Penske finally gets the global marketplace
[Editor's Note: Funny thing how Roger Penske gets the global marketplace for his own companies, yet in the past has suggested IndyCar stay a domestic product. Hence it remains small and unprofitable.]
Penske Automotive Group Inc. plans to snap up more dealerships overseas, but shift its product mix toward domestic brands in the United States.
That's a change for the dealership group, which has largely focused on acquiring volume foreign brands for more than a decade.
Penske's fourth-quarter brand mix was 70 percent premium luxury brands, 26 percent volume foreign brands and 4 percent domestic brands.
"Our goal is to grow that domestic piece in the next 12 to 24 months," Chairman Roger Penske said in an interview with Automotive News on Wednesday. "We think there are some real opportunities in all three domestics."
Penske said the company will look to acquire domestic franchises in U.S. markets where it has dealerships so it can leverage economies of scale.
Penske has $115 million to $120 million to spend on future acquisitions, Penske said.
The shift in Penske's strategy comes as some analysts see Detroit's prospects improving in the U.S. market.
Chrysler Group's U.S. sales have expanded for 34 consecutive months, and General Motors and Ford Motor Co. officials believe the two companies are entering the sweet spot of their product cycles.
In January, all three Detroit automakers gained U.S. market share in the same month for the first time since August 2011.
Penske plans to target the United States and United Kingdom for most of its future acquisitions, given that the dealership group already has scale in those markets.
But Penske is looking at "opportunities" in Germany and Italy, he said.
"For China you won't see us make a move there in 2013," Penske said. "It's more expensive. Some dealers have gone public there, there's a mix of partners and outside investors and I'd like to see that settle down and maybe there'll be some opportunities in the next couple of years."
In 2012, 64 percent of Penske's global revenue was generated in the United States with 36 percent coming from its international operations. This year that will shift slightly to 60 percent domestic and 40 percent international, Penske said.
"We'll probably see a little more focus on international than maybe domestic," Penske said.
Penske ranks No. 2 on the Automotive News list of the top 125 dealership groups in the United States with retail sales of 154,829 new vehicles in 2011. On Wednesday, it reported new retail sales for 2012 of 180,764 units.