DETROIT — Penske Automotive Group Inc. said its retail automotive business improved in May over sharp drops in business in late March and April amid the coronavirus pandemic.
The nation's second-largest new-vehicle retailer said its May U.S. new- and used-vehicle sales were down 25 percent year over year, while U.S. service and parts gross profit declined 39 percent.
That's better than the drop of about 50 percent Penske experienced in new and used sales in April and its 52 percent decline in service and parts gross profit the same month amid stay-at-home orders.
Penske said all of its U.S. dealerships' sales and service departments were open and that it was seeing sequential improvement in business.
"I am encouraged by the significant improvement we continue to see in our operations," CEO Roger Penske said in a statement Tuesday. "Since the COVID-19 pandemic began impacting operations in the second half of March, we took actions to reduce costs and preserve our liquidity position. Based on these actions, I expect further improvements to our operating results in June and into the second half of the year as the economy continues to recover."
The company said its dealerships in Germany, Italy and Spain also had reopened and business was improving week to week. Service and parts business resumed in mid-May at United Kingdom dealerships, while showrooms in most of the U.K. reopened June 1, Penske said. The dealerships had been closed since March 24 per a government order.
The retailer said it was able to remotely sell and deliver about 2,500 vehicles last month in the U.K. and had another 4,000-plus vehicles sold and awaiting delivery at the beginning of June. In the first week of June, U.K. sales were up 50 percent compared with the same week a year earlier, Penske said.
In late March, Penske announced executive pay cuts, furloughs and postponement of capital expenditures as part of efforts to preserve cash and trim expenses because of the hit to business from the coronavirus. The company furloughed more than half of its global work force, including 5,300 in the U.S., and terminated 500 employees.
Penske, of Bloomfield Hills, Mich., ranks No. 2 on Automotive News' list of the top 150 dealership groups based in the U.S., retailing 222,800 new vehicles in 2019. It retailed 284,200 used vehicles for the same period, ranking it No. 2 on Automotive News' list of the top 100 retailers in used-vehicle sales.
