What changed in PENSKE AUTOMOTIVE GROUP, INC.'s 10-K — 2024 vs 2025

As of December 31, 2024, PTG operated 45 locations selling new and/or used trucks, performing service and parts operations, or offering collision repair services. We retailed and wholesaled 20,947 new and used trucks in 2024. These businesses represented 11.6% of our total revenues and 11.7% of our total gross profit in 2024.

Penske Australia is the exclusive importer and distributor of Western Star heavy-duty trucks (a Daimler brand), MAN heavy- and medium-duty trucks and buses (a VW Group brand), and Dennis Eagle refuse collection 2 Table of Contents vehicles, together with associated parts, across Australia, New Zealand, and portions of the Pacific.

We recorded $198.0 million and $289.5 million in equity earnings from this investment in 2024 and 2023, respectively, and during 2024 and 2023, we received $98.4 million and $168.8 million, respectively, of pro rata cash distributions relating to this investment. Outlook Retail Automotive.

During 2024, U.S. industry new light vehicle sales increased 2.5%, to 16.0 million units, including a 3.0% increase in retail sales, partially offset by a 2.5% decrease in fleet sales, as compared to 2023.

U.K. new vehicle registrations increased 2.6% to 2.0 million registrations, including an 11.8% increase in fleet sales, partially offset by an 8.7% decrease in retail sales, as compared to 2023. New vehicle sales are being positively impacted by continued strong consumer demand in the U.S. and manufacturer incentives. Government incentives on electric vehicles ("EVs") also impact vehicle sales.

Our new vehicle days' supply is 49 as of December 31, 2024, compared to 39 as of December 31, 2023, including vehicles which are unable to be sold due to open recalls.

Our used vehicle days' supply is 47 as of December 31, 2024, compared to 48 as of December 31, 2023, and is being impacted by a lower supply of 1-4 year old used vehicles as a result of the lower number of new vehicles sold in recent years and fewer lease returns in the U.S.

As a reference, our new and used days' supply was 71 and 52, respectively, as of December 31, 2019 (pre-COVID). According to the National Automobile Dealers Association, sales for the U.S. light vehicle market are expected to grow to 16.2 million units in 2025 compared to a 16.0 million market in 2024.

As the supply of new vehicles has improved, we have experienced, and may continue to experience, reduced new and used vehicle gross profit. The regulatory authorities in our markets have adopted emissions limits on new vehicles which are designed to incent adoption of electric or other zero-emissions vehicles.

We believe there is a direct correlation between the availability of government incentives for EVs and EV sale levels. New vehicle sales levels could be impacted by changes to these regulatory mandates as well as vehicle affordability challenges, inflation, interest rates, or a reduction in consumer spending resulting in decreased demand.

The unavailability of 1-4 year old quality, low-mileage used vehicles for sale may adversely impact our used vehicle operations.

Representatives of the U.K. government have proposed a ban on the sale of internal combustion engines in new cars and new vans that may take effect as early as 2030 while also providing government incentives on certain EVs to entice consumers to transition from internal combustion vehicles to EVs.

In part due to these incentives, U.K. new registrations of EVs, excluding hybrid, represented 19.6% of the overall market during 2024, as compared to 16.5% during 2023, and represented 24.3% of our U.K. new unit sales, as compared to 22.4% during 2023.

U.K. new registrations of hybrid vehicles represented 21.9% of the overall market during 2024, as compared to 20.0% during 2023, and represented 13.2% of our U.K. new unit sales, as compared to 11.9% during 2023. In the U.S., sales of EVs increased 7.3% to 1.3 million units as compared to 2023.

EV sales (excluding hybrid) represented 8.1% of the overall U.S. market during 2024, as compared to 7.7% during 2023. In the U.S., sales of hybrid vehicles were 1.9 million units in 2024 as compared to 1.2 million units in 2023.

EV sales may increase or decrease in our markets as a result of government policy, manufacturer incentives, and consumer acceptance of vehicle range or vehicle charging infrastructure.

During 2024, 4.2% of new vehicle sales in the U.S., and 2.6% of the new vehicle sales in the U.K., were sold by vehicle manufacturers directly to consumers outside of the retail automotive franchised system, principally consisting of one manufacturer.

We expect continued strong demand for our service and parts operations driven by increases in demand in light of increasing vehicle sales in recent years, recall campaigns, increased miles driven, and vehicle complexity. 3 Table of Contents Retail Commercial Truck Dealership.

