Penske Automotive rebrands UK CarShop business, sells 3 stores

Penske Automotive Group Inc., through its Sytner Group business unit in the United Kingdom, in July completed rebranding its used vehicle-only CarShop locations in the U.K. Those stores now use the Sytner Select name.

One store was converted in April, and the rest followed in June and July, the company said.

Randall Seymore, COO of international operations, said during Penske Automotive's July 31 second-quarter earnings call that the change was made in part to cut costs.

"We rebranded and transitioned the operations of CarShop to Sytner Select to more closely align the used-car operation with franchised dealerships and to reduce our cost base," Seymore said. "We successfully transitioned nine locations and sold the remaining three locations to a third party. Going forward, we will operate nine Sytner Select locations in the U.K. market."

Seymore said Penske's new business model offers benefits such as Sytner's "high-quality" brand recognition, eliminates a CarShop headquarters office and provides easier vehicle sourcing from franchised dealerships.

"We're already seeing a pretty significant increase in our gross profit per unit because of the sourcing of those vehicles," he said.

Penkse's franchised dealerships in the U.K. do not sell off-brand used vehicles, but Sytner Select sells all brands, spokesperson Tony Pordon said in a statement.

"CarShop focused on older, less expensive vehicles that were most likely acquired from a fleet company or at auction, [and] Sytner Select will acquire these vehicles from the franchised dealership for potential sale," Pordon said.

U.K. used-car retailer Big Motoring World said on its website that it bought three CarShop stores, though Penske would not comment on the purchaser.

The CarShop rebranding and store sales follow Penske's second-quarter closure of a CarShop location in Doncaster, England.

Penske Automotive acquired CarShop in February 2017 and four years later said it expected the business to sell 150,000 vehicles annually by the end of 2023. But in 2022, the company paused its sales goal as it dealt with higher costs of sales and challenges sourcing used vehicles.

Penske has six U.S. CarShop locations — five in Pennsylvania and one in Mount Holly, N.J., east of Philadelphia. The retailer said the U.S. stores will continue to use the CarShop name and operate as usual.

In January, Penske closed a CarShop store in Monmouth Junction, N.J., citing lack of profitability. In 2023, the company closed a Scottsdale, Ariz., CarShop location.

"We had great expectations on CarShops in the U.S. and in the U.K.," CEO Roger Penske said during the second-quarter call. He cited sourcing issues for vehicles at certain price points and said the company "just overbuilt" in the U.S.

CarShop last year retailed 69,605 used vehicles in the U.S. and U.K., down from 71,242 in 2022. The unit generated $1.8 billion in revenue in 2023, up slightly from $1.7 billion in 2022.

Penske Automotive, of Bloomfield Hills, Mich., ranks No. 3 on Automotive News' list of the top 150 dealership groups based in the U.S., retailing 229,942 new vehicles in 2023.