Business Analysis of Penske Automotive Group

 Analyze Historical Performance, Strategic Priorities, And Business Improvement Opportunities of Penske Automotive Group

PENSKE AUTOMOTIVE GROUP

Business Overview

Penske Automotive Group, Inc. operates as a transportation services company. The company operates through Retail Automotive, Retail Commercial Truck, Other, and Non-Automotive Investments segments. It operates automotive and commercial truck dealerships principally in the United States, Canada, and Western Europe; and distributes commercial vehicles, diesel engines, gas engines, power systems, and related parts and services primarily in Australia and New Zealand. The company engages in the sale of new and used motor vehicles; and related products and services, such as vehicle service and collision repair services, as well as placement of finance and lease contracts, third-party insurance products, and other aftermarket products. In addition, it is involved in the sale and placement of third-party finance and insurance products, third-party extended service and maintenance contracts, and replacement and aftermarket automotive products. Further, the company distributes commercial vehicles and parts to a network of more than 70 dealership locations, including 6 company-owned retail commercial vehicle dealerships. As of December 31, 2016, it operated 355 automotive retail franchises, of which 164 franchises are located in the United States; and 191 franchises are located outside of the United States primarily in the United Kingdom. The company also operates 14 dealerships locations of heavy and medium duty trucks primarily under Freightliner and Western Star brand names, as well as offers a range of used trucks, and service and parts. Penske Automotive Group, Inc. is headquartered in Bloomfield Hills, Michigan.

Penske Automotive Group

Penske Automotive Group


R&P Rank: 134
Sector: Retail
Industry:Specialty Retail
H.Q Location:Michigan
Website: www.penskeautomotive.com
Company Address:
2555 TELEGRAPH RD, BLOOMFIELD HILLS MI 48302-0954
Ph:248-648-2500

Business Analysis of Penske Automotive Group

The Retail Sector is witnessing a major shakeup, new age business models in the industry are transforming both customers and businesses. Faced with this uncertainity, companies are investing resources to transform their business. An in-depth business analysis is a valuable resource to identify and articulate the need for a business model change. At R&P Research we believe, the starting point for a business analysis is Benchmarking. Business benchmarking can be done at various levels: 1) Industry Benchmarking 2) Peer Benchmarking 3) Disruptors Benchmarking. In this report, we share the snapshot of how Penske Automotive Group compares against the industry on the major performance indicators. This analysis, along with peer group/disruptors benchmarking and revenue model understanding can help identify growth and cost optimization opportunities to maximize the value delivered by Penske Automotive Group to its stakeholders. R&P Research Industry Intelligence Platform provides historical data for last 15 years with an easy to use benchmarking interface for an in-depth comparative business analysis.

Here is the performance snapshot of Penske Automotive Group with an interactive chart.

  1. Revenue Growth: Penske Automotive Group reported a revenue growth of 4.3% year-on-year during 2016. Specialty Retail Industry grew at -1.6% in the same period
  2. COGS share of Revenues: As a percentage of revenue, Penske Automotive Group spent 85.3% of its total revenues on COGS. Specialty Retail industry average (COGS share of revenue) in the same period was 76.8%
  3. R&D share of Revenues: Penske Automotive Group R&D share of Revenues details are not available because either company does not share the data or we do not have it
  4. SG&A share of Revenues: As a percentage of revenue, Penske Automotive Group spent 11.4% of its total revenues on Sales, Marketing, and General Administration (SG&A). Specialty Retail industry average SG&A spending in the same period was 16.8%
  5. Inventory share of Revenues: As a percentage of revenue, Penske Automotive Group spent 16.9% of its total revenues on Inventories. Specialty Retail industry average Inventory spending in the same period was 13.8%
  6. Accounts Payable share of Revenues: As a percentage of revenue, Penske Automotive Group invested 2.5% of its total revenues on Accounts Payable (A/P) Specialty Retail industry average Accounts Payable investment in the same period was 7.5%
  7. Accounts Receivable share of Revenues: As a percentage of revenue, Penske Automotive Group invested 4.4% of its total revenues on Accounts Receivable (A/R). Specialty Retail industry average Accounts Receivable investment in the same period was 8.4%
  8. PP&E share of Revenues: As a percentage of revenue, Penske Automotive Group invested 9.0% of its total revenues on Property, Plants, and Equipments (PP&E). Specialty Retail industry average PPE investment in the same period was 11.9%
  9. Intangibles share of Revenues: As a percentage of revenue, Penske Automotive Group invested 8.5% of its total revenues on Intangibles. Specialty Retail industry average Intangibles investment in the same period was 7.2%
  10. Net Margins: Penske Automotive Group Net Margins in the year 2016 were 1.7%. Specialty Retail industry average Net Margins in the same period were 2.7%

Sector and Industry Association of Penske Automotive Group

For the purpose of performance benchmarking of a company with a sector or industry average, R&P Research associates every company with one sector and one industry. An industry consists of companies with related/similar business models. A sector comprises of a group of related/similar industries.

Penske Automotive Group is associated with Retail Sector and Specialty Retail Industry.

