U.S. New Vehicle Industry Overview - 2017 Trends to Watch€¦ · GM FORD TOYOTA FCA NISSAN HONDA...

Confidential. © 2017 IHS MarkitTM. All Rights Reserved.Confidential. © 2017 IHS MarkitTM. All Rights Reserved.

U.S. New Vehicle Industry Overview -2017 Trends to Watch

Confidential. © 2017 IHS MarkitTM. All Rights Reserved.

Annual New Vehicle Registrations – It’s All Relative

2


17.1 17.3 17.2 17.1

Industry plateauing: U.S. sales forecasted at 16.8 to 17.1 million

3

U.S. Light-Vehicle Sales

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

10.4

Source: July 2017 IHS Markit Forecast

17.617.3 million

17.0 17.1 16.9 16.8


Ramifications of Plateauing

4

Greater emphasis on conquesting

Higher incentive

spendHigher fleet

mix

Increased pressure on

sales and F&I depts.


Light trucks dominate: they will account for 66% of new sales by 2020

5

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Car Light Truck

66%

Car-Light Truck Vehicle Sales Split by Year17.3 million



New players and growth in high-end shoppers will drive the luxury segment to double by 2020

1.9 1.9

1.5

1.21.4

1.4

1.61.8

1.92.1 2.1 2.1 2.3 2.3 2.5

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Total Non-Luxury Total Luxury

6

Luxury-Non-Luxury Vehicle Sales Split by Year (in millions)



SUVs/CUVs—Growth Continues

7


SUV/CUV share takes the crown at 41.7%

8

IHS Markit Registration Type: Total * July 2017 CYTD

U.S. New Vehicle Registrations Market Share by Body Style

41.7%

28.0%

15.5% 5.1%

4.4% 2.3%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

2012 2013 2014 2015 2016 2017*

SportUtility Sedan Pickups Van Hatchback Coupe

Body

Sty

le U

.S. M

arke

t Sha

re


More than half of all luxury sales are SUV/CUVs

9

IHS Markit Registration Type: Total * July 2017 CYTD

SUV/CUV Market Share – Luxury and Mainstream

41.7%

54.1%

40.1%

20%

25%

30%

35%

40%

45%

50%

55%

60%

2012 2013 2014 2015 2016 2017*

Industry Luxury Mainstream

SUV/

CU

V U

.S. M

arke

t Sha

re


SUV/CUV loyalty dominates, with almost two thirds of households acquiring another one

10

*June 2017 CYTD

Body Type Loyalty

Note: “Total Sport Utility” includes SUV, CUV and ”Truck Wagon”

65%

52% 49% 50%

33% 26%

0%

10%

20%

30%

40%

50%

60%

70%

TotalSportUtility Industry Sedan Pickups Van Hatchback

2012 2013 2014

2015 2016 2017*


SUV/CUV Dominance*

§ #1 body type in new registrations§ #1 body type for body type loyalty§ #1 and #2 and #3 models in industry (Rogue, CR-V and RAV4) after three full

size pickups § #1 segment in industry (non-luxury compact CUV)§ #1 segment in mainstream (same)§ #1 and #2 segments in luxury (luxury midsize and compact CUV)

11

*Based on IHS Markit new vehicle registration data


SUV/CUV Dominance* (Continued)

§ #1, 2 and 3 model May 2017 CYTD for: BMW, Buick, Jeep, Land Rover and Subaru

§ #1 and 2 May CYTD for:Acura, Cadillac, Lexus, Mitsubishi, Porsche and Volvo

§ #1 May CYTD forAudi, Honda, Jaguar, Lincoln, Mazda, Nissan and Toyota

12

*Based on IHS Markit new vehicle registration data


Pickup Competition

13


Fullsize pickup share of industry has climbed more than two percentage points from its low point in 2009

14

0%

2%

4%

6%

8%

10%

12%

14%

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 July2017CYTD

NONLUXURYFULLSIZEHALFTONPICKUP NONLUXURYFULLSIZE3QTRTO1TONPICKUP

13.3%

ShareofU.S.Ind

ustry

11.9%

10.7%11.5% 11.6%

11.2%12.1% 12.2% 12.3%

12.6%13.1%


Fullsize Pickup is one of the most profitable categories in the industry, rivaled only by fullsize SUVs

Model* 2016 CY Total New U.S. Registrations

Estimated Net Profit Per Unit

Estimated 2016 Net Profit from PU Model

F SERIES 774,963 $8,000 $6,199,704,000

SILVERADO 581,050 $8,000 $4,648,400,000

RAM 472,646 $8,000 $3,781,168,000

15

*Models include all series; models are light duty only


Although Silverado has been #2 every year for the past ten years, through seven months in 2017 it leads Ram by less than 28,000 Units

