Roger Penske Buys Dealerships From Fords Failed Foray Into Retailing

The Auto Channel editorial board has for years strongly supported the traditional Franchised Dealership distribution scheme and once again the foresight of TACH proves correct.

Ford has sold seven Oklahoma dealerships to Roger Penske’s UnitedAuto Group. These dealerships were unloaded by Ford because their foray into the retail space just didn’t work. Those of you with memories from just a few years ago will remember when the buzz was that auto manufacturers with the help of The Internet would be able to remove independent dealers from the auto marketing process…well guess what now everyone including Wall Street recognizes that “when it ain’t broken don’t fix it” applies to the way Americans are sold cards and trucks.

Shares of UnitedAuto, Sonic, CarMax, Auto and other Dealer Groups are trading at or near 52-week highs as investors shed concerns about whether Internet-based competition and a slowing economy would hurt dealer profits. UnitedAuto, Sonic Automotive Inc. and CarMax Group shares have all more than doubled this year, while largest retailer AutoNation Inc. is up more than 90 percent.

Two years ago Penske paid $83 million for a controlling interest in UnitedAuto. It has since added 37 dealerships for a total of 123 in 19 states, Puerto Rico and Brazil, not counting the Tulsa Ford dealerships announced Tuesday.

More History

18 November 1999

Ford To Test priceline.com's "Name-Your-Own-Price" Internet Car Buying Service Through Ford.com DETROIT and STAMFORD, Conn.--Nov. 15, 1999-- Test program uses priceline.com service in Florida

Prices accepted online will be honored at local Ford dealerships

Customers remain completely anonymous until their price offer is accepted by a local Ford dealer

Starting this week, a new program from the Ford Motor Company and priceline.com will allow Florida residents to use the Internet to name their own price for a Ford car or truck of their choice and transact through a local Ford dealership. Ford Motor Company, the world's second-largest vehicle manufacturer and one of the most innovative Internet marketers, said that, beginning November 16th, it will test a name-your-own-price car buying option using the priceline.com network in the Florida market. When the test concludes, the two companies will decide how broadly to expand it. Florida customers who visit Ford's Web site (www.ford.com) can "virtually" shop for the exact Ford car or truck they want, then have the option to name their own price and payment method. Priceline.com distributes consumers' purchase offers directly to local Ford dealerships, beginning with the dealership located closest to the buyer. The first dealership to accept the offer gets the sale. If dealers cannot accept the customer's offer, or have the customer's vehicle in a different color or with similar option packages, dealers can electronically submit counter-offers to priceline.com for customer consideration. Each customer receives a response to his or her offer in one business day. The Ford/priceline.com car buying experience is very different from other services on the Internet because it is the first time that a price named by the customer and accepted by the dealer online can be honored by a local car dealership. For new Ford buyers, the process is simple and efficient. All necessary information is provided up-front on the Web site to make an informed vehicle and price choice. There is no negotiating involved and because purchase offers can be made to several dealers in a specified area, customers have the maximum chance of obtaining the car they want at the price they want to pay.

About Ford Motor Company Ford Motor Company is the world's largest producer of trucks and the second largest producer of cars and trucks combined, marketing and selling approximately seven million vehicles globally through its seven brands last year. Ford Motor Company employs approximately 345,000 people in plants, offices and laboratories to serve consumers in more than 200 countries and territories. Ford Motor Company is also one of the largest providers of financial services worldwide through Ford Credit and related businesses. Ford Motor Company provides consumers and commercial financial services through 2,400 branches in 33 countries.

About priceline.com Priceline.com is the patented Internet pricing system that enables consumers to achieve significant savings by naming their own price for goods and services. Priceline.com takes consumer offers and then presents them to sellers who can fill as much of that guaranteed demand as they wish at price points determined by buyers. Priceline.com's "virtual" business model allows for rapid scaling using the Internet. Because the Company electronically collects consumer demand, it can fill this demand directly with sellers or by using proprietary databases. Priceline.com does not maintain or warehouse inventories in any of its product lines. Priceline.com is currently selling multiple services to its sellers across three distinct product categories: a travel service that offers leisure airline tickets and hotel rooms, a personal finance service that offers home mortgages, refinancing and home equity loans, and an automotive service that offers new cars in nine states. Recently, priceline.com announced that it would also offer name-your-own-price services for rental cars and long distance calling. Priceline.com also licensed its business model to a privately owned company, Priceline WebHouse Club, which offers name-your-own-price retail goods, beginning with groceries in the New York metro area. The WebHouse Club launched in early November. In return for the WebHouse Club license, priceline.com has received warrants allowing it to purchase a majority equity stake in the WebHouse Club under certain contingent conditions. Prior to the exercise of this warrant, the results of WebHouse Club operations will not be included in priceline.com's financial statements. This press release may contain forward-looking statements that are made pursuant to the safe-harbor provisions of the Private Securities Litigation Reform Act of 1995. Expressions of future goals and similar expressions including, without limitation, "may," "will," "believes," "should," "could," "hope," "expects," "expected," "does not currently expect," "anticipates," "predicts," "potential," and "forecast," reflecting something other than historical fact are intended to identify forward-looking statements, but are not the exclusive means of identifying such statements. These forward-looking statements involve a number of risks and uncertainties, including the timely development and market acceptance of products and technologies and other factors described in the Companies' filings with the Securities and Exchange Commission. The actual results may differ materially from any forward-looking statements due to such risks and uncertainties. The Companies undertake no obligations to revise or update any forward-looking statements in order to reflect events or circumstances that may arise after the date of this release