Tony Pordon - Executive Vice President of Investor Relations and Corporate Development Roger Penske - Chairman, Chief Executive Officer J.D. Carlson - Chief Financial Officer Shelley Hulgrave - Controller.

James Albertine - ConsumerEdge John Murphy - Bank of America Merrill Lynch John Healy - Northcoast Research Irina Hodakovsky - KeyBanc David Whiston - Morningstar David Lim - Wells Fargo.

Good afternoon ladies and gentlemen. And welcome the Penske Automotive Group Fourth Quarter And Full-year 2017 Earnings Conference Call. Today's call is being recorded and will be available for replay approximately one hour after completion through February 15, 2018 on a Company's website under the investor Relations tab at www.penskeautomotive.com.

I will now introduce Tony Pordon, the Company’s Executive Vice President of Investor Relations and Corporate Development. Please go ahead..

Thank you, John, and good afternoon, everyone and thank you for joining us today. As John said, a press release detailing Penske Automotive Group’s fourth quarter 2017 financial results was issued this morning, and is posted on our website along with our presentation designed to assist you in understanding our performance and Company strategy.

As always, I’m available by phone or e-mail for any follow-up questions you may have. Joining me for today’s call are Roger Penske, our Chairman; our Chairman; J.D. Carlson, our Chief Financial Officer; and Shelley Hulgrave, our Controller.

On this call, we will be discussing certain non-GAAP financial measures, such as adjusted income from continuing operations, adjusted earnings per share from continuing operations and, earnings before interest, taxes, depreciation and amortization or EBITDA.

As we noted in our press release, Penske Automotive Group's fourth quarter 2017 income from continuing operations and related per share include a benefit of $243.4 million or $2.84 per share related to U.S. Tax Reform.

Fourth quarter and full-year 2006 income from continuing operations included a tax benefit of $5.1 million or $0.06 per share from the revaluation of the deferred tax liability.

Excluding these benefits, fourth quarter 2017 adjusted income from continuing operations increased 11.9% to $86.6 million and related earnings per share increased 11% to $1.01.

WE have prominently presented the comparable GAAP measures and have reconciled the non-GAAP measures in this morning's press release and investor presentation which is available on our website for the most directly comparable GAAP measures.

Additionally, we may make sine forward-looking statements about our operations and earnings potential and outlook on this call today. Our actual results may vary materially because of risks and uncertainties outlined in today’s press release.

I now direct you also to our SEC filings, including our Form 10-K for the additional discussion and factors that could cause any results to differ materially. At this time, I will now turn the call over to Roger Penske..

59% through our retail automotive dealerships; 9% through our commercial truck dealerships and 32% through our non-automotive joint ventures such Penske Truck Leasing and operations in Australia and New Zealand. Now let's turn to the performance of our retail automotive business in Q4. U.S.

retail increased 7% to be set up to almost $120,000 on a same store basis; retail units declined 2.7%, while the retail revenue increased, because of the mix of 2.6%. Variable gross profit per unit, which includes new vehicle, used vehicle and finance and insurance gross profit was $3,455, an increase of 46%.

Same store variable gross profit was $3,510 per unit representing an increase of $96. Turning to new vehicles, U.S. retail declined 2% including a 3% decline on a same-store basis. Gross profit per new unit increased $165 including $98 on a same store basis.

New vehicle gross margin declined 10 basis points to 7.8%, but improved 30 basis points sequentially. Our supply new vehicles was 67 days at the end of December compared to 64 days at the same time last year. Turning to used vehicles.

Used retail increased 19% and our used and new ratio improved to 0.95 from 0.80, mainly due to the acquisitions of CarSense and CarShop, which I'll discuss momentarily. Same-store used units declined 2%. Gross profit for used units declined $114on a same-store basis, largely from diesel impact in Germany and Italy.

Used vehicle margin declined 60 basis point to 4.9% and was driven by 350 basis point decline from the diesel impact again from Germany and Italy. Our supply of used vehicles was 55 days at the end of December compared to 49 days at the same time last year.

Finance and insurance revenue grew 19% for the quarter, including a 6% on a same-store basis and our F&I revenue per unit increased $124 to $1,211, including $98 on a same-store basis. Service and parts revenue grew 7.3% including 4.3% on a same-store basis. Gross margin increased 118 basis points in total or 100 basis points on a same-store basis.

Our customer pay was up 8.1% on a same store-basis, warranty was up 6.2%. Body shops and PDI was up 4%. So again 7.3% on a same-store 4.3%. Moving to our standalone used vehicle super center businesses, as most of you know we acquired standalone used vehicle super centers in the U.S. and UK during the first quarter of 2017.