During 2024, North American sales of Class 6-8 medium- and heavy-duty trucks, the vehicles sold by our PTG business, decreased 3.0% from last year to 473,159 units, primarily due to increased deliveries in 2023 as a result of deliveries expected in 2022 being delayed into 2023 due to supply constraints as well as continued lower freight rates in the U.S.

The Class 6-7 medium-duty truck market increased 0.5% from last year to 157,260 units, and Class 8 heavy-duty trucks, the largest North American market, decreased 4.7% from last year to 315,899 units. We expect replacement demand to continue in 2025, although a continued weak freight market may impact unit sales and service and parts demand.

As of December 31, 2024, the Class 6-8 medium- and heavy-duty truck backlog is 213,366 units according to data published by ACT Research compared to 278,616 as of December 31, 2023. See Item 1. Business , "Retail Commercial Truck Dealership Operations." Commercial Vehicle Distribution and Other.

During 2024, the Australian heavy-duty truck market reported sales of 17,153 units, representing a decrease of 2.4% from last year, while the New Zealand market reported sales of 3,439 units, representing a decrease of 13.7% from the same period last year.

Our power system operations continue to grow through sales in the off-highway segments such as energy solutions, which provide power systems for large data centers, mining, and military applications. Penske Transportation Solutions. A majority of PTS' revenue is generated by multi-year contracts for full-service leasing, contract maintenance, and logistics services.

PTS also rents additional trucks to commercial customers in response to demand for freight as well as consumer customers.

With a managed fleet of over 435,000 vehicles at December 31, 2024, PTS regularly sells trucks in order to maintain a low fleet age as well as in response to changes in demand for truck leasing and records a gain or loss on those sales.

PTS is currently experiencing positive revenue growth in its business despite adverse global economic freight conditions. This growth is being driven by its full-service leasing, contract maintenance and logistics businesses, partially offset by lower revenues in its commercial and consumer rental product lines.

The weaker freight environment and higher interest rates have directly impacted demand for its transactional products as well as used vehicle pricing. PTS has decreased, and expects to continue to decrease, the size of its consumer and commercial rental fleets in connection with this lower demand, aimed at improving the utilization rate of the fleet.

PTS further anticipates that these market conditions will continue through 2025, and possibly longer, before improving.

Additionally, increased market interest rates compared to prior years have resulted in meaningful increases to its interest expense, both in its variable rate indebtedness and as it refinances existing fixed rate indebtedness, while lower average selling prices for used trucks has resulted in a meaningful decrease in gain on sale from remarketing activities. As described in Item 1A.

Risk Factors , there are a number of factors that could cause actual results to differ materially from our expectations. For a detailed discussion of our financial and operating results, see Part II, Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations .

Diversification Our business benefits from a diversified revenue and gross profit mix, including multiple revenue and gross profit streams in our traditional vehicle and commercial truck dealerships (new vehicles, used vehicles, finance and insurance, and service and parts operations) across many geographies, our commercial vehicle distribution and power systems operations, and returns relating to our joint venture investments, which we believe helps to mitigate the cyclicality that has historically impacted some elements of the automotive sector.

Furthermore, PTG provides diversification both by business line and by its business being represented across the U.S. and in Canada. Finally, our ownership interest in PTS provides us with additional diversification as well as equity earnings, cash dividends, and significant cash savings on taxes.

We are also diversified geographically as established by the following table, which shows our consolidated revenue and gross profit by country as a percentage of our total revenue and total gross profit: Country % of Total 2024 Revenue % of Total 2024 Gross Profit United States 58 % 61 % United Kingdom 31 % 27 % Germany/Italy 5 % 5 % Japan 1 % 1 % Canada 2 % 2 % Australia/New Zealand 3 % 4 % 4 Table of Contents We are also diversified within our automotive retail operations by brand.

We represent over 40 brands in our markets and our automotive dealership revenue mix consists of 72% related to premium brands, 21% related to volume non-U.S. brands, 2% related to brands of U.S. based manufacturers, and 5% related to our used vehicle dealerships as further detailed in the chart below: Corporate Responsibility As a leading international, diversified transportation services company, we recognize it is our responsibility to ensure that we contribute to a healthy environment, economic opportunity, and social equity in the communities where we operate around the world.

We recognize we are accountable to key stakeholders and the communities in which we do business. We are committed to responsible business practices, continuous improvement of our operations, and strengthening relationships with our stakeholders.

