Category: Auto News Today

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AutoNation’s record Q3 earnings: Balancing inventory woes, growth

Customers are inclined to buy a new vehicle close sufficient to what they want in present-day limited inventory sector or find a little something in the pipeline and wait around for it, Jackson claimed. Many others will switch to applied vehicles or say they will hold out until upcoming year. Jackson sights that as making “pent-up need.”

Stephens Inc. analyst Rick Nelson explained in a notice to buyers last week that inventory concentrations possible would not enhance immediately when automobile output increases. The good reasons are overall large buyer demand from customers and that a lot of the incremental output will go to purchasers who now have requested motor vehicles.

“We don’t believe that inventory will materially increase until perfectly into 2022,” Nelson wrote. “As a end result we see outsized new car margins over the coming quarters.”

How AutoNation’s stock problem performs out in the fourth quarter and future calendar year will be on Manley’s enjoy.

Manley also will direct AutoNation’s capital allocation approach, which has involved growing the retailer’s system of AutoNation United states used car-only shops, buying back shares and returning to dealership acquisitions.

Final 7 days, AutoNation reported it had signed an settlement to acquire Precedence 1 Automotive Group of Towson, Md., pending automaker and other approvals. The acquisition, which handles nine luxurious dealerships and three collision centers, is predicted to deliver about $420 million in once-a-year earnings. A closing date is slated for November.

In late September, AutoNation bought 11 dealerships and a collision center from Peacock Automotive Team in a deal at first declared in April. These outlets are anticipated to crank out $380 million in yearly earnings.

The discounts have been the very first acquisitions for AutoNation after staying on the sidelines of the acquire-promote market place because 2018.

“We will continue on to look for extra acquisitions that enhance our portfolio and fulfill our return thresholds,” AutoNation CFO Joe Reduced advised analysts very last 7 days.

From Sept. 30, 2020, to Sept. 30, 2021, AutoNation put in $2.2 billion to acquire back 27 {cfdf3f5372635aeb15fd3e2aecc7cb5d7150695e02bd72e0a44f1581164ad809} of its superb shares of stock. Through the third quarter by yourself, AutoNation used $879 million to repurchase virtually 11 p.c of its own shares.

The firm’s board of administrators has authorized paying out an additional $1.3 billion on stock repurchases.

Jackson has mainly favored stock buybacks around paying what he has described as high rates to get dealerships.

And some analysts see that technique continuing.

Truist Securities analyst Stephanie Moore, in a observe to investors very last 7 days, reported that with AutoNation’s $1.8 billion in liquidity, “we count on share repurchases to provide as a major portion of its money allocation method.”

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Setback for CDK, Reynolds in effort to block Arizona dealership data law

A federal appeals courtroom turned down an work to block enforcement of an Arizona law built to give auto merchants far more manage of data inside dealership management units, upholding a very similar selection final calendar year by a reduced court.

In a final decision Monday, a a few-choose panel of the U.S. Courtroom of Appeals for the Ninth Circuit agreed with a federal district judge’s July 2020 view that DMS giants CDK Global Inc. and Reynolds and Reynolds Co. “were being not likely to succeed on the deserves of their statements” in a lawful challenge to the condition facts regulation.

The law, handed in 2019, took influence in July 2020 soon after U.S. District Judge G. Murray Snow denied CDK’s and Reynolds’ ask for for an injunction. CDK and Reynolds afterwards appealed that injunction selection.

It was not immediately obvious Tuesday how CDK and Reynolds will react. A CDK spokesman on Tuesday explained the corporation does not remark on active lawful matters, although a spokesman for Reynolds and Reynolds did not promptly reply to a concept in search of comment.

Bobbi Sparrow, president of the Arizona Vehicle Sellers Association, which intervened in the circumstance, mentioned the affiliation is “thrilled” with the appeals court’s view and that the statute could provide as a lawful framework for other states thinking about equivalent legislation.