We believe these used vehicle dealerships further diversify PAG’s business and provide an opportunity to capitalize on the highly fragmented used vehicle marketplace. In the fourth quarter, these businesses retailed 9,500 units, generated $176 million in revenue and $29 million in gross profit.

In the U.S., the average transaction price was $20,700 and the variable gross profit was $2,826 per unit. Approximately $400 more than our franchise dealerships. In the UK, the average transaction price was $12,754 with a variable gross profit of $2,040.

In the U.S., we identified three new Greenfield locations to expand the CarSense brand and we expect to have all three of these locations up and running within the next 12 months to 18 months. In January, 2018, we acquired the Car People Company in the UK which operates for large scale retail locations in Northern England.

This acquisition complements our existing scale, obviously in the UK. Car People is expected to retail approximately 18,000 units and generate on an annualized basis almost $300 million. In total, we expect our used vehicle super center operations to retail approximately 70,000 vehicles annually and generate over $1 billion in revenue in 2018.

If you look at our CarSense and CarShop businesses, we typically see a 3.5% to 4% return on sales and a pretax return on invested capital, averaging between 15% and 20%. Turning to our retail truck leadership business, this market continues to experience improved conditions, including strong freight metrics and heavy duty truck utilization rates.

For the quarter, Premier Truck Group increased its new and used unit sales 47% to 2,294 units generating 308 million of revenue and $45 million gross profit.

Same-store revenue increased 39% due to the strong heavy duty truck market service and parts represented 68% of the total gross profit and covered 117% of our fix cost and nearly a 100% of our operating expenses in 2017.

According to Act, fourth quarter class 8 build that’s heavy duty tractor build rates increased 40% and net orders increased 94% and retail sales increased 26%. Looking into 2018 Act production forecast is 322,000 units Class 8 retail sales for 2018 or forecast to 315,000 which would represented 25% increase over 2016.

We believe the strong conditions will drive our business to improve sales and growing profitability throughout 2018.

Turning to our Australia truck distribution and power system business, the fourth quarter revenue increased 27% to a $147 million, we are generally experiencing heavy duty truck conditions improving in the Australian market with heavy duty truck market sales up approximately 22% year-to-date.

Our market share of products distributors increased 240 basis points compared to the same period last year, on the engine distribution side of the business, order increased to winning more bids in fact in January we were chosen to provide the Australian Defense with engines for its new fleet of offshore patrol vessels and lifecycle support for parts and service for the next 20 years.

Looking at our balance sheet, we had $45 million of cash at the end of the December, floor plan $3.8 billion and non vehicle debt was $2.2 billion. 32% of our floor plan in non-vehicle debt is at fixed rate while the remaining 68% is at variable. We had $700 million in liquidity at the end of December.

Our debt to capitalization ratio was 47.1% down from 52% in Q3, a leverage ratio improved as I said earlier from 3.1 to 2.9 at the end of September. New and used automotive vehicle inventory was $3.3 billion up $412 million when compared to last year.

On a same-store basis, inventory was $3.1 billion up $211 million, approximately $20 million of our U.S. inventory is currently on stop sale representing approximately 600 vehicles, 12 million on new vehicles and 8 million unused.

Capital expenditures were approximately 225 million net of 22 million in sales leased back, CapEx includes $20 million in land purchases. Let me talk now about and take a minute to discuss the tax reform and the positive impact we expect to have for our business.

In the fourth quarter, we recorded as Tony said earlier, a $243.4 million from especially two items.

One-time revaluation of our tax liability from a decrease in corporate income tax from 35% to 21% providing approximately $300 million and repatriates taxes on the accumulative earnings of our international operation which was an expense of $55 million.

In general terms, the new Tax Reform package required us to incur tax expense and earnings we have deem to be permanently reinvested overseas. Although we recorded $55 million expense when it carry over tax losses from our PTL investment. Therefore, we didn't have a cash outlay for this expense.

Going forward, we will generally be able to repatriate earnings back to the U.S. on a tax advantage basis. We expect our 2018 tax rate to be in the range of 25% to 26%, which will provide us the opportunity to pursue our strategic initiatives, invest with our employees and improve shareholder value.

In closing, we continue to build a different model that is about diversification, our performance continues to demonstrate and reinforce to add ability of our business and changing market conditions. We remain optimistic about our outlook for 2018.

