Auto dealer giant Penske Automotive Group recently announced plans to expand in the Charlotte area, starting with its acquisition of the Mercedes-Benz of South Charlotte dealership in Pineville.
Anthony Pordon, Penske Automotive's executive vice president of investor relations and corporate business development, told News Break that Charlotte is a "destination location" for the company's business, touting the city's "strong and growing population base."
"It's one of the fastest growing cities in U.S. and the Mercedes-Benz South Charlotte dealership is ranked as the #1 dealer in North Carolina," Pordon added.
Penske's entry brings a fresh flow of competition to Charlotte's existing auto retail market, dominated in part by the city's own Hendrick Automotive Group and Sonic Automotive.
According to its website, Charlotte-headquartered Hendrick Automotive has a retail footprint spanning 93 dealership locations, including a pair of Mercedes-Benz facilities in Northlake and on East Independence Boulevard in southeast Charlotte. Sonic Automotive, also headquartered in Charlotte, operates several dealerships and collision centers across the region, including Cadillac of South Charlotte and the South Charlotte Collision Center in Pineville—both just a short walk away from Mercedes-Benz of South Charlotte. Sonic's retail network spans more than 100 locations and 24 brands nationwide, its website says.
For Penske Automotive, the Mercedes-Benz of South Charlotte acquisition adds a boost to its existing retail footprint of 304 franchise dealerships and 19 CarShop used car stores worldwide. That includes about two dozen Mercedes-Benz brand dealerships, with 10 located in the U.S.
The Mercedes-Benz of South Charlotte first opened in October 2006 and has a 70,000-square-foot showroom, a 50-bay service shop and the capacity to display 15 vehicles. Pordon said the facility "represents a unique design that fits into the existing architecture of the area."
"We are now in the process of reviewing the facility to determine if any improvements are needed," he added.
The terms of the acquisition were not disclosed. However, a press release said the deal would add $150 million in annual revenue for the publicly traded company.
"We are thrilled to enter this new market area and we welcome the Mercedes-Benz of South Charlotte team to Penske Automotive Group," stated Rob Kurnick, the company's president, in the announcement. "With the completion of this acquisition, Penske Automotive Group has now added over $700 million in expected annualized revenue to its operations this year as the company drives to its target goal of achieving $1 billion in earnings before taxes in 2023."
According to annual filings with the U.S. Securities and Exchange Commission, Penske Automotive's total revenue topped $20.4 billion in 2020, about 87% of which was sourced from its retail automotive dealerships. This segment accounted for $443.4 million of the company's $707.6 million in net income. Penske sold 500,000 vehicles through retail and wholesale channels last year.
In its first-quarter 2021 earnings presentation to investors in April, Penske Automotive outlined a three-year growth plan targeting $1 billion in pre-tax income in 2023. Aiming for a $292 million increase in income, the plan includes $46 million in acquisitions, $86 million through Penske's CarShop used vehicle business and $160 million in organic growth.
"We are an international, diversified transportation services company with operations across four continents and nine countries," Pordon said. "We are a growth company and look for opportunities to expand in all of our markets."
Pordon said there are no changes planned for the existing workforce at Mercedes-Benz of South Charlotte. As of this writing, Penske's job board shows two openings for a service advisor and a cashier at the dealership.
Pordon declined to share additional details about Penske's future plans for expanding in the Charlotte area.