Retail sector is comprised of the following industries: Broadline Retail; Grocery Retail; Specialty Retail; Apparel Retail; Home Improvement Retail; Specialized Consumer Services. The definitions for each of the industries is as follows:

  • Broadline Retail industry includes retail outlets and wholesalers offering a wide variety of products including both hard goods and soft goods.
  • Grocery Retail industry includes retail stores that primarily offer non-perishable food that is packaged in cans, bottles and boxes, with some also having fresh produce, butchers, delis, and bakeries
  • Specialty Retail industry includes retailers and wholesalers concentrating on a Single Class of Goods, such as electronics, books, automotive parts or closeouts. It also includes automobile dealerships, video rental stores, dollar stores, duty-free shops and automotive fuel stations not owned by oil companies.
  • Apparel Retail industry consists of retailers and wholesalers specializing mainly in Clothing, Shoes, Jewelry, Sunglasses and Other accessories.
  • Home Improvement Retail industry includes retailers and wholesalers concentrating on the sale of home improvement products, including Garden Equipment, Carpets, Wallpaper, Paint, Home Furniture, Blinds and Curtains, and Building materials.
  • Specialized Consumer Services industry includes providers of consumer services such as Auction Houses, Day-care Centers, Dry Cleaners, Schools, Consumer Rental Companies, Veterinary Clinics, Hair Salons and providers of Funeral, Lawn-maintenance, Consumer-storage, Heating and Cooling installation and Plumbing services.

Industry Ranking of Penske Automotive Group

With $20.1 billion revenues, Penske Automotive Group ranked number 3 of all the companies in the US Specialty Retail industry. There were a total of 50 public companies in the US Specialty Retail industry that had revenues greater than $50 million during 2016.

The top-10 companies in the US Specialty Retail industry by revenues during 2016 were:

  1. Best Buy ($39.5 billion)
  2. AutoNation ($21.6 billion)
  3. Penske Automotive Group ($20.1 billion)
  4. Staples ($18.8 billion)
  5. CarMax ($15.1 billion)
  6. Murphy USA ($11.6 billion)
  7. CST Brands ($11.1 billion)
  8. Office Depot ($11 billion)
  9. Group 1 Automotive ($10.9 billion)
  10. Sonic Automotive ($9.7 billion)

Business Model Analysis (BMA) Framework

We use the following framework to assess the business model of a company. Business Model Analysis framework can be used by organizations to articulate growth strategies and identify cost optimization opportunities. Technology and consulting companies can use this framework to identify the value drivers and pain points of their targeted customers. Entrepreneurs can use this framework to understand the language of business and identify promising business opportunities. This framework can be used by any professional aspiring to take up a leadership role to better understand the businesses challenges, articulate growth strategy, and monitor the business improvement requirements for the organization.

Next Steps

  • Conduct a holistic benchmarking; to identify and target additional sources of value
  • Get in touch with us to learn more about Business Model Analysis Framework
  • Get free data, charts, and analysis of Penske Automotive Groupand its peers on select key performance indicators by clicking the reports provided below

Industry Peers and Competitors of penske-automotive-group

Best Buy (BBY) Business Analysis – Analyze Historical Performance, Strategic Priorities,...

Best Buy Co Inc with $40 billion revenues in the year 2016 was the number 1 Specialty Retail company. Read this report to know the top competitors of Best Buy and identify growth and cost optimization opportunities of Best Buy

AutoNation (AN) Business Analysis – Analyze Historical Performance, Strategic Priorities, And...

AutoNation, Inc. with $22 billion revenues in the year 2016 was the number 2 Specialty Retail company. Read this report to know the top competitors of AutoNation and identify growth and cost optimization opportunities of AutoNation

Staples (SPLS) Business Analysis – Analyze Historical Performance, Strategic Priorities, And...

Staples Inc with $19 billion revenues in the year 2016 was the number 4 Specialty Retail company. Read this report to know the top competitors of Staples and identify growth and cost optimization opportunities of Staples

CarMax (KMX) Business Analysis – Analyze Historical Performance, Strategic Priorities, And...

CarMax Inc with $15 billion revenues in the year 2016 was the number 5 Specialty Retail company. Read this report to know the top competitors of CarMax and identify growth and cost optimization opportunities of CarMax

Murphy USA (MUSA) Business Analysis – Analyze Historical Performance, Strategic Priorities,...

Murphy USA Inc. with $12 billion revenues in the year 2016 was the number 6 Specialty Retail company. Read this report to know the top competitors of Murphy USA and identify growth and cost optimization opportunities of Murphy USA

CST Brands (CST) Business Analysis – Analyze Historical Performance, Strategic Priorities,...

CST Brands, Inc. with $11 billion revenues in the year 2016 was the number 7 Specialty Retail company. Read this report to know the top competitors of CST Brands and identify growth and cost optimization opportunities of CST Brands

Revenues Analysis

Penske Automotive Group (PAG) Revenues And Revenue Growth From 2012 To...

This report provides the last five years revenues and revenue growth of Penske Automotive Group, Inc. (PAG) from 2012 to 2016. Penske Automotive Group generated a total of $20.1 billion revenues during 2016. Penske Automotive Group reported a revenue growth of 4.3% year-over-year during 2016. The revenues and the revenue growth correspond to the fiscal year ending in December.

Penske Automotive Group (PAG) Revenues And Revenue Growth From 2002 To...

This report provides the last fifteen years revenues and revenue growth of Penske Automotive Group, Inc. (PAG) from 2002 to 2016. Penske Automotive Group generated a total of $20.1 billion revenues during 2016. Penske Automotive Group reported a revenue growth of 4.3% year-over-year during 2016. The revenues and the revenue growth correspond to the fiscal year ending in December.

Penske Automotive Group (PAG) Revenue Growth Comparison With Industry Growth From...

This report provides a comparison of Penske Automotive Group, Inc. (PAG) revenue growth with Specialty Retail industry growth during the last five years from 2012 to 2016. Penske Automotive Group reported a revenue growth of 4.3% year-over-year during 2016. The Specialty Retail industry growth was -1.6% year-over-year during 2016. Penske Automotive Group growth was faster than the industry during 2016.