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Press Release

Penske Automotive Reports Third Quarter Results

Adjusted Income from Continuing Operations of $27.9 Million, or $0.30 Per Share

BLOOMFIELD HILLS, Mich., Oct 30, 2008 (BUSINESS WIRE) -- --Adjusted Results Exclude $0.03 Per Share in Severance and Other Charges

--Worldwide Headcount Reduced By 4%

--Company Repurchased 3.6 Million Shares for $50 Million

Penske Automotive Group, Inc. (NYSE: PAG), an international automotive retailer, today reported third quarter 2008 adjusted income from continuing operations of $27.9 million, or $0.30 per share, compared to income from continuing operations of $42.9 million, or $0.45 per share, in the third quarter last year. Adjusted third quarter 2008 earnings exclude an aggregate of $2.7 million ($0.03 per share) of after-tax severance costs, costs associated with the termination of an acquisition agreement, and insurance deductibles relating to damage sustained at the Company's dealerships in the Houston market during Hurricane Ike. Including these items, actual third quarter income from continuing operations was $25.1 million, or $0.27 per share. Net income in the third quarter was $24.2 million, or $0.26 per share, compared with net income of $43.4 million, or $0.46 per share, in the prior year.

Third quarter revenues were $3.0 billion, which compare to $3.4 billion in the prior year. Same-store retail revenues decreased 17.0%, as same-store unit sales of new vehicles fell 19.3% during the quarter. "Obviously, it was a difficult quarter for auto retailers in our markets," said Penske Automotive Group Chairman Roger Penske. "We experienced a rapid decline in consumer interest for new vehicles in both the United States and the United Kingdom. We believe the challenges in our markets relate mainly to consumer confidence, not credit availability. In fact, the Company's largest captive finance partners are responsible for funding more than 75% of the vehicles financed at our dealerships in the United States and remain committed to the needs of our customers."

During the third quarter, adjusted selling, general and administrative expenses increased to 82.5% as a percentage of gross profit, due in part to the decline in vehicle sales during the period. Penske continued, "In an effort to address the impact of these challenging market conditions, we took steps during the third quarter to better align variable expenses with current business levels. These actions included a 4.3% reduction in worldwide employment levels, resulting in an estimated $24.0 million reduction in annualized personnel expense. We continue to evaluate staffing levels and other selling, general and administrative expenses, and are making further reductions as warranted by market conditions."

For the nine months ended September 30, 2008, revenues were $9.6 billion, which compare to $9.8 billion in the prior year. Adjusted income from continuing operations for the nine months was $102.3 million, or $1.09 per share, compared to adjusted income from continuing operations of $112.0 million, or $1.18 per share, in the prior year. Adjusted 2008 earnings exclude the severance, transaction termination costs and deductibles outlined above, and adjusted 2007 earnings exclude $12.3 million ($0.13 per share) of after-tax costs relating to the redemption of the Company's 9.625% Senior Subordinated Notes in March of 2007. Actual income from continuing operations and net income for the nine months ended September 30, 2008, were $99.6 million, or $1.06 per share, and $98.0 million, or $1.04 per share, respectively.

During the third quarter, the Company utilized $50 million of its previously announced share buyback authority. In total, the Company repurchased 3,565,143 shares of its common stock at an average price of $14.04 per share, and currently has approximately 91.9 million shares outstanding. The Company has an additional $100 million of repurchase capacity outstanding under that program.

smartUSA

Commenting on smartUSA, Penske said, "During the third quarter, our distribution business continued to perform well, despite the difficult retail market conditions. The Company wholesaled 6,683 units in the quarter, bringing our total wholesale deliveries to 19,329 for the first nine months. During the quarter, smartUSA also appointed three additional retail centers, bringing the total number of retail centers to 73."

During October, the smart fortwo was recognized as the most fuel efficient, non-hybrid, all gas powered vehicle in the United States according to the U.S. Environmental Protection Agency's 2009 Fuel Economy Guide. The 2009 smart fortwo achieves an average of 41 miles per gallon on the highway, already exceeds the 2020 Corporate Average Fuel Economy (CAFE) standards, and is classified as an Ultra-Low Emissions Vehicle by the California Air Resources Board (CARB). The 2009 smart fortwo is expected to begin arriving at dealerships in November.

