happens when we turn a car from or an SUV or a truck from being that into something else. So before I tell you what a software
• 02:30 - 03:00 defined vehicle is, does anybody know what the vehicle is on this screen? Chances are, unless you drive one, you probably don't. And the reason is because we're slowly sort of gravitating into everything sort of looking and behaving the same. The answer to this thing is it's a Kia Sportage. But I who work in the commercial vehicle space had to go look that up. So that tells you something. When we talk about softwaredefined vehicles, a software
• 03:00 - 03:30 definfined vehicle is any vehicle that manages its operations, functionality, and enables new features primarily through software. So if you think back what was the car, let's say 10, 20, 30 years ago, it was a mechanical beast, right? Well, going into the future, it's all going to be software driven and we're going to change it so that now the passenger gets to experience more. you know, now it's not about driving. It's going to be about the user experience. And that's what you see on screen. We have all
• 03:30 - 04:00 these embedded systems, you know, uh, sensors, controls to keep the the occupant safe. We have telemetry on board so that we can do software updates like over the air updates. The vehicle can communicate back to home base and to other vehicles. We have hardware on board like ECUs, controllers, chips, you know, everything that to keep the dynamics uh of the vehicle in check and in play. But that one in the top right is really sort of what most people think
• 04:00 - 04:30 of and where we're going to land when we think softwaredefined. You know, infotainment systems, vehicle controls, uh cockpits, advanced driver systems, all of these things that are really about the user experience. So now more than ever, you're going to climb into a vehicle and it's going to be the environment is going to be technology focused. And that's what you see on the left. You know, you control your music, you can check sports, watch
• 04:30 - 05:00 movies. This doesn't just mean that we're talking autonomous, which eventually we'll get there, but really what it means is that now sudden you're immersed in that in that system or in that environment. Um, you know, you can check your emails. I I've done work on what we call sound zones, which is really interesting. So, just really quickly, what that is, let's say you're the driver and you want to take a call, but you don't want other people in in the car to hear it. Well, we can create a sound zone where you can
• 05:00 - 05:30 take your conference call and they other occupants can play music or talk to each other and they won't hear what you're talking about. Or let's say you have kids. Everybody in the car can have their own different sound zone and listen to different music and those the noise won't clash with you. That sound will clash with with each other. So really cool stuff like really exciting time when it comes to what's going on in a passenger car. Here's the
• 05:30 - 06:00 thing that love affair for what a vehicle could be does not exist in commercial vehicle. commercial vehicle, we're talking about, you know, rubber hits the road, real people doing real things, job has to get done. And I have countless stories about fleet managers who are basically annoyed by the sheer amount of tech that's on board the new trucks. So, it's one thing to change an alternator, but it's another thing when
• 06:00 - 06:30 you're trying to track down a sensor failure on a class 8 and it's some silly little thing that's in the back of a truck. It cost you like 20 bucks and it takes down the truck for a week because you got to have two techs on board like checking all the electronics going through body harnesses. It's a could be a huge pain. So suffice it to say, you know, OEMs like and need technology because it makes the trucks more efficient, better to control. You know, you can reduce costs over the long run for the people who own them. But fleet managers for
• 06:30 - 07:00 them or owners it basically adds cost and complexity. So that again that sort of love affair that you get in passenger doesn't exist in in commercial. But as we move to you know increasingly towards softwaredefined vehicles there's still lots of room for hardwire defined vehicles especially in the commercial vehicle space. Why is that? Because there's more upside when
• 07:00 - 07:30 it comes to product evolution, particularly around uh modularity, flexibility, and usability. So, you know, I was just at work truck week, which I'm sure a lot of you guys were. Um, and there was lots to see. I focused my time when I was there on outfits in particular. And the thing about outfits is that they're getting more and more sophisticated. they're getting easier to use, better, you know, better quality,
• 07:30 - 08:00 better builds. So, there's actually a lot of opportunity for dealers to become more involved in the upfit space. And when you join this to this notion of, hey, modularity and flexibility um when it comes to upfitting a truck, now all of a sudden there's way more opportunity space for a dealer or let's say a third party to be involved. What is it that we mean when we talk about modularity or flexibility? Well, the formal definition is separate
• 08:00 - 08:30 interchangeable units or modules that when combined for form a complete whole facilitating flexibility, scalability and ease of maintenance. So, why is this important? You know, to everybody in the audience, what does this have to do with me? Well, when you embrace this idea of components and flexibility, it allows a dealer or uh even an upgrader to be more involved in the process. So now it's