“I think it is now the road map for the other states,” she said, incorporating that it is a positive consequence for both of those auto sellers and individuals.

Arizona Gov. Doug Ducey signed the regulation in April 2019. It will allow dealerships to share information stored inside their DMS with third-social gathering vendors deemed licensed integrators, and prevents providers which include CDK and Reynolds from charging fees or putting other constraints on that info access. Other states have adopted equivalent legislation, which include Montana, Oregon and Hawaii.

CDK and Reynolds very first submitted suit in July 2019 towards Arizona Lawyer Basic Mark Brnovich and John Halikowski, director of the state transportation office, while Halikowski eventually was eliminated as a defendant.

In a statement, Katie Conner, a spokeswoman for the Arizona lawyer general’s workplace, stated: “Right now is a terrific working day for shoppers and for the protection of their private information and facts.”

Several unique statements have been dismissed in May 2020 and CDK and Reynolds afterwards filed a revised grievance.

The DMS organizations declare the facts regulation is unconstitutional and obscure, and leaves consumers’ private data possibly susceptible to cyber threats and misuse. In their revised grievance, CDK and Reynolds wrote that the legislation interferes with their DMS contracts with dealerships and needs giving “totally free and unfettered obtain” to third functions, together with likely destructive actors.

“These provisions retroactively rewrite Plaintiffs’ negotiated contracts and undercut Plaintiffs’ considerable initiatives to secure the confidentiality, integrity and availability of their DMSs by restricting obtain to approved consumers and barring or detecting unauthorized intrusions,” according to their amended complaint.

The Ninth Circuit panel, having said that, wrote that Arizona’s legislation includes provisions to ensure that data is secured, adding that “CDK might disagree with the State’s policy option, but that does not imply that the legislation violates the Structure.”

Brad Miller, director of authorized and regulatory affairs and senior counsel of electronic affairs for the Nationwide Automobile Sellers Affiliation, which supported Arizona’s dealership affiliation in the litigation, explained in a assertion that the Ninth Circuit choice “is a apparent victory for the AADA and Arizona sellers.”

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Veoneer Q3 Net Sales Up 5{cfdf3f5372635aeb15fd3e2aecc7cb5d7150695e02bd72e0a44f1581164ad809} To US$391m – Just Auto

Veoneer has recorded third-quarter net sales up 5{cfdf3f5372635aeb15fd3e2aecc7cb5d7150695e02bd72e0a44f1581164ad809} to US$391m.

Business Highlights:

  • Entered into a definitive merger agreement, under which SSW and Qualcomm will acquire Veoneer, terminated merger agreement with Magna International
  • Organic Sales growth outperformed the global LVP by ~23pp during Q3, 21
  • Semiconductor supply chain shortages continue to create industry production, delivery and cost challenges
  • Temporary inventory build-up negatively impacted cash flow, expect the effect to reverse in fourth quarter
  • ADAS and AD software unit Arriver performed first public demonstration running on the Snapdragon Ride platform, at IAA, Munich with positive feedback and reviews
  • Veoneer announced as key active safety contributor to Mercedes S-Class with 4th generation Vision and Perception software, enabling Level 3 self-driving
  • Order intake over the Last Twelve Months (LTM) was more than US$500m of average annual sales at the end of Q3, 21

“Veoneer showed strong operational performance during the third quarter,” said Veoneer chairman, president and CEO, Jan Carlson. “Despite a sequential drop in the light vehicle production of 12{cfdf3f5372635aeb15fd3e2aecc7cb5d7150695e02bd72e0a44f1581164ad809}, our net sales were essentially flat, sequentially. Through our market adjustment initiatives, we also managed to improve our gross profit and reduce our operating loss sequentially and year-over-year.

“The global underlying demand for all of our products remains very strong, but as is true for many industries and companies today, semiconductor shortages and supply chain constraints continue to hamper our growth. We are managing this situation daily and are doing our utmost to support our customers through this difficult situation.

