August 7, 2017

“Mixed reactions noted in the auto auctions across the nation as the market tries to find direction going forward after a resilient performance in the first two quarters.”

Anil Goyal, Senior Vice President of Automotive Valuation and Analytics

Model Years: 2008-2014, Volume Weighted Wholesale Average Values, Weekly Change from 7/28/17 to 8/4/17

Car Segment Depreciation Level Increases

Volume-weighted, overall car segment values declined by 0.46% last week. In comparison, the market

values had decreased on average by 0.35% per week in the previous four weeks.

In car segments, Mid-Size Car and Compact Car segments performed the worst, decreasing by 0.75%

and 0.70%, respectively.

Volume-weighted, overall truck segment (including pickups, SUVs and vans) values decreased by

0.28% last week, worse than the average decrease of 0.22% per week in the previous four weeks.

In truck segments, Sub-Compact Crossover values dropped the most by 1.23%.

-$28-0.48%

-$54-0.70% -$68

-0.75%

-$13-0.12%

-$20-0.12%

-$101-0.50%

-$127-0.38%

-$27-0.17%

-$82-0.21% -$50

CARS-0.46%

-1.0%

-0.8%

-0.6%

-0.4%

-0.2%

0%

WEE

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-$150-1.23%

-$45-0.36% -$95

-0.60%

-$1+0.00%

-$104-0.57%

-$103-0.51% -$157

-0.73%

-$83-0.26%

-$22-0.17%

-$7-0.09%

-$5-0.03% -$31

-0.21%

+$17+0.08%

-$47TRUCKS-0.28%

-1.7%

-1.2%

-0.7%

-0.2%

+0.3%

WEE

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2

August 7, 2017

Sentiment from the Auction Lanes

Our editors and personnel attend about 60 auctions every week across the country to provide key insights:

“Attendance and consignment were both good but there was a lot of no-sales. The reps were not willing to drop their floors enough to record the sale.” Andrew in GA

“The market seemed to take a step back today. Not only was the consignment lower but the overall interest in the vehicles was also sub-par.” Jim in WA

“The market is softer here when compared to the prior weeks. Consignors had challenges selling their inventories.” Bob in MA

“Dealers need good, clean cars and are paying what they have to in order to get them.” Matt in CO

“Sellers were the happy group here as buyers were hitting the bids a few extra times in order to secure inventory.” Mark in MI

Retention Trends of Three-Year Old Mid-Size Cars Wholesale Average as Percent of Typically-Equipped MSRP

Source: Black Book Visual Analytics

Mid-Size Car prices have continued to come down in the last two years. The 2014 model year vehicles in

2017, are valued about two percentage points lower than the same age vehicles, a year ago.

Vehicle Highlight 2018 Alfa Romeo Stelvio features an all- aluminum, 2.0- liter, direct- injection turbocharged I4 engine that produces 280 HP and 306 lb-ft of torque, making it capable of doing 0-60 mph in 5.4 seconds. This 2018 model is the first Alfa SUV to hit the American market ever, and it comes in four options with a base MSRP starting at $42,990 and going all the way up to $47,490 including destination charges. This luxury SUV only comes in AWD and will have a lot of competition in the American market including the Jaguar F- Pace, Porsche Macan, Mercedes GLC43, BMW X3, and Audi Q5.

This week’s report includes our Monthly Edition Supplement on Specialty Markets.

3

August 7, 2017

All Eyes Turn Towards Monterey “The auctions held in late June and July all had very respectable showings, but

everyone in the hobby has turned their attention to the automotive super week that

takes over Pebble Beach and the Monterey peninsula in mid-August. In addition to

the rallys, tours, and shows, there will be auctions featuring the “best of the best” staged by Bonhams,

Gooding, Worldwide, Mecum, RM Southeby’s, and Russo and Steele.

Eric Lawrence, Director of Specialty Markets

RM Sotheby’s Santa Monica sale, held in the historic Barker Hanger, was their fifth annual sale at this location, and their first with sister company Auctions America. The final sales figures came in at $9,300,000, generated from a “boutique selection” of 175 vehicles being offered.

Mecum’s second annual Portland auction did a respectable $7,900,000, with a total of 461 cars crossing the block during the two-day sale. The top sellers were dominated by vintage muscle cars. Their Denver auction finished with total sales of $11,400,000 (411 of 591 declared sold) and an impressive 70% sell-through rate.

Barrett-Jackson’s second annual Northeast Auction, held at the Mohegan Sun Resort in Connecticut, achieved an impressive four day total of $23,500,000 on the sale of 630 collectible vehicles. Their sell through rate was in excess of 95%, typical for their primarily “no-reserve” format.

