What the chip shortage means to the service drive

An oft-told story of 2020 was how the pandemic brought back into focus the importance of fixed operations at franchised dealerships. The pandemic forced states to temporarily close businesses, including auto sales departments across the country. But service departments were considered essential and remained open, bringing in money to keep dealerships afloat until restrictions eased later in the year.

Ian Grace, senior director of partner performance at automotiveMastermind, thinks the crisis that hits the industry in 2021 will be a lack of vehicle inventory.

Blame microchip shortages and other supply chain issues that are pinching production. And that could result in a sort of dealership déjà vu.

"It's causing many [dealers] to kind of go back to that 2020 view of the importance of the service drive," Grace says.

In addition to more repair and warranty work, Grace says the service drive could help the dealership bottom line by being "a source of i…

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MUSA Auto Finance rebrands under new leadership

Dallas new- and used-vehicle leasing company MUSA Auto Finance has changed its name to Drivrz Financial and replaced its top executive as it ramps up its used-car leasing business.

MUSA Holdings parent, PowerBand Solutions Inc., said April 8 that MUSA will now be run by Jon Lamb, 49, who also is president of the Canadian technology company's automotive marketplace Drivrz, which is still under development. He will keep both roles moving forward. The name change was announced the next day.

Lamb replaces MUSA CEO and founder Jeff Morgan, who formed the company in 2016 alongside Richard Frunzi, former co-founder and COO of Exeter Finance Corp.

The leasing company abruptly halted new business in 2018 after a partnership with Tesla Inc. overwhelmed its capital resources. The company resumed leasing under new leadership, shortly after PowerBand signed an agreement to acquire 60 percent of MUSA Holdings and its subsidiaries in July 2019. Read more

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Auto booming at 3 major U.S. lenders

Several major U.S. auto lenders posted landmark first-quarter earnings last week, citing voracious customer demand despite limited inventory.

Auto loan and lease originations surged 35 percent at Chase Auto to $11.2 billion, with the company recording in March the highest number of auto originations in its history. Wells Fargo Auto increased originations 7.7 percent to $7 billion. Ally Financial posted its highest auto origination volume in five years with $10.2 billion in loans and leases.

Similar to its competitors, Ally's first-quarter results benefited greatly from year-over-year comparisons to the first quarter of 2020 that faced the brunt of the COVID-19 pandemic impact. But Doug Timmerman, Ally's auto finance president, pointed out that the company's strength still greatly exceeded 2019's first-quarter results.

"As we start the second quarter, we see that continue," Timmerman told Automotive News. "Strong flow of apps and ori…

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Supplier Nemak swings to Q1 net profit

Mexican supplier Nemak reported net income of $40 million in the first quarter, compared with a net loss of $14 million in the year-earlier period, and attributed the turnaround to cost-reduction initiatives and an improved product mix in its electric vehicle and structural applications segment.

Revenue increased 15 percent to about $1.04 billion, up from $907 million in the first quarter of 2020. Nemak, a maker of powertrain and body structure components, attributed that to volume growth, the improved product mix, higher aluminum prices and the appreciation of the euro against the U.S. dollar.

Earnings before interest, taxes, depreciation and amortization rose 19 percent to $169 million. Operating income jumped 37 percent to $89 million.

Nemak joined several suppliers this week reporting first-quarter earnings as the COVID-19 crisis lingers around the globe. More companies are set to report results over the next few weeks.

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Mercedes-Benz USA names new VP for customer service

Dianna du Preez, a more than 30-year Daimler veteran, has been appointed vice president of customer services at Mercedes-Benz USA.

Du Preez, 55, replaces Christian Treiber, who is leaving after 28 years at Daimler. Du Preez takes over May 1.

It's the latest change in management in Mercedes-Benz's second-biggest market. Mercedes' U.S. business is on its second CEO since 2019. Dimitris Psillakis took over as CEO on Jan. 1 after previous chief Nicholas Speeks left the company after less than a year in the top job.

In her new role, du Preez will oversee customer service operations, engineering services, after-sales business development and parts logistics, Mercedes-Benz Academy and MBUSA's customer assistance center. Du Preez will report to Psillakis.

"Dianna is a proven leader whose broad experience and steadfast focus to advance our customer experience will continue to be a great asset for our company," Psillakis said i…

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Tesla drives on Autopilot through regulatory gray zone, report says

BERKELEY, Calif. -- The fatal crash of a Tesla with no one apparently behind the wheel has cast a new light on the safety of semi-autonomous vehicles and the nebulous U.S. regulatory terrain they navigate.

Police in Harris County, Texas, said a Tesla Model S smashed into a tree on Saturday at high speed after failing to negotiate a bend and burst into flames, killing one occupant found in the front passenger seat and the owner in the back seat.

Tesla CEO Elon Musk tweeted on Monday that preliminary data downloaded by Tesla indicate the vehicle was not operating on Autopilot, and was not part of the automaker's "Full Self-Driving" (FSD) system. Tesla's Autopilot and FSD, as well as the growing number of similar semi-autonomous driving functions in cars made by other automakers, present a challenge to officials responsible for motor vehicle and highway safety.

NHTSA, the top U.S. auto safety regulator, has yet to issue specific regulations or perform…

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AutoNation to acquire 11 dealerships

Auto retail giant AutoNation Inc. is poised to make its first franchised dealership acquisitions since 2018, after it signed an agreement to acquire 11 stores from Peacock Automotive Group of Hardeeville, S.C.