Consistent with recent practice, the Company is not providing quarterly earnings guidance for the upcoming quarter, and is therefore withdrawing previously issued guidance relating to the full year. It is the Company's current intention to provide annual earnings guidance for 2009 at a later date.

Penske Automotive will host a conference call discussing financial results relating to the third quarter of 2008 on October 30, 2008, at 2:00 p.m. EDT. To listen to the conference call, participants must dial (866) 205-3921 [International, please dial (612) 332-0923]. The call will be simultaneously broadcast over the Internet through the Penske Automotive Group website at www.penskeautomotive.com.

About Penske Automotive

Penske Automotive Group, Inc., headquartered in Bloomfield Hills, Michigan, operates 307 retail automotive franchises, representing more than 40 different brands, and 25 collision repair centers. Penske Automotive, which sells new and previously owned vehicles, finance and insurance products and replacement parts, and offers maintenance and repair services on all brands it represents, has 160 franchises in 19 states and Puerto Rico and 147 franchises located outside the United States, primarily in the United Kingdom. Penske Automotive is also the exclusive distributor of the smart fortwo through its wholly-owned subsidiary smartUSA Distributor LLC. smartUSA operates 73 smart centers across the United States. Penske Automotive is a member of the Fortune 200 and Russell 1000 and has approximately 15,000 employees. smart and fortwo are registered trademarks of Daimler AG.

Caution Concerning Forward Looking Statements

Statements in this press release may involve forward-looking statements, including forward-looking statements regarding Penske Automotive Group, Inc.'s future sales and earnings potential and its ability to reduce its variable expenses. Actual results may vary materially because of risks and uncertainties, including external factors such as interest rate fluctuations, changes in consumer spending and other factors over which management has no control. These forward-looking statements should be evaluated together with additional information about Penske Automotive's business, markets, conditions and other uncertainties which could affect Penske Automotive's future performance. These risks and uncertainties are addressed in Penske Automotive's Form 10-K for the year ended December 31, 2007, and its other filings with the Securities and Exchange Commission ("SEC"). This press release speaks only as of its date, and Penske Automotive disclaims any duty to update the information herein.

This release contains certain non-GAAP financial measures as defined under SEC rules, such as adjusted income from continuing operations and related earnings per share, which exclude certain items disclosed in the release. The Company has reconciled these measures to the most directly comparable GAAP measures in the release. The Company believes that these non-GAAP financial measures improve the transparency of the Company's disclosure and the period-to-period comparability of the Company's results from operations.

