Penske Automotive Group, Inc. (NYSE:PAG) Q2 2023 Earnings Call Transcript

So, we’re watching the used car pricing. We’re being careful. One of the things that’s going to have to take place. We’ve already seen it in the U.K., we’re in our – with Mercedes Benz on our commission or agency fee they’ve already raised at 100 basis points on EVs. We’re seeing discounts and also incentives here in the U.S. or remove this you’ve seen what’s happened domestically here with Ford. I think this lately here in the paper. So I think we’re in that kind of environment. So, we’re going to watch it carefully. But the OEM captives at least on the premium side, we’re going to have to step up and put residual values on these things if they’re going to move them. And I just can’t say that there’s no other way to move these because right now, I think it’s sticker shop for the customer.

David Whiston: Yes. And real quick, that MSRP ratio you just mentioned is interesting because that’s higher than what I’ve heard from some other dealers. Do you think that’s sustainable for the next few quarters or is it going to crash hard soon as inventory grows?

Roger Penske: Start with a higher batting order. I want to get enough out, but for MSRP it will be stopped, but there’s going to be pressure. Let’s may be honest. But remember, we don’t have a domestic portfolio today. We’re 1% so at this particular time, with the day supply we have in premium luxury, what we have in volume for and I still think we’ve got model right now, at least a market that’s providing us the opportunity to hold pricing.

David Whiston: Okay. Appreciate all information. Thank you.

Roger Penske: Yes. Great.

Operator: Mr. Penske, I’ll turn it back to you for closing.

Roger Penske: All right. Well, thanks, everybody, for joining us. We’ll see you next quarter. Thanks for the support for our people that are on the line. Thanks.

Operator: Ladies and gentlemen, that does conclude your conference for today. Thank you for your participation. You may now disconnect.