Post on 11-Jul-2020
Vehicle Market InsightsManheim Used Vehicle Value Index Call - July 8, 2020
J o n a t h a n S m o k e & Z o R a h i m
S p e c i a l G u e s t : W h i t n e y G e r k i n
1
INVENTORY
RETAIL
FINANCIAL
MOBILITY
COVID-19 Market Update
4
Covid-19 Local Impact Assessment
Source: Cox Automotive
5
Continuing Claims At 19.3 Million Nationally
Source: U.S. Department of Labor
6
114.23
113.8
81.23
86.81
60
70
80
90
100
110
120
ICS Value (7-Day Average)
Consumer Sentiment Moves Down Again
Source: Morning Consult
Morning Consult’s Index of Consumer Sentiment on Monday was down 23.4% since February 29
7
New Vehicle Sales Down But Recovering
Source: BEA
-50%
-40%
-30%
-20%
-10%
0%
10%
20%
30%
40%
Jan
-06
Jun
-06
No
v-06
Ap
r-0
7
Sep
-07
Feb
-08
Jul-
08
Dec
-08
May
-09
Oct
-09
Mar
-10
Au
g-1
0
Jan
-11
Jun
-11
No
v-11
Ap
r-1
2
Sep
-12
Feb
-13
Jul-
13
Dec
-13
May
-14
Oct
-14
Mar
-15
Au
g-1
5
Jan
-16
Jun
-16
No
v-16
Ap
r-1
7
Sep
-17
Feb
-18
Jul-
18
Dec
-18
May
-19
Oct
-19
Mar
-20
Total New % Change y/y
8
New Vehicle Market Share Performance – 1H 2020
Source: Cox Automotive
0.02
0.05
0.06
0.07
0.12
0.12
0.14
0.17
0.17
0.22
0.28
0.29
0.36
0.47
0.59
0.00 0.10 0.20 0.30 0.40 0.50 0.60 0.70
LAND ROVER
LEXUS
VOLKSWAGEN
VOLVO
SUBARU
LINCOLN
GMC
TOYOTA
JEEP
RAM
TESLA
HYUNDAI
MAZDA
KIA
CHEVROLET
0.00
-0.01
-0.01
-0.02
-0.02
-0.02
-0.05
-0.07
-0.08
-0.10
-0.10
-0.19
-0.19
-0.65
-1.65
-2.00 -1.50 -1.00 -0.50 0.00
ACURA
HONDA
JAGUAR
FORD
AUDI
FIAT
MINI
CADILLAC
CHRYSLER
INFINITI
MITSUBISHI
BMW
BUICK
DODGE
NISSAN
9
New Vehicle Market Share Performance – 1H 2020
Source: Cox Automotive
0.00
0.01
0.03
0.07
0.17
0.22
0.68
1.12
1.36
2.41
0.00 0.50 1.00 1.50 2.00 2.50 3.00
Electric Vehicle
High-end Luxury Car
Luxury Full-size SUV/Crossover
Compact SUV/Crossover
Luxury Mid-size SUV/Crossover
Luxury Compact SUV/Crossover
Mid-size Pickup Truck
Subcompact SUV/Crossover
Mid-size SUV/Crossover
Full-size Pickup Truck
-0.20
-0.24
-0.27
-0.30
-0.44
-0.53
-0.62
-0.80
-0.82
-1.83
-2.20 -1.70 -1.20 -0.70 -0.20 0.30
Hybrid/Alternative Energy Car
Full-size SUV/Crossover
Entry-level Luxury Car
Van
Luxury Car
Full-size Car
Minivan
Subcompact Car
Mid-size Car
Compact Car
10
Retail Sales Recovery Estimates
Source: Cox Automotive
-70.0%
-60.0%
-50.0%
-40.0%
-30.0%
-20.0%
-10.0%
0.0%
10.0%
20.0%
30.0%
1/6
1/1
0
1/1
4
1/1
8
1/2
2
1/2
6
1/3
0
2/3
2/7
2/1
1
2/1
5
2/1
9
2/2
3
2/2
7
3/2
3/6
3/1
0
3/1
4
3/1
8
3/2
2
3/2
6
3/3
0
4/3
4/7
4/1
1
4/1
5
4/1
9
4/2
3
4/2
7
5/1
5/5
5/9
5/1
3
5/1
7
5/2
1
5/2
5
5/2
9
6/2
6/6
6/1
0
6/1
4
6/1
8
6/2
2
6/2
6
6/3
0
7/4
Y/Y % Change in 7-Day Moving Average of Retail Sales
New Used
Update: Manheim’s Shift to All-Digital
Whitney Gerkin
Digital Marketplace Director
Manheim
12
ACCESSING MANHEIM INVENTORY TODAY
MANHEIM.COM OVE / PRIVATE STORES MANHEIM EXPRESS
SIMULCAST DIGITAL BLOCKS
(In-Lane Bidding)
13
OPERATIONAL UPDATES SINCE GOING ALL-DIGITAL
Welcomed sellers back on
the block at all locations.
