Penske Automotive Group, Inc. operates as a diversified international transportation services company and a premier automotive and commercial truck retailer worldwide. The company is a subsidiary of Penske Corporation.
The company operates dealerships in the United States, the United Kingdom, Canada, Germany, Italy, Japan, and Australia. The company is one of the largest retailers of commercial trucks in North America for Freightliner. The company also distributes and retails commercial vehicle...
Penske Automotive Group, Inc. operates as a diversified international transportation services company and a premier automotive and commercial truck retailer worldwide. The company is a subsidiary of Penske Corporation.
The company operates dealerships in the United States, the United Kingdom, Canada, Germany, Italy, Japan, and Australia. The company is one of the largest retailers of commercial trucks in North America for Freightliner. The company also distributes and retails commercial vehicles, diesel and gas engines, power systems, and related parts and services principally in Australia and New Zealand. Additionally, the company owns 28.9% of Penske Transportation Solutions, a business that manages trucking fleets in North America with over 435,000 trucks, tractors, and trailers under lease, rental, and/or maintenance contracts; and provides transportation, supply chain, and technology solutions to its customers.
Business
Retail Automotive: The company is diversified geographically with 56% of its total retail automotive dealership revenues in 2024 generated in the U.S. and Puerto Rico, and 44% generated outside of the U.S. The company offers over 40 vehicle brands, with 72% of its retail automotive franchised dealership revenue in 2024 generated from premium brands, such as Audi, BMW, Land Rover, Mercedes-Benz, and Porsche. As of December 31, 2024, the company operated 353 retail automotive franchised dealerships, of which 148 are located in the U.S. and 205 are located outside of the U.S., principally in the U.K. As of December 31, 2024, the company also operated 16 used vehicle dealerships, with six dealerships in the U.S. operating under the brand name CarShop, nine dealerships in the U.K. operating under the brand name Sytner Select, and one dealership in Australia operating under the brand name Penske Select. The company retailed and wholesaled, including agency units, more than 594,000 vehicles in 2024.
In addition to selling new and used vehicles, the company generates higher-margin revenue at each of its dealerships through maintenance and repair services, the sale and placement of third-party finance and insurance products, third-party extended service and maintenance contracts, replacement and aftermarket automotive products, and, at certain of its locations, collision repair services. The company operates its franchised dealerships under franchise agreements with a number of automotive manufacturers and distributors that are subject to certain rights and restrictions typical of the industry. Some of the company's dealerships in the U.K. and Europe operate under an agency model, where it receives a fee for facilitating the sale by the manufacturer of a new vehicle but does not hold the vehicle in inventory.
Retail Commercial Truck Dealership: The company operates Premier Truck Group (‘PTG’), a heavy- and medium-duty truck dealership group offering primarily Freightliner and Western Star trucks (both Daimler brands), with locations across 10 U.S. states and the Canadian provinces of Ontario and Manitoba. As of December 31, 2024, PTG operated 45 locations selling new and/or used trucks, performing service and parts operations, or offering collision repair services. The company retailed and wholesaled 20,947 new and used trucks in 2024. These businesses represented 11.6% of the company's total revenues in 2024.
Penske Australia: Penske Australia is the exclusive importer and distributor of Western Star heavy-duty trucks (a Daimler brand), MAN heavy- and medium-duty trucks and buses (a VW Group brand), and Dennis Eagle refuse collection vehicles, together with associated parts, across Australia, New Zealand, and portions of the Pacific. In most of these same markets, the company is also a distributor of diesel and gas engines and power systems, principally representing MTU (a Rolls-Royce solution), Detroit Diesel, Allison Transmission, and Bergen Engines. Penske Australia offers products across the on- and off-highway markets, including in the trucking, mining, power generation, energy solutions, defense, marine, rail, and construction sectors, and supports full parts and aftersales service through a network of branches, field service locations, and dealers across the region. These businesses represented 2.5% of the company's total revenues in 2024.