16

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 July2017CYTDFSERIES 639,549 480,059 389,981 500,391 545,191 600,081 709,711 700,095 727,846 774,963 485,539

RAM 356,271 245,260 175,276 189,741 234,683 279,827 341,630 422,922 432,986 472,646 288,534

SILVERADO 614,938 469,655 315,325 366,857 411,730 415,399 476,081 523,809 596,749 581,050 316,197

0

100,000

200,000

300,000

400,000

500,000

600,000

700,000

800,000

900,000

NewVehicleRegistratio

ns


And Ram has outsold Silverado in three of the first seven months of 2017

17

Jan-2016 Feb-2016 Mar-2016 Apr-2016 May-2016 Jun-2016 Jul-2016 Aug-2016 Sep-2016 Oct-2016 Nov-2016 Dec-2016 Jan-2017 Feb-2017 Mar-2017 Apr-2017

May-2017 Jun-2017 Jul-2017

FSERIES 54,339 60,691 65,683 63,973 70,273 66,072 60,196 66,790 66,193 62,280 66,080 72,393 65,506 63,916 74,089 66,218 77,734 69,870 68,022

RAM 32,812 38,685 41,170 36,712 41,368 38,816 36,966 41,939 47,757 42,976 35,387 38,058 39,321 37,977 43,134 39,880 47,480 40,838 39,860

SILVERADO 44,387 45,445 45,644 47,241 48,690 47,855 54,555 53,644 48,638 50,290 45,133 49,528 38,417 52,197 43,080 40,800 45,240 48,295 48,113

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

90,000

TotalN

ewRegistratio

ns

Registration Type: Total


0

1000

2000

3000

4000

5000

6000

7000

8000

Jan-15

Feb-15

Mar-15

Apr-15

May-15

Jun-15

Jul-1

5

Aug-15

Sep-15

Oct-15

Nov-15

Dec-15

Jan-16

Feb-16

Mar-16

Apr-16

May-16

Jun-16

Jul-1

6

Aug-16

Sep-16

Oct-16

Nov-16

Dec-16

Jan-17

Feb-17

Mar-17

Apr-17

May-17

Jun-17

Jul-1

7

RAM Silverado F-Series

The Silverado and Ram are in an incentives battle, while Ford consistently spends less per unit than either competitor

18

Ince

ntiv

e Sp

end

Per

Uni

t

Data source: AutodataNote: Data are for complete model, including all series (for example, Ford includes F-150, F-250 and F-350)

Incentivespendmetricincludesconsumerrebates,discountfinancing,leaseratesubvention,residualexposure,dealerallowances,volumebonuspaymentsandcontests.


Four years ago Ram consistently ranked fourth on brand loyalty, but in the past six quarters it has been near to or equal to the GMC Sierra

19

0

10

20

30

40

50

60

70

80

1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2

2012 2013 2014 2015 2016 2017

F150 Silverado1500 RAM1500 Sierra1500

BrandLoyalty

%


Ram Pickup has had a positive C/D ratio with each of its three primary competitors every quarter since the start of 2015

20

1 2 3 4 1 2 3 4 1 22015 2016 2017

Ram1500vs.Silverado1500 4.33 2.57 2.15 1.91 1.63 1.54 2.17 2.56 2.51 2.66Ram1500vs.Sierra1500 5.72 2.49 2.44 1.9 1.97 1.85 2.15 2.45 2.02 2.45Ram1500vs.F1500 4.76 4.53 2.74 2.1 2.26 1.7 2.26 1.78 1.83 1.69

0

1

2

3

4

5

6

7

Conq

uest/D

efectio

nRa

tio


Silverado 1500 and Sierra 1500 households are three times as likely to defect to a midsize pickup as Ram 1500 or F-150 households

21

0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

3.0%

3.5%

4.0%

1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2

2012 2013 2014 2015 2016 2017

Silverado1500 Sierra1500 Ram1500 FordF-150

Percento

fDefectio

nsto

MidsizePickup

Segment

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

7.0%

8.0%

1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2

2012 2013 2014 2015 2016 2017Sierra15002dr Silverado15002dr

Silverado15004dr Sierra15004dr


Pickup Product Activity – Remainder of 2017 – 2019

§ Ram 1500 Re-Design - February 2018§ Silverado 1500 and Sierra 1500 Re-Design – August 2018§ Ranger US Launch - December 2018§ Frontier Re-Design – January 2019§ Hyundai Santa Cruz US Launch – May 2019§ Jeep Pickup US Launch – May 2019§ Silverado and Sierra HD Re-Design – July 2019