• 08:30 - 09:00 just more than sales and service. You know, now a truck doesn't have to be one thing forever. And in that sense, it means that, you know, you can become a true partner in helping your customer meet their ongoing needs versus just selling them a body or a truck one time. So now we're talking about sort of adaptability, which is something we've never seen before, right? You talk to a truck owner, it's like, "Hey, I'm buying this truck. I'm going to keep it for 3 years or 30
• 09:00 - 09:30 years, and that truck is going to do exactly what I want it to do for that whole amount of time." Well, now it doesn't have to be like that. Um, you know what? I'm sad because that thing was supposed to be a graphic. Really cool graphic like this. That's what you're supposed to see. Someone doing origami with a bunch of squares. Okay. So, what does this new relationship look like? You know, what does this relationship where does the dealer sort of fit into this? Well,
• 09:30 - 10:00 maybe it's a case of shelving or racking changing depending on how the business evolves because businesses evolve all the time. We don't see stagnant either. Or let's say as the truck ages, maybe its use case or application changes and now you can change that truck with it as it sort of changes over time. You know, you might be adding storage compartments. You might be adding again sort of racking, but maybe it's you're changing things inside the cab, too. Um,
• 10:00 - 10:30 what you're looking at is is a uh um a snow plow. It's a this monster plow truck that I climbed inside. It was one of the best trucks I've ever been in. Look at the size of that monitor. Well, imagine that now you can sort of configure trucks. You can add things or take things out as you need. and and again sort of help the the the truck evolve. Now, we've done a lot of work at Escalant in this area as far
• 10:30 - 11:00 as um what sort of strategies make the most sense when it comes to partnerships in the commercial vehicle space. So, let me run you through uh a couple of key ones that we sort of uncovered. The first one is that end users. So the customer likes the idea of standardization. You know, they want the they want the guy in the the guy in the field wants systems that work together.
• 11:00 - 11:30 This is kind of what we all know, right? This idea of integration between systems. Typically, we talk about it in terms of software, but it's also a hardware thing. So again, at the show, you know, I go and I talked to the Grid Rack guy, super nice guy, and he's telling me about Grid Rack, how everything is modular. You know, you can hook things on, you could take things off at the at a twist. Their system works primarily with DeWalt and Milwaukee. But as you know, like when a
• 11:30 - 12:00 guy's in the field, he's got like 50 different brands of tools. So yeah, for sure Grid's working towards sort of expanding that. And that's that's the key is do you have a truck that can change as or can adapt to what the the needs are. This is the Milwaukee truck as I'm sure you could uh um figure out. And you know it's got the packs in it. This thing looks amazing. Like I saw this thing from a mile away. I was like what is that? And while the packs are
• 12:00 - 12:30 great, you know, people don't typically have like seven rows of of of packs. You know, they might have a row or two. So, while this truck looks great, it's kind of like it's kind of not how people work. But now, if you can get a truck that that you can sort of clip anything into, you know, any type of equipment that you have, then all of a sudden it becomes really a great idea. So they're both everybody's working towards this
• 12:30 - 13:00 that gets a great idea of sort of standardizing it so that everything fits for everybody. Another big idea here was um that people think very differently around what this idea of upfit means. And I'm sure even when I said it, you were kind of like upfit. Well, we don't do upfits. You know, we sell we sell trucks or we sell vans or whatever that might be. Well, I think we need to sort of broaden that definition of what upfit
• 13:00 - 13:30 means. So, and I'll keep referring back to the show just because it was just such a a good a good source of information and a good source of reference, but I talked to one national upfitter. We're talking about the bodies and you know, he's saying, "Well, I don't know why anybody would do a body swap." because I was talking to him about these guys who make super high quality bodies and he's like, I don't know why anybody would do a body swap. You know, typically a body's going
• 13:30 - 14:00 to outlast a truck. And with our customers, our customers flip their trucks, you know, every couple years. They they don't really care about the time and expense of switching swapping a body over. And then I talked to another guy and they said, you know, we're making super high quality bodies. These things will you can use these things for a good five 6 700,000 miles. So right away you have two different perspectives on on longevity around an upit uh what
• 14:00 - 14:30 an uppit even means. You know if you're a guy who or if you're a company who changes their trucks frequently then you might not care. But if you talk to a municipality or a city, they go, "Well, we're keeping our trucks, you know, 5 10 15 years. We're running these things into the ground." And the idea of a body swap is great for us because then we don't have to do a rebidding process. You know, we can basically just take all the stuff off and just buy ourselves a new truck. So, it depends. Again, you
