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Wholesale Market Insights Through March 2018 · PDF file 2018-05-08 · 1 Lease...

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  • Wholesale Market Insights Through March 2018

    J o n a t h a n S m o k e & Z o R a h i m - C o x A u t o m o t i v e

  • 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

  • Manheim Used Vehicle Value Index

    All Manheim U.S. sales

    Classify by market segment

    Account for differences in mileage

    Weight to provide unchanging segment mix

    Seasonally adjust

    3

    Steps:

    A single measure of used vehicle price change that is independent of underlying segment shifts in the characteristics of vehicles being sold

    Concept:

  • 130.8

    90

    95

    100

    105

    110

    115

    120

    125

    130

    135

    Jan-95 Jan-98 Jan-01 Jan-04 Jan-07 Jan-10 Jan-13 Jan-16

    Manheim Used Vehicle Value Index Down From Record Levels

    4Source: Manheim, Cox Automotive

    January 1995 = 100

    March was down slightly versus February but saw a 5.4% increase from March 2017

  • 5.4%

    -15%

    -10%

    -5%

    0%

    5%

    10%

    15%

    20%

    25%

    Jan-96 Jan-99 Jan-02 Jan-05 Jan-08 Jan-11 Jan-14 Jan-17

    Manheim Used Vehicle Value Index – Y/Y Trend

    5Source: Manheim, Cox Automotive

    The year-over-year trend saw improvement in March from 4.9% and 5.1% in two prior months

  • Wholesale Used Vehicle Prices vs. New Vehicle Prices

    6Source: Manheim, Kelley Blue Book, Cox Automotive

    Y/Y new prices now up 2% while wholesale up 5% and inflation up 2%

    $25,000

    $27,000

    $29,000

    $31,000

    $33,000

    $35,000

    $37,000

    $39,000

    $9,500

    $10,000

    $10,500

    $11,000

    $11,500

    $12,000

    $12,500

    $13,000

    $13,500

    $14,000

    Ja n

    -1 2

    M ar

    -1 2

    M ay

    -1 2

    Ju l-

    1 2

    Se p

    -1 2

    N o

    v- 1

    2

    Ja n

    -1 3

    M ar

    -1 3

    M ay

    -1 3

    Ju l-

    1 3

    Se p

    -1 3

    N o

    v- 1

    3

    Ja n

    -1 4

    M ar

    -1 4

    M ay

    -1 4

    Ju l-

    1 4

    Se p

    -1 4

    N o

    v- 1

    4

    Ja n

    -1 5

    M ar

    -1 5

    M ay

    -1 5

    Ju l-

    1 5

    Se p

    -1 5

    N o

    v- 1

    5

    Ja n

    -1 6

    M ar

    -1 6

    M ay

    -1 6

    Ju l-

    1 6

    Se p

    -1 6

    N o

    v- 1

    6

    Ja n

    -1 7

    M ar

    -1 7

    M ay

    -1 7

    Ju l-

    1 7

    Se p

    -1 7

    N o

    v- 1

    7

    Ja n

    -1 8

    M ar

    -1 8

    Manheim Non-Adjusted Price (LHS) Average new vehicle transaction price per KBB (RHS)

  • Weekly Tax Refunds (in billions)

    7

    $0

    $10

    $20

    $30

    $40

    $50

    $60

    $70

    $80

    Week 1 Week 2 Week 3 Week 4 Week 5 Week 6 Week 7 Week 8 Week 9

    2014 2015 2016 2017 2018

    Week ending 2/16/18

    Source: IRS

  • 3-Year-Old Vehicles Saw Abnormal Depreciation Pattern in 2017

    8Source: Manheim Manheim Market Report (MMR) 3 Year Old Model Weekly Trend, Cox Automotive

    2018 started softer but price level of 3YO Models now stronger

    80.0%

    85.0%

    90.0%

    95.0%

    100.0%

    105.0%

    110.0%

    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

    3-Year-Old Model Index by Week

    2015 2016 2017 2018

  • Retention Values Now Slightly Up From Last Year

    9Source: Kelley Blue Book Auction Values as a % of MSRP and New Vehicle Sales Weighted

    (1 to 3 year old models) 45%

    47%

    49%

    51%

    53%

    55%

    57%

    59%

    61%

    63%

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

    R e ta

    in e d

    V a lu

    e a

    s a

    % o

    f M

    S R

    P

    CY 2016 CY 2017 CY 2018

  • 5.4% 5.4%

    0.9%

    4.1% 5.5% 5.1%

    13.4%

    -15%

    -10%

    -5%

    0%

    5%

    10%

    15%

    20%

    25%

    30%

    Industry Compact cars Midsize cars Luxury cars Pickups SUV/CUV Vans

    1 year 2 years 3 years 4 years

    Percent Change in Wholesale Prices for Major Market Segments

    10Source: Manheim, Cox Automotive

    All major segments saw year-over-year gains in March

  • Cars still dominate the wholesale market, while the SUV reigns supreme in new

    Shifting Consumer Preferences Not Reflected in Used Volumes

    11Source: Motor Intelligence/Autodata, Manheim, Cox Automotive

    33%

    16%

    46%

    5%

    0%

    10%

    20%

    30%

    40%

    50%

    60%

    2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

    New Vehicle Sales by Category

    CAR PICKUP SUV VAN

    51%

    11%

    32%

    6%

    Manheim Sales in March

    Car

    Pickup

    SUV

    Van

  • $13,500

    $14,000

    $14,500

    $15,000

    $15,500

    $16,000

    $16,500

    $17,000

    $17,500

    1 2 3 4 5 6 7 8 9 10 11 12

    2015 2016 2017 2018

    Average Auction Price – Rental Risk Units

    (mix and mileage adjusted)

