Penske Automotive Group has doubled its profits to $20.4m in the first quarter of 2010 compared to the same period last year, a result attributed to the company’s strong performance in the premium/luxury brand sector.
But revenues in the distribution part of its business showed a drop from $80m to just under $8m, down 90%, due to a significant decline in sales of smart USA vehicles, of which Penske Automotive is the exclusive distributor through its wholly-owned subsidiary, smart USA Distributor LLC.
First quarter sales of the smart fortwo dropped from 5,714 units in 2009 to 956 in the same quarter this year.
With the decline in sales of the smart fortwo our distribution segment revenues have fallen accordingly,” confirmed Anthony Pordon, Penske Automotive’s Senior Vice President.
During 2009 smart USA wholesaled 13,772 smart fortwo vehicles, down from initial US sales of nearly 25,000 in 2008.
The smart fortwo was the first vehicle to enter the ‘micro car’ segment in the US following Daimler’s signing of a distributorship deal with Penske Automotive in 2006.
Despite the decline in smart fortwo sales, overall revenues for the company in the first quarter of 2010 rose 15.4% to $2.5 billion, driven by a 9.2% increase in retail unit sales. Penske Automotive operates 326 automotive franchises (174 in the US) representing 40 separate vehicle brands.
"I am extremely pleased with the performance of our business in the first quarter," said Penske Automotive chairman Roger Penske. "Despite difficult weather conditions in many of our markets and the challenging market dynamics facing the smart brand, an improving overall retail environment and the continued strong performance of our premium/luxury brands in all of our markets contributed to our strong operating results. On an adjusted basis, income from continuing operations increased 105% and earnings per share doubled compared to the first quarter last year."