I recently had the opportunity to attend a presentation by Walter Czarnecki, Executive Vice President of Penske Corporation. Penske is a closely-held, Michigan-based company, with a variety of automotive-related businesses. Czarnecki provided an overview of the Penke organization and the current state of the automotive industry in the United States. The presentation was at the Clemson CUICAR facility in Greenville, SC. From a marketing perspective, Czernecki shared significant insight about Penske’s business model, selection of markets, product strategy and marketing initiatives.Czarnecki joined with race-car legend Roger Penske in the early 1970s to build a Chevrolet dealership in Michigan. Over the years, they expanded the business to include fleet leasing and maintenance, motor speedway operations, manufacturing and a variety of related businesses.
Czarnecki showed a series of slides that described the strategy of Penske. Their approach retail car business was to focus on selling foreign brands in the United States. This included a focus on premium brands such as BMW (BMW accounts for 23% of new sales for Penske), and Lexus. In addition, foreign volume manufacturers, such as Toyota and Honda represented a significant share of Penske’s sales. U.S. manufacturers accounted for only 5% of Penske’s volume. That strategy proved to be sound as Penske grew as the foreign manufacturers gained market share in the United States. Another part of the Penske strategy was to build large auto malls with several brands. According to Czarnecki’s slide, Penske dealers sell approximately more new vehicles per store than the average retailers. In 2007, Penske became the exclusive dealer for SMART Cars in the United States. Over 26,000 SMART cars have been sold in the United States since they entered the market.
The truck leasing and operation business is another key component to the Penske business. Penske owns, leases, and maintains vehicles for large fleet truck operators such as FedEx. A key component of Penske’s success here has been partnerships with their clients. Czarnecki also described Penske's partnerships with investors and other companies such as GE.
Penske has had a long association with motor sports in the U.S. and around the world. Penske doesn’t view motorsports as a sponsorship, but rather as a business. Penske Racing is well known throughout racing circles around the world. Czarnecki said that motor sports was the one common thread that ran though all of Penske’s businesses and was a unifying factor. In addition, Penske utilizes their sponsor relationships as opportunities to connect their business partners to truly bring value for their investment. He cited examples, such as connecting Cintas with Snap-on Tools to discuss supplying uniforms; and connecting Avis with Exxon Mobil to discuss rental car programs.
