Penske says punching problems can be solved

Roger Penske

Punching cars creates headaches for dealerships and customers, Penske Automotive Group Chairman Roger Penske says.

But it’s a problem that can be solved, Penske told the Automotive News Retail Forum at the Encore Las Vegas Thursday.

“We’ve got to look at the mix of cars that we have, and we’ve got to look at this market," Penske said. “China got cold, and [manufacturers are] trying to move all this inventory, and there’s pressure in the U.S."

Penske said he has talked to the automakers about improving the situation. “It can be fixed pretty easily: Let’s slow down the inventory, and let’s get the right mix," he said.

Punching — or self-registration by dealerships of vehicles in loaner or rental fleets — happens when retailers and automakers try to reach monthly and quarterly sales targets. Penske dealerships have done it, and so do other dealerships, Penske said. He noted that it’s ironic that dealers get notification “on March 31, we need to put 100 loaner cars in."

The practice creates bad habits in the dealership, he said. If a white BMW 3 series on a lot has an extra $1,000 discount on it, but the customer wants the black one next to it with no discount, that puts pressure on the sales staff to match the discount.

The shorter warranty period created by the practice also concerns Penske.

“Think about it: A punched car, warranty starts and you deliver it, and the guy thought he had a 36-month warranty, and it’s 33," Penske said. “So these are the things that I’m struggling with as the dealer, and I’m sure you are here, too." Autonews