PENSKE AUTOMOTIVE GROUP, INC.
Consolidated Statements of Income
(Amounts In Thousands, Except Per Share Data)
(Unaudited)
                                                                            Third Quarter
                                                                            2008                        2007
Revenues:
New Vehicle                                                                 $1,556,198                  $1,882,971
Used Vehicle                                                                721,075                     785,598
Finance and Insurance, Net                                                  68,135                      78,400
Service and Parts                                                           363,067                     355,348
Distribution                                                                85,567                      - -
Fleet and Wholesale Vehicle                                                 202,401                     283,538
Total Revenues                                                              2,996,443                   3,385,855
Cost of Sales:
New Vehicle                                                                 1,428,921                   1,723,615
Used Vehicle                                                                668,443                     723,137
Service and Parts                                                           161,252                     157,734
Distribution                                                                72,362                      - -
Fleet and Wholesale Vehicle                                                 204,352                     281,877
Total Cost of Sales                                                         2,535,330                   2,886,363
Gross Profit                                                                461,113                     499,492
SG&A Expenses                                                               384,533                     390,523
Depreciation and Amortization                                               14,133                      12,556
Operating Income                                                            62,447                      96,413
Floor Plan Interest Expense                                                 (15,557     )               (19,235     )
Other Interest Expense                                                      (16,358     )               (12,409     )
Equity in Earnings of Affiliates                                            8,995                       1,475
Income from Continuing Operations Before Income Taxes and Minority          39,527                      66,244
Interests
Income Taxes                                                                (14,190     )               (22,814     )
Minority Interests                                                          (189        )               (531        )
Income from Continuing Operations                                           25,148                      42,899
Income (Loss) from Discontinued Operations, Net of Tax                      (932        )               501
Net Income                                                                  $24,216                     $43,400
Income from Continuing Operations Per Diluted Share                         $0.27                       $0.45
Diluted EPS                                                                 $0.26                       $0.46
Diluted Weighted Average Shares Outstanding                                 93,134                      94,614
PENSKE AUTOMOTIVE GROUP, INC.
Consolidated Statements of Income
(Amounts In Thousands, Except Per Share Data)
(Unaudited)
                                                             Nine Months
                                                             2008                        2007
Revenues:
New Vehicle                                                  $4,922,718                  $5,318,796
Used Vehicle                                                 2,339,925                   2,387,664
Finance and Insurance, Net                                   218,474                     221,130
Service and Parts                                            1,088,277                   1,055,177
Distribution                                                 247,758                     - -
Fleet and Wholesale Vehicle                                  735,028                     838,918
Total Revenues                                               9,552,180                   9,821,685
Cost of Sales:
New Vehicle                                                  4,512,354                   4,871,488
Used Vehicle                                                 2,159,328                   2,200,786
Service and Parts                                            479,678                     466,327
Distribution                                                 208,585                     - -
Fleet and Wholesale Vehicle                                  738,132                     831,021
Total Cost of Sales                                          8,098,077                   8,369,622
Gross Profit                                                 1,454,103                   1,452,063
SG&A Expenses                                                1,179,670                   1,143,756
Depreciation and Amortization                                41,125                      37,657
Operating Income                                             233,308                     270,650
Floor Plan Interest Expense                                  (49,378     )               (54,206     )
Other Interest Expense                                       (40,962     )               (44,053     )
Equity in Earnings of Affiliates                             13,322                      3,183
Debt Redemption Charge                                       - -                         (18,634     )
Income from Continuing Operations Before                     156,290                     156,940
Income Taxes and Minority Interests
Income Taxes                                                 (55,632     )               (55,746     )
Minority Interests                                           (1,052      )               (1,527      )
Income from Continuing Operations                            99,606                      99,667
Loss from Discontinued Operations, Net of Tax                (1,597      )               (1,330      )
Net Income                                                   $98,009                     $98,337
Income from Continuing Operations Per Diluted Share          $1.06                       $1.05
Diluted EPS                                                  $1.04                       $1.04
Diluted Weighted Average Shares Outstanding                  94,215                      94,512
PENSKE AUTOMOTIVE GROUP, INC.
Consolidated Condensed Balance Sheets
(Amounts In Thousands)
(Unaudited)
                                                       9/30/08              12/31/07
Assets
Cash and Cash Equivalents                              $27,772              $13,267
Accounts Receivable, Net                               371,557              447,717
Inventories                                            1,721,833            1,680,062
Other Current Assets                                   80,689               65,756
Assets Held for Sale                                   7,496                90,987
Total Current Assets                                   2,209,347            2,297,789
Property and Equipment, Net                            701,480              617,707
Intangibles                                            1,691,002            1,668,163