Penske Transportation Solutions: The company holds a 28.9% ownership interest in Penske Truck Leasing Co., L.P. (‘PTL’). PTL is owned 41.1% by Penske Corporation, 28.9% by the company, and 30.0% by Mitsui & Co., Ltd. (‘Mitsui’). The company accounts for its investment in PTL under the equity method, and therefore records its share of PTL's earnings on its statements of income under the caption ‘Equity in earnings of affiliates,’ which also includes the results of its other equity method investments. Penske Transportation Solutions (‘PTS’) is the universal brand name for PTS' various businesses, which articulates the breadth of its services. It is a provider of transportation and supply chain services. PTS is capable of meeting customers' needs across the supply chain with a broad product offering that includes full-service truck leasing, truck rental, and contract maintenance along with logistics services, such as dedicated contract carriage, distribution center management, freight management, and dry van truckload carrier services.
Outlook
Retail Automotive: The company's new vehicle days' supply was 49 as of December 31, 2024. The company's used vehicle days' supply was 47 as of December 31, 2024.
Retail Commercial Truck Dealership: During 2024, North American sales of Class 6-8 medium- and heavy-duty trucks, the vehicles sold by the company's PTG business.
Commercial Vehicle Distribution and Other: The company's power system operations continue to grow through sales in the off-highway segments, such as energy solutions, which provide power systems for large data centers, mining, and military applications.
Penske Transportation Solutions: A majority of PTS' revenue is generated by multi-year contracts for full-service leasing, contract maintenance, and logistics services. PTS also rents additional trucks to commercial customers in response to demand for freight, as well as consumer customers. With a managed fleet of over 435,000 vehicles as of December 31, 2024, PTS regularly sells trucks in order to maintain a low fleet age, as well as in response to changes in demand for truck leasing, and records a gain or loss on those sales. PTS is experiencing positive revenue growth in its business despite adverse global economic freight conditions. This growth is being driven by its full-service leasing, contract maintenance, and logistics businesses, partially offset by lower revenues in its commercial and consumer rental product lines. The weaker freight environment and higher interest rates have directly impacted demand for its transactional products, as well as used vehicle pricing.
Diversification
The company's business benefits from a diversified revenue and gross profit mix, including multiple revenue and gross profit streams in its traditional vehicle and commercial truck dealerships (new vehicles, used vehicles, finance and insurance, and service and parts operations) across many geographies, its commercial vehicle distribution and power systems operations, and returns relating to its joint venture investments. Furthermore, PTG provides diversification both by business line and by its business being represented across the U.S. and in Canada. Finally, the company's ownership interest in PTS provides it with additional diversification.
The company is also diversified within its automotive retail operations by brand. It represents over 40 brands in its markets, and its automotive dealership revenue mix consists of 72% related to premium brands, 21% related to volume non-U.S. brands, 2% related to brands of the U.S.-based manufacturers, and 5% related to its used vehicle dealerships.
Retail Automotive Dealership Operations
Retail Automotive Franchises: The company routinely acquires and disposes of retail automotive franchises.
New Vehicle Retail Sales: In 2024, the company retailed, including agency units, more than 244,990 new vehicles, which generated 46.1% of its retail automotive dealership revenue. The company strives to maintain outstanding relationships with the automotive manufacturers based in part on its long-term presence in the retail automotive market, its commitment to providing premium facilities, its commitment to driving customer satisfaction, the reputation of its management team, and the consistent sales volume at its dealerships. The company's dealerships finance the purchase of most new vehicles from the manufacturers through floor plan financing provided primarily by various manufacturers' captive finance companies.
Used Vehicle Retail Sales: In 2024, the company retailed 246,608 used vehicles, which generated 33.5% of its retail automotive dealership revenue. The company acquires used vehicles from various sources, including trade-ins from consumers in connection with their purchase of a new or used vehicle from the company, purchases of used vehicles directly from consumers, lease expirations, public auctions, and auctions open only to authorized new vehicle dealers. To improve customer confidence in its used vehicle inventory, the company provides vehicle history reports for all used vehicles, and virtually all of its franchised new vehicle dealerships participate in manufacturer certification processes for used vehicles. If certification is obtained, the used vehicle owner is typically provided benefits and warranties similar to those offered to new vehicle owners by the applicable manufacturer.
