UPDATE 2-Auto dealer Penske Q2 profit tumbles 63 pct

* Net EPS 15 cents vs 40 cents

* Revenue down 30 pct to $2.3 billion (Adds background on Saturn transaction)

DETROIT, July 29 (Reuters) - Penske Automotive Group Inc (PAG.N) posted a 63 percent decline in quarterly profit on Wednesday as the recession hurt consumer demand for new vehicles.

The second-largest U.S. car dealership group, which has agreed to buy General Motors' [GM.UL] Saturn brand, said due diligence and negotiations are continuing.

Net income fell to $14.2 million, or 15 cents per share, in the second quarter, from $38.3 million, or 40 cents per share, a year earlier.

It earned 22 cents per share from continuing operations, down from 41 cents a year earlier.

Revenue declined 30 percent to $2.3 billion.

Bloomfield Hills, Michigan-based Penske operates more than 310 retail automotive franchises selling new and used vehicles, replacement parts and finance products.

Automakers, dealers and parts suppliers have all suffered steep declines in revenues this year, with U.S. auto sales down to their lowest levels since the early 1980s amid tight credit and fragile consumer confidence.

In June, Penske reached a tentative deal with GM to buy its Saturn brand with the goal of completing the transaction in the third quarter.

Under the deal, Penske would acquire rights to the Saturn brand and other assets, while GM would continue production of the Saturn Aura, Vue and Outlook on a contract basis. (Reporting by Soyoung Kim; editing by John Wallace and Jeffrey Benkoe)