Welcomed buyers to
preview vehicles on the
lot at all locations.
Piloting in-lane bidding
"Digital Blocks" at select
locations.
14
DIGITAL WHOLESALE IS STRONG
Manheim’s sales rates are now higher than
pre-COVID levels.
January through June, Manheim experienced
1.5+ million digital transactions, which is more
than 20% higher than the same period in 2019.
OVE sales were up nearly 70 percent in June
compared to last year.
Source: Manheim Data
15
23,000SIMULCAST SALES
OCCURRED ON A
SINGLE DAY IN JUNE,
A RECORD ON THE
PLATFORM
~40%IS THE INCREASE IN
USAGE OF SIMULCAST
REMOTE SELLER SINCE
MARCH 16
8200+VEHICLES SOLD IN A
WEEK AT MANHEIM PA
IN JUNE, 900 HIGHER
THAN SAME WEEK
2019
6 in 10DEALERS SAY THAT
SIMULCAST IS
WORKING AS A
REPLACEMENTBUYERS MADE FIRST
TIME PURCHASES ON
SIMULCAST
8300+
STATS: MANHEIM DIGITAL MARKETPLACE
MANHEIM DIGITAL COVID-19 SNAPSHOT
16
SIMULCAST ATTENDANCE & BIDDING ARE ON THE RISE
Source: Manheim Data
0.0
1.0
2.0
3.0
4.0
5.0
6.0
7.0
8.0
9.0
10.0
0
50
100
150
200
250
300
350
400
Simulcast Attendance & Bidding in 2020
Attendees Per Lane Bids Per Unique Offer
Att
en
dees P
er
Lan
eB
ids P
er U
niq
ue O
ffer
“The system is really easy and I
really enjoy it. I'll be honest. I was
one of the biggest skeptics
against it because I really
hadn't tried it and I couldn't get
over the idea of bidding online.
But since I've done it the last few
weeks I do like it. The more I use
it, the more I like it.”
-Manheim Dealer Client
• Wholesale will remain heavily digital for the
foreseeable future.
New vehicle tracking technologies will make
it easier to locate and preview inventory.
We’re going all-in on vehicle imaging.
In-lane bidding is contingent on safety first.
WHAT’S NEXT FOR WHOLESALE?
