Just headquartered in Bloomfield Hills, Michigan, is a diversified and international transportation services company. It's truly one of the most diversified companies that we have here with well, there's so many businesses to name, but leading automotive dealership groups in the U.S., in the largest luxury dealership group in the U.K., a large and growing set of commercial dealership groups in the U.S. and Canada, and also a business in Australia that does vehicle distributorship and ownership of Penske Truck Leasing. So with that said, it's great to have Tony Pordon here, who's the company's Executive Vice President for corporate development and investor relations. And we'll get right into Q&A, Tony. Thank you for being here. Thanks, Brian. Appreciate it. So the other thing that you may or may not have picked up on is that this year, in the second quarter, and now we just announced the beginning of the third quarter, so we've just added three Porsche dealerships in Australia. That's right. I missed that. Yeah. So we have two. We think that it'll give us about $130 million in revenue if they're both in Melbourne. And then we just announced the acquisition of the third and final spot in Melbourne. It will close probably in December. That'll give us another $130 million. So we'll do about $260 million just of Porsche in the Melbourne marketplace. And we'll have that entire market with every Porsche that's sold in the second largest city in Australia. Can't beat that. No. And I think it speaks to the opportunities that maybe the looks that you get relative to maybe some other dealership sets within the space, given your relationship with the OEMs that have lasted as long as they have. Sure. Let's maybe start our discussion in the U.S., both in the luxury market and otherwise. We've had this gross profit per unit bid-ask within the investment community that gross per unit was going to come crashing down, and it really hasn't. Talk about what you're seeing there and why we've found this or are finding this floor. So I'll point to a couple of different things. And I think, number one, it comes down to inventory as the most important piece. Inventory today is sitting at about a million units less than what it did prior to the pandemic. 3.7, 3.8, you guys are all experts out there in terms of what the inventory was. Some people had it at about 4 million. It sits at somewhere around 2.7, 2.8 million units right now. Day supply for the industry is about consistent with where it was prior to the pandemic. The difference is the SAAR has not kept up with what the market was expecting, which would have been 16 and a half, 17 million units or so, roughly speaking. We saw 16 million get reported for the month of October, which was good. However, when you look at our business and you go back to 2019, we were doing $3,100 in gross per transaction on new. Our average transaction price was $42,000. Our average transaction price, nine months year to date, $58,000. Okay? $58,000, and we did $5,000 in gross profit. $5,200, actually. We were at $6,500 a year ago, year and a half ago. That has come down a little bit. But I don't see the average transaction price coming down back to $41,000 or $42,000. So I think there's a floor. Wherever that floor may be, I think, is still undetermined. But I think it's going to be much higher than what it was back in 2019. I'm pretty confident in that, right? And particularly, the thing that could screw it up is inventory. If the OEMs put too much inventory that's out there and the market does not sell, then the cars will have to be discounted. But we sold 32% of our cars at MSRP in the quarter. The problem with that is that when you look at the mix of the different cars, battery electric vehicles, we discounted $6,600 a car. $6,600 a car. They are just not selling. So again, you have to take a look at what the manufacturers are doing, and are they going to push more electric vehicles on the market? If they push more electric vehicles on the market, it's going to require more discounting. I think they're going to be more rational than that, to be honest with you. So my point is I have a high degree of confidence that the gross will stay at a high level and much higher than it was pre-pandemic. Let's stay with EVs because you bring up the point already. Why do you think that we're seeing this malaise in demand for these vehicles? Is it the quality, the design? It's your floor. It's really surprising. So I think there's a couple of things to consider. And really, it's different by market. If you look at the international marketplaces, there's a much higher demand and government push, quite frankly, for EVs and zero-emission vehicles than you've seen in the U.S. I think the consumer. How many are here from Chicago? What happened last winter in Chicago with the Teslas and the EVs? What happened in Florida? Anybody here from Florida? What happened with the recent hurricanes in Florida? No electricity, but the salt water interacted with the batteries, and they all blew up. And then if you're in Phoenix or Vegas out here and you take a look at what happens in the summertime, you can't really run the air conditioning in the cars because the minute you turn it on, the available battery usage goes down in half, if not more. So it's technology. I think that consumers today are at the point where they just have anxiety. They have anxiety on infrastructure. They have anxiety on range. And that is holding them on the sidelines. People that wanted these cars, people that were early adopters, they have them. What you're seeing now in the marketplace is all the early adopters have everything, so you have nobody else to go after. Now you have to convert people. And those people, quite frankly, are going to this hybrid strategy or this interim strategy of wanting hybrids. And hybrid sales are on fire. We can't keep them in stock. And then you go over to the U.K. They have 17.3% BEV market share. U.S. is at 7.5%. Mario, you probably know that number better than I do, right? 