CarShop’s second-quarter revenue rose 15 percent to $468 million, up 7 percent, on sales of 20,124 vehicles.
After closing two smaller CarShop Express locations in the UK in May, Penske operated 21 CarShop outlets in the quarter.
CEO Roger Penske said it’s difficult to buy vehicles for carshops right now. The unit is not selling vehicles priced at $10,000 or less because of the amount of reconditioning they require and customer feedback. Instead CarShop aims to stay in the $15,000 to $25,000 range.
“It’s very difficult to acquire cars on that [price] point,” Penske said. “So we’re really looking at cost and technology at this point. And I think, although, again, we did 20,000 units in the quarter, we are not getting the margin.”
Penske said CarShop is performing well at the store level.
“When you add up all the technology and the other fixed costs that we have, it’s impacting our profitability,” he said. “But we are fully engaged in the brand. We are continuing to grow it.”
Penske said the new carshop is likely to open in the next six months.
“And we’re going to wait and see what happens in the market once this thing opens up and we’ve used the availability,” he said.