While a number of used car operations are shutting their doors, the Penske Automotive Group is in full buy mode. After announcing that it had purchased competitors CarSense and CarShop, the latter in the United Kingdom, founder, and Chairman Roger Penske announced that they still plan to expand over the coming years in both the United States and Great Britain. He touts the company’s dedicated people and efficient processes as the keys to making gains while his competitors continue to fall by the side of the road, given that Ashbury Automotive Group closed their line of used cars recently.
Penske’s sales forecasts for used vehicles in the US and the UK approach $350 million dollars a year and should be delivering about a 5% return, the company claimed. The chairman also noted that the company’s used car division is returning about $400 more per vehicle, all in, than its new car franchises. The reasons for this are somewhat varied, but most point to the one price selling strategy in which the sales person is there to find you the right car, not the most expensive one. Their sales people are paid a straight salary and not a commission, thereby changing the focus to volume versus price, but the company did admit that they have volume incentives in place at its stores. Other also point to the seven-day return policy and a six month part and accessory no-deductible repair plan on all vehicles sold. But what most will agree on is that Penske knows how to get inventory no matter what the market conditions are and if you can’t get inventory at a good price, then you just can’t stay in the game, as most of Penske’s competitors are finding out.