Penske Automotive Group Inc. posted a 59-percent hike in net income in the third quarter of 2013 to $65.3 million. The dealership group also logged a 15-percent surge in revenue to $3.82 billion. The gains were partly attributed to the group's concentration of stores in the United Kingdom as well as to its feat of being able to keep down costs while having solid sales of finance and insurance products.
Group Chairman Roger Penske said in a statement that they remain confident in their ability to continue growing their business, adding that they expect both the US and UK markets to continue to perform well.
The company's operations in the US and the UK accounted for 63 percent and 35 percent of revenues in the quarter, respectively. The remaining 2 percent was accounted for by sales in other international market. The group's retail new-car sales surged 5 percent and retail used-car sales soared by 16 percent in the first three quarters of 2013.
Penske said that he expects the market to continue to accelerate. He remarked that some luxury carmakers like Mercedes-Benz and BMW will have many customers coming off lease in the next few months. "I see credit being strong," Penske said. The group chairman remarked that certified pre-owned growth remains strong due to the warranties being offered.
He also noted that the acquisition market remains "vibrant," saying that the group has the opportunity to "look both nationally and internationally." He disclosed that between 5 percent and 6 percent of Penske's future revenue will be from acquisitions as the group looks for deals locally and abroad.
He remarked that there are "a couple" of points the group is in the process of acquiring that should generate "a couple hundred million" in future revenue. The group is targeting Western Europe, where prices are "considerably less." The chairman said that the group has also entered Italy, with the progress to be reported in the next quarter. [source: Penske]