Mercedes Snips Dealer Margin to Pay for EVs
To help cover the enormous expense of plunging into electric vehicles, Mercedes-Benz will tap an outside financial resource: its dealers' profit margin. According to Automotive News, the automaker told U.S. dealers this month at its national retailer meeting in Las Vegas that it will cut their margin by half a percentage point, to 13 percent. The reduction will come out of the dealers' 6 percent "trade margin," which is the difference between a vehicle's invoice and its sticker price. Mercedes also committed to not cutting the margin further for five years, sources told Automotive News Daimler plans to invest more than $46 billion between 2022 and 2030 to develop EVs and become an all-electric brand in markets ready for the switch. Mercedes will launch its first battery-electric model in the U.S. next month, the EQS sedan. Read more here (Source: Automotive News).
AutoNation's Record Q3 Earnings: Balancing Inventory Woes, Growth
With new-vehicle inventory dwindling on AutoNation Inc.'s dealership lots amid the microchip shortage, the auto retail giant is reaping higher profits on the new cars it does have and is turning even more heavily to used vehicles, reports Automotive News. Those strategies were readily apparent as AutoNation reported record third-quarter results last week that included all-time-high new-vehicle gross profit per unit. At the same time, the country's largest new-vehicle retailer — in its final weeks with longtime CEO Mike Jackson at the helm — is looking at how to invest for the future. AutoNation last week announced a deal to buy nine dealerships and revealed details of a share buyback spree. On the chip front, AutoNation's new- vehicle inventory dropped to just a 10-day supply at the end of September, worse than the 14-day supply it had at the end of June and far below the 43-day supply of September a year earlier. Read more here (Source: Automotive News).
Tesla Pulls Its New Full Self-Driving Beta Due to Software 'Issues'
U.S. electric car maker Tesla Inc on Sunday rolled back the latest version of its Full Self-Driving (FSD) beta software, less than a day after its release, after users complained of false collision warnings and other issues, reports Reuters. The setback comes as Tesla is under regulatory scrutiny over the safety of its semi-autonomous driving technology, which it calls "FSD." In a Twitter post on Sunday, Chief Executive Elon Musk said, "Seeing some issues with 10.3, so rolling back to 10.2 temporarily.” He went on: "Please note, this is to be expected with beta software. It is impossible to test all hardware configs in all conditions with internal QA (quality assurance), hence public beta," he said. The release of the new driving assist system to some owners of Tesla models, which the company said featured several improvements, had been announced for Friday, Oct 22. Read more here (Source: Reuters).
Supercar Makers Skid Into EV Era
Are supercars expensive toys or valuable assets? The question is as relevant for stock investors as proud owners of a Ferrari, Lamborghini, or Aston Martin, reports The Wall Street Journal. At the corporate level, such brands can generate financial returns to match their speed and looks, but they aren’t guaranteed. That is particularly true at a time when the companies have to come up with electric vehicles that somehow build on their heritage in noisy engines. Lamborghini, which has a rocky financial history, celebrated a period of rapid growth with a capital markets day at its North Italian headquarters on Friday. Such a move might normally be interpreted as the prelude to a spinoff by Volkswagen, which bought the Italian brand in its late-1990s empire-building days. Rumors of a portfolio shake-up have swirled around VW ever since Chief Executive Herbert Diess took over in 2018. With Lamborghini, though, VW has kept expectations in check. The brand portrayed Friday’s event as a low-key affair motivated by a group-level commitment to transparency. Read more here (Source: The Wall Street Journal).
Nothing Lasts Forever: A Baker's Dozen of Vehicles Disappearing in 2021 (in the U.S.)
It happens every year: Halloween. Descended from the ancient Celtic festival of Samhain on Oct. 31, it’s a day when people believe that ghostly spirits return to earth. It’s the day before the Celtic New Year, Nov. 1, which also happens to be the dawn of the new model year, a time when various automobiles pass into the history books to remembered — or reviled. And so, reports The Detroit Bureau, it’s time to mourn the vehicles whose time have come and gone, passing into the great beyond for the 2022 model year. Read more here (Source: The Detroit Bureau).
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