PCV 'bullish' at local prospects

The President of Penske Commercial Vehicles, Randall Seymore (pictured), says the company remains "bullish" about its prospects in Australia and New Zealand, despite the challenges currently faced by its Western Star, MAN and Dennis Eagle brands.

Speaking at a press conference at the recent Brisbane Truck Show, Mr Seymore underlined the Penske group's commitment to Australasia, which it views as a metaphoric 'springboard' from which it can penetrate the broader South-East Asia region.

Penske Commercial Vehicles acquired the importation and distribution rights for Western Star, MAN and Dennis Eagle from Transpacific Industry Group in August 2013, while Penske Truck Rental – a joint venture between America's Penske Truck Leasing (which owns 55 per cent) and Penske Commercial Vehicles (which owns 45 per cent) – followed with the opening of its first outlet in Brisbane in August 2014.

Penske Commercial Vehicles' parent company, Penske Automotive Group, then announced its acquisition of local power generation specialist MTU Detroit Diesel Australia in September 2014, the new entity being rebranded as Penske Power Systems Inc from April 1, 2015. The head office complex in Altona, Melbourne, also facilitated the expansion of Penske Truck Rental, its second Australian branch opening at the MTUDDA address in February 2015.

Penske Corporation is owned and ruled by US businessman, entrepreneur and former champion race car driver, Roger Penske. While its major subsidiary, Penske Automotive Group, now owns 340 car dealerships throughout the US, Mr Seymore said commercial vehicles represent an important part of Penske's plans moving forward.

"Commercial vehicles is a growing part of our diversification strategy," he said.

"In the US we currently own 16 truck dealerships, predominantly in Texas, Oklahoma and Tennessee, and we're going to continue to grow that footprint. We really view commercial vehicles and the engine side as a growing part of our strategy and we are quite bullish on that; in the US the truck business is absolutely going gangbusters right now – in fact it's been arguably the best it has been in the past 20 to 25 years."

Mr Seymore says Penske is leveraging some long-established relationships to further its interests in this part of the globe, particularly when it comes to Penske Power Systems Inc.

"We have a lot of history with Detroit Diesel," he said.

"Penske owned Detroit Diesel for several years [from 1988 through the 1990s] and [we] have a deep relationship with Daimler as well, so when they [former MTUDDA owners Daimler AG and MTU Friedrichshafen] called and said there may be an opportunity over here in the Australian and New Zealand markets, we were very interested."

Penske's involvement here with MAN is also building on some pre-existing relationships, Mr Seymore said.

"Ultimately MAN is owned by Volkswagen, and via the car side of the business that Penske Auto Group is in, and now some of the growing relationships on the truck side, we certainly have some long, strong relationships there as well," he said.

To date Penske Commercial Vehicles has struggled to bolster its presence in Australia with its three truck brands. Last year Western Star, MAN and Dennis Eagle finished with respective overall market shares of 2.1 per cent, 0.8 per cent and 0.2 per cent (TIC T-MARK data), representing drops of 1.0 per cent, 0.4 per cent and 0.2 per cent from the corresponding 2013 figures.

While registrations of light-duty trucks continue to push ahead in Australia, the heavy-duty segment – which encompasses the lion's share of Penske Commercial Vehicles' interests – remains in something of a holding pattern at present, with operators seemingly reticent to replace aging vehicles.

However, the company will now leverage additional sales and increase brand awareness through its local Penske Truck Rental operation, which is continuing to expand its local footprint, while further brand awareness will be enhanced through Roger Penske's V8 Supercars interests – even if DJR Team Penske has languished in its opening season.

Former V8 champion and DJR Team Penske spearhead Marcus Ambrose shocked the V8 Supercars world with his withdrawal from competition after just two rounds of the 2015 title chase. After many successful years in America's NASCAR series, the Tasmanian struggled to find form back in Australia, while replacement Scott Pye has soldiered on in the Ford FG Falcon at the bottom of the championship points table.

Meanwhile, on the truck front, Western Star will now target the medium-duty segment with its new 2800SS, which was unveiled in Australia for the first time at the 2015 Brisbane Truck Show. Well entrenched in the US, the new-for-Australia model will take on the likes of Isuzu, Fuso, Hino and UD in this hotly contested and lucrative market.

Despite the challenges, Mr Seymore says there is much cause for optimism across the various Penske platforms now in place in Australasia, with a major new truck dealership opening recently in Auckland, New Zealand, and Australian market conditions indicative of future growth.

"We're bullish on where this investment is – where it's going in the future and the transportation industry [in general], as we look at the growing freight task and how that's going to grow relative to the population," he said.

"We look at the average age of a truck [in Australia] at nearly 14 years, as compared to the US where it's about six-and-a-half to seven years, so eventually customers are either going to have to keep repairing or [start] buying new trucks. Certainly that bodes well for us and our brands.

"From a strategic standpoint Penske has a launch board for this part of the world as more opportunities present themselves … we're very excited about this market."