DMS provider Tekion raises $150 million more

Dealership management system provider Tekion last week said it raised $150 million in its latest funding round, bringing the company’s valuation to more than $1 billion.
Tekion CEO Jay Vijayan told Automotive News that the company intends to use the money to add features to its DMS platform and increase its capacity to bring more dealerships on board.
Tekion began enrolling franchised dealerships in late 2019, Vijayan said. He declined to disclose Tekion’s dealership count but said customer stores are in 28 states.
Tekion touts its cloud-native DMS platform as creating a seamless, efficient process for dealership staff and customers similar to the e-commerce experience available from Amazon or Apple Inc. The company’s vision, Vijayan said, is to “run the core business for automotive retail dealerships in one single platform.”

Before the latest funding round, Tekion had raised $65 million, including investments from General Motors; Alliance Ventures, run by Nissan, Renault and Mitsubishi; and BMW i Ventures.
Vijayan, a former chief information officer at Tesla, founded Tekion in 2016. The company has integrated with 17 auto brands and is targeting the first quarter of 2021 to complete integrations with more brands, Vijayan said. He would not disclose the brands using Tekion’s system today.
He said he is Tekion’s single largest shareholder but declined to disclose the size of his stake. Private equity firm Advent International led the latest funding round. Other investors included Index Ventures, Airbus Ventures and Exor, the largest shareholder of Fiat Chrysler Automobiles.

Joe Serra, president of 50-store Serra Automotive, also invested. He did not disclose the amount but called it “substantial for me.”
Before deciding to invest and after learning about Tekion from GM, Serra suggested leaders at his Chevrolet-Buick-GMC store near Nashville consider Tekion. It switched to Tekion’s DMS in the spring, he said. Other Serra stores could follow next year.
“I’ve just been begging and praying for somebody to give us a tool that we need and deserve,” he said. “I’m rooting for them.”

Read more

Toyota dealer profitability nears record

Profitability among Toyota and Lexus dealers year-to-date is up almost a third to near-record results, and is tracking even higher as the automaker works to climb back to pre-COVID production levels.
“We’re in a completely different place” from six months ago, said Bob Carter, Toyota Motor North America’s head of sales, during a teleconference last week.
“I’m anticipating that this fourth quarter that we’re in right now, when you consider COVID, and all the natural disasters, and all the challenges — this fourth quarter could be one of the finest quarters in North American auto history, and certainly for Toyota,” he said.
Chris Reynolds, head of North American manufacturing, said the region’s production had increased to 93.7 percent of capacity by the end of September. The previous year, it was 95.9 percent.
“Many of our plants have been working overtime and Saturdays to help meet strong customer demand for our products,” Reynolds said. “Our team members in the plants are voting with their feet. They believe in the [safety] protocols. They respect them, even though many of them are uncomfortable and inconvenient, but they get the job done.”
Combined Toyota and Lexus sales in September were up 16 percent from a year earlier, and were tracking up for October, Carter said. The company sees a continued strong recovery through the end of the year and 2021. Carter predicted the industry will finish 2020 at 14.5 million and said the company believes 2021 will recover to 15.5 million.
“The automotive industry has not just survived, but it’s really thrived during this pandemic,” Carter said, adding that he feels that the Toyota brand will finish this year at about 1.75 million sales in the U.S., with Lexus on track to finish at about 265,000 sales. The Toyota brand sold 2,085,234 vehicles in the U.S. in 2019, while Lexus’ volume was 298,114 vehicles.
Pickups, crossovers and hybrids remain particularly strong for Toyota, Carter said, despite very short dealer stocks of such vehicles. He said the automaker’s pickup plant in San Antonio, which makes the full-size Tundra and midsize Tacoma, is running at “maximal overtime” to keep up with demand.
“That plant is running three Saturdays a month; we’re running wide open,” Carter said.
Carter said that while Toyota is sticking to its plan to expand its hybrid lineup — it revived the Venza nameplate for a new hybrid-only crossover and redesigned the Sienna minivan — sales are constrained by a lack of batteries.
“Overall, we have 14 [hybrid] models when you combine the two brands,” Carter said. “We are bringing up that [battery] supply, but if we could bring it up a little quicker than the plan, we could sell it. The demand is truly there.”
In terms of dealing with COVID-19, Reynolds said the safety protocols Toyota put in place after it restarted production in early May are working, but they add complexity to plant operations. Still, Toyota’s depleted dealership lots should start to fill back up to normal levels soon. He doesn’t see a second production shutdown on the horizon, even if the virus spread continues to grow.
“We have to balance that intense effort to fill the pipeline with, frankly, the health and safety of our team members in each of our factories and make sure that we’re doing everything responsibly,” Reynolds said. “We think that probably by no later than the end of this calendar year, we should have the pipeline closer back to what I’ll call normal than where it was at the end of our shutdown, but it’s taking a while to build back up.”
Carter said the economy as a whole is recovering, and the auto industry is continuing to capitalize with strong demand across the board, especially for more expensive models. He said search results for Toyota and Lexus are up significantly year-over-year.
“If you watch the transaction prices for the industry, transaction prices are heading up substantially, and what’s really driving that is consumer demand” away from sedans and “into big pickup trucks and SUV,” Carter said.
He added that even within the specific models, consumer demand right now “is not for base grades, it’s for upper grades.”
Carter also said the pressure now is to keep up with demand.
“We don’t see any doom or cliff coming in the future,” the longtime Toyota executive said. “We’re pedaled down; it’s go time.”