Vehicle Finance and Insurance Sales: Finance and insurance sales represented 3.1% of the company's retail automotive dealership revenue in 2024. The company typically receives a flat fee or a portion of the cost of the financing or leasing paid by the customer for each transaction. While these services are generally non-recourse to the company, it is subject to chargebacks in certain circumstances, such as default under a financing arrangement or pre-payment. These chargebacks vary by finance product but typically are limited to the fee the company receives.
The company also offers its customers various vehicle warranty and extended protection products, including extended service contracts, maintenance programs, and voluntary vehicle protection products. The extended service contracts and other products that the company's dealerships offer to customers are underwritten by independent third parties, including the vehicle manufacturers' captive finance companies. Similar to finance transactions, the company is subject to chargebacks relating to fees earned in connection with the sale of certain protection products. The company also offers for sale other aftermarket products, including security systems and protective coatings.
The company offers finance and insurance products using a ‘menu’ process, which is designed to ensure that it offers its customers a complete range of finance, insurance, protection, and other aftermarket products in a transparent manner. The company utilizes docuPAD at its U.S. dealerships, an interactive electronic interface designed to improve document processing and menu presentation of finance and insurance options during the purchase or lease transaction.
Service and Parts Sales: Service and parts sales represented 11.7% of the company's retail automotive dealership revenue in 2024. The company generates service and parts revenue in connection with providing a wide range of services, such as vehicle maintenance, cosmetic repair, manufacturer recalls, warranty, out-of-warranty, rapid repair, and collision repair services. The company also reconditions used vehicles that it intends to sell in its dealerships. The company looks to generate higher revenue by driving higher levels of customer satisfaction, marketing, and the use of technology, such as videos, which allow its technicians to interact directly with the customer, obtain digital approvals, and increase efficiency. Additionally, the company's AI-driven service scheduling and reception system at certain of its dealerships enhances the customer experience by providing instant support, reducing wait times, and offering 24/7 assistance, enabling seamless service even outside regular hours. By accurately interpreting customer needs and automating appointment bookings, the system streamlines operations, allowing staff to focus on more complex tasks while providing customers with access to human support when necessary. The company also offers rapid repair services, such as paintless dent repair, tire sales, and windshield replacement at most of its facilities in order to offer its customers the convenience of one-stop shopping for all of their automotive requirements.
The company also operates 36 automotive collision repair centers, each of which is operated as an integral part of its dealership operations. The collision centers are staffed with factory-certified technicians with broad capabilities, extending to complete vehicle reconstruction and mechanical engine repairs. The company’s collision centers also carry an extensive inventory of parts for the new and used vehicles they repair.
Fleet and Wholesale Sales: Fleet and wholesale sales represented 5.6% of the company's retail automotive dealership revenue in 2024. Fleet activities represent the sale of new units to customers that are deemed to not be retail customers, such as cities, municipalities, or rental car companies; and are generally sold at contracted amounts. Wholesale activities relate to the sale of used vehicles generally to other dealers and occur at auction. In the U.K., the company offers used vehicles to wholesalers and other dealers via a proprietary online auction.
Retail Commercial Truck Dealership Operations
Premier Truck Group (‘PTG’) is a heavy- and medium-duty truck dealership group offering primarily Freightliner and Western Star trucks (both Daimler brands) with 45 locations across various U.S. states and the Canadian provinces of Ontario and Manitoba. PTG dealerships provide a similar suite of services as the company's automotive dealerships, offering new trucks and a large selection of used trucks for sale, a full range of parts, maintenance and repair services, collision centers, and finance and insurance options by facilitating truck and trailer financing and leasing, extended maintenance plans, voluntary vehicle protection products, and other programs.
The maintenance and repair of commercial trucks is an essential service and a key area of differentiation for the company's business. The company offers ‘Elite Support’ certified locations to help maximize vehicle uptime. Elite Support certified locations provide an express assessment whereby the company communicates a primary diagnosis, checks parts availability, and provides an estimate of cost and repair time within a few hours of service write-up. As part of this service, many of the company's locations offer a comfortable environment for customers with amenities, such as customer lounges, lockers, showers, and laundry facilities. The company also offers roadside remote service for certain repairs and provides 24/7 technician support for breakdown/emergency service in select locations.
