Penske Automotive Group has just purchased Michigan’s Bill Brown Ford in Michigan, which sells more Ford-badged automobiles than any other retailer in the world. This is the second Ford dealership purchased by the company this year. Penske had previously bought Don Allen Auto Service Inc. in Massachusetts.
Thus far, 2024 has been a year of expansion for the brand. While best known for its commercial trucking services, Penske has been ramping up dealer acquisitions, buying out trucking rivals and trying to expand its already sizable footprint in both Europe and Australia. In the latter market, Penske recently took control of Melbourne-based Porsche dealerships.
The above global expansion has been made possible thanks largely to its share price absolutely exploding after 2020. At the start of the pandemic, shares were going for roughly $22 a piece. But they’re trading closer to $160 at the time of this writing. While net income declined, annual revenue has not. Penske has been consolidating business and investors have responded.
In its most-recent dealer acquisition, the company said it was expanding its North American retail operations presence in the Midwest and diversifying the business. What that means is that it’s planning on further increasing its annual revenue by an estimated $550 million.
From Penske:
As part of the acquisition, the Company will acquire over 200,000 square feet of existing facilities across 29 acres, including a main dealership premises, a pre-owned facility, a fleet maintenance center and a collision center. Bill Brown Ford is proudly an 18-time recipient of the Ford President’s Award, representing a commitment to the highest level of performance, customer service and satisfaction.
Commenting on the acquisition, Penske Automotive Group North American Operations Officer Rich Shearing said, “We are pleased to expand our retail automotive footprint in the Midwestern U.S. and our relationship with Ford. For decades, Bill Brown Ford has been building partnerships within its community by creating an environment that focuses on exceeding the expectations of its customers and empowering its employees. We look forward to cultivating those partnerships and welcome the employees of Bill Brown Ford to the Penske Automotive Group team.”
Year-to-date 2024, Penske Automotive Group has completed acquisitions representing nearly $2 billion in estimated annualized revenue.
A lot of large businesses have spent the last few years absorbing smaller rivals and the automotive space serves as a prime example. However, the trend actually dates back to the aftermath of the 2007 financial crisis.
Larger franchised dealerships were in a better position to weather the storm and spent the recovery period buying up smaller stores that were in worse financial shape. This has actually shifted the entire business sector, which was previously dominated by local retailers that were often family operated. While those types of dealerships still exist, they’re losing ground to larger dealer networks.
It’s not great news for anybody hoping to start a multi-generational automotive business. However, it appears to be working out rather well for companies like Penske. It’s been seeing sizable leaps in revenue every year since 2020 and was hovering around $29.5 billion in 2023 with all signs pointing to that number going up by a few percentage points for 2024.
[Image: Penske]
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