Read more

Nissan execs Judy Wheeler, David Kershaw swap roles

Nissan North America moved last week to reposition some of its U.S. leadership team as it works to turn around the business.
Two top executives will swap roles as part of the reorganization, Nissan told dealers Thursday, Oct. 22, in an email obtained by Automotive News. Nissan confirmed the moves, which take effect Nov. 1.
Judy Wheeler, 58, will oversee U.S. sales and be tasked with shoring up the brand’s retail operations. In the first nine months, Nissan Division’s U.S. sales tumbled 38 percent compared with the same period a year ago.

In her new role as division vice president of sales and regional operations in the U.S., Wheeler will run the field sales organization and lead sales operations, distribution, fleet and certified pre-owned sales.

It will be a familiar role for Wheeler. She was division vice president for U.S. sales before taking her present role as division vice president of Dealer Network Development and Customer Quality in 2018.
David Kershaw, 55, who had been promoted to oversee Nissan’s U.S. sales last year, will take over Wheeler’s current job.

In his new role, Kershaw will manage dealer network development for the Nissan and Infiniti brands for the U.S. and Canada.
Prior to his current role, Kershaw ran sales and marketing for the Southeast region.
Nissan National Dealer Advisory Board Chairman Scott Smith described the changes as “the right moves at the right time.”
“Judy knows every inch of the sales space,” Smith said. “She knows how to offer real retail solutions.”
The role swap comes as Nissan looks to improve dealer relations. The automaker’s controversial sales incentive program triggered unrest last year.

Dealers have complained Nissan sets unrealistic sales targets that foster a culture of discounting and dent resale values and brand reputation.
Nissan, in a statement, said: “Dave and Judy both are veteran execs with experience in both sales and dealer network development who have expanded their skill sets in their previous positions— making great progress in developing our sales plan and improving dealer relations.”
At the same time, Allyson Witherspoon, 43, will be elevated to chief marketing officer for the U.S.
Witherspoon took her current role as vice president, marketing communications and media for the U.S. last year. Before that, she was Nissan general manager of global brand engagement at the automaker’s headquarters in Yokohama, Japan.

Witherspoon’s promotion occurs as Nissan executes a product offensive that will take the model lineup from one of the industry’s oldest to its newest.
Nissan will bring six new or redesigned vehicles to dealerships by the end of 2021.
Dan Mohnke, 53, has been appointed vice president, eCommerce where he will lead online commerce efforts. He currently is Nissan North America vice president, Customer Journey and Data Innovation.

Read more

As Magna holds strong, it sizes up the future

Don Walker offered a few words of advice last week as he announced he would retire as CEO of North America’s biggest auto supplier, Magna International Inc.
“I think we’re well positioned to take advantage of the future trends,” Walker said in a phone call with Automotive News and the man who will succeed him, Magna President Swamy Kotagiri.
“But whenever there are things changing, you’ve got to get it right,” he urged, “because you’re going to have some people make big missteps and make bad investments.”
When he exits at the end of this year, Walker will leave Magna as a fine-tuned company that, despite the upheaval of a pandemic and disruptive industry change at every turn, seems to be holding strong. In early August, even as the supplier stabilized from the financial shock of North America and Europe’s second-quarter halt in vehicle production, resulting in what Walker told analysts was “the worst decline that I have experienced in my 40 years in the auto industry,” Magna was still confident enough about its liquidity to declare a quarterly dividend of 40 cents, an outlay of $216 million to shareholders.

The Canadian company’s sales have almost doubled in the last 15 years that Walker has been in charge. With sales to automakers of $39.43 billion last year, Magna trails only Germany’s Robert Bosch and Japan’s Denso Corp. among the largest suppliers in the world.