Notable Recent Auction Sales Include:

1960 Mercedes 300 SL Roadster $1,100,000 (RM)

1992 Ferrari F40 Coupe $957,000 (RM)

1929 Dusenberg Model J Murphy Convertible $880,000 (RM)

1966 Aston Martin DB6 Vantage Coupe $341,000 (RM)

1968 Chevrolet Yenko Camaro $395,000 (Mecum)

1970 Chevrolet Chevelle LS6 Coupe $125,000 (Mecum)

2017 Ferrari 488 Spider $434,000 (B-J)

1969 Ford Mustang Boss 429 Fastback $407,000 (B-J)

1958 Dual-Ghia Convertible $269,000 (B-J)

1966 Shelby GT-350H Fastback $220,000 (B-J)

300 SL Roadster. Photo courtesy of RM Sotheby’s.

-1.72% -1.73%

-3.63%

6.28%

-0.99%

1.65%

-6.00%

-4.00%

-2.00%

0.00%

2.00%

4.00%

6.00%

8.00%

Muscle Cars Pony Cars American Classics Sports Cars Exotic Cars Classic Trucks

Percent Change from August 2016 to August 2017

SPECIALTY MARKETS:

COLLECTIBLE CARS

4

August 7, 2017

RV Values at Auction Rise as Wholesale Volume Declines “The values of both motorized and towable RVs increased at auction last month,

although the sales volumes were down. The increased values could be a result of

fewer desirable units to choose from, or it could be related to the recent surge in interest in RVs from

consumers. Dealers are seeing growth in the extremes of their customer base, from retiring Boomers to

Millennials, many whom are new to the hobby and may be shopping ‘out of season’.” Eric Lawrence, Director of Specialty Markets

For Motor Homes (including Class A, B, and C)

Average selling price was $41,494, up $1,250 (3.1%) from previous month

One year ago, the average selling price was $39,423

Auction volume was down 14.2% from the previous month

For Towables (including Travel Trailers and Fifth Wheels)

Average selling price was $12,780, up $945 (7.9%) from previous month

One year ago, the average selling price was $10,797

Auction volume was down 10.5% from previous month

30000

32000

34000

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38000

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46000

Jan

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Motor Home Value Trends

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Travel Trailer and Fifth Wheel Value Trends

SPECIALTY MARKETS:

RECREATIONAL VEHICLES

5

August 7, 2017

Powersports Market Declines Across The Board “Every segment in the Powersports market is down, even a few that normally show signs of life this time of year. The only relative bright spots are the Street Bike and domestic V-Twin segments, which have declined only slightly compared to last month.”

Scott Yarbrough, Motorcycle & Powersports Editor

Our first bright spot is the Street segment, which while down, dropped a meager 0.4 percent. Two of the other three road going segments, the Dual Sports and the Scooters, dropped 1 and 2 percent respectively.

The last road going segment, Cruisers, is more of a mixed bag. While the entire segment is down nearly 3 percent, the drop for the domestic V-Twins was only around 1.5 percent, surely good news for Harley-Davidson (which makes up the majority of this segment) considering recent concerns about their production levels.

The biggest decliners this month are not surprisingly the Personal Watercraft and Jet Boats. With the heavy use season coming to an end soon, the values for these vehicles at the wholesale level have started to plummet, dropping nearly 5 percent versus last month.

All of the off-road segments are down between 2.5 and 3.3 percent, somewhat surprising as these units should start to appreciate a bit around this time of year. Make sure to keep an eye on pricing for these segments over the coming weeks.

-2.0%

-2.7%

-4.5%

-3.3%

-1.0%

-1.9%

-0.8%

-0.4%

-2.4%

-4.9%

-6.0%

-5.0%

-4.0%

-3.0%

-2.0%

-1.0%

0.0%Motorcycle & Powersports Percent Changes July to August 2017

SPECIALTY MARKETS:

POWERSPORTS

6

August 7, 2017

Construction/Vocational Trucks Still Doing Well but

Their Depreciation is Normalizing!

“The reasons why some trucks do better than others is often hard to

pinpoint, but age, miles and condition are the big factors.”

Charles Cathey, Editor – Heavy Duty Truck Data

The demand for Construction/Vocational Trucks is still very evident, but the demand and supply are closing in on

each other, which is resulting in closer to normal depreciation. Over the Road and Regional Tractors is another story.

