Wholesale Market Insights Through June 2019 J o n a t h a n S m o k e & Z o R a h i m 1
T R A N S F O R M I N G T H E W AY T H E W O R L D B U Y S , S E L L S & O W N S C A R S
3 Manheim Used Vehicle Value Index Concept: A single measure of used vehicle price change that is independent of underlying segment shifts in the characteristics of vehicles being sold Steps: All Manheim U.S. sales Classify by market segment Account for differences in mileage Weight to provide smoother segment mix Seasonally adjust
Spring Bounce Fading Prices in June increased 0.61% versus May 2019 and were up 4.1% compared to June 2018 145 140.5 140 135 130 125 120 115 110 105 100 95 January 1995 = 100 90 Jan-95 Jan-98 Jan-01 Jan-04 Jan-07 Jan-10 Jan-13 Jan-16 Jan-19 Source: Manheim/Cox Automotive 4
Used Vehicle Values Continue to Stay Above Average Year-over-year price performance has been much stronger than average over the last 24 months 25% 20% 15% 10% 4.1% 5% 0% -5% -10% -15% Jan-96 Jan-99 Jan-02 Jan-05 Jan-08 Jan-11 Jan-14 Jan-17 Source: Manheim/Cox Automotive 5
Manheim Index versus Mix & Quality Adjusted New Vehicle Price with 3 ½ year Lag Used vehicle prices stay above the historical new vehicle price relationship trend 60% 55% 50% 45% 40% 35% 30% Jan-95 Jan-97 Jan-99 Jan-01 Jan-03 Jan-05 Jan-07 Jan-09 Jan-11 Jan-13 Jan-15 Jan-17 Jan-19 Source: Bureau of Labor Statistics, Manheim/Cox Automotive 6
Wholesale Used Vehicle Prices vs. New Vehicle Prices Manheim Non-Adjusted Price (LHS) Average new vehicle transaction price per KBB (RHS) $14,500 $39,000 $14,000 $37,000 $13,500 $35,000 $13,000 $12,500 $33,000 $12,000 $31,000 $11,500 $11,000 $29,000 $10,500 $27,000 $10,000 $9,500 $25,000 Feb-12 Feb-13 Feb-14 Feb-15 Feb-16 Feb-17 Feb-18 Feb-19 Source: Manheim/Cox Automotive 7
2019 Weekly Price Trend Looking Like Last Two Years Much higher than normal depreciation for start of year, then strong spring bounce, and now low appreciation 3-Year-Old Model MMR Index by Week 2014 2015 2016 2017 2018 2019 110.0% 105.0% 100.0% 95.0% 90.0% 85.0% 80.0% 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 Source: Manheim/Cox Automotive 8
Weekly Price Trend Up in Non-Luxury Despite weak start of the year, prices remain above January levels and trending higher Non-Luxury 3YO Model MMR Index by Week 2014 2015 2016 2017 2018 2019 115.0% 110.0% 105.0% 100.0% 95.0% 90.0% 85.0% 80.0% 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 Source: Manheim/Cox Automotive 9
Luxury Now Seeing Improving Trend Luxury vehicles saw steep depreciation in first quarter, then stabilization, and now appreciation Luxury 3YO Model MMR Index by Week 2014 2015 2016 2017 2018 2019 105.0% 100.0% 95.0% 90.0% 85.0% 80.0% 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 Source: Manheim/Cox Automotive 10
2019 Weekly Price Trend Stable on One-Year-Old Vehicles One-year-old vehicle prices have been very stable with little to no depreciation 1-Year-Old Model MMR Index by Week 2014 2015 2016 2017 2018 2019 110.0% 105.0% 100.0% 95.0% 90.0% 85.0% 80.0% 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 Source: Manheim/Cox Automotive 11
Retention Values Holding Up Relative to Last Year Adjusting for MSRP and fixing the basket of vehicles by what was sold remain just above last year 63% 61% 59% 57% 55% 53% 51% 49% 47% (1 to 3 year old models) CY 2017 CY 2018 CY 2019 45% Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Source: Kelley Blue Book/Cox Automotive 12
Tax Refunds by Week in Recent Years Amount of Refunds (Cumulative) 2014 2015 2016 2017 2018 2019 $300.0 $250.0 $200.0 Billions $150.0 $100.0 $50.0 $0.0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 Source IRS 13
Percent Change in Wholesale Prices for Major Market Segments All major segments saw year-over-year gains in June 1 year 30% 2 years 3 years 4 years 25% 20% 15% 10% 5.3% 4.8% 5% 4.1% 4.1% 2.5% 1.2% 0.4% 0% Industry Compact cars Midsize cars Luxury cars Pickups SUV/CUV Vans Source: Manheim/Cox Automotive 14
Spring Bounce Stronger In Non-Luxury Luxury prices in June were up 2.5% compared to June 2018, while non-luxury prices increased 4.2% Luxury Non-Luxury 138.5 140 130 120 115.8 110 100 90 January 2000 = 100 80 Jan-00 Jan-03 Jan-06 Jan-09 Jan-12 Jan-15 Jan-18 Source: Manheim/Cox Automotive 15