Other Assets                                           327,853              84,894
Total Assets                                           $4,929,682           $4,668,553
Liabilities and Stockholders' Equity
Floor Plan Notes Payable                               $1,077,639           $1,069,710
Floor Plan Notes Payable -- Non-Trade                  537,095              476,028
Accounts Payable                                       233,496              266,251
Accrued Expenses                                       239,663              211,588
Current Portion Long-Term Debt                         13,444               14,522
Liabilities Held for Sale                              11,419               57,940
Total Current Liabilities                              2,112,756            2,096,039
Long-Term Debt                                         1,073,878            830,106
Other Long-Term Liabilities                            351,392              320,949
Total Liabilities                                      3,538,026            3,247,094
Stockholders' Equity                                   1,391,656            1,421,459
Total Liabilities and Stockholders' Equity             $4,929,682           $4,668,553
PENSKE AUTOMOTIVE GROUP, INC.
Selected Data
                                        Third Quarter                               Nine Months
                                        2008                2007                    2008                2007
Total Retail Units
New Retail                              45,416              53,168                  141,164             149,362
Used Retail                             26,411              25,648                  81,359              77,945
Total Retail                            71,827              78,816                  222,523             227,307
smart Wholesale Units                   6,683               - -                     19,329              - -
Same-Store Retail Units
New Same-Store Retail                   42,733              52,923                  126,512             142,993
Used Same-Store Retail                  25,390              25,515                  76,896              74,724
Total Same-Store Retail                 68,123              78,438                  203,408             217,717
Same-Store Retail Revenue
New Vehicles                            $1,473,271          $1,874,985              $4,493,349          $5,122,145
Used Vehicles                           681,034             782,675                 2,192,650           2,303,289
Finance and Insurance, Net              65,554              78,128                  204,076             216,035
Service and Parts                       342,836             352,931                 1,018,308           1,023,544
Total Same-Store Retail                 $2,562,695          $3,088,719              $7,908,383          $8,665,013
Same-Store Retail Revenue Growth
New Vehicles                            (21.4       %)      8.7         %           (12.3       %)      7.4         %
Used Vehicles                           (13.0       %)      12.5        %           (4.8        %)      15.9        %
Finance and Insurance, Net              (16.1       %)      11.6        %           (5.5        %)      9.6         %
Service and Parts                       (2.9        %)      7.1         %           (0.5        %)      8.2         %
Revenue Mix
New Vehicles                            51.9        %       55.6        %           51.5        %       54.2        %
Used Vehicles                           24.1        %       23.2        %           24.5        %       24.3        %
Finance and Insurance, Net              2.3         %       2.3         %           2.3         %       2.3         %
Service and Parts                       12.1        %       10.5        %           11.4        %       10.7        %
Distribution                            2.9         %       --          %           2.6         %       --          %
Fleet and Wholesale                     6.7         %       8.4         %           7.7         %       8.5         %
Average Retail Selling Price
New Vehicles                            $34,265             $35,415                 $34,872             $35,610
Used Vehicles                           27,302              30,630                  28,760              30,633
Gross Margin                            15.4        %       14.8        %           15.2        %       14.8        %
Retail Gross Margin -- by Product
New Vehicles                            8.2         %       8.5         %           8.3         %       8.4         %
Used Vehicles                           7.3         %       8.0         %           7.7         %       7.8         %
Service and Parts                       55.6        %       55.6        %           55.9        %       55.8        %
PENSKE AUTOMOTIVE GROUP, INC.
Selected Data (Continued)
                                         Third Quarter                         Nine Months
                                         2008             2007                 2008              2007
Gross Profit per Retail Transaction
New Vehicles                             $2,802           $2,997               $2,907            $2,995
Used Vehicles                            1,993            2,435                2,220             2,398
Finance and Insurance                    949              995                  982               973
Brand Mix:
BMW                                      23       %       22       %           22        %       22        %
Toyota / Lexus                           19       %       20       %           20        %       20        %
Honda / Acura                            15       %       15       %           15        %       15        %
Mercedes Benz                            10       %       10       %           10        %       11        %
Audi                                     9        %       8        %           9         %       8         %
Land Rover                               4        %       5        %           4         %       5         %
Ferrari / Maserati                       3        %       2        %           3         %       2         %
Porsche                                  3        %       3        %           3         %       4         %
Other                                    14       %       15       %           14        %       13        %
                                         100      %       100      %           100       %       100       %
Premium                                  64       %       64       %           64        %       65        %
Foreign                                  31       %       30       %           31        %       29        %
Domestic Big 3                           5        %       6        %           5         %       6         %
                                         100      %       100      %           100       %       100       %
Revenue Mix:
U.S.                                     64       %       63       %           63        %       62        %
International                            36       %       37       %           37        %       38        %
                                         100      %       100      %           100       %       100       %
Debt to Total Capital Ratio              44       %       37       %           44        %       37        %
Rent Expense                             $40,922          $38,422              $121,216          $111,909

SOURCE: Penske Automotive Group, Inc.

Penske Automotive Group, Inc. 
Bob O'Shaughnessy, 248-648-2800 
Chief Financial Officer 
boshaughnessy@penskeautomotive.com 
or 
Tony Pordon, 248-648-2540 
Senior Vice President 
tpordon@penskeautomotive.com

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