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GIANT US dealership group AutoNation says there is no money in selling new cars and has promptly signed a multi-year deal with autonomous-car provider Waymo to service and repair its self-drive vehicles.

AutoNation – which has car sales, auctions, parts and smash repair outlets in 16 US states and in 2017 had revenue of $A27 billion – said the margins for new-car sales are one per cent and sales of new cars represent only 18 per cent of its revenues.

Its boss, Mike Jackson, said: “There’s no money in selling new vehicles. Thank God I have the scale and a strong brand.”

The latest venture for AutoNation will see it maintain and repair Waymo’s fleet of self-driving cars.

Mr Jackson said Waymo – a subsidiary of Google – is “far ahead of everybody else as far as providing a consumer service”.

“The business model for autonomous ride-hailing services is still in its infancy.

“All I’m looking for is to join hands with the baby that’s crawling on the floor, and eventually they’ll stand up. One day they’ll make money and then we’ll make money.

“I don’t need to make money (now). I just want to be there from the beginning and pick the right partner.”

In an interview with Forbes, Mr Jackson said Waymo – started by Google founders Larry Page and Sergey Brin and now led by car industry veteran John Krafcik – is that partner.

He said he liked the fact that Google makes “a lot of money and the founders are passionate about Waymo”.

The important thing, he said, is that AutoNation remains relevant even in an autonomous world.

“I’ve made a bet on Waymo,” he said.

“How fast autonomous sharing grows, I can’t predict, but I’ll be there however fast it goes.”

By Neil Dowling

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