And finally, I’d like to congratulate all of our employees for their efforts in making the Penske Automotive Group one of the world's most admired companies like Fortune. We are honored to be part of that prestigious group of companies. Thanks for joining us on the call today. At this time, I'd like to have the operator open it up for questions.

Thank you..

[Operator Instructions]. And first, we go to line of James Albertine with ConsumerEdge. Please go ahead..

Thank you and good afternoon, everyone..

Thank you, James..

Hi, Jamie..

Hi.

thanks for the detail, you said a little bit more this time around on the used vehicle superstores, I’m just wondering if you could elaborate maybe a little bit more on your strategy around that business, and then as a related question, do you see opportunities to layer in sort of best practices from your franchise operations as it relates to parts and service over time? Thanks..

Well, Jamie, obviously, we see this used vehicle strategy; it further diversifies our PAG business. And there is a highly fragmented marketplace, obviously, a lot of white space, which gives us the opportunity to grow these and a footprint that would be reasonable for us, but not only the U.S. domestically, but also in the UK.

We are able to leverage off vehicle sourcing, which is key to us for the number of news coming off, both in UK and in the U.S. from the standpoint of leases. There is no question that vehicle sourcing allows us to get access to vehicles that maybe they couldn't get before.

So that is key and I think overall, when you look at our metrics from a compensation standpoint, if you look at comp to gross, it's about 700 basis points, lower than our traditional business, and on a variable basis, it's about 10%. So to me, we have strong return on capital as we said earlier somewhere between 15% and 20%.

We have got higher grosses in fact, to our traditional business. It's up about $400, and certainly, there is lower CapEx, which obviously is key, we don't have the CI standards that we have from the normal OEM.

So, overall, I think the model works, we have the ability to grow in markets, where we have people and I think the expertise and the technology that both we have in the U.S. and the UK will allow us to grow this part of our business substantially in the future.

So, you'll see this be a growth opportunity for us and when you think about going from 40,000 to 70,000 units approximately in 2018 versus 2017, will be a real benefit, and it will generate approximately $1 billion in revenue..

So, overall I think there is a very good move within the Company.

On the other hand, we want to be sure we run this business separately from our normal OEM business, because of the different models of compensation just one example, the average sales person in a Penske Automotive Group dealership probably around the world sales 10 cars on a monthly basis. In the superstores, they approach almost 20 per person.

So, the better utilization and obviously, the compensation is mostly variable here and salary and unit bonuses in the other businesses..

Very good. Thank you for that color and best of luck..

Thank you..

Our next question is from John Murphy with Bank of American Merrill Lynch. Please go ahead..

Good afternoon, Roger..

Hi, John..

Maybe I guess, I’d follow up on cars, I mean these three Greenfield facilities that you are talking about building, I’m just curious if you have a rough dollar number on sort of a capital it’s needed to spend on those.

And so what the ramp curve on those is at around 18 to 24 months before those stores mature and what would you expect to revenue to roughly be as they mature?.

Well, the first one we’ll have will be going into Phoenix that it was on existing land, we have purchased a very realistic rate. So, we’ll spend probably $3 million to $4 million initially on that facility to build the sales facility. The balance will be vehicles online. We also have already have a PDI set that we could utilize.

And then as we move into the other markets, there’ll be contiguous where we have scale and capability, and I would expect within the first six months we’ll see Phoenix and then the other two will come in within 12 months. So, one down in New Jersey and another went over in Pennsylvania areas. So, we have these things circled.

We are already starting in detail drawings and mainly, some will be a reaffirm of existing locations and others will be a straight build soon..

Okay, that’s helpful.

Any idea on sort of revenue generation from each point that you would target?.

Well, it’s hard. It’s really too early and to be honest with you, we have in the past have purchased businesses that had an ongoing business. So, we had the benefit of that, but when we look at certainly, the cars are stable, went up operations here in the U.S.

from a Greenfield side and it probably takes, probably between four months and six months, probably the breakeven as you get into these, because you are building a customer base and building a team.

But it hasn’t even when I looked at and the car people had Laurelton and England, they have a big operation there that has probably, the ability to store above 800 or 900 cars. And it took them six months to get into the black. So, I think that’s much sooner than you would see on a normal OEM point..

Yes. That’s impressive. And then just a second question on tax reform here. I have been curious if you are seeing anything as far as your customers are purchasing with the accelerated depreciation both on the sort of a light duty side where you have detail.

And then also on the commercial truck side second portion that do you expect any of that benefit to be competed away amongst dealers.

