Penske Automotive Group (PAG) Gabelli Funds 48th Annual Automotive Aftermarket Symposium summary

Recent acquisitions and international expansion

• Added three Porsche dealerships in Melbourne, Australia, expected to generate $260 million in annual revenue and secure exclusive market coverage for Porsche in the city.

• Australian business is expanding into power systems, supplying engines for data centers, construction, and military applications, with 80% of revenue from parts and service.

U.S. and global automotive market trends

• New vehicle gross profit per unit remains elevated post-pandemic, with average transaction prices rising from $42,000 in 2019 to $58,000 year-to-date.

• Inventory levels are about 1 million units below pre-pandemic, supporting higher prices and margins.

• Electric vehicle (EV) demand is soft in the U.S. due to consumer anxiety over infrastructure, range, and technology, while hybrid sales are strong.

• U.K. mandates 22% zero-emission vehicle sales, with significant government incentives and penalties for non-compliance.

Parts, service, and operational innovation

• 72% of business is premium luxury brands, driving high service retention due to vehicle complexity and OEM maintenance packages.

• Investing $200 million annually in facilities, technology, and AI to enhance service efficiency and customer experience, including AI-driven appointment booking and partnerships with Uber.

• Adoption of flat rate hours and advanced CRM systems has improved technician productivity and service revenue.