Driving the news: Penske Automotive Group $PAG ( ▼ 0.41% ) has acquired four high-volume Toyota and Lexus dealerships from Penske Motor, including: Longo Toyota and Longo Lexus in El Monte, California, Lexus of Stevens Creek in San Jose, and Longo Toyota of Prosper in Texas. Together, the stores are expected to add $1.5 billion in annual revenue.
For context: Longo Toyota has held the no. 1 volume position among U.S. Toyota dealers for 58 straight years, while Longo Lexus dominates the Western region and Lexus Stevens Creek leads Northern California, according to the company.
Combined, the four stores retailed over 28,000 new and used vehicles in 2024.
Penske funded the purchase through existing credit availability and a seller note, closing the transaction on November 19.
What they're saying: "The acquisition of these premier dealerships represents a strategic addition to the Penske Automotive Group portfolio. The transaction strengthens our relationship with the Toyota and Lexus brands and expands the Company's presence in southern California to the Los Angeles area, complements the Company's existing presence in northern California and expands our operations in Texas to the fast-growing Dallas market," said Rich Shearing, North American Operations Officer.
Rich Shearing
Penske Automotive Group
Bottom line: The deal gives Penske immediate scale in California's competitive Los Angeles and San Jose markets plus the fast-growing Dallas suburbs, though the added leverage means successful integration will be critical to achieving expected returns.
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