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Penske Automotive Group Q1 2008 Earnings Call Transcript

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2008-04-29 20:38:53.0

Tags: Penske Automotive Group Inc.

Question-and-Answer Session

Operator

(Operator Instructions) First to the line of Edward Yruma with J.P. Morgan. Please go ahead.

Edward Yruma - J.P. Morgan

Can you give us a little bit more color on the performance of in-skip intern sale? Have these ramped as quickly as you might have expected given the weakly eco environment?

Roger Penske

Well, I would say the good news is the in skip -- we have completed all of the construction, we got our management team in place and I think that we were positive in the first quarter. I think that we will see an upward trend as we go into the second, third and fourth quarter of the year. We are still under construction and chances of overwriting an Audi point -- open Audi point there and we expecting to finish that up at the end of the year and again I would say that they are still not generating the EBT that we are forecasting. Obviously as we go forward and when you think about San Diego and think Scottsdale 101, it takes a couple of years to get them in a position where we’ll produce solid results, but at this point they are surely not a drag on earnings.

Edward Yruma - J.P. Morgan

And have there been any surprises to-date in terms of the smart vehicles that you retailed, in terms of the model that people prefer and the level of accessorisation?

Roger Penske

Let me say this that we had expected the inexpensive model, that pure would be 10% to 11% of our brand mix. It’s running 3% to 4% and the interesting thing is that people can figure their car; we are looking at anywhere from a $1000 to $1100 more content, so that’s part of the -- and the average selling price for the first quarter is right around $15,000 which is positive for us and I think that it’s unique when you think about today’s new vehicle environment that we are able to sell this brand into a separate market, but I think the vehicle itself with the fuel economy that’s certainly metro favorable from the stand point of size and I think the receiving hours will be great as we go forward. We delivered -- I think I said in my comments, we wholesaled 4900 units in the first quarters.

Edward Yruma - J.P. Morgan

And one final follow up. Can you give us a little bit of color around acquisition multiples particularly in the U.K, thank you.

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