We focus our efforts where we can have the most positive impact on our business and society and are driven by our core values that ensures we enrich our communities, manage our environmental impact, protect the health and safety of our team members and customers, and promote opportunities for our personnel – all while creating value for our stakeholders.

The most important investments we make are in our people. Everything we aspire to be as a company builds on our ability to come together as one team. 5 Table of Contents Retail Automotive Dealership Operations Retail Automotive Franchises. We routinely acquire and dispose of retail automotive franchises.

The following table exhibits our retail automotive franchises by location and manufacturer as of December 31, 2024: Location Franchises Franchises U.S. Non-U.S.

Total Arizona 24 BMW/MINI 26 66 92 Arkansas 4 Toyota/Lexus 23 — 23 California 30 Mercedes-Benz/Sprinter/smart 18 29 47 Connecticut 8 Audi/Volkswagen/Bentley 17 35 52 Florida 3 Chrysler/Jeep/Dodge/Ram 4 — 4 Georgia 4 Honda/Acura 19 — 19 Indiana 4 Ferrari/Maserati 2 12 14 Maryland 1 Porsche 10 15 25 Massachusetts 5 Jaguar/Land Rover 7 19 26 Michigan 2 Lamborghini 1 5 6 Minnesota 2 Nissan/Infiniti 3 — 3 New Jersey 18 Cadillac/Chevrolet 4 — 4 North Carolina 4 Others 14 24 38 Ohio 7 Total 148 205 353 Puerto Rico 4 Rhode Island 8 Tennessee 1 Texas 11 Virginia 7 Wisconsin 1 Total U.S. 148 U.K. 141 Germany 23 Italy 26 Japan 12 Australia 3 Total Non-U.S. 205 Total Worldwide 353 Retail Automotive Used Vehicle Dealerships.

The following table exhibits our used vehicle dealerships we operated by geographic location as of December 31, 2024: Location Number of Dealerships U.S. (CarShop) Pennsylvania 5 New Jersey 1 Total U.S. 6 U.K. (Sytner Select) 9 Australia (Penske Select) 1 Total 16 New Vehicle Retail Sales.

In 2024, we retailed, including agency units, more than 244,990 new vehicles which generated 46.1% of our retail automotive dealership revenue and 27.0% of our retail automotive dealership gross profit.

We strive to maintain outstanding relationships with the automotive manufacturers based in part on our long-term presence 6 Table of Contents in the retail automotive market, our commitment to providing premium facilities, our commitment to drive customer satisfaction, the reputation of our management team, and the consistent sales volume at our dealerships.

Our dealerships finance the purchase of most new vehicles from the manufacturers through floor plan financing provided primarily by various manufacturers' captive finance companies. Used Vehicle Retail Sales. In 2024, we retailed 246,608 used vehicles, which generated 33.5% of our retail automotive dealership revenue and 10.7% of our retail automotive dealership gross profit.

We acquire used vehicles from various sources, including trade-ins from consumers in connection with their purchase of a new or used vehicle from us, purchases of used vehicles directly from consumers, lease expirations, public auctions, and auctions open only to authorized new vehicle dealers.

To improve customer confidence in our used vehicle inventory, we provide vehicle history reports for all used vehicles, and virtually all of our franchised new vehicle dealerships participate in manufacturer certification processes for used vehicles.

If certification is obtained, the used vehicle owner is typically provided benefits and warranties similar to those offered to new vehicle owners by the applicable manufacturer. Vehicle Finance and Insurance Sales. Finance and insurance sales represented 3.1% of our retail automotive dealership revenue and 19.1% of our retail automotive dealership gross profit in 2024.

At our customers' option, our dealerships can arrange third-party financing or leasing in connection with vehicle purchases. We typically receive a flat fee or a portion of the cost of the financing or leasing paid by the customer for each transaction.

While these services are generally non-recourse to us, we are subject to chargebacks in certain circumstances, such as default under a financing arrangement or pre-payment. These chargebacks vary by finance product but typically are limited to the fee we receive.

We also offer our customers various vehicle warranty and extended protection products, including extended service contracts, maintenance programs, and voluntary vehicle protection products. The extended service contracts and other products that our dealerships currently offer to customers are underwritten by independent third parties, including the vehicle manufacturers' captive finance companies.

Similar to finance transactions, we are subject to chargebacks relating to fees earned in connection with the sale of certain protection products. We also offer for sale other aftermarket products, including security systems and protective coatings.

We offer finance and insurance products using a "menu" process, which is designed to ensure that we offer our customers a complete range of finance, insurance, protection, and other aftermarket products in a transparent manner.