• 14:30 - 15:00 can sort of see the key theme here. We haven't even gone got dug into it too far, but the key theme is flexibility. Do I have flexibility to keep this truck on the road and keep making it something else? This, what you're looking at is the Holman Lego set. And if you're at work truck week and you didn't grab one of these things, then I'm sad for you cuz this thing is awesome. I got one in my office. It's
• 15:00 - 15:30 super cool. Um, I'm sure you can reach out to Homeman and they'll send you one. I don't work for Homeman. I'm just saying the thing about this what we're looking at is again this idea of transformation. So a Lego set, right? The whole premise of a Lego set is that you can continually change it and make it something else. Well, one of the one of the uh I was talking to they've got these boxes and they're a storage box. You clip it into
• 15:30 - 16:00 the racking that's in the back of the truck. Well, imagine if through time you could keep changing that box and the box becomes something else. So now all of a sudden it's a lockable box that you can control from your phone, which they did have. You could see what's in it. You could open it and lock it from your phone. Imagine the next iteration of that is it tells you what's inside. It tells you when you need, you know, when your materials are running low. It tells you a location of the box. And now you're not guessing where the box is,
• 16:00 - 16:30 you know, on and on and on, you know, is it? So now we're talking about innovative thinking about how this thing moves through time. Really, it was really great stuff. Another big idea here was um this idea of proprietary equipment. And so not to pick I'm not picking on Milwaukee or Gridrack or anybody else, but Milwaukee is going to do Milwaukee stuff. You know, DeWalt's going to do DeWalt stuff. Why are you
• 16:30 - 17:00 looking at a bathroom? Because I just finished doing my bathrooms. And I ended up sourcing all the materials myself. So, I bought some colar stuff and I bought some Delta stuff and I bought some Growy stuff, all this stuff. And I handed it over to the contractor and they're like, "Hey, man. Like, some of this stuff just doesn't fit together. You can't put the color piece on the mowing piece because it's not built for that. Well, that's great. It ends up costing a
• 17:00 - 17:30 little more money getting getting a system that work together, but that's not how fleets work either. Like fleets mix and match stuff. They're people use different tools. So, from a supplier side, this idea of a proprietary market sounds great, but on the dealer side or anybody else, you want to broaden that market. You don't want things that are one type of system. You want things that anybody can use anywhere. So, ditch the
• 17:30 - 18:00 idea of proprietary equipment and broaden your market. I always wondered if OEMs, and I'll have to talk to someone because we deal with OEMs all the time, but if they think about, hey, if we opened it up and went to sort of a standard system, how much more incremental we would pick up than people just focusing on our system only? Sort of an interesting question. All right. So where do you fit into this? What you know what's the the whole point of this presentation is success strategy. So where do you fit?
• 18:00 - 18:30 Well imagine you know okay so traditionally modularity is the domain of an OEM. Again I talk to OEMs all the time and they go modularity is great because it allows us to sort of reduce our production costs. We can use one thing and then hook a bunch of different things on to it and it it saves us money. Well, that's an OEM thing. And outfits are really, you know, when we think about it, we go, "Oh, that's a third party thing. Like, I'm going to get the chassis and send it to somebody
• 18:30 - 19:00 else and they're going to manage it." Well, imagine if a dealer sort of inserted himself into that mix and became a second party. So, it might be something like facilitating the swap of components. So, you know, the upfitter makes it, the OEM makes the chassis. The dealer is sort of that intermediary who might swap things or they might store the pieces because nobody likes to store stuff. Remember the minivans with the sto with the seats and you take them out, they weighed like
• 19:00 - 19:30 90 lbs and then once they came out of that minivan, they were never going back in cuz they're such a pain. Well, imagine if you had someone to store it for you and take it out and put it in. a dealer might rent or lease different modules so that companies don't have to not only store them, but they don't own them. You know, maybe the the dealer depreciates them and owns them over time. So really what we're talking about here is almost upfit as a service. That is an interesting idea. Um, and not only
• 19:30 - 20:00 does it serve the dealer and the OEM and the upfitter, but it also serves the customer. So really now we're talking about a whole different strategy of interacting with customers. Um, one of the things that we hear when we go and we do our explorations in the marketplace is that um, when you get a good dealer, so if you're a fleet and you have a good dealer, you love them. Like I'm sure everybody in the audience has experienced this hopefully, but I'll