7.5%? Something like that. And then the BEV or the hybrid market share is up 230 basis points in the U.K. this year. So they have a mandate to get to 22% zero-emission vehicles in the U.K. this year. If you don't get there as a manufacturer, the government's going to fine you GBP 15,000 a car. They can't afford not to force those incentives. Yeah. No, it gives a 15,000 GBP-per-car incentive. Well, and what they're doing in the marketplace is they're doing fleet sales. And we only make a little bit of money on those. And the consumers then on these fleet sales don't have to pay any payroll taxes because they get company cars. So that's what's going on in the marketplace. You just can't. It's completely different between here and there. It'll be interesting to see what happens tomorrow with the election and what direction this country goes in in terms of whether we're going to drill more, whether we're going to do more battery electric vehicles, the incentives are going to stay or not. It's very, very costly for these incentives. One area you have excelled is in the parts and service side. And while you do tend to be more of a luxury dealership group that the customer base is more predisposed to using the dealer, you've gained share of wallet. Maybe talk about how you're doing that and some of the tools that you now have that are allowing you to gain or regain share of wallet on the parts and service side. I think some of it comes naturally with the brand mix that we have. We're 72% premium luxury, meaning that our largest brands are BMW MINI, which is 26% of our business. Porsche is 8%. Audi is 10%. Mercedes is 8%. So we have quite a few areas where our business would naturally lend itself to the customers coming back to the dealership to have their work done because you can't really take these cars many other places. You probably don't even know how to change oil in the car anymore because it's so complicated. So I think that's part and parcel of it. Secondly, a lot of the OEMs are offering maintenance packages with these cars to allow the consumers to bring them back to the dealership, paying the dealership to do it so that they know that the car is getting serviced correctly. Because typically, a luxury vehicle has a 50% lease rate to it, sometimes 60%, depending on which brand it is. But what we have done is we've tried to invest in the dealership footprint. We're investing $200 million a year in the facility itself to invest in technicians, the technology in the back of the shop, diagnostic tools, but then implementing artificial intelligence. So we've eliminated our call centers. We've put artificial intelligence in place. And you can now call the stores and book your appointment using artificial intelligence. So that improves convenience. We offer loaner cars. Loaner cars is a huge deal so that you don't inconvenience a consumer. But if we don't have a loaner car, we've got a partnership with Uber so that we will drive you to where you want to go and then pick you up later so that you can have the convenience of not being without a car. Our CRM system allows us to do the direct marketing and the follow-up that we need to. And then who's ever been driving their car and has their car talk to them and tells you your oil needs to be changed or you've got a tire that's low or something else happens? I have an app on my phone for the two cars that I have that gives me monthly a report that tells me whether everything's green or yellow or red. All of that has helped us drive higher service and parts. So all of that, the vehicle complexity, I think, is helping us drive it as well. And then, quite frankly, we're being more efficient, Brian, with the technicians that we have, the training that we go through, and driving a higher effective labor rate. We went to what's called flat rate hours, which allows the technician to get paid more for generating more hours in a given day. So all of that is helping us drive higher service and parts business. I can vouch for the Penske experience I had. A terrific one the other day for my wife's car. So we had videos and everything of every single item. Oh, I forgot that one. The video thing is. That's what I'm here for. Phenomenal. Yeah, you're good. You want to work for us? Yeah. Videos is very important. Talk about the warranty aspect of parts and service. You've had stop sales all over the place with some of your brands. And really, over the last five years, warranty has become a bigger issue. Is this just here to stay, do you think? I do. Okay. So tell us why. So the warranty on a car, and particularly an EV, has an extended warranty. The battery life has an eight-year warranty. Basic warranties, I think, on a battery electric vehicle are four years on everything bumper to bumper. You see the OEMs have gone to more bumper to bumper things on their cars. They also have, I think they've learned over time, and they learned from the Toyota airbag incident that we first saw, or it was the Toyota accelerator issue, then the airbag incident, where they didn't react in a timely manner, and people died. People got hurt or injured. So now the OEMs are deferring and making stop sales, perhaps maybe a little more aggressively than they used to. So things are going on stop sale until they can get a fix in place and deliver us parts. So what we saw in the third quarter is BMW had an integrated brake recall. It was 1.5 million vehicles on a worldwide basis, all the X products, the 5 Series, the 7 Series. That was announced in August. We didn't get the fix, and we didn't get the parts for the fix until the latter part of September. So we weren't able to get all the cars fixed in the appropriate amount of time. So yeah, it did cost us on earnings. Somewhat, we talked a little bit about that on the call last week. But you see more and more of this taking place. At the same time, every Porsche Macan, the battery electric Macan, went on stop sale at the same time. So brand new product released from the manufacturer, we couldn't sell any of those. So I suspect that we will continue to see more. There's another one on Honda right now, the CR-Vs and the Accords that are on complete stop sale. So we're having trouble with those right now. We'll eventually get those out. But these are the things