Penske Gambles On smart

Washington DC June 26, 2007; The AIADA newsletter reported that Roger Penske, the race-team owner and former driver, who is also CEO and controlling shareholder of United Auto Group Inc., has gradually taken a stronger hand in running the Michigan-based dealership chain.

The Wall Street Journal said that next week, the company will change its name to Penske Automotive Group Inc., to take advantage of name recognition. Now, Mr. Penske and UAG are gearing up to become the sole U.S. distributor of DaimlerChrysler AG's Smart car.

Mr. Penske is counting on growing interest from U.S. consumers in small, fuel-efficient cars amid rising gasoline prices. Smart cars are expected to retail for an average of about $15,000. The cars, which get 40 mpg, seat two and are so small that two of them can fit in a traditional parking spot.

To sell the car, Mr. Penske is ripping a page from Toyota and BMW, both of which recently launched new brands, Scion and Mini, respectively, using a largely Internet-based advertising model that targets niche buyers.

Mr. Penske, using a racing term that is the equivalent of "riding their coattails," said Smart could be successful "if we could draft in behind those two models."