And then the third portion of it does this lower tax rate that you now have make the after tax returns that much better, so going at making acquisitions and investments more aggressively to grow would be something you do just on a more aggressive basis..

Well I think it’s too early to tell. I think obviously the tax benefits are rolling into the market, we have upgraded our 401(k) investment, which is for retirement in most cases, I think a lot of companies are now giving employees certain dollars.

We felt that 401(k) was better because it's a long-term benefit rather than a one-time payment, but I think that the economy that we can see something is going on, because as we look at our Penske Truck Leasing business, our rental is really off the charts, we have never seen January come through like it has been.

So there is plenty of freight out there, what means, people are doing business and that's going to drive more money in the progress of our consumers, certainly we hope to see that as we go through the next two quarters or three quarters.

I think on the other hand when you look at the economy of business is better that's going to be better for the individuals.

From a dealer perspective and I have seen some dialogue regarding, what will some of the other dealers do with this benefits, well, when you think about the other maybe, 80% or 85% of the dealers out there that don't have a public Company, they are typically pass through entities LLC.

And I don't see them taking that benefit and lowering prices because most of them already have done everything they can, revaluing the inventory and other things at year ends to reduce their taxes.

So I don't see that really being a big benefit and there is no question when you look at our business overall, our benefits come at the holding Company and all of our managers are paid on earnings before taxes. So there won't be any benefit from a tax flowing down into an individual dealership and so all the managers paid on a variable basis.

So I really don't see that as a risk at all, especially when you look at the - not sure, where we have 60% or 66% of our revenue here in the. U.S. and there is only 1,200 of those dealers out of 18,000, I don't think the inner brain competition is going to drive a lot of lower grosses now, obviously, I might be wrong.

From a tax return perspective, we have got double-digit commitment to 401(K) going from 1.5 to 2.5 which was up 67% for our people.

Also, as we look at our dividends in the future quarters, do we pass more of that profit back into the shareholders, today, we are about 2.8% return, and we have 30% of our net income that we pass on to shareholders through dividend.

So, to me, I think that the good thing about this and the one thing we can't forget any of us that are on the phone, we never really had a competitive tax rate here in the U.S. at 35%. Thinking right now in the UK, it’s 19%. So we have had the benefit of that for several years.

So I think that's only going to be good for business and attracting business to the U.S. in the future..

Sounds great. And then just really quickly lastly on diversification, I mean, you kind of went through the stats of retail auto being 59% to CV and the JV income, I’m just curious as you think about cap allocation and where you want this business to be over time, to be balanced out to sort of whether the ups and downs of economic business cycles.

I mean do you have targets that you think about in your head or in your plan, where you think you want to take this retail auto down to, or is it just sort of a constant evaluation of where you are getting your best returns on the next dollar of capital that’s collected to growth?.

Well, I think we are managing the marketplace, I guess, if we went back four years or five years on this call, we wouldn't be close to a 60/40 split, but because of our knowledge in markets, certainly, the heavy duty truck market and the ability for us to invest in that that has a very long opportunity for us, because when you look at the fix cost, they almost covered a 100% buyer parts and service, in a downturn you are going to have more parts and service business.

And you look at the leasing companies we have invested in, they are really a source of transportation and from our perspective with the used car business, all this does is balance maybe some cyclical parts to the business. And we have some cyclical obviously in the new truck business.

But, I think we’ll continue to look at, we are going to look at pricing, it’s going to be key, contiguous opportunities which where we have scale already where we can leverage our back offices.

So, to me I think it’s, we have a pretty good platform today and we are starting to see certainly when we look at the return on capital at premier truck or heavy duty truck business. We are looking to returning on the certainly on the supercenters is very positive.

So, that will be our focus also the dividend returns to our shareholder will be a top priority also..

Great. Thank you very much..

Thank you..

Our next question is from John Healy from Northcoast Research. Please go ahead..

Hi, John..

Roger I was hoping you could talk a little bit just about how you may see the another return on sales picture of the truck dealership stores kind of developing. It is helpful in terms of how you describe kind of the profile of these retail stores. But, given kind of the where we are at in the cycle.

Where might we see the earnings power of the truck dealership business kind of potentially goes here over the next two years or three years potentially?.

Well, I think today we are in the 3.5% to 4% depending on which market we are in, Canada because it’s new and probably a little bit less than that.

But, we see that being very strong and when you look at that business, you look at it long-term and you think about the parts and service gross profit being almost 70% of your overall fixed cost and then getting to a 100% when you look at your overall cost.

