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BUSINESS: ROGER PENSKE

The racing legend and auto dealer shows off his Vegas Ferrari/Maserati showroom.
November 2005

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WORDS JIM GORZELANY

FAST TIMES IN LAS VEGAS

An unparalleled success in both auto racing and retailing, Roger Penske breaks the bank in Las Vegas with a car dealership that’s truly one-of-a-kind.

Las Vegas Ferrari Store offers a full range of items adorned with the eminent automaker’s logo, and the Wynn Resort operates an appropriately Italian-themed restaurant, Corsa Cucina.

As a successful race-car driver in the early ’60s, followed by a notable career as a racing team owner, and now operating one of the largest auto-dealer groups in the world, Roger Penske has few equals in the world of wheels.

His latest accomplishment can be found near the main entrance to the recently opened Wynn Resort on the Las Vegas strip, in the form of the Penske-Wynn Ferrari/ Maserati dealership. While many people have an innate distrust of car dealers, Penske has them lining up to visit his Las Vegas franchise, drawing several thousands of visitors—not to mention at least a few bona fide buyers—each week. “Instead of trying to bring traffic to a dealership, we took the dealership to where there is a heavy volume of traffic,” says Wynn Resorts’ chief operating officer Marc Schorr. “It’s a destination point of its own,” Penske boasts. “There’s no dealership I know of in the country that’s like it. It’s amazing.”


Roger Penske (left)
with Maurizio Parlato,
president and CEO
of Ferrari North AmericaThe 10,000-square-foot new-car showroom displays both Ferrari and Maserati brands separately, with five rotating turntables highlighting the hottest new models. In a nod to Ferrari’s rich Formula One heritage, a number of vintage road- and race-cars is also on display. These have included two from Penske’s own fleet—an F50 and a rare Enzo, named after the Italian automaker’s founder Enzo Ferrari.

The lower-level showroom for pre-owned exotics is able to display as many as 35 vintage cars sold on a consignment basis, and has quickly become a magnet for enthusiasts of all stripes from around the world. “It’s almost like an automotive museum,” Penske exclaims. “These are cars that you would never ordinarily see—they’re like rare works of fine art.”

A state-of-the-art service area boasts seven service bays and two full detailing areas where hotel guests can have their Ferraris or Maseratis washed or worked on, and car-less patrons can lease one of the world’s most exclusive rides if their budgets permit. Meanwhile, the adjacent

Going For The Checkered Flag

For the soft-spoken, but ultimately driven Roger Penske, the Las Vegas dealership is another milestone in what has become a long and lucrative career in the automotive industry. As with most self-made people, his empire started out rather modestly, while pursuing a degree in industrial management from Lehigh University in the late ’50s. “I had a garage off-campus in which I would buy cars, fix them up, and sell them,” he recalls. “By then the car business was in my blood.”

Penske drove in his first race in 1958 at the age of 21 in the Sports Car Club of America (SCCA) National in Maryland; he took home his first winner’s trophy the following year at the SCCA Regional in Connecticut. By 1961, he was named SCCA driver of the year by Sports Illustrated. Yet he shocked the sport by stepping away from the wheel in 1965 to concentrate his efforts on running Penske Racing, which he developed into one of the most successful sports dynasties in history.

Meanwhile, with the help of connections forged on the racing side of the business, Penske opened his first automotive franchise, a Philadelphia Chevrolet dealership, in 1965. It was certainly not to be his last. Today, Penske’s Detroit-based UnitedAuto Group (UAG) owns 249 dealerships worldwide, including 149 in the US, representing 41 vehicle lines. The company registered nearly $10 billion in sales last year, and is expected to grow by about 10% over the course of 2005, during which Penske expects to sell nearly 300,000 new and used vehicles worldwide. He also owns several California dealerships exclusive of UAG, as well as truck leasing, logistics management and vehicle component companies, among other ventures.

While he’s undeniably one of the most successful businessspeople in the country, Penske still manages his affairs as if the checkered flag was but a lap away. “We’ve used racing as a common thread through our businesses for 30 years, because it demonstrates performance and teamwork, and shows your technical capabilities,” Penske explains. “There are people in the racing business and there are racers, and there’s a big difference between them. We’re racers because we do whatever it takes to succeed.”

Viva Las Vegas

The idea to place a super-premium auto dealership in the lobby of the Wynn Las Vegas was conceived early on in the resort’s planning process as a way to combine Marc Schorr’s innate enthusiasm for all things Ferrari with Wynn Resorts’ chairman of the board and CEO, Steve for fine art. The idea was to establish an auto retailing operation that was as much a gallery as it was a showroom. With UAG already owning six Ferrari/Maserati franchises in the US, the United Kingdom, and Germany, Penske was tapped to help create and manage the one-of-a-kind car boutique. “We needed a top operator and there was only one choice: UnitedAuto Group and Roger Penske,” Schorr declares. “Steve and Marc saw that we were passionate about the car business and we quickly determined that we could form a partnership that would really change the game in terms of premium automotive retailing,” Penske explains.

Penske brought his experience and expertise to the drawing board throughout the dealership’s development, set in place an experienced management team from UAG to run the show, and hired the remainder of the 28-person staff from among the local talent pool, all with an eye toward operational efficiency. “Roger and Steve Wynn are very similar,” Schorr says. “They live by paying attention to detail.”

The Ferrari/Maserati complex opened its doors this past May and business, according to all concerned, has been outstanding. While the dealership attracts far more browsers than it does buyers, Penske is still able to leverage the sheer volume of visitors to a profitable end. “We’re generating a guest list from which we can communicate with potential customers around the country on behalf of our other franchises,” he explains. “Foot traffic drives the auto business, and there isn’t a showroom anywhere that has this kind of traffic on a daily basis.”

The Best Team Wins The Race

Automotive retailing can certainly be a profitable venture, but for most dealers it’s anything but stable. Aside from having to weather the sales effects of economic storms, fluctuating gasoline prices and increasingly fickle consumers, a stunning 90% to 100% employee turnover is typical, with hiring costs a continuous drain on operating expenses. But Roger Penske’s vast UnitedAuto Group of dealerships worldwide is the exception that proves the rule. Penske is decidedly proud of his company’s ability to identify and retain key employees, and considers this to be one of his most valuable keys to success.

As a result, the annual turnover rate among all his franchises dropped to an industry-impressive 39% in 2004, and is running at around 33% this year. “We try to find people who will want to stay with us,” Penske boasts. “We want to hire the right people in the first place, have a robust process for training them, and then do what it takes to get these folks to join our culture.”

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