Welcome to today's edition of the Daily 5.
Volkswagen Group clearly isn't afraid of the inevitable legal fight it is going to face with its U.S. dealers when it launches the revived Scout brand and its electrified SUVs and pickups. VW plans to sell Scout vehicles directly to customers, bypassing its franchised U.S. dealerships.
And what a legal fight this could be, potentially setting a precedent that could pave the way for legacy automakers to start new subsidiaries that sell directly to customers. In a statement today, the dealers are vowing to fight in the courts.
"VW's decision to attempt to sell Scout vehicles direct to consumers and compete with its U.S. dealer partners is disappointing and misguided, and it will be challenged," National Automobile Dealers Association CEO Mike Stanton said in an emailed statement. "Unfortunately, it's also not terribly surprising, as VW AG CEO Oliver Blume and Scout CEO Scott Keogh have avoided engaging with or even responding to NADA for months."
VW is betting billions of dollars on Scout. We have another story today from our affiliate Ad Age about the vast marketing efforts underway to launch the business.
Time will tell how all this shakes out. It seems a little strange to launch such a major investment knowing you'll have a court fight over how you execute your sales channels, but VW obviously thinks it'll win in court.
Meanwhile, in other news, AutoNation reported lackluster third-quarter earnings, with net income slipping 24 percent. The dealership group blamed lower used-vehicle sales and a continued fallout from this summer's cyberattacks against CDK Global. The disappointing results sent AutoNation shares down 4.5 percent for the day.
From Silicon Valley, Google's self-driving affiliate, Waymo, said it landed $600 million in funding on top of $5 billion in previous commitments. The round marks the "latest vote of confidence as our team continues to shape the future of mobility," Waymo co-CEO Tekedra Mawakana wrote on LinkedIn.
Looking ahead to Saturday, we'll have the latest installment in our dealership Best Practices series and on Monday we'll have more coverage of VW's plans for Scout.
That's it for now. Have a great weekend.
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— Philip Nussel, online editor
