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SEC Filings

10-K
PENSKE AUTOMOTIVE GROUP, INC. filed this Form 10-K on 02/24/2017
Entire Document
 

Retail Automotive Dealership Operations

 

Retail Automotive Franchises. We routinely acquire and dispose of retail automotive franchises. Our financial statements include the results of operations of acquired dealerships from the date of acquisition. We expect to continue to pursue acquisitions and selected dispositions in the future. The following table exhibits our retail automotive franchises by location and manufacturer as of December 31, 2016:

 

 

 

 

 

 

 

 

 

 

 

 

Location

    

Franchises

    

Franchises

    

U.S.

    

Non-U.S.

    

Total

Arizona

 

23

 

BMW/MINI

 

21

 

45

 

66

Arkansas

 

11

 

Toyota/Lexus

 

24

 

 3

 

27

California

 

29

 

Mercedes-Benz/Sprinter/smart

 

20

 

25

 

45

Connecticut

 

10

 

Audi/Volkswagen/Bentley

 

18

 

50

 

68

Florida

 

 6

 

Chrysler/Jeep/Dodge/Fiat/Alfa Romeo

 

16

 

 —

 

16

Georgia

 

 3

 

Honda/Acura

 

22

 

 —

 

22

Indiana

 

 2

 

Ferrari/Maserati

 

 4

 

12

 

16

Maryland

 

 2

 

Porsche

 

 8

 

11

 

19

Minnesota

 

 2

 

Jaguar/Land Rover

 

 8

 

20

 

28

New Jersey

 

24

 

Lamborghini

 

 1

 

 4

 

 5

Ohio

 

 8

 

Nissan/Infiniti

 

 6

 

 1

 

 7

Puerto Rico

 

13

 

Cadillac/Chevrolet

 

 5

 

 —

 

 5

Rhode Island

 

12

 

Others

 

11

 

20

 

31

Tennessee

 

 1

 

Total

 

164

 

191

 

355

Texas

 

 9

 

 

 

 

 

 

 

 

Virginia

 

 7

 

 

 

 

 

 

 

 

Wisconsin

 

 2

 

 

 

 

 

 

 

 

Total U.S.

 

164

 

 

 

 

 

 

 

 

U.K.

 

146

 

 

 

 

 

 

 

 

Germany

 

28

 

 

 

 

 

 

 

 

Italy

 

17

 

 

 

 

 

 

 

 

Total Non-U.S.

 

191

 

 

 

 

 

 

 

 

Total Worldwide

 

355

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

New Vehicle Retail Sales. In 2016, we retailed 249,695 new vehicles which generated 51.1% of our retail automotive dealership revenue and 27.1% of our retail automotive dealership gross profit. New vehicles are typically acquired by dealerships directly from the manufacturer. We strive to maintain outstanding relationships with the automotive manufacturers, based in part on our long-term presence in the retail automotive market, our commitment to providing premium facilities, our commitment to drive customer satisfaction, the reputation of our management team and the consistent sales volume at our dealerships. Our 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 2016, we retailed 207,556 used vehicles, which generated 30.3% of our retail automotive dealership revenue and 12.2% of our retail automotive dealership gross profit. We acquire used vehicles from various sources including auctions open only to authorized new vehicle dealers, public auctions, trade-ins from consumers in connection with their purchase of a new vehicle from us and lease expirations or terminations. To improve customer confidence in our used vehicle inventory, we provide vehicle history reports for all used vehicles and each of our 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. Most of our dealerships have implemented software tools which assist in procuring and selling used vehicles. In the U.K., we offer used vehicles to wholesalers and other dealers via online auction.

 

Vehicle Finance, Extended Service and Insurance Sales. Finance, extended service and insurance sales represented 2.7% of our retail automotive dealership revenue and 18.3% of our retail automotive dealership gross profit in 2016. At our customers’ option, our dealerships can arrange third-party financing or leasing in connection with vehicle purchases.

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