(Reuters) - U.S. auto retailer AutoNation Inc announced a multi-year partnership on Thursday to support Alphabet Inc’s Waymo self-driving car unit, including vehicle maintenance and repairs as the company adds new brands into its fleet.
That news and better-than expected third-quarter profit for AutoNation sent shares of America’s largest auto retailer up 4 percent in premarket trading.
There is fierce competition between large automakers to bring self-driving cars to market first. The pact between Waymo and Ft. Lauderdale, Florida-based AutoNation is the latest in a series of recent partnerships the self-driving unit has formed.
Fully self-driving vehicles are expected to hit the market in a limited form by around 2020, in vehicle fleets rather than owned by individuals until the price of the technology involved becomes more affordable for consumers.
General Motors Co and rival Ford Motor Co have both said they aim to sell fully self-driving cars by 2021.
AutoNation said its stores will maintain and repair Waymo’s self-driving Chrysler Pacifica hybrid vehicle fleet, plus additional brands as Waymo expands.
“The ambition is to grow with Waymo,” AutoNation Chief Executive Mike Jackson told Reuters. “The only way to get a return on a truly autonomous system is on a shared vehicle, where there is an extended life cycle.”
That requires service through the manufacturer’s warranty period and beyond, Jackson said.
Fiat Chrysler Automobiles NV is part of an alliance with Waymo to develop self-driving cars based on a test fleet of Chrysler Pacifica hybrid minivans in Phoenix, Arizona.
In June, Waymo signed a multi-year agreement with Avis Budget Group Inc for the car rental firm to manage its growing autonomous vehicle fleet.
AutoNation reported better-than-expected profit on Thursday, as the impact from the recent spate of hurricanes was not as bad as feared.
The company’s net income from continuing operations fell to $97.6 million or $1.00 per share in the quarter ended Sept. 30, from $107.8 million or $1.05 per share, a year earlier.
Total revenue fell 2.4 percent to $5.43 billion.
Analysts on average had expected third-quarter profit of 84 cents per share and revenue of $5.58 billion, according to Thomson Reuters I/B/E/S.
In premarket trading, AutoNation shares were up 4.6 percent at $49.80.
Reporting by Ankit Ajmera in Bengaluru; Editing by Sai Sachin Ravikumar and Bernadette Baum