that are happening with the OEMs. They're reacting to regulatory pressure, cost pressure, and they want to just make it right. Let's shift to the used market and maybe just from a 30,000-foot approach. We've seen online-only and omnichannel experience become more accepted. This is something that Penske's had the capability of for some time, but clearly a market that's evolving. Maybe give some thoughts on how the online model works within the context of a franchise dealership. So there's a lot to unpack there. So let's break it down in the simplest pieces. Every dealership has their own website. That website is designed for local marketing so that people can say, "I want a BMW in Scottsdale," and our dealership will pop up. From there, we take every car that we have for the manufacturers that allow us to put every new and used car on something called PenskeCars.com. PenskeCars.com has every one of our vehicles on it. It's just a cross-marketing promotional technique that allows us to put our vehicles in front of somebody that they can look at it on a worldwide basis. You can go to your smartphone right now. You can go to PenskeCars.com. You can search for different vehicles, different price points, high to low, different models, and different manufacturers. It's very powerful. On top of that, what we have done, instead of us going and saying, "Here's the Penske way to buy a car," we have gone and partnered with the manufacturers, or vice versa, the manufacturers have partnered with the dealerships to install a purchase process that is commensurate or designed with that brand that is a digital marketplace. It is Toyota SmartPath, Lexus Monogram, BMW Anywhere, those types of things. So from a Penske perspective, we have embraced those tools along with the manufacturer. It's integrated into the captive finance process with that manufacturer so that funding can be done day one. Customers can sign for things online. It makes it much easier for that customer. And then we don't have to invest in constantly changing technology because we believe it's going to be plug and play. Longer term, that type of buying a car online is going to be a plug-and-play type process. So then what we have done is if you are sitting in our dealership and you go to the F&I office or you meet with the salesperson to sell the car, we've taken and integrated a digital process into finance and insurance that has every type of piece of paper, every type of paperwork that you can have for this car, along with all the compliance things that we need to do, shows up on a tablet in front of the consumer. So if I was selling the car, the tablet would be right here. The consumer would be in front of me. The tablet would be facing that consumer, and we'd walk them through every single piece of the transaction. They then accept or deny any or decline any of the different pieces that they may want from the interest rate, the loan, the term, any of the products that we want to sell. And when it's all done and you sign the paperwork, you hit send to the consumer and it emails them all the paperwork. So from a sustainability perspective, we're not printing things anymore, driving a greener dealership, but then we're completing everything from a compliance standpoint upfront. And our F&I numbers have been great. Prior to the pandemic, we were doing $1,200 a car. We're now doing almost $1,800. We're selling more product. This is just a process that I think we will continue to use and develop. Clearly, it's helping you from a unit perspective and from a profitability standpoint. We've started to see gross per unit on the used side come back a little bit and even in your U.S. markets, we'll get to sit in there maybe the next question. What are you able to do there in this sort of used vehicle environment that's helping you? Used is a tough market right now. You saw our grosses on a year-over-year basis be up $200, really because the market is much steadier today on the used vehicle side than it was a year ago. The market was a little overheated through the first half of last year, and there was a big correction in Q3 and Q4. Now, with the market being steady, you shouldn't knock on wood. We didn't see it in the third quarter. I don't expect that we'll see it in the fourth quarter in terms of big correction where you see a big year-over-year decline. The challenge with the used vehicle market right now is, one, affordability. We talked about the higher average prices that are out there. Consumers don't want to pay the price for a used vehicle that's out there. And secondly, the amount of vehicles that we have coming off lease or the amount available in that one to five-year-old type area that we like to sell cars in is very much limited and probably will be that way for the next 12 months. Beyond that, we see that the leasing market has picked back up. We're leasing 32% of the new cars that we sell right now. During the pandemic, we were down below 20%, 15%, somewhere right around there. So now you're talking about those cars in 2021 and 2022 that were leased at a much lower level are just coming back off lease, but we don't have as many used cars coming off that can go from the off-lease cars. So we expect in 2025, end of 2025, that those things will probably start getting a little bit better. So that, to us, are the couple of things that are bothering the used car market right now. Gross is $1,800 or so, which is consistent with where we think they'll be. Yep. In the UK market, you made a couple of strategic decisions regarding your CarShop business. Can you talk about that and why you did what you all did? Yeah. We had a 12.5% decline in third quarter on used cars on both the same store and a total basis, and it was self-inflicted. We had a standalone business that was called CarShop. We had eight stores in the U.S. We had 13 stores in the U.K. And because of the challenges with acquiring the inventory and the cars that we were trying to push through, particularly in the U.K., it just wasn't working. It went from a profitable business to a business that was losing money. And we decided to restructure that business, change the name