So, to me it’s quite positive, we see that very positive and the fluctuation there, if the new truck business is off, there is going to be more parts and service, because people will be fixing their trucks and not buying new.

And when you look at the used cars supercenters, there is no question that in the price range when you are thinking $14,000 in the UK and the $20,000 in the U.S.

These are cars people are buying to use on a daily basis and there is no question that fix absorption that we would look at once we be able to build and one thing I didn’t mentioned earlier on that question is, one area that we have early capitalize on the supercenters is the parts and service.

We are just scratching the service and as we build new, we are going to anticipate by putting in service drive to try to connect that customers as we go forward, because I don’t think we are getting all of that as we look at our business here in the U.S.

when we look at our general dealership, it’s really a big difference, because on the standalone use, it’s 2% of our business and in the U.S. on a normal basis and in the UK it’s about 11%..

Great. And then just one big picture question. I know you guys have ton of areas where you can put the capital for use.

But, I was curious to know if there is much on the horizon relating to mobility, any thoughts regarding kind of how you see kind of fleets and changing car ownership and maybe what some of the priorities or maybe the pipeline for deals looks like in 2018?.

Well, one of our associated Company Penske Vehicle Services, we really haven’t talked much about it.

But we are involved in certain up-fitting of the autonomous cars for one of the operators and I think that we haven’t really talked about that at this point, but we are looking at opportunities on right share, on subscription, all of these things are top of mind for us.

in fact, we have a strategy group today that's looking at that and I think that at some point, you will make an investment in one of these. So we understand completely, not just a portion of the supply chain, we would own the asset, we would operate the asset and we would buy and sell it, maintain it.

So, I think we need to do that to find out, if this is going to be a model that we need to be in from the standpoint of strategy going forward. There is no question, we made them a small investment in fair in 2017 to understand that model and you’ll see us do that overtime.

So there is no question that this is autonomous and the things that are out there are going to be important to us long-term..

Great. Thank you guys..

Sure..

Next, we’ll go to Irina Hodakovsky with KeyBanc. Please go ahead..

Hi, Irina..

Hello gentlemen. A quick question for you on the modeling for SG&A expense. The leverage was below targeted 20% to 25% for our 2017 with a few headwinds.

If you can maybe discuss some of the headwinds that happened in 2017 that are going away in 2018 and how are you – what is your outlook for 2018? Do you anticipate to get to your targeted 20% to 25% range?.

Well, I think, when I look at, we were at 30 basis points higher this quarter than last year in the same quarter, and I think that there are really three items that really affected our SG&A.

The first was 280 basis point increase in the comp to gross profit in the UK, which was approximately $5 million and we realized lower gross profit in that market, because we missed our OEM aggressive sales target in the quarter and Q4 of 2016, we obviously hit those. So that was a major impact in one case.

Also, we had higher fixed costs in compensation in the UK. We had a lot of turnover in our service related writers and we felt that it was some of that was due to compensation. So we not only added people, but we also increased comp, so we hold through productivity that we’ll get that back on a going-forward basis.

Then, we had $1.2 million additional rent expense and also from leases and also our CapEx on a same-store basis.

So, overall, those were the things that probably represented 50 basis points to 60 basis points by themselves, and I think we have taken steps to address all of these, including negotiating more realistic targets with our OEMs that not only in the U.S., but internationally and we think by streamlining some of our businesses, our employee costs will come down.

So, obviously and we'd like to be in that percent when you talked about earlier that we will be hit our target going forward. So to me, it was the overall flow through for the Company was 17%, but the U.S. flow through was 42.6%..

And a follow-up question on some of your standalone used vehicle businesses with the centers.

How big are these locations? Are we thinking 300 units, 400 units in inventory?.

Well, I would say, in most cases, it could be 500 units to 600 units when you look at the ones in the UK I know that one location sells 700 units a month. So, they have probably an excess of 1,000 units. So these will be in most cases, 10, 12, 15 acre sites minimum..

Thank you very much..

Thank you..

Our next question is from David Whiston from Morningstar. Please go ahead..

Hi, guys..

Hello..

I guess first on the UK market.

Can you talk a bit about the premium luxury customer there in terms of their similar confidence? Are they much more confident than the broader UK market in light of Brexit concerns and if they are as that sustainable?.

Well, let’s put in this perspective. The market was down around 6% last year and I think in the quarter, it was down 12.6% and basically, we were flat if you looked at our business. And remember that the premium luxury market now is 34.5% of the market. If you go back seven years or eight years, I think it was about 18% or 19%.