The collision centers at PTG are full-service, heavy-duty paint and collision repair facilities with certified professionals that can handle everything from light cosmetic issues to complete vehicle reconstruction, including mechanical engine repairs. PTG also carries an extensive inventory of parts for the new and used trucks they sell and service. The service and parts business of the company’s PTG commercial truck dealerships represents approximately 65% of the company's retail commercial truck dealership gross profit.
A significant portion of the company's new commercial vehicle sales are to customers with large fleets of commercial vehicles. Because of the size and geographic scope of its dealership locations, its strong relationships with its fleet customers and its ability to manage large quantities of used commercial vehicle trade-ins, the company is able to successfully market and sell to large fleet customers. The broad range of products and services the company offers to purchasers of commercial vehicles at the time of purchase and post-purchase results in a high level of customer loyalty.
The company sells the majority of its new heavy-duty commercial vehicles by customer special order and the company sells the majority of its medium-duty commercial vehicles out of inventory.
Commercial Vehicle Distribution and Other Operations
Penske Australia: Penske Australia is the exclusive importer and distributor of Western Star heavy-duty trucks (a Daimler brand), MAN heavy- and medium-duty trucks and buses (a VW Group brand), and Dennis Eagle refuse collection vehicles, together with associated parts, across Australia, New Zealand, and portions of the Pacific. In most of these same markets, the company is also a distributor of diesel and gas engines and power systems, principally representing MTU (a Rolls-Royce solution), Detroit Diesel, Allison Transmission, and Bergen Engines. Penske Australia offers products across the on- and off-highway markets, including in the trucking, mining, power generation, energy solutions, defense, marine, rail, and construction sectors; and supports full parts and aftersales service through a network of branches, field service locations, and dealers across the region.
Penske Australia distributes commercial vehicles and parts for Western Star, MAN, and Dennis Eagle to a network that comprises on average of more than 70 dealership locations across Australia, New Zealand, and portions of the Pacific. Of these dealership locations, 12 are company-owned retail commercial vehicle and/or service and parts dealerships in Australia, and three are company-owned retail commercial vehicle dealerships in New Zealand.
Western Star trucks are manufactured by Daimler Trucks North America in Portland, Oregon. These technologically advanced, custom-built vehicles are ordered by customers to meet their particular needs for line haul, long-distance road train, mining, logging, and other heavy-duty applications. The company is also the exclusive importer of MAN trucks and buses. MAN Truck and Bus, a VW Group company, is a producer of medium- and heavy-duty trucks, as well as city and coach buses. These cab-forward, fuel-efficient vehicles are principally produced in several sites in Germany and are ordered by customers for line haul, local distribution, mining, and other off-road applications. Dennis Eagle refuse collection vehicles are manufactured by Ros Roca in Warwick, England. These brands represented 4.1% of heavy-duty truck units sold in Australia and 2.0% in New Zealand during 2024.
The company also distributes diesel gas engines and power systems to over 100 dealer locations that are strategically located throughout Australia, New Zealand, and portions of the Pacific. Most of the dealers represent the Detroit Diesel brand, with the majority aligned to Western Star and/or Freightliner truck manufacturers. The remaining dealers represent the MTU and Allison Transmission brands. The ‘off-highway’ business principally includes the sale and servicing of power systems directly to customers in the commercial, defense, mining, maritime, power generation, and energy solutions sectors from various facilities the company operates across Australia and New Zealand. The company also utilizes mobile remote field service units to travel directly to customer premises.
Penske Transportation Solutions
The company holds a 28.9% ownership interest in Penske Truck Leasing Co., L.P. (‘PTL’). Penske Transportation Solutions (‘PTS’) is the universal brand name for PTL's various business lines through which it is capable of meeting customers' needs across the supply chain with a broad product offering that includes full-service truck leasing, truck rental, and contract maintenance, along with logistics services, such as dedicated contract carriage, distribution center management, freight management, and dry van truckload carrier services. PTS has a diversified customer base ranging from multi-national corporations across industries, such as food and beverage, transportation, manufacturing, automotive, retail, and healthcare, with whom it has long-term contracts to individual consumers who rent a single truck on a daily basis.