in the U.K. from CarShop to Sytner Select. Sytner is our brand name in the U.K. And as a result, we are now selling one- to five-year-old cars that are cars that come from our dealerships instead of the CarShop cars, which were cars that were six and seven and eight and nine years old that were generating grosses of $1,000 a car. So a couple of the reasons why we did that. Number one, we found that the older car that we were selling resulted in more problems, more comebacks, more warranty. It left an unsatisfied consumer. Secondly, the dealerships in the U.K. Think about a comparison of the U.S. and the U.K. In the U.S., if you take a car in on trade, you can sell it. It can be any brand. At a BMW store, you could buy a Porsche. You could buy a Ford. You could buy a Chevy. In the UK, there's restrictions on whether or not you're able to do that or not. So in the UK, if you take a trade on a BMW at the BMW store and the car that's being traded is an Audi, you can't sell that Audi. It has to be transferred to one of your other Audi stores or the Sytner Select store. So we're transferring that to other locations in the network where when we had the CarShop locations, it just wasn't working for us. So that has helped us. We believe we're going to be able to take the 13 locations. We restructured that down to eight. We closed two locations, got rid of a bunch of people. We sold three other locations that were unprofitable. So now we're down to eight locations, and it's a much better business for us, but you're going to see some year-over-year headwind with unit sales. But ultimately, that means we're going to be much more profitable. One of the things I appreciate about Penske Organization is how entrepreneurial it's been. And sometimes things have gone better than others. One area that has gone terrific for you is Premier Truck Group, your dealership set for medium and heavy-duty vehicles. Can you talk about that business? A difficult market right now, but one that continues to be a great source of profit for the enterprise. Yeah, so one of the great things about our company is the diversification that we have, not just an auto retailer, but the commercial truck business, which gives us a lot of the same things that the auto business has, but just more. Autos for us, 63% of our EBT comes from autos. 37% comes from trucks, a combination of both Penske Truck Leasing and Premier Truck Group, like you talked about, Brian. Premier Truck Group sells about 20,000 medium and heavy-duty trucks annually. 80% of those are heavy-duty trucks, Class 8s. The other 20% are the medium duties. The vocational market is really good right now. The over-the-road trucks are struggling, as you guys heard from Rusty just a short while ago. The great thing about that market, and I'm sure Rusty told you a little bit, is on compare and contrast the car side to the truck side. On the car side, 45%-ish of our gross profit comes from service and parts. On the truck side, that's 65%-70%. So that business produces an absorption ratio that is typically 125%-130% of our fixed costs is absorbed by service and parts. We have a higher return on sales. Acquisitions are a lower multiple in that side of the business. We've grown it from $500 million-$4 billion. We just acquired another $200 million. It has a high return on sales that's higher than the car business. So those are some of the things that we find really attractive about that part of the business. And oh, by the way, that growth that the business has had, they have no debt. Yes, sir. I have to ask. You've built a fantastic business. Roger's done a great marathon runner and everything he's done in business. Yes. Then I look at a company that's on a highway here with cars stacked on like a vending machine. Yeah, like a vending machine, by chance. Yeah, $40 billion market cap, and you got $10 billion. And you can do some of the same things if you kind of re-engineer the way your business is modeled. How are you guys thinking about that? Or do you don't think that's sustainable, the Carvana valuation? It hasn't been in the past. It hasn't been in the past. I think there's a lot of momentum and people hoping that they aren't missing the next big thing. But I think when you see us go and look at doing a CarShop business or a Sytner Select business and how we're looking at the used side of the marketplace, we are actually trying to do more of those things. We're trying to grow the business in unique and different ways. And I think that that is maybe misunderstood about our business, that we're not doing that, that we're just a new car dealer. Well, that's not true. We've got these used cars. We're making a ton of money on used cars. We've got the internet, the digital process in place, the same thing that they have. We just don't get as much love. You're too diverse. 30 minutes isn't enough. I know. We're up against the slot. Can I say one more thing? Thank you very much. Yeah, go ahead. One more thing, please. This business in Australia is hitting its stride with what we're doing in terms of power systems and providing. Think about an engine that wouldn't fit inside these tables, right? These are going to power these huge data centers. Go and look at businesses like Austal, right, in terms of what they're doing. We're providing the power that powers the data centers and the gensets. These are things that are going to be bigger and bigger and bigger as we continue to grow. And we're doing construction and industrial. We're powering military frigates and submarines in that market. So this is still a very small business. It's less than $1 billion in revenue, but it's growing. And guess what? 80% of that business is parts and service. So every one of these engines that we put in has got a 30-year life. We're going to have the parts and service for this going on. So anyway, we'll talk about that sometime. Next time, I will bring a video that will show all the stuff that we do. It's just the video that we have right now has the Indianapolis Motor Speedway in it, and it's not ours, so. We're just going to make you the keynote next year, Tony. All right. I will. Anytime. Thank you.