So, we have had the benefit of the tailwind of the premium luxury market growing and I think we are going continue to see this and there is no question that when you look at 2017, the fourth quarter, we were 34.5% and on a year-to-date basis, it was 31%. So, you can see it was up really from the standpoint of about 300 basis points in Q4.

So, we feel pretty good about that and again, the way we are set up in the UK we have dealership areas. So we might have three or four dealerships that are contiguous. So, we have less brand competition from an inter-brand perspective, which helps us on our margins..

Okay. Thanks.

And on the standalone use, do you have interest in doing that in markets beyond the US and Europe such as Australia?.

Well, we would not go to Australia first, because we really don’t have a retail footprint there. But there is no question that we can be looking potentially at Germany and Spain at some point, but there is so much wide space here in the U.S.

and I think that we have the infrastructure both in the UK and in the US that we would probably see for the next few years that we are going to pretty much state where we have people of capability..

Okay. And my last question is on German 3 and portion for RE customers relative to test what was that new the second generation roaster they just unwilled some impressive stacks.

Are you getting your customers at these brands asking more and when are these companies going to come up their Tesla fighter?.

Well, there is no question if there is a lot of people that are interested in the EV and Portia, and certainly everyone has something coming. And sometimes when they talk about being 100% electric that means hybrid in many cases, but I don’t see that particular tests are often affecting our business.

But one thing we have that they don’t have we have got a captive finance Company. We have the benefit of great residuals will be set on these vehicles. And we have the ability obviously to have a customer base and service fees for the customer and sell them at the same location that we would service.

So, at this point, I’m watching the test business – they’ve done a quite a job in promoting the vehicles, but as we all say, you got to make money some time. And I think the fact that all of these OEMs to German guys particularly, they know what they are doing, they’ve got the best technology ultimately.

But they know that they don’t make any money on those vehicles until they get longer range and the range anxiety goes away. And I think we are approaching now 250 miles to 350 miles, which will make a huge difference on a fully electric vehicle. So, we think we are in a very good spot with our OEMs at this point..

Okay. Very helpful. Thank you..

Sure..

Our next question is from David Lim with Wells Fargo. Please go ahead..

Hi, good afternoon, Roger and Tony. Just several things. On the equity and earnings of various line, I was under the sense that Q3 would be the peak and then sort of tails of in Q4.

Can you just us a little bit more color on the strength that you guys realized in Q4?.

That was really as we added more PTL ownership during the quarter. That was a biggest factor..

And that was purely it. But, okay, I got you.

It had nothing to do with any kind spike in the industry or anything like that?.

Roger Penske:.

- :.

Got you. And then when we think about like some of the new OEM entrants, like Chinese OEMs, et cetera, I mean, are you guys already in discussions with them for a possible U.S.

entrance from overseas like some of these Chinese OEMs?.

I would say at this point, we have had nothing that I would call serious discussions. People call us all the time, we have had calls in the past, looked at some of this, but I'm not at this point ready to jump into the distribution of those types of vehicles at the moment.

There is no customer base, there is no fixed operations, so you are going to rely on your profitability strictly from vehicle sales and I'm sure that those margins will be small..

Got you. And then finally on 2018, Roger, What is your initial take? I mean, a lot of people are throwing out the number 16.8 million and obviously, you have been in the industry far longer than probably all of us have put together.

What is your per application for 2018?.

Well, I guess I have been in the business for long time, I guess, you are right there, that's for sure. But I think based on what I see, the market will be somewhere between 16.5% and 17%. But I think we have got to break out, we're going to be the leaders and I think you are going to see certainly Toyota and Honda to be strong.

You can see the big three OEMs are fighting in the truck business and the Premium Luxury people have a number of new models coming out, which I think will drive their customer base back and they've got very, very strong leasing programs where people will be turning in these lease cars.

Remember, when these lease cars come back, we have been talking about all the lease returns. Those people normally, they will walk out with another car and go lease a car someplace else. So, I think we have got a continuing string of business because of that.

So I feel good about where we are today now, anything can happen, I think this tax benefit we talked about earlier, we haven't seen that really flow through the industry yet, but that certainly can't hurt us..

Roger, thank you so much..

Sure..

And that will conclude the question-and-answer session. Mr. Penske, I will turn it back to you for any closing comments..

Alright, John, thank you and thank you, everybody for joining us today. We’ll see you next quarter. Thank you..

Ladies and gentlemen that does conclude our conference for today. Thank you for your participation. You may now disconnect..