“The gradual weakening of the LVP during the quarter was especially challenging where we saw a temporary build-up of inventory, which is reflected in our working capital and cash flow. We have taken initiatives to rectify the situation and I view this as another sign of our discipline and executional strength as the full year 2021 LVP expectation eroded from a 14{cfdf3f5372635aeb15fd3e2aecc7cb5d7150695e02bd72e0a44f1581164ad809} growth in the beginning of the year, to virtually flat growth from the depressed COVID-19 pandemic levels in 2020.

“Following the end of the quarter, we announced we signed a merger agreement with SSW and Qualcomm for the acquisition of Veoneer by SSW and subsequent transfer of Arriver to Qualcomm. The board of directors determined the $37 per share, all cash transaction offered by SSW and Qualcomm was superior to the previous transaction agreement with Magna International.

“The proposed transaction with SSW and subsequent SSW-Qualcomm transaction are pending and subject to various conditions and we will provide updates as appropriate.”

https://www.veoneer.com/en/press-releases

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Biden to nominate No. 2 U.S. auto safety official to head NHTSA

WASHINGTON — President Joe Biden on Monday announced strategies to nominate the No. 2 car safety formal and a former California Air Assets board formal to head the Nationwide Freeway Site visitors Safety Administration.

Steven Cliff, who has been deputy administrator because February, has been a critical figure in the Biden administration’s proposed rewrite of gas economic system criteria by way of 2026 and is overseeing the department’s ongoing safety probe of Tesla Inc. and investigation of regardless of whether 30 million motor vehicles developed by approximately two dozen automakers have unsafe air luggage.

The White Dwelling also options to announce Duke University engineering and laptop science professor Missy Cummings as the new senior adviser for basic safety at NHTSA.

NHTSA, which is element of the U.S. Transportation Department, faces a backlog of pending vehicle basic safety polices and has not had a Senate-verified administrator considering that January 2017. There has not even been a nominee for NHTSA’s leading career due to the fact 2019.

NHTSA in August proposed substantially revising the Trump administration’s rollback of Company Ordinary Fuel Overall economy policies, proposing raising gasoline effectiveness by 8 {cfdf3f5372635aeb15fd3e2aecc7cb5d7150695e02bd72e0a44f1581164ad809} each year for the 2024-2026 model many years.

Cliff said the proposal lessens “local climate pollution by roughly the similar quantity as if we took far more than 5 million of today’s cars off the highway.”

Given that the COVID-19 pandemic, the U.S. has witnessed a sustained raise in website traffic fatalities that NHTSA has ascribed to impaired driving, rushing, a failure to dress in seatbelts and other unsafe habits.

NHTSA previous month estimated 8,730 people died in motor vehicle crashes in the initial 3 months of 2021, when compared with 7,900 fatalities during the exact period very last calendar year — up 10.5 percent in spite of a 2.1 p.c drop in miles driven.

Last thirty day period, NHTSA questioned Tesla why it has not issued a recall to address program updates made to its Autopilot driver-aid system.

NHTSA in August opened a official protection probe into Tesla’s Autopilot program in 765,000 U.S. automobiles immediately after a sequence of crashes involving Tesla styles and emergency vehicles.

NHTSA in June issued an order demanding automakers and operators of vehicles equipped with state-of-the-art driver aid or automatic driving devices to immediately report crashes.

Cummings in a 2018 interview said the U.S. needs “an solely new regulatory framework exactly where an company like NHTSA would oversee” autonomous automobiles, adding the company “does have the authority to mandate tests and other interventions, but they are not carrying out it.”

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NHTSA asks Tesla why it didn’t recall vehicles

WASHINGTON — U.S. vehicle security regulators are requesting information from Tesla Inc. on its Whole Self-Driving beta tests method and asking no matter whether the electric powered auto maker intends to recall autos that gained above-the-air updates to superior detect emergency vehicles.