Manheim Used Vehicle Value Index
All Manheim U.S. sales
Classify by market segment
Account for differences in mileage
Weight to provide smoother segment mix
Seasonally adjust
19
Steps:
A single measure of used vehicle price
change that is independent of underlying
segment shifts in the characteristics of
vehicles being sold
Concept:
20
Record-Setting Rebound In Wholesale Prices
Source: Manheim/Cox Automotive
149.3
90
95
100
105
110
115
120
125
130
135
140
145
150
155
Jan-95 Jan-98 Jan-01 Jan-04 Jan-07 Jan-10 Jan-13 Jan-16 Jan-19
January 1995 = 100
Prices in June increased 8.95% from May 2020 and were up 6.3% compared to June 2019
21
Used Vehicle Values Back to Pre-Covid Strength
Year-over-year price performance stronger than average
6.3%
-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 Jan-20
Source: Manheim/Cox Automotive
22
Manheim Index versus Mix & Quality Adjusted New Vehicle Price with 3 ½ year Lag
Used vehicle prices back above the historical new vehicle price relationship trend
30%
35%
40%
45%
50%
55%
60%
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
23
Wholesale Used Vehicle Prices vs. New Vehicle Prices
Source: Manheim/Cox Automotive
$25,000
$27,000
$29,000
$31,000
$33,000
$35,000
$37,000
$39,000
$41,000
$9,500
$10,500
$11,500
$12,500
$13,500
$14,500
$15,500
Jan-12 Jan-13 Jan-14 Jan-15 Jan-16 Jan-17 Jan-18 Jan-19 Jan-20
Manheim Non-Adjusted Price (LHS) Average new vehicle transaction price per KBB (RHS)
24
2020 Weekly Price Trend More Than Recovered
2020 spring bounce ended abruptly as COVID-19 pandemic hit the US but prices more than recovered in weeks
since
Source: Manheim/Cox Automotive
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 MMR Index by Week
2014-2016 2017 2018 2019 2020
25
Retention Values Ended June Up 1.9% Relative to 2019
Relative to MSRP and fixing the basket of vehicles by what was sold leaves residuals following similar pattern
Source: Kelley Blue Book/Cox Automotive
(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
CY 2018 CY 2019 CY 2020
26
Percent Change in Wholesale Prices for Major Market Segments
Most major segments saw year-over-year gains in June
Source: Manheim/Cox Automotive
6.3%
4.0%
1.8%
9.7%
5.9%
4.6%
-3.5%
-8%
-3%
2%
7%
12%
17%
22%
Industry Compact cars Midsize cars Luxury cars Pickups SUV/CUV Vans
1 year
2 years
3 years
4 years
27
Average Auction Price – Rental Risk Units
Average price for rental risk units sold in June up 3.4% y/y and up 8.9% m/m
Source: Manheim/Cox Automotive
13,000
13,500
14,000
14,500
15,000
15,500
16,000
16,500
17,000
1 2 3 4 5 6 7 8 9 10 11 12
2016
2017
2018
2019
2020
28
Distribution of Rental Risk Vehicles
Source: Manheim/Cox Automotive
2018 Q2 2019 Q2 2020 Q2
Number of unique
year, make, model,
body configurations
sold
3,023 3,337 3,090
Share accounted for
top 10 YMMB 13.5% 12.0% 14.0%
Share accounted for
top 25 YMMB 22.9% 22.3% 25.9%
Number of YMMB to
reach 50% share 109 106 86
29
Average Mileage – Rental Risk Units Sold at Auction
Average mileage for rental risk units in June was down 7% compared to a year ago and down 6% m/m
Source: Manheim/Cox Automotive
43,473
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 Jan-19
30
Rental Risk Units Sold by Condition
Source: Manheim/Cox Automotive
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2015 Q4 2016 Q2 2016 Q4 2017 Q2 2017 Q4 2018 Q2 2018 Q4 2019 Q2 2019 Q4 2020 Q2
5.0
4.0 - 4.9
3.0 - 3.9
2.0 - 2.9
0 - 1.9
31
Rental Risk Units Sold by Make
Source: Manheim/Cox Automotive
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2015Q4
2016Q1
2016Q2
2016Q3
2016Q4
2017Q1
2017Q2
2017Q3
2017Q4
2018Q1
2018Q2
2018Q3
2018Q4
2019Q1
2019Q2
2019Q3
2019Q4
2020Q1
2020Q2
All other
Mazda
Kia
Jeep
VW
Chrysler
Hyundai
Dodge
Toyota
Nissan
Ford
Chevrolet
32
Rental Risk Units Sold by Segment
Source: Manheim/Cox Automotive
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2015Q4
2016Q1
2016Q2
2016Q3
2016Q4
2017Q1
2017Q2
2017Q3
2017Q4
2018Q1
2018Q2
2018Q3
2018Q4
2019Q1
2019Q2
2019Q3
2019Q4
2020Q1
2020Q2
Van
SUV
Sports Car
Pickup
Luxury Car
Midsize Car
Compact Car
33
Manheim Market Report (MMR) Vehicle Insights
Source: Manheim/Cox Automotive
All top selling vehicles in June at Manheim saw higher prices over the last 30 days (June 1 – July 1). Prices year-
over-year saw mostly lower than normal depreciation, but a few vehicles sold for more than year-ago prices.
