New economists in harmony at Cox Automotive

CARY, N.C. - 

By now, you probably realize that Cox Automotive has some new faces on its analytical front to replace longtime chief economist Tom Webb, who is officially retiring on June 30.

You probably also realize that one of those additions has a DJ as an “alter ego.”

That would be Jonathan Smoke, Cox Automotive’s new chief economist, or as some may know him, “DJ Smokey Smoke.”  

(More on that in a few).

Smoke’s lieutenant — or in music parlance, shall we say, “hype man” — is Charlie Chesbrough, senior economist and senior director of industry insights at Cox Automotive.

Smoke had most recently held the same position with and had worked in the housing industry for 21 years.

Jonathan Smoke, Cox Automotive

Before his time with, Smoke was chief economist at media and market intelligence company Hanley Wood. He also served in various roles at Beazer Homes.

Chesbrough was most recently executive director and senior economist for the Original Equipment Suppliers Association, and also spent time as senior principal economist and director of industry analysis at IHS Automotive.

Together, they’re leading the company’s new analytical front.

Each will be involved across the board in the company’s analytical and economic activity, but in general, Chesbrough will focus more on new vehicles and “big picture strategies” from the automakers since he is based in Detroit, with Smoke — based in Atlanta — focusing more on the used-car side, auctions and so forth.

“We’ll be collaborating and working together on a lot of the aspects, because the two parts of the business are certainly related to one another,” Smoke said in a late May phone interview that also included Chesbrough.

“And so as Charlie’s working on the new-vehicle SAAR forecast, it’s important to then understand what the implications might be to the used-vehicle market, to used-vehicle values, to changes that we see happening in the dealer landscape, especially between franchised dealers, who are of course impacted by the OEMs, but then seeing how that’s also transitioning into the independents, who don’t deal with those pressures,” he said.

Learning from a legend

Smoke’s background is in the economics of the real estate business. Being relatively new to the auto industry, Chesbrough — given his experience in automotive — has helped him learn more about the car business. And they got the chance to work with Webb in preparing for their roles.

“It’s a very complicated business and industry, and so the ability to soak up a historical perspective from him has been immensely valuable to me because he’s clearly lived through and seen many different cycles,” Smoke said of Webb. “And he’s seen aspects of the business today that in some ways are same as they were, but in other ways, they’re very different.”

One example of something Webb gave him some good perspective on was automotive leasing, a topic that doesn’t have the exact same parallel in the real estate market. Smoke gained understanding of leasing’s growth in the new-car market, how it has changed significantly since the late 1990s and early 2000s and its current impact on the used-car market.

“That’s helped me really get a grounding in the appreciation of how those aspects of the business relate to one another, but also how the wholesale market is a really perfect position to bridge those two worlds, because you see it coming through the commercial volumes that are dominating the auction landscape today,” Smoke said. “And of course, you see it in terms of what dealers are purchasing and how prices are playing out very differently across the different vehicle segments.

“So to me, that’s been invaluable to be able to sit down with Tom and ask a few what I would characterize as ‘stupid questions’ to a master that could really walk me through a deeper understanding.”

Chesbrough added that the Manheim Used Vehicle Value Index has long been the “go-to measurement” to keep track of the goings-on in the auction market, calling it “cutting-edge.”  

“It’s quite remarkable. It’s organized chaos,” Chesbrough said of auction sales. “To see all of these vehicles going through and quick auctions going on … as an economist, you’re really seeing the real value of a vehicle out in the marketplace.

“And this is going on, every week all around the country,” Chesbrough said. “What Tom’s been able to do is encapsulate all of that into this overall measurement.”

Auto-themed music?

So about that DJ’ing.

Smoke tested it some automotive-themed tunes internally at a Cox Automotive event in May, and was set to try it out for folks outside the company at a lender summit.

He shared one song that captures some of the industry dynamics: “Weak” by AJR.

“I use it as a perfect fun song to illustrate that new-vehicle sales are likely not just weak, but they’re likely on a downward cycle now. But I love the punch line in the song. It says, ‘I’m weak, but what’s wrong with that?’” Smoke said.

“We’re at a point in the cycle where the economy remains strong and traditionally this would indicate an infection point that dealers are going to be OK, because the dealers are going to see a shift away from new vehicles into used vehicles. Because principally what we’re seeing is credit and affordability pressures, which tend to favor used. And dealers make more money off of used vehicles than the dealers who are basically managing their businesses well, a la vAuto and Velocity, then they’re going to be just fine.

“I love that song as sort of a caricature of, ‘Hey, I’m weak, but what’s wrong with that? I’m gonna do just fine.’”

So will this alter ego re-emerge?

“You bet,” Smoke said. “I’m just looking for the venues to play a few tunes.”


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