“The automotive industry is going to continue to be global,” Walker said. “I think there’s going to be some new entrants, which we’re very well aligned to support. I think our traditional customers are going to be having to move very quickly with new technologies, and we have a lot of those new technologies to offer them.”
But the traditional automakers, he added, “have to cut back on their spending, cut back on their fixed costs, if they want to survive and they want to be agile going forward.”
“And with COVID and the movement of people and goods, I think, permanently changing, there is a lot going on right now and a lot of things to be addressed and opportunities and things we should be doing,” he said of Magna’s future.
Walker, 64, has spent 33 years at the diversified global company, more than half of them as its chief executive.
Magna founder Frank Stronach recruited Walker from General Motors after the young engineer professed a desire to run his own company. He has served two stints as CEO — first from 1994 to 2001 and then again starting in 2005. He left the job for just over three years to be CEO of Intier Automotive, the vehicle interiors business that Magna took private but still controlled as a wholly owned subsidiary. Grupo Antolin of Spain later acquired most of Magna’s interiors operations.

Kotagiri, 51, brings his know-how as former chief technology officer, as well as from leadership roles in other areas of the company, and “will continue to advance Magna’s position in the changing mobility landscape,” Chairman William Young said in a press call last week.
Kotagiri’s experience nearly rivals Walker’s. He has more than 25 years in the industry, 21 of which have been spent at Magna.
As he prepares to become one of only a handful of people who have held the title of Magna CEO since its founding in 1957, Kotagiri said the future will require focus and prioritization. It will require “reading the tea leaves,” he said.
“The question is, how many initiatives do we pick that we can successfully follow through? I think it’s going to be the most important thing for us to retain our focus.”
Just a week before Walker’s retirement news, Magna announced plans to supply the electric vehicle platform for Fisker’s Ocean SUV, a significant foray into the future of electrification. Magna is in talks to do similarly with Canoo Holdings.
Will developing such vehicles worry customers that Magna aspires to become their competitor?
“The short and clear answer is no,” Kotagiri said. “We don’t want to be an OEM. We’ll continue to communicate that and clarify that. We bring a different value proposition to the table, like in the case of Fisker, and we continue to do it with our existing customers, too.
“We look at the gaps and look at the trends and see where we need to be looking and what’s strategic for us, whether it’s cities and research institutions or Silicon Valley and Tel Aviv,” he added.
Kotagiri said changes in other industries and among consumer habits have started to make an impact on the automotive and mobility worlds.
Those changes “will bring a new set of players possibly. That’s something we have to be aware of and be able to react, either through our own capability or through partnerships and alliances and so on,” he said.
“The mobility market is changing. We can’t turn the ocean. We’ve got to pick our battles and opportunities.”

Read more

Pricey Maybach ready to roll out

Mercedes-Benz’s Alabama plant is committed to delivering the most expensive mass-production passenger vehicle made in America on time.
The Mercedes-Maybach GLS 600 4MATIC arrives in stores in December and starts at $161,550, including shipping. Fully loaded, the SUV will top out at nearly $200,000.
The plant in Vance, which builds the GLE, GLE Coupe and GLS and is tooling up to launch electric vehicle production, started making the Maybach SUV in September. Despite the plant being shut down temporarily in the spring along with the rest of the auto industry because of the coronavirus pandemic, a Daimler spokeswoman said the new ultraluxury SUV is on schedule for retail distribution.
The SUV could deliver fatter profit margins. Ultraluxury SUVs, which often share platforms with much less expensive vehicles, are cash cows for automakers. The global market for ultraluxury SUVs should grow from around 7,500 in 2018 to more than 20,000 by 2023, according to AutoForecast Solutions. About 75 percent of these vehicles will be sold in the U.S. and China.

Ed Kim, AutoPacific principal analyst, said that in image and functionality, luxury SUVs speak to the tastes of luxury customers far more than luxury sedans do.
“They have money to spend, and they want the most prestige they can get for their money,” he said. “These days, luxury SUVs provide just that.”
The Maybach SUV, based on the redesigned third-generation GLS platform, is powered by a specially developed 550-hp V-8 engine.
The engine is combined with a 48-volt electrical system paired with an integrated starter generator, known as EQ Boost, that can add up to 21 hp for short periods. The Maybach GLS can accelerate from 0 to 60 mph in 4.8 seconds and reach a top speed of 130 mph.
The new model features E-Active Body Control, a suspension system developed by Mercedes-Benz that is powered in part by the 48-volt system. The technology combines a hydropneumatic active suspension with the Mercedes Airmatic air suspension system and allows spring and damping forces to be individually controlled at each wheel, counteracting body roll, pitch and squat, the automaker said.
The next generation of the Maybach SUV could be electrified. Mercedes plans to introduce an electric Maybach within three years as the automaker aims to decarbonize its fleet to meet tightening emissions standards.
Exterior highlights include the Maybach-exclusive grille with vertical louvers, a standing Mercedes-Benz star on the hood (a first for a Mercedes SUV), chrome trim elements and retracting Maybach running boards.
The cabin is available as a five-seater or a four-seater, with all seats electrically adjustable, heated, ventilated and equipped with massage.

Read more