Penske said his company entered the Japanese market in January 2016 to learn about the dealership business there and the requirements around accounting, controls and risk.
The Japanese retail market is a different animal from the U.S. While there are small entrepreneurs and big family dynasties, the landscape also is populated by powerful retailing networks owned directly by the country’s big manufacturers.
Online retailing barely has a toehold. Total vehicle sales in Japan have hovered at just more than 5 million vehicles a year, vs. more than 14 million in the U.S. during each of the past nine years.
Penske said the acquisition creates a “solid footprint” in the region. He said he has a “very good operator” there who trained for three years before taking over as the group’s CEO, while the group’s former partner and owner is now non-executive chairman.
“We think that we have a lot of opportunity to expand in our market area there with the premium luxury manufacturers,” Penske said. “There’s been a lot of interest.”
Penske told analysts and investors in a call last month that automakers have asked the company “a number of times” to add to its dealership platform in Japan. The company will continue to evaluate U.S. acquisition opportunities that meet brand preferences and help it add scale, he said.
“I think the bigger question is probably human capital, with today having a tough time of hiring people to do the jobs that are needed in the service sector,” Penske said. “And you take on these bigger acquisitions, are you going to be able to have the human capital to operate them at the level that you need to be to maintain the customer satisfaction? And that’s probably tougher than it is to raise the money.”
Hans Greimel contributed to this report.