Shifting Consumer Preferences Not Reflected in Wholesale Market Volumes The SUV reigns supreme in new vehicle sales while cars still dominated the used car market New Vehicle Sales by Category Manheim Sales by Category CAR PICKUP SUV VAN CAR PICKUP SUV VAN 60% 60% 50% 50% 48% 48% 40% 40% 36% 30% 30% 30% 20% 20% 17% 11% 10% 10% 5% 5% 0% 0% 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Source: Manheim/Cox Automotive 16
Average Auction Price – Rental Risk Units Average price for rental risk units sold in June up 4% y/y and down 0.2% m/m 17,000 2015 2016 16,500 2017 2018 2019 16,000 15,500 15,000 14,500 14,000 13,500 13,000 1 2 3 4 5 6 7 8 9 10 11 12 Source: Manheim/Cox Automotive 17
Average Mileage – Rental Risk Units Sold at Auction Average mileage for rental risk units in June was up 9% compared to a year ago and up 3% m/m 60,000 55,000 50,000 46,621 45,000 40,000 35,000 30,000 25,000 20,000 Jan-03 Jan-05 Jan-07 Jan-09 Jan-11 Jan-13 Jan-15 Jan-17 Jan-19 Source: Manheim/Cox Automotive 18
Distribution of Rental Risk Vehicles 2017 Q2 2018 Q2 2019 Q2 Number of unique year, make, model, 2,624 3,023 3,337 body configurations sold Share accounted for top 10 YMMB 16.0% 13.5% 12.0% Share accounted for top 25 YMMB 29.6% 22.9% 22.3% Number of YMMB to reach 50% share 70 109 106 Source: Manheim/Cox Automotive 19
Rental Risk Units Sold by Condition 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 2015 Q4 2016 Q1 2016 Q2 2016 Q3 2016 Q4 2017 Q1 2017 Q2 2017 Q3 2017 Q4 2018 Q1 2018 Q2 2018 Q3 2018 Q4 2019 Q1 2019 Q2 0 - 1.9 2.0 - 2.9 3.0 - 3.9 4.0 - 4.9 5.0 Source: Manheim/Cox Automotive 20
Rental Risk Units Sold by Make 100% 90% 80% All other 70% Mazda Kia 60% Jeep VW Chrysler 50% Hyundai Dodge 40% Toyota Nissan 30% Ford Chevrolet 20% 10% 0% 2015 Q4 2016 Q1 2016 Q2 2016 Q3 2016 Q4 2017 Q1 2017 Q2 2017 Q3 2017 Q4 2018 Q1 2018 Q2 2018 Q3 2018 Q4 2019 Q1 2019 Q2 Source: Manheim/Cox Automotive 21
Rental Risk Units Sold by Segment 100.0% 90.0% 80.0% 70.0% Van 60.0% SUV Sports Car 50.0% Pickup Luxury Car 40.0% Midsize Car Compact Car 30.0% 20.0% 10.0% 0.0% 2015 Q4 2016 Q1 2016 Q2 2016 Q3 2016 Q4 2017 Q1 2017 Q2 2017 Q3 2017 Q4 2018 Q1 2018 Q2 2018 Q3 2018 Q4 2019 Q1 2019 Q2 Source: Manheim/Cox Automotive 22
Manheim Market Report (MMR) Vehicle Insights Top selling vehicles in June at Manheim saw mixed levels of low depreciation and appreciation in the last 30 days (June 3 – July 2) as sedans dominated and saw low depreciation to slight appreciation, and luxury vehicles again were not represented in top volume list. Prices year-over-year were also quite varied but generally lower than normal. Rank Source(Rank) Category Subcategory Vehicle 2-Jul Past 30 Days Last Year Current Dep L12M Dep/Mo 1 All SUV SUV Midsize 2016 NISSAN ROGUE AWD 4D SUV 2.5L SV $14,450 $14,500 $16,150 -0.3% -0.9% 2 All Compact Car Compact Car Premium 2017 HYUNDAI ELANTRA 4D SEDAN SE $10,700 $10,700 $10,500 0.0% 0.2% 3 All Midsize Car Midsize Car Premium 2016 NISSAN ALTIMA 4C 4D SEDAN S $10,650 $10,600 $10,900 0.5% -0.2% 4 All Compact Car Compact Car Premium 2016 HONDA CIVIC 4D SEDAN LX $11,750 $11,800 $12,050 -0.4% -0.2% 5 All SUV SUV Midsize 2016 NISSAN ROGUE AWD 4D SUV 2.5L S $13,200 $13,200 $14,450 0.0% -0.7% 1 Dealer Dealer Pickup Pickup Lite Duty Fulls 2016 FORD F150 4WD V8 FFV CREW CAB 5.0L XLT $27,400 $27,500 $28,900 -0.4% -0.4% 1 Lease Lease SUV SUV Midsize 2016 NISSAN ROGUE AWD 4D SUV 2.5L SV $14,500 $14,500 $16,150 0.0% -0.9% 1 Rental Rental Van Van Compact 2018 CHRYSLER PACIFICA MINIVAN TOURING L $21,700 $21,800 $24,600 -0.5% -1.0% Source: Manheim/Cox Automotive 23
Used Vehicle Sales Plateau USED VEHICLE SALES OUTLOOK (MILLIONS) 46 43 39.4 40 37 34 31 28 25 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 2018 2019 2020* 2018 2019 2020* COX AUTOMOTIVE COX AUTOMOTIVE 39.4 39.2 39.0 19.5 19.8 20.0 FULL-YEAR FORECASTS USED RETAIL FORECASTS Source: Cox Automotive estimates based on IHS Markit Registrations 24
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