Rank Source(Rank) Category Subcategory Vehicle 1-Jul Past 30 Days Last Year Current Dep L12M Dep/Mo
1 All SUV SUV Midsize 2017 NISSAN ROGUE AWD 4D SUV 2.5L SV $15,800 $15,550 $16,000 1.6% -0.1%2 All Compact Car Compact Car Premium 2017 HYUNDAI ELANTRA 4D SEDAN SE $9,925 $9,750 $10,700 1.8% -0.6%
3 All SUV SUV Entry 2017 FORD ESCAPE FWD 4D SUV 1.5L SE $13,450 $13,250 $13,950 1.5% -0.3%
4 All Compact Car Compact Car Premium 2017 NISSAN SENTRA 4D SEDAN SV $9,875 $9,675 $10,400 2.1% -0.4%5 All Pickup Pickup Heavy Duty Full 2019 RAM 2500 4WD V8 CREW CAB 6.4L BIG HORN $38,500 $37,800 $36,800 1.9% 0.4%
1 Dealer Dealer Midsize Car Midsize Car Premium 2014 VOLKSWAGEN PASSAT 4C TDSL 4D SEDAN TDI SE $9,600 $9,425 $9,525 1.9% 0.1%
1 Lease Lease SUV SUV Midsize 2017 NISSAN ROGUE AWD 4D SUV 2.5L SV $15,800 $15,550 $16,000 1.6% -0.1%
1 Rental Rental Midsize Car Midsize Car Entry 2018 CHEVROLET MALIBU 4D SEDAN LT $12,950 $12,650 $13,900 2.4% -0.6%
34
Sales Impact Varies by DMA As Evidenced By Unique Credit Apps
Source: Cox Automotive
April 5th July 5th
Appendix
35
36
Weekly Price Trend Similar For Non-Luxury
Slightly stronger declines followed by stronger recovery
Source: Manheim/Cox Automotive
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
Non-Luxury 3-Year-Old Model MMR Index by Week
2014-2016 2017 2018 2019 2020
37
Weekly Price Trend Less Severe For Luxury
Luxury vehicles have outperformed by not declining as much and now seeing similar strength
Source: Manheim/Cox Automotive
80.0%
85.0%
90.0%
95.0%
100.0%
105.0%
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
Luxury 3-Year-Old Model MMR Index by Week
2014-2016 2017 2018 2019 2020
38
Weekly Price Trend Now Strong for One-Year-Old Vehicles
One-year-old vehicle prices were very stable throughout most of 2019 but had a rough March and April
Source: Manheim/Cox Automotive
80.0%
85.0%
90.0%
95.0%
100.0%
105.0%
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
1-Year-Old Model MMR Index by Week
2014-2016 2017 2018 2019 2020
39
Luxury Prices Move Higher Than Non-Luxury In June
Source: Manheim/Cox Automotive
Luxury prices in June were up 7% compared to June 2019, while non-luxury prices increased 6%
January 2000 = 100
124.4
146.2
80
90
100
110
120
130
140
150
Jan-00 Jan-02 Jan-04 Jan-06 Jan-08 Jan-10 Jan-12 Jan-14 Jan-16 Jan-18 Jan-20
Luxury Non-Luxury
40
107.5
0
20
40
60
80
100
120
140
Jan-15 Jan-16 Jan-17 Jan-18 Jan-19 Jan-20
Electric Car
Electric Car Prices Improve In June
Source: Manheim/Cox Automotive
Electric car prices in June were up 5% compared to June 2019
January 2015 = 100
41
Rise of SUV Not Yet Fully Reflected in Wholesale Market
The SUV reigns supreme in new vehicle sales while cars still dominated the used car market
Source: Manheim/Cox Automotive
44%
12%
39%
5%
0%
10%
20%
30%
40%
50%
60%
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Manheim Sales by Category
CAR PICKUP SUV VAN
25%
20%
50%
5%0%
10%
20%
30%
40%
50%
60%
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
New Vehicle Sales by Category
CAR PICKUP SUV VAN
42
Thank You
Jonathan Smoke & Zo RahimEconomic Industry Insights
jonathan.smoke@coxautoinc.com
zohaib.rahim@coxautoinc.com
@SmokeonCars
@autosanalyst