• 20:00 - 20:30 talk to guys all day long. They go, "My dealer's great. Why are they so great?" They keep an eye out for the trucks that I need. They keep me informed in in the loop. They reach out to me. You know, I bring my trucks in for service and they're doing all sorts of little things without me asking about it. And so, you get this sort of respect for your dealer. Like, there's a great respect for really great dealers who know how to deal with their customers. And nine times out of 10, they're sort of going above and beyond. Well, if you take the extension of that,
• 20:30 - 21:00 the extension of that is dealers taking on even a more proactive role to sort of uncover and investigate new offerings that are coming to the market. They filter those out and then they inform their customers like, "Hey, I know this is what you're doing. I know this is what you guys are up to. Have you considered doing this or keep an eye out for this?" This might even go as far as training in teaching customers on how to
• 21:00 - 21:30 do things or how to use things. You know, I've yet to have uh talked to a fleet who didn't love the fact that their dealer is keeping them up to speed and helping them understand and run their business more not just efficiently, but more effectively. So there's a great amount of respect there for great dealers that can easily be leveraged if it's done properly. The next one is another strategy is this idea of u being more
• 21:30 - 22:00 entrepreneurial or consultative. You know, again, we talk about that respect, which is a great thing because it allows you to sort of leverage your base uh your base customer and give them incremental, you know, incremental value. But this idea of um dealers, you know, they know a dealer uh when you go there costs more, but they go but they also deliver to me a
• 22:00 - 22:30 higher level of quality. I know things that fit, you know, they they know things that fit. They make good parts. They, you know, they um they're near to me. So, this idea of proximity, which means they're responsive and they're available and it keeps my downtime to a minimum. You know, this basically says you can easily checking the time. You can easily collaborate with them because they covet the relationships that they they have with the dealer. you know, they see them as reliable. Um, they get
• 22:30 - 23:00 prioritized. They can negotiate pricing. There's so many benefits that that's why they like to deal with a dealer. Now, of course, cost is one of those things that, you know, sort of can throw that off, but you've never heard someone say, "Hey, you know what? I'm not going to pay for something that's going to give me significantly more value because I see the benefit in the long run." One of the last big things here is this
• 23:00 - 23:30 idea of um uh expanding your horizons and in this sense we really need to talk about online. So online is a significant market opportunity and I don't know who out there is leveraging this but when we do our when we do our explorations or our research recently what we found is if a fleet is looking for let's say
• 23:30 - 24:00 parts or they're looking for something um to sort of augment what they need from a supply side then not only will they contact local distributors they'll scour the nation to get exactly what it is that they need. The exception to this is if they need it right away, then of course they're going to go local. But if not, they start looking online. you know, they're looking for and sorry, they start looking online and the reason
• 24:00 - 24:30 that this makes sense is because now all of a sudden the source of of supply gets bigger and then if they really need it, they can get it expedited and it's there the next day anyway. So now people don't just look locally, they look nationally, which is an opportunity for you because now you're basically your market expands into a national one. um online makes sense to them because it's easy. Uh they can integrate your
• 24:30 - 25:00 online system with their online system and keep track of inventory. They get exposure to multiple brands, you know, dra direct consumer pricing benefits. There's all sorts of benefits to having sort of an online portal. And so if the offering is good, now it's not just about selling to the guy, you know, 5 miles away. Now it's about selling to the guy 500 miles away and facilitating that. So when we look at sort of the
• 25:00 - 25:30 opportunity space that's out there, if we had to sort of tie all this together, basically what we're saying is in the near future, you're going to we're going to start to experience a lot more around modularity, flexibility, you know, things that can help make a truck stop being just a truck and help it evolve through its use cases and applications through time. Given that if you're a dealer or even an
• 25:30 - 26:00 upfitter, you can start to insert yourself into that evolutionary process and play a bigger more significant role by helping them do that like helping facilitate that do that them do that. And it's not just about sort of grabbing market share in business. This is really about collaborating with others in the industry. like it's going to have to be a collaboration between the OEMs, upfitters, dealers, and suppliers. Basically, everybody's got to sort of I
• 26:00 - 26:30 won't say everybody's got to come together, but certainly the parties are going to have to come specific parties going to have to come together to sort of build out that marketplace. And not only is it going to help sort of uh grow your market, um but you're going to do that within an existing market. So really you're sort of dealing with two markets and so your your value is exponential and then with that comes a more sustainable future for you. Have
• 26:30 - 27:00 yourselves a good rest of your day and have yourselves a good rest of your summit. We'll catch you next time.