Tesla should reply to the agency by Nov. 1, or it could encounter civil penalties of up to approximately $115 million.

In a letter sent Tuesday, NHTSA reported it was trying to get info on Tesla’s early Oct launch of a  Full Self-Driving beta ask for menu alternative for shoppers and an update to its Autopilot driver-guide procedure in September that was supposed to strengthen the detection of crisis car lights in low-mild situations.

“Any maker issuing an around-the-air update that mitigates a defect that poses an unreasonable possibility to motor car or truck protection is needed to timely file an accompanying recall detect to NHTSA,” Gregory Magno, main of the automobile flaws division at NHTSA’s Place of work of Problems Investigation, wrote in the letter to Eddie Gates, Tesla’s director of field excellent.

Among the requests, NHTSA is asking Tesla to submit a chronology of events and any internal investigations that led to its deployment of the update and a record of vehicles that gained it. NHTSA also is asking whether Tesla intends to file a safety remember masking those vehicles.

The company is asking Tesla for an evaluation of any variations to incident timing or consequence experienced the crisis-gentle detection update been operational in the 12 Tesla crashes involving Autopilot and first-responder scenes below investigation by NHTSA.

Federal regulators in August opened an investigation into Tesla’s Autopilot mode soon after a collection of collisions with very first-responder automobiles wherever the driver-assist technique was engaged. NHTSA’s basic safety probe handles an approximated 765,000 Teslas from the 2014 to 2021 product yrs. Most of the crashes happened just after dark and in whole resulted in 17 accidents and 1 dying.

The agency also is searching for information on Tesla’s conditions and timeline for allowing for access to consumers who have asked for consideration in the Full Self-Driving beta ask for method.

Tesla CEO Elon Musk tweeted on Monday that the most recent variation — beta 10.2 — will be obtainable to all those with safety scores of 100 and who have driven much more than 100 miles. Individuals need to agree to enable Tesla assess their driving actions for a week.

Tesla’s Entire Self-Driving expands the Autopilot method by including much more state-of-the-art driver-support capabilities, but motorists will have to stay absolutely engaged in the driving undertaking. No automaker sells a self-driving car or truck to the community nowadays.

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BEVs Not For Everyone – Toyota – Just Auto

Many people are passionate about climate change, but not everybody should drive a battery electric vehicle as a means to combat it, Toyota Motor chief scientist Gill Pratt told the Reuters Events Automotive Summit.

The news agency noted his comments, during a discussion on electric vehicles, appeared to amplify remarks made over the past year by Toyota president Akio Toyoda.

Toyoda and other company officials have long maintained electric vehicles would play a greater role in reducing emissions but other technology, such as the automaker’s petrol-electric hybrid models or hydrogen-powered fuel cell electric vehicles, should also be used.

Pratt confirmed Toyota believed in “diversity of drivetrains” to give customers different ways to reduce CO2.

“It’s not for us to predict which solution is the best or say only this will work,” he said.

According to Reuters, he said government incentives should be aimed at reducing carbon emissions, not picking which car technology was the best way to achieve those goals.

Many governments have now announced bans on ICE vehicle sales, starting in 2030.

Reuters noted Toyota was among major automakers that supported the Trump administration in its attempt to bar California from setting its own zero emission requirements, but the company dropped that support earlier this year.

Toyota announced earlier this week it would invest US$3.4bn (JPY380bn) in automotive batteries in the US by the end of 2030. The investment was for developing and localising automotive battery production, including those for battery electric vehicles, and was part of the global total of $13.5bn (JPY1.5 trillion) set aside for investment in battery development and production announced last month.

But Reuters said the automaker’s plans to roll out new battery electric vehicles (BEVs) seemed relatively modest compared with those of General Motors and Ford which are spending around $30 billion each by the end of 2025 to electrify more of their vehicle lines.

Toyota executives continue to tout the merits of the company’s hybrid vehicles, which have been on the market for more than 20 years, the report added.