22

Source: IHS Forecasting


Parity

23


16.9%

14.9% 14.1%

12.5%

9.5% 9.5% 7.7%

GM FORD TOYOTA FCA NISSAN HONDA HYUNDAI

21.4%

16.8%

14.5%

11.5% 10.9%

7.2% 5.4%

GM TOYOTA FORD FCA HONDA NISSAN HYUNDAI

Market share range among the seven leading OEMs has declined from about 16 pp to about 9 pp

24

U.S. Market Share

Jan – Jul 2008 Jan – Jul 2017

15.9 pp9.2 pp


Mainstream and Luxury brand leaders remain close to one another in registrations and share

1,413,050 1,231,839 1,145,246

14.2%

12.4%

11.5%

11.0%

11.5%

12.0%

12.5%

13.0%

13.5%

14.0%

14.5%

0

200,000

400,000

600,000

800,000

1,000,000

1,200,000

1,400,000

1,600,000

FORD TOYOTA CHEVROLET

New RegistrationsU.S. Market Share

187,247 170,753 169,315

1.9%

1.7%1.7%

1.60%

1.65%

1.70%

1.75%

1.80%

1.85%

1.90%

160,000

165,000

170,000

175,000

180,000

185,000

190,000

MERCEDES-BENZ* BMW LEXUS

25

*Excludes Sprinter

Mainstream Brand Leaders Luxury Brand Leaders

1,438

Time Period: July 2017 CYTD


“Best Selling” margins can be very small

26

Note: All data are based on total new registrations July 2017 CYTD

Luxury Compact CUV Luxury Midsize CarNon-Luxury Compact CUV Non-Luxury Compact Car

4,46610,082

229,584 223,646 219,502211,162

194,438

32,533 30,633 28,509 28,067 29,327 27,580

0

50,000

100,000

150,000

200,000

250,000

TOYOTARAV4

NISSANROGUE

HONDACR-V HONDACIVIC TOYOTACOROLLA

LEXUSNX ACURARDX BMWX3 AUDIQ5 LEXUSES MERCEDES-BENZE-CLASS

16,724 1,747

New

Veh

icle

Reg

istra

tions

Jul

y 20

17 C

YTD


Implications of Parity

27

Heavier targeted

incentivesHigher fleet

mix?

Pressure to reduce

product life cycles/

increase cadence

Impact on residuals?

Pressure to increase

availability/inventories


ICE Forever?Internal Combustion Engine

28


Fuel Type U.S. Market Share

Gasoline vehicles continue to dominate, with over 84% share

29

84.8%

2.7% 2.6% 0.6% 0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

GASOLINE DIESEL HYBRID ELECTRIC

2012 2013 2014 2015 2016 July2017CYTD

Shar

e of

U.S

. Mar

ket


Electric Vehicle Volumes and Market Share – July 2017 CYTD

Tesla (Models S and X), Leaf and Bolt account for 79% of all electric vehicle registrations

16,106

9,7028,900 8,751

3,831

2,2071,212 1,116 998 821 375 371 140

0%

5%

10%

15%

20%

25%

30%

35%

40%

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

18,000

New Vehicle Registrations EV Share

30

New

Reg

istra

tion

Volu

me

Shar

e of

Tot

al E

V

Note: IHS Markit classifies Electric Vehicles as those powered solely by electricity, with no extended range gasoline support system


Electric Vehicles in Operation (VIO) by State

50% in California

31

Note: IHS Markit Data as of July 2017

49.1%

5.4%

4.9%

3 states combined

account for 60%

32 states combined

account for 10%

49.5%


Tesla Model S leads the Luxury Sedan category by a wide margin, with more registrations than the S-Class and 7-Series combined

50

1,652

1,746

2,257

2,365

3,619

5,824

6,359

6,558

8,774

16,106

HYUNDAI EQUUS

AUDI A8

TOTAL XJ

GENESIS G90

LEXUS LS

PORSCHE PANAMERA

7 SERIES

CADILLAC CT6

MERCEDES-BENZ S-CLASS

CADILLAC XTS

TESLA MODEL S

Luxury Sedan New Vehicle Registration Volume

IHS Markit July 2017 CYTD

32


Hybrids and Evs will gain share, but gasoline will remain dominant

33

2017 2018 2019 2020 2021 2022 2023 2024 2025Hybrid 3.5% 4.3% 7.4% 9.4% 11.9% 13.3% 14.9% 16.5% 18.4% EV 0.6% 1.1% 1.2% 1.8% 2.1% 2.4% 2.5% 2.7% 2.9% Fuel Cell 0.0% 0.0% 0.0% 0.1% 0.1% 0.1% 0.1% 0.1% 0.1% Gasoline 95.9% 94.6% 91.3% 88.7% 86.0% 84.2% 82.5% 80.6% 78.5%

