Welcome to today's edition of the Daily 5.
They're called black swan events on Wall Street — rare, one-time problems with potentially severe results. And yes, it's probably not good karma to bring up black swan events on Oct. 29, the anniversary of the great stock market crash of 1929, so I'll keep this short.
But when it comes to large auto dealership groups, the third quarter was loaded with black swans. Some groups experienced one, two or even three of them in the three months that ended Sept. 30. Those events were the CDK Global cyberattacks that shut down half of the nation's dealership management systems, BMW's expansive stop-sales for faulty brakes, and Hurricane Helene's destruction in the Southeast.
Florida's AutoNation Inc. grappled with all three, reporting third-quarter net income slipped 24 percent.
"We were able to navigate through a challenging environment, which included the lingering effects of the CDK outage, which we are relieved to have behind us, weather challenges and OEM stop-sale orders," CEO Mike Manley said in an Oct. 25 statement.
It was a similar story at Asbury Automotive Group Inc., which said today that net income fell 25 percent in the quarter. Penske Automotive Group Inc. partially blamed its 14 percent drop in net income on BMW's stop-sales.
Ultimately, when you peel away the one-time troubles, the dealership groups overall posted pretty solid quarters. Penske and AutoNation, for example, both reported improved new-vehicle sales.
"I am pleased with our financial performance during the third quarter, despite the impact from the stop-sale of certain vehicles and the residual impact from the CDK cyber security incident," Penske Automotive CEO Roger Penske said in a statement.
In other news today, Lucid Motors said it will start taking orders Nov. 7 for its second vehicle, the Gravity crossover, offering the Grand Touring trim with a starting price of $94,900 before shipping. This vehicle has strategic importance to this unprofitable company because so far it has only offered one vehicle, the Air sedan.
Out of Europe, China electric vehicle giant BYD again raided the management team at Stellantis, this time hiring the legacy automaker's U.K. chief, Maria Grazia Davino, Bloomberg reported. Davino left Oct. 18 and is the third European executive to jump from Stellantis to BYD in recent weeks, the report said.
Finally, Richard Truett handicapped the potential winners of the 2025 North American Car, Utility and Truck of the Year awards in his column today. A couple of his picks were interesting surprises.
Looking ahead to tomorrow, we'll be covering Group 1 Automotive Inc.' s third-quarter results. Yes, we'll be looking for more black swans.
That's it for today. Have a great rest of your day.
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— Philip Nussel, online editor
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