BLOOMFIELD HILLS, Mich. — Penske Automotive Group isn't
satisfied with F&I gross profit per retail sale in 2012 coming in at $1,000
when others franchised dealer groups have higher levels.

Chairman Roger Penske explained this week that F&I is a
target for improvement through what he said would be a combination of efforts,
including "adding resources to drive additional training higher product
penetration rates and targeting our underperforming locations."

Penske's F&I gross profit per unit sold still moved 1.2
percent above what the company posted in 2011. All told in 2012 on a same-store
basis, net F&I increased 13.4 percent to $298.7 million, up from $263.5
million.

Nonetheless, Penske is looking to improve, especially in
light of what other industry players are doing.

The first publicly traded company to report its 2012
performance was AutoNation, which generated full-year net F&I revenue of $571.2
million, compared to $474.5 million in 2011. AutoNation indicated its gross
F&I profit totaled $1,273 on each unit retailed, marking a 6-percent gain
year-over-year.

Penske noted that the company posts nearly that F&I
profit figure per unit sold in the U.K. So in the U.S., the chairman is
thinking his strategic moves might produce a gain of at least $50 in F&I
gross profit per unit this year.

"We've left this process for the last 10 years really based
down at the dealership level," Penske said. "We found that consistency is
probably most important so we've added specific people that will drive the
F&I product on a day-to-day basis not just relying on our local management.
I think that's going to make a difference.

"Obviously being in the premium luxury side, there's lots of
leasing so we don't have some of the benefits of extended service contracts on
a lease product. But we do have some wrap-around service that we can provide
that customer," he added.

Penske went on to mention that the strategy utilized by
captive finance companies also is putting the company in position to enhance
F&I gross profit during 2013.

"The OEMs that have a captive finance company, they have
been very strong," Penske said. "They're buying used-car paper, which I think
is very helpful to us in growing our business. They had to get into that
business when new-car business went down and they've continue to buy used along
with new. I see them as very active."

Penske also touched on the impact made on the certified
pre-owned market.

"The benefit of getting new-car rates on some of the CPO
activity is very powerful in the market from the perspective of conquesting
customers to the brand," he said.

GE Capital Retail Bank and Penske Launch Consumer Financing
Program

In other company news, GE Capital Retail Bank and Penske made
an agreement to provide a private label consumer credit card program to
customers of Penske dealerships in the U.S.

GE Capital Retail Bank provides financial solutions to
retailers to help grow their customer sales and will service the account and
manage the credit card program.

"We are pleased to offer the CarCareONE credit card program,
providing a convenient payment option to our customers for planned and
unexpected automotive maintenance and repair services," said Rob Kurnick,
president of Penske Automotive Group.

"GE Capital brings a strong understanding of our industry
and deep expertise to our U.S. dealers to assist us in growing customer loyalty
in this important, recurring part of our business," Kurnick continued.

Qualifying Penske CarCareONE cardholders can take advantage
of promotional financing offers such as six-month deferred interest financing
on purchases of $299 or more and 12-month deferred interest financing on
purchases of $750 or more.

The credit card can be used for full-service vehicle
maintenance and repair services and replacement costs at Penske dealerships
locations in the U.S. and Puerto Rico.

Qualifying cardholders can also enjoy a range of benefits,
including exclusive savings and e-bill and online account management options.

Applications can be completed in-store or online.

"We look forward to working with Penske Automotive to help
build its business and serve the needs of its service customers," said Orlando Zayas,
vice president of sales in the automotive aftermarket group for GE Capital's retail
finance business.

"This new relationship underscores GE Capital's commitment
to this important auto dealership market where we have provided consumer
financing options for more than three decades," Zayas went on to say.

Nick Zulovich can be reached at nzulovich@subprimenews.com. Continue the conversation with SubPrime Auto Finance News on LinkedIn and Twitter.