DONNA HARRIS

Penske's wheels keep turning

Donna Harris covers retail issues for Automotive News
Not long ago, I heard Roger Penske, the chairman of the publicly held Penske Automotive Group, tell analysts how his company was propping up profits. And smack in the middle of his presentation, Penske says some of his shops "have paint booths just for wheels."

Paint booths for wheels? What's up with that?

Well, for one thing, there's demand for fancy wheels among the luxury clientele most of Penske's dealerships serve. A set of wheels can run more than $1,000; for high-end luxury cars a single wheel can cost $3,000.

And if there's demand to buy them there's also demand to repair and protect them. So Penske has two more profit opportunities: He can sell tire-and-wheel coverage out of the finance and insurance office, and he can specialize in wheel repair in the service drive.

Penske may not have reinvented the wheel but he's certainly hit on a new profit stream.

25

Shares

ATTENTION COMMENTERS: Over the last few months, Automotive News has monitored a significant increase in the number of personal attacks and abusive comments on our site. We encourage our readers to voice their opinions and argue their points. We expect disagreement. We do not expect our readers to turn on each other. We will be aggressively deleting all comments that personally attack another poster, or an article author, even if the comment is otherwise a well-argued observation. If we see repeated behavior, we will ban the commenter. Please help us maintain a civil level of discourse.

Newsletters