Penske Automotive Group will expand its standalone, used-vehicle supercenter footprint with three new used-car stores in the U.S., said chief executive Roger Penske.
The company will open the greenfield sites under its U.S. brand, CarSense, which operates five used-car supercenter locations in Pennsylvania and New Jersey.
The first new location will be in Phoenix and is to open in about six months, followed by locations in the New Jersey and Pennsylvania areas. All three locations will be up and running within “12 to 18 months,” Penske said.
Penske Automotive expects its standalone used-vehicle superstore operations, which also includes locations in the U.K., to sell approximately 70,000 used cars and trucks and generate over $1 billion this year.
“We believe these used-vehicle dealerships further diversify PAG’s business and provide an opportunity to capitalize on the highly fragmented used-vehicle marketplace,” Penske said during the company’s conference call on Thursday outlining its quarterly and annual financial results.
“In the fourth quarter, these businesses retailed 9,500 units, generated $176 million in revenue and $29 million in gross profit.”
Penske Automotive acquired CarSense in January 2017. It also purchased CarShop, which operates five used-car locations in U.K., in 2017. In January, it closed the deal on The Car People, which operates four used-car locations, also in the U.K.
Penske Automotive’s adjusted income from continuing operations in its fourth quarter that ended Dec. 31 included a $243.4 million benefit from changes in the U.S. federal tax law.
Excluding the tax benefit, Penske Automotive’s income in the quarter rose 11.9 percent to $86.6 million and was up 9.2 percent to $370.1 million for the year.
Penske Automotive’s revenue in the quarter increased 10.4 percent to $5.4 billion and its revenue for the 12-month period ending Dec. 31 increased 6.3 percent to $21.4 billion.
Penske Automotive operates automotive and commercial truck dealerships principally in the U.S., Canada and Western Europe.