    Source: Manheim, Cox Automotive

    Average price for rental risk units sold in March up 7% y/y and up 4% m/m

    12

  • 45,081

    20,000

    25,000

    30,000

    35,000

    40,000

    45,000

    50,000

    55,000

    60,000

    Jan-03 Jan-05 Jan-07 Jan-09 Jan-11 Jan-13 Jan-15 Jan-17

    Average Mileage – Rental Risk Units Sold at Auction

    Source: Manheim, Cox Automotive

    Average mileage for rental risk units sold in March was 13% above a year ago

    13

  • Distribution of Rental Risk Vehicles

    Source: Manheim, Cox Automotive 14

    2016 Q1 2017 Q1 2018 Q1

    Number of unique

    year, make, model,

    body configurations

    sold

    3,481 2,736 3,005

    Share accounted

    for top 10 YMMB 18.3% 13.4% 13.1%

    Share accounted

    for top 25 YMMB 30.0% 25.1% 23.3%

    Number of YMMB

    to reach 50% share 74 82 108

  • Rental Risk Units Sold by Condition

    Source: Manheim, Cox Automotive 15

    0%

    10%

    20%

    30%

    40%

    50%

    60%

    70%

    80%

    90%

    100%

    2015 Q4 2016 Q1 2016 Q2 2016 Q3 2016 Q4 2017 Q1 2017 Q2 2017 Q3 2017 Q4 2018 Q1

    0-1.9 2.0-2.9 3.0-3.9 4.0-4.9 5

  • Rental Risk Units Sold by Make

    Source: Manheim, Cox Automotive 16

    0%

    10%

    20%

    30%

    40%

    50%

    60%

    70%

    80%

    90%

    100%

    2015 Q4 2016 Q1 2016 Q2 2016 Q3 2016 Q4 2017 Q1 2017 Q2 2017 Q3 2017 Q4 2018 Q1

    All other

    Mazda

    Kia

    Jeep

    VW

    Chrysler

    Hyundai

    Dodge

    Toyota

    Nissan

    Ford

    Chevrolet

  • Rental Risk Units Sold by Market Segment

    Source: Manheim, Cox Automotive 17

    0.0%

    10.0%

    20.0%

    30.0%

    40.0%

    50.0%

    60.0%

    70.0%

    80.0%

    90.0%

    100.0%

    2015 Q4 2016 Q1 2016 Q2 2016 Q3 2016 Q4 2017 Q1 2017 Q2 2017 Q3 2017 Q4 2018 Q1

    Van

    SUV

    Sports Car

    Pickup

    Luxury Car

    Midsize Car

    Compact Car

  • Manheim Market Report (MMR) Vehicle Insights

    Source: Manheim, Cox Automotive

    Most top selling vehicles in March at Manheim showed appreciation in the

    last 30 days (Mar 5- April 4), while depreciation over the last 12 months

    has been normal to below normal.

    18

    Rank Source(Rank) Category Subcategory Vehicle 4-Apr Past 30 Days Last Year Current Dep L12M Dep/Mo

    1 All Midsize Car Midsize Car Premium 2015 NISSAN ALTIMA 4C 4D SEDAN S $10,800 $10,550 $11,300 2.4% -0.4% 2 All Van Van Compact 2017 CHRYSLER PACIFICA 4D WAGON TOURING-L $21,900 $22,100 $24,900 -0.9% -1.0%

    3 All Luxury Luxury Car Premium 2015 MERCEDES-BENZ C CLASS 4D SEDAN C300 4MATIC $9,350 $9,175 $9,200 1.9% 0.1%

    4 All Midsize Car Midsize Car Premium 2013 VOLKSWAGEN PASSAT 5C 4D SEDAN SE $15,100 $15,100 $16,700 0.0% -0.8% 5 All Compact Car Compact Car Premium 2017 HYUNDAI ELANTRA 4D SEDAN SE $11,000 $10,900 $12,100 0.9% -0.8%

    1 Dealer Dealer Midsize Car Midsize Car Premium 2015 NISSAN ALTIMA 4C 4D SEDAN S $10,800 $10,550 $11,300 2.4% -0.4%

    1 Lease Lease Midsize Car Midsize Car Premium 2015 NISSAN ALTIMA 4C 4D SEDAN S $10,800 $10,550 $11,300 2.4% -0.4%

    1 Rental Rental Midsize Car Midsize Car Entry 2017 CHEVROLET MALIBU 4D SEDAN 1LT $13,850 $13,650 $16,350 1.5% -1.3%

  • While Used Sales Continue to Climb

    19Source: Cox Automotive estimates based on IHS Markit Registrations

    33,000,000

    34,000,000

    35,000,000

    36,000,000

    37,000,000

    38,000,0

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