Anthony Pordon, Executive VP of Penske Automotive Group, Inc. (PAG), says the company generated 4.6% organic growth in the first quarter. He says one of the most attractive areas for organic growth is the service and parts business.
“Service and parts in the retail automotive business account for about 40% of our overall gross profit,” Pordon says. “We earned somewhere in the neighborhood of 59.5% to 60% gross margin in that business.”
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He says that with the growth in the new vehicle market, there has been an expansion of the zero- to five-year-old vehicle parc. In addition, he says there is an increasing complexity in the vehicles that are being produced by all the different OEMs and manufacturers today.
“So we believe the service and parts business is a really good business to be in, and we believe there is future growth to come in that side of the business,” Pordon says.
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