PTS manages one of the largest, most comprehensive and modern trucking fleets in North America, with approximately 435,000 trucks, tractors, and trailers under lease, rental, and/or maintenance contracts as of December 31, 2024, through its network of locations throughout North America. Furthermore, PTS has consistently been among the largest purchasers of commercial trucks in North America and had an average full-service leasing Class 8 tractor fleet age of approximately 3.4 years as of December 31, 2024, which is substantially lower than the overall Class 8 tractor fleet age in the United States.
Full-service truck leasing, truck rental, and contract maintenance: Full-service truck leasing, truck rental, and contract maintenance of commercial trucks, tractors, and trailers constitute PTS' largest business. PTS manages a fleet of over 435,000 trucks, tractors, and trailers, consisting of over 282,900 vehicles owned by PTS and leased to customers under full-service lease or rental agreements and over 152,300 customer-owned and -operated vehicles for which it provides contract maintenance services. Lease terms under its full-service leases generally range from four to seven years for tractors and trucks and six to twelve years for trailers. Its commercial and consumer rental fleet, as of December 31, 2024, consisted of approximately 94,800 vehicles for use by its full-service truck leasing, small business, and consumer customers for periods generally ranging from less than a day to 12 months. Most of its leased vehicles are configured according to customer specifications, including custom painting and lettering, while its rental trucks bear Penske branding.
Commercial customers often outsource to PTS to reduce the complexity, cost, and total capital associated with vehicle ownership. Under a full-service lease, PTS provides and fully maintains the vehicle, which is generally configured for the customer. The services provided under full-service lease and contract maintenance agreements generally include preventive and regular maintenance, advanced diagnostics, emergency road service, fleet services, safety programs, and fuel services through PTS' network of company-operated facilities and a nationwide network of independent truck stops. In addition, PTS makes available to its full-service leasing and contract maintenance customers additional vehicles on a rental basis. PTS' commercial rental operations offer short-term availability of tractors, trucks, and trailers, typically to accommodate seasonal, emergency, and other temporary needs. A significant portion of these rentals are to existing full-service leasing and contract maintenance customers who are seeking flexibility in their fleet management. PTS has established a network of approximately 930 locations to provide full-service truck leasing, truck rental, and contract maintenance services to customers. This network enables PTS to meet multi-location customer requirements. PTS' commercial rental business generated 19% of its revenue for 2024, and its full-service lease and contract maintenance business generated 50% of its revenue in 2024.
For consumer customers, PTS provides short-term rental of light- and medium-duty vehicles on a one-way and local basis, typically to transport household goods. Customers typically include local small businesses and individuals seeking a do-it-yourself solution to their moving needs. PTS' consumer fleet generally consists of late model vehicles ranging in size from small vans to 26-foot trucks, and its consumer rentals are conducted through approximately 1,910 independent rental agents and approximately 410 of its company-operated leasing and rental facilities. PTS' consumer business generated 3% of its revenue for 2024.
Logistics: PTS' logistics business offers an extensive variety of services, including dedicated contract carriage, distribution center management, freight management, lead logistics provider, and dry van truckload carrier services. PTS coordinates services for its customers across the supply chain, including inbound material flow, handling and packaging, inventory management, distribution and technologies, and sourcing of third-party carriers. These services are available individually or on a combined basis and often involve its associates performing services at the customer's location. By offering a scalable series of services to its customers, PTS can manage the customer's entire supply chain or any stand-alone service. PTS also utilizes specialized software that enables real-time fleet visibility and provides reporting metrics. PTS' international logistics business has approximately 520 locations in North America, South America, and Europe. PTS' logistics business generated 28% of its revenue for 2024.
