CHICAGO — Penske Automotive Group Inc. is realizing when to pivot on certain strategies.
Take its standalone used-car business CarShop, for instance.
Keeping pace in an ever-evolving market environment entailed that Penske step back and put its used-car strategy under the spotlight. Earlier this year, Penske slowed its plan to expand CarShop, with 21 stores in the U.S. and U.K., due to higher costs of acquiring vehicles. The company had hoped to have 40 CarShop stores by the end of 2023.
"What we're experiencing now … is just a lot of pressure when it comes down to the ability to buy the [used] car right and the ability to get an acceptable margin because of where used-car pricing has gone," Penske Automotive Group President Rob Kurnick said at the Automotive News Retail Forum: Chicago on Thursday.
The Bloomfield Hills, Mich., auto retailer is still experiencing high demand for new vehicles brought on by the global semiconductor chip shortage and low inventory levels on its lots. Pent-up demand and high average vehicle sale prices have in part led to continued profitability for the public retailer, which posted record revenue of $6.9 billion in the third quarter.