Question-and-Answer Session
Operator
(Operator Instructions) Your first question comes from the line of Richard Nelson - Stephens, Inc.
Richard Nelson - Stephens, Inc.
Congratulations Roger, do you think the used car performance is sustainable given the price rise that we’re seeing at wholesale, higher sourcing prices that you need to pass along as well as the bank and their LTB requirements.
Roger Penske
Let me first say that we saw higher margins on used cars and certainly as we see the marketplace, what’s happening we’re going to see less used cars available because we didn’t have sales in 2008 and we see that in the UK also, there’s been two years of downward new car sales.
So as I see a supply of used cars really tightening up, you’re going to see the obviously the wholesale prices going up which I think is good in one case because it gets the transaction closer on a used to a new price that we’ll be able to generate some new sales.
But overall we’ve seen our certified business go up. There is no question that we’ll start seeing probably some limits from the standpoint of advance rates from our lenders, but at the moment in think its been good and I don’t see it changing.
Last year at this time I talked to our guys in the UK this morning and they started to see at the end of June used car prices falling. They don’t see that now so I’d say a strong wholesale market if you look at our wholesale we lost money on wholesale last year and made money this.
And I think when you look at the gross per unit year over year without foreign exchange we were up $385.00 per unit. So it was significant.
Richard Nelson - Stephens, Inc.
I’d also like to ask you about regional areas of strength and weakness and specific commentary on California and Florida, if you could.
Roger Penske
Well let me say this, our Florida business has been tough. We’ve done some reorganization down there with some of the brands that we have, but I’d say southern Florida hasn’t really improved. I know that there’s more action there based on cash for clunkers. I’d say California is a little bit better.
We really are, in San Diego, and that market is staying even through this whole downturn has been probably one of our best markets. Northern California has certainly gotten better, Vegas is still tough and we experience in the Mid West a tougher market. So overall I’d say Florida is still tough and California better.
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