0%

20%

40%

60%

80%

100%

120%

0% 2% 4% 6% 8%

10% 12% 14% 16% 18% 20%

Fuel

Typ

e S

hare

-Al

l Fue

l Typ

es

Exce

pt G

asol

ine

Fuel

Typ

e Sh

are

–G

asol

ine

Onl

y

IHS Markit Fuel Type Mix Forecast

Note: Diesel not included in forecast


Loyalty on the Rise

34


U.S. Industry Brand Loyalty %

Brand loyalty has surpassed the 50% mark, as brands on average now retain more customers than they lose

48.249.6 50.2

51.552.9 53.4

1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2

2012 2013 2014 2015 2016 2017

35

Data displayed are Q2 make loyalty results


Lincoln and Mercedes-Benz are tied for luxury brand loyalty leadership

64%61%

60%58% 58% 58% 57% 56%

54%52%

54%

FORD CHEVROLET TOYOTA LINCOLN MERCEDES-BENZ HONDA NISSAN SUBARU BMW LEXUS INDUSTRY

36

Brands with Highest Brand Loyalty

IHS MarkitJuly 2017 CYTD


Leasing Pause

37

LEASING


Retail Lease Penetration

Leases continue to account for almost a third of all new vehicle transactions, though their penetration appears to have peaked

38

20.2% 23.3%

25.3% 26.7%

31.6% 30.3% 30.1% 29.5%

0%

5%

10%

15%

20%

25%

30%

35%

1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2

2012 2013 2014 2015 2016 2017

Note: Retail lease penetration = retail lease/total retail

Ret

ail L

ease

% T

otal

Ret

ail


39

Retail Lease Penetration – Top 5 Segments Retail Lease Penetration in Luxury Compact Car Segment – Top 5 Models

30%

52%

60%

62%

67%

69%

0% 10% 20% 30% 40% 50% 60% 70% 80%

INDUSTRY

LUXURYCOMPACTCUV

LUXURYPRESTIGEFULLSIZECAR

LUXURYMIDSIZECAR

LUXURYCOMPACTCAR

LUXURYSUBCOMPACTCAR

71%

73%

77%

78%

83%

64% 66% 68% 70% 72% 74% 76% 78% 80% 82% 84%

MBC-CLASS

INFINITIQ60

JAGUARXE

BMW330

INFINITIQ50

Time Period: Q2 2017


In the non-luxury compact CUV segment, younger, wealthier and/or Hispanic households are better lease conquest targets

40

42%

39% 37%

36%

25%

27%

29%

31%

33%

35%

37%

39%

41%

43%

18-34 35-44 45-54 65+

36% 37%

39% 41% 40%

25%

27%

29%

31%

33%

35%

37%

39%

41%

43%

45%

32%

26%

34%

25%

27%

29%

31%

33%

35%

37%

39%

AFRICAN AMERICAN

ASIAN HISPANIC

Time Period: April 2017 CYTD


In the Pipeline

41


Asians launch 33 all-new or re-designed products in U.S. in next 15 months

Brand Model Body Type Car/LT Brand Model Body Type Car/LT

Q4 2017 Q2 2018Honda Accord Sedan PV Acura RDX SUV CV

Hyundai Accent Sedan PV Honda Insight Hatchback PVLexus LS Sedan PV Hyundai Santa Fe Sport SUV CVTesla Model 3 Sedan PV Infiniti Q70 Sedan PV

Q1 2018 Kia Stonic SUV CVGenesis G70 Sedan PV Kia Forte Sedan PVHyundai Veloster Hatchback PV Kia Forte Hatchback PVHyundai Kona SUV CV Nissan Kicks SUV CVInfiniti QX50 SUV CV Subaru Ascent SUV CVNissan Leaf Hatchback PV Toyota Avalon Sedan PV

42

U.S. Product Activity at Asian Brands – Q4 2017 - 2018


Asians launch 33 all-new or re-designed products in U.S. in next 15 months

Brand Model Body Type Car/LTQ3 2018

Genesis G70 Coupe PVKia K900 Sedan PVKia Telluride SUV CV

Lexus ES Sedan PVMazda CX-8 SUV CV

Q4 2018Honda Pilot Sport SUV CV

Hyundai C-SUV EV SUV CVKia Soul SUV PV

Mazda 3 Sedan PVMazda 3 Hatchback PVNissan Altima Sedan PVSubaru Forester SUV CVToyota Prius V MPV PVToyota Corolla iM Hatchback PV

43

U.S. Product Activity at Asian Brands – Q4 2017 - 2018


Five takeaways

1. 16.5+ million industry will continue through end of decade

2. Targeted conquesting becomes high priority

3. SUV/CUV dominance is industry-wide, will continue in near term

4. Fullsize pickup competition is intense, and will only get more so

5. The traditional internal combustion engine (I.C.E.) will dominate through 2025

44


Thank [email protected]

45

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