AutoNation said Tuesday that it plans to buy 11 stores and a collision center in the Hilton Head and Columbia areas of South Carolina and in Savannah, Ga., from Peacock Automotive, a group owned by Warner Peacock. The group dates to 2001 and counts baseball great Ken Griffey Jr., lawyer Jay Brennan, and another unnamed lawyer as its investors, Warner Peacock said.

Peacock's dealerships represent a mix of import, domestic and luxury brands including Hyundai, Genesis, Jaguar, Land Rover, Audi, Porsche, Subaru, Chrysler, Dodge, Jeep, Ram and Volkswagen.

AutoNation, the largest new-vehicle retailer in the U.S., did not release the price it will pay to acquire the stores but said the deal is expected to close in the summer following necessary approvals…

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Braman dealerships affected by cyberattack, report says

Braman Dealerships in Florida has experienced a system outage that has affected operations, one that may be linked to a ransomware incident, according to a local news report.

"We recently experienced a network outage which is currently impacting our operations," David Leibowitz, secretary and general counsel for Braman Management Association, which includes the dealerships, said in an emailed statement to Automotive News on Friday evening. "We are working diligently to restore systems at our dealerships as quickly and as safely as possible. Our investigation into this matter is ongoing."

The Miami dealership group has not confirmed whether the outage is connected to a cyberattack. The group also did not respond to additional questions about when the outage began, whether it affected the entire group or selected stores or whether customer data was affected.

Braman Dealerships is ranked No. 29 on Automotive News' list of the top 150 dealership groups in th…

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U.S. indicts two Stellantis managers from Italy on emissions fraud charges

Federal prosecutors unsealed charges against two Italian nationals Tuesday for their alleged role in a conspiracy to defraud U.S. regulators and customers about the fuel efficiency of more than 100,000 diesel vehicles sold in the U.S. by Fiat Chrysler Automobiles.

Sergio Pasini, 43, of Ferrera, Italy, and Gianluca Sabbioni, 55, of Sala Bolognese, Italy — two senior diesel managers at FCA Italy, a subsidiary of Stellantis N.V. — conducted their alleged scheme with Emanuele Palma, 42, of Bloomfield Hills, Mich., who was charged in 2019.

A Justice Department spokeswoman said in an email that the two Italian managers are not in custody. The indictment says they worked for an Italian diesel manufacturing company called VM Motori S.p.A. in Cento, Italy, which was 50 percent owned by Fiat Chrysler in 2010 and became a fully owned FCA subsidiary in 2013.

Palma remains free on bond while awaiting trial.

The indictment says Pasini, Sabbioni and Palma were …

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Used-car market sizzling for sellers, not so great for buyers

These are unprecedented times for used cars. Almost anything that runs, drives and has brakes, regardless of year, make or model, is a valuable commodity in these days of chip shortages and low new-vehicle inventories.

In June 2018, it wasn't that way.

That month, I paid top dollar — $10,000 cash — for a 2010 Mini Cooper S, an off-lease car with just 16,700 miles under its wheels. I found the Mini on Cars.com and bought it over the Internet. Three days later, it was deposited in my driveway.

This week, I deposited the Mini — now with 39,433 miles — in the driveway of its new owner, one town over. He paid me $10,000 cash, which is full retail and then some, based on the ads I scanned on Edmunds, Cars.com, Autotrader and elsewhere.

I never imagined I could drive a car for almost three years and sell it for what I paid for it. Welcome to 2021.

Carvana would have bought the Mini from me for $8,004, according to the company's website valuation p…

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Biden kicks off electric vehicle push with South Carolina plant ‘tour’

WASHINGTON -- President Joe Biden will virtually tour a South Carolina electric bus and battery manufacturing plant on Tuesday as the White House touts his proposal to boost the production of zero-emission buses and cars.

Biden will tour a facility of U.S. electric bus manufacturer Proterra. He has proposed spending $20 billion to electrify at least 20 percent of school buses and $25 billion to electrify some transit vehicles as part of his $2.3 trillion infrastructure and jobs plan. In total, Biden has proposed a $174 billion boost for EVs, including $100 billion in consumer rebates.

The White House's push to electrify vehicles comes as China has dominated the world electric bus market. But Proterra estimates 50 percent of all new North American-built buses in 2025 will be electric.

The U.S. has over 475,000 school buses and 65,000 transit buses and most run on diesel fuel, the White House said. Biden "made a commitment that all American-made …

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Ford begins offering COVID-19 vaccinations at some plants

DETROIT — Ford Motor Co. on Monday said hourly and salaried workers at a handful of its U.S. manufacturing plants could begin to receive COVID-19 vaccinations on-site.

The automaker said it is partnering with the UAW and various pharmacies and health care providers to offer the shots in southeast Michigan; Lima, Ohio; and Kansas City, Mo.

In Michigan, workers at Ford's Flat Rock Assembly Plant, Rouge Complex, Van Dyke Transmission Plant and Rawsonville Components Plant can receive the Moderna vaccine through Rite Aid. Workers at its Lima Engine Plant and Kansas City Assembly Plant can receive the Pfizer-BioNTech vaccine through local health systems.

"COVID-19 vaccines are a major tool to help reduce the risk of infection, so we want to ensure our employees have access to vaccines," Dr. Francesca Litow, Ford corporate medical director, said in a statement. "We are grateful to partner with various health providers across the country to protect the health a…

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