Penske uses training, consistency to boost F&I
Roger Penske, chairman of Penske Automotive Group, said last week the group will rely on more F&I training and more consistent efforts across the group to sell more F&I products in 2013.
Penske acknowledged that the company, one of the nation’s six large publicly traded new-car retail groups, needs to make up some ground when compared with the other five. “When I look at our peers in the business, some of them are higher,” Penske said in a conference call for investors.
In fact, most of the other five public new-car retailers have consistently outscored Penske in F&I revenue per unit for a couple of years now.
Last week Penske reported F&I revenue per vehicle of $986 in the fourth quarter of 2012, up only $1 or 0.1 percent from the same quarter a year earlier.
Meanwhile, AutoNation Inc. typically has the highest F&I revenue among the six largest public retailers. On Jan. 31, AutoNation reported all-time record fourth-quarter F&I revenue per vehicle of $1,307, up 7 percent.
AutoNation ranks No. 1 on Automotive News’ list of the top 125 dealership groups in the United States with retail sales of 224,034 new vehicles in 2011. Penske Automotive Group ranks No. 2, with 154,829 new units sold.
Roger Penske has long blamed high lease penetration for the fact that his group lags the other large publics in F&I. That’s because lease customers are less prone to buy extended-service contracts and GAP policies.
Last week he admitted that, in addition, a decentralized strategy to increase F&I sales doesn’t seem to be working.
“We left this process for the last 10 years really based down at the dealership level. And we found consistency is most important,” he said.
In answer to a question, Penske said he thinks the group could increase F&I revenues per vehicle by as much as $50. A simplified menu will help, he said.
“We’ve added specific people to drive the F&I product on a day-to-day basis, not just relying on a local management,” he said. “I think that’s going to make a difference.”
Jamie LaReau contributed to this report
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