Marketing Strategy
The company's integrated marketing strategies empower each dealership to capitalize on local branding while being supported by corporate programs and web presence, allowing it to leverage scale. The company aligns itself with the marketing implemented by its vehicle manufacturer partners for their respective brands and integrate those initiatives and resources across the brands it represents.
The company is focused on executing a comprehensive data-driven digital strategy with emphasis on customization, personalization, and creating a connection with the company's customers. The company endeavors to build and optimize its presence across all digital platforms and deliver a seamless, convenient, and transparent experience that gives customers the ability to purchase, sell, or schedule service for their vehicles on their terms.
To stay at the forefront of technological innovations, the company leverages software and systems to support its customers regardless of how they want to engage with the company, from fully online to in-person or anywhere in between. In addition, it has implemented AI-driven technologies at certain of the company's dealerships, including a voice assistant to answer and appoint inbound service calls and an engagement system to address customer lead inquiries and schedule sales and service appointments. These technologies are designed to improve the company's customer experience and allow customers to engage with it 24/7.
The company monitors customer satisfaction data to gain insight into its business performance and enhance the areas of the company's business that drive customer referral and loyalty. Additionally, the company leverages corporate social media efforts and partners to benefit its dealerships and create a strong sense of community. Online reputation management sites are proactively monitored to ensure it is offering superior customer experience.
Agreements with Vehicle and Equipment Manufacturers
The company operates its new vehicle dealerships under separate agreements with the manufacturers or distributors of each brand of vehicle sold at that dealership. These agreements are typical throughout the industry. In addition, the General Manager and/or the owner of a dealership typically cannot be changed without the manufacturer's consent. In exchange for complying with these provisions and standards, the company is granted the non-exclusive right to sell the manufacturer's or distributor's brand of vehicles and related parts and warranty services at its dealerships. The agreements also grant the company a non-exclusive license to use each manufacturer's trademarks, service marks, and designs in connection with its sales and service of its brand at its dealership.
Many of these agreements also grant the manufacturer or distributor a security interest in the vehicles and/or parts sold by them to the dealership, as well as other dealership assets, and permit them to terminate or not renew the agreement for a variety of causes, including failure to adequately operate the dealership, insolvency or bankruptcy, impairment of the dealer's reputation or financial standing, changes in the dealership's management, owners, or location without consent, sales of the dealership's assets without consent, failure to maintain adequate working capital or floor plan financing, changes in the dealership's financial or other condition, failure to submit required information to them on a timely basis, failure to have any permit or license necessary to operate the dealership, and material breaches of other provisions of the agreement.
In the U.S., some of the company's franchise agreements, including those with BMW, Honda, and Toyota, expire after a specified period of time ranging from one to six years. Manufacturers have not historically terminated the company's franchise agreements, and its franchise agreements with fixed terms have typically been renewed. In the U.K., many of the company's agreements have two-year rolling terms. The company’s agreements with BMW, its largest U.K. manufacturer, expire in December 2025. Similar to the U.S., the manufacturers in the U.K. have not historically terminated our agreements, and the company’s agreements with fixed terms have typically been renewed.
With respect to the company's commercial vehicle distribution and other operations in Australia and New Zealand, it is party to distributor agreements with each manufacturer of products it distributes, pursuant to which it is the distributor of these products in those countries and nearby markets. The agreements govern all aspects of the company's distribution rights, including sales and service activities, service and warranty terms, use of intellectual property, promotion and advertising provisions, pricing and payment terms, and indemnification requirements. The agreement with Western Star expires in 2031, the agreement with MTU expires in 2029, and the agreement with Detroit Diesel expires in 2031. The company is also a party to shipping agreements with respect to importing those products.
Competition
In the company's retail commercial truck dealership operations, it competes with other manufacturers and retailers of medium- and heavy-duty trucks, such as Ford, International Kenworth, Mack, Peterbilt, and Volvo.
Regulation
In the U.K., the Financial Conduct Authority (the ‘FCA’) regulates financial services firms and financial markets, including the company's activities in acting as broker for the financing of vehicle sales.
History
Penske Automotive Group, Inc. was incorporated in the state of Delaware in 1990.