They have much more need for being dependable and in good condition. Both segments must go on longer trips

than Constructional/Vocational, and in many situations, that means coast to coast. For Regional Tractors, the trips

are much shorter than the normally newer Over the Road Tractors, but many of the loads are similar and need to

get where they are going within a certain timeframe.

DATE

Construction/Vocational Over the Road Trucks & Tractors Regional Tractors MODEL

YEARS Value $ Change % Change Value $ Change % Change Value $ Change % Change

08/01/17 91,678 -369 -0.4% 75,182 -778 -1.0% 64,973 -685 -1.0% 2015-2016

07/01/17 81,289 -667 -0.8% 64,379 -1025 -1.6% 54,775 -892 -1.6% 2014-2015

2015-2016 HD Construction/Vocational segment dropped an average of $369 (0.4%) in July compared to the average decline of $667 (0.8%) in June.

2015-2016 HD Over the Road Tractor segment dropped an average of $778 (1.0%) in July compared to the average drop of $1025 (1.6%) in June.

2015-2016 HD Regional Tractor segment dropped an average of $685 (1.0%) in July compared to the average depreciation of $892 (1.6%) in June.

DATE

Construction/Vocational Over the Road Trucks & Tractors Regional Tractors MODEL

YEARS Value $ Change % Change Value $ Change % Change Value $ Change % Change

08/01/17 46,782 -399 -0.8% 34,141 -631 -1.8% 25,508 -572 -2.2% 2007-2014

07/01/17 40,218 -450 -1.1% 29,282 -658 -2.2% 21,167 -535 -2.5% 2006-2013

2007-2014 HD Construction/Vocational segment dropped an average of $399 (0.8%) in July compared to $450 (1.1%) in June.

2007-2014 HD Over the Road Tractor segment dropped an average of $631 (1.8%) in July compared to $658 (2.2%) average deprciation in June.

2007-2014 HD Regional Tractor segment dropped an average of $572 (0.8%) in July compared to the average drop of $535 (2.2%) in June.

-$1,600-$1,400-$1,200-$1,000

-$800-$600-$400-$200

$0

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Average Wholesale Value Changes (Market)

Construction/Vocational Over the Road Trucks & Tractors Regional Tractors

SPECIALTY MARKETS:

HEAVY DUTY

7

August 7, 2017

Returning to a More Normal Depreciation “Used Units dropped a bit more in June compared to July.”

Josh Giles, Senior Truck Editor

The wholesale market continues its downward trend as we ease through the

summer months. This past month we experienced a bit more depreciation than we did in June. Auction

prices continue to drop on most of the units we track. Of course, there will always be that low mileage,

great conditioned truck that will bring out of book. These units are few and far between at auction

because dealers need good inventory. The overall condition of the units hitting the auction lanes are

showing up in worse and worse condition. We understand this and take this into consideration when

evaluating units and adjusting our prices. This past month Late Model units (2015-2016) dropped an

average of $192 (0.4), which is $122 more than the depreciation we saw in June. The older units (2007-

2014) dropped an average of $139 (0.7), which is $53 more than the depreciation we saw this past month.

DATE

Medium Duty MODEL

YEARS

DATE

Medium Duty MODEL

YEARS Value $ Change % Change Value $ Change % Change

08/01/17 47,176 -192 -0.4% 2015-2016 08/01/17 20,355 -139 -0.7% 2007-2014

07/01/17 40,773 -70 -0.2% 2014-2015 07/01/17 17,663 -86 -0.5% 2006-2013

On a more positive note, fuel prices have remained relatively steady all over the country for the past couple

of months. We all know how import these prices are to our bottom line. Currently, as a national average,

we are paying $2.49. This is $0.05 cheaper than last month. Unfortunately, this is also $0.06 more expensive

than this time last year. Hopefully these stable prices will continue for a while. Our sources are indicating

that there is no significant changes to these prices in the near future.

1745 N. Brown Rd., Suite 130, Lawrenceville, GA 30043| 1.866.452.1400

www.blackbook.com| info@blackbook.com Opt-in to receive reports from Black Book at http://www.blackbook.com/insights/market-insights

+$0.01+$0.01+$0.01

-$0.02-$0.04-$0.04

+$0.09

+$0.07

+$0.05+$0.04

+$0.06

+$0.09

-$0.06

-$0.04

-$0.02

+$0.00

+$0.02

+$0.04

+$0.06

+$0.08

+$0.1007/17/1707/10/1707/03/1706/26/1706/19/1706/12/17

Diesel Price Changes

Price Chg/Week Price Chg/Year

SPECIALTY MARKETS:

MEDIUM DUTY