Vehicle Market Insights · OFFSITE WHOLESALE IS SETTING NEW RECORDS ... Q4 2016 Q1 2016 Q2 2016 Q3...

Vehicle Market InsightsManheim Used Vehicle Value Index Call – October 7, 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 : Z a c h H a l l o w e l l

1

INVENTORY

RETAIL

FINANCIAL

MOBILITY

COVID-19 Market Update

4

Covid-19 Local Impact Assessment

Source: Cox Automotive

5

Continuing Claims At 11.8 Million Nationally

Source: U.S. Department of Labor

6

Consumer Sentiment Improved In Summer

Source: Morning Consult

Morning Consult’s Index of Consumer Sentiment on Monday was down 19.1% since February 29

113.93

81.23

91.64

60

70

80

90

100

110

120

1/1/20 2/1/20 3/1/20 4/1/20 5/1/20 6/1/20 7/1/20 8/1/20 9/1/20 10/1/20

ICS Value (7-Day Average)

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

Au

g-2

0

Total New % Change y/y

8

New Vehicle Market Share Performance – YTD 2020 (Sept)


0.04

0.06

0.10

0.10

0.10

0.12

0.12

0.14

0.20

0.27

0.30

0.32

0.33

0.35

0.51

0.00 0.10 0.20 0.30 0.40 0.50 0.60

ACURA

VOLKSWAGEN

VOLVO

LINCOLN

SUBARU

LEXUS

JEEP

GMC

FORD

RAM

CHEVROLET

HYUNDAI

MAZDA

TESLA

KIA

-0.01

-0.01

-0.02

-0.02

-0.02

-0.03

-0.04

-0.07

-0.07

-0.09

-0.11

-0.11

-0.12

-0.63

-1.73

-2.00 -1.50 -1.00 -0.50 0.00

GENESIS

HONDA

JAGUAR

TOYOTA

FIAT

MINI

AUDI

MERCEDES-BENZ

CADILLAC

BUICK

MITSUBISHI

BMW

INFINITI

DODGE

NISSAN

9

New Vehicle Market Share Performance – YTD 2020 (Sept)


0.0

0.0

0.0

0.0

0.2

0.3

0.5

1.2

1.3

2.1

0.0 0.5 1.0 1.5 2.0 2.5

Luxury Full-size SUV/Crossover

Electric Vehicle

High-end Luxury Car

High Performance Car

Luxury Mid-size SUV/Crossover

Luxury Compact SUV/Crossover

Mid-size Pickup Truck

Subcompact SUV/Crossover

Mid-size SUV/Crossover

Full-size Pickup Truck

-0.2

-0.2

-0.2

-0.2

-0.3

-0.5

-0.5

-0.6

-0.8

-1.7

-2.2 -1.7 -1.2 -0.7 -0.2 0.3

Entry-level Luxury Car

Full-size SUV/Crossover

Van

Hybrid/Alternative Energy Car

Luxury Car

Full-size Car

Minivan

Subcompact Car

Mid-size Car

Compact Car

10

Retail Sales Recovery Estimates


-13.0%

-29.1%

-70.0%

-60.0%

-50.0%

-40.0%

-30.0%

-20.0%

-10.0%

0.0%

10.0%

20.0%

30.0%

1/8/2020 2/8/2020 3/8/2020 4/8/2020 5/8/2020 6/8/2020 7/8/2020 8/8/2020 9/8/2020

Y/Y % Change in 7-Day Moving Average of Retail Sales

New Used

Update: Manheim’s Shift to All-Digital

Zach Hallowell

Vice President, Manheim Digital

of Manheim locations

now offer in-lane bidding

BUTDEALERS ARE CHOOSING DIGITAL OVER PHYSICAL

95%

of purchases are still

from digital buyers87%

13

OFFSITE WHOLESALE IS SETTING NEW RECORDS

w1

w3

w5

w7

w9

w11

w13

w15

w1

7

w19

w21

w23

w25

w27

w29

w31

w33

w35

w37

w39

w41

w43

w45

w47

w49

w51

w1

w3

w5

w7

w9

w11

w1

3

w15

w17

w19

w21

w23

w25

w2

7

w29

w31

w33

w35

w37

w39

2019 2020

42% Increase in Offsite Transactions YoY

14

MANHEIM AUDIENCE HAS GROWN

Pre-COVID Average Attendance Current Average Attendance

87.9K83.8K

Weeks 1-11, 2020

Digital Physical

Weeks 22-39, 2020

15

IMAGING IS CRITICAL TO DIGITAL SUCCESS

Undercarriage

imaging pilotHigh-res imaging

across platforms

Automated

image capture

images on condition

reports (2X higher)

Expanded Image Package:

15+invested in better,

faster imaging$20M

Committed Investment:

COMING SOON

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

16

Steps:

A single measure of used vehicle price

change that is independent of underlying

segment shifts in the characteristics of

vehicles being sold

Concept:

17

Wholesale Prices Begin To Cool

Source: Manheim/Cox Automotive

161.2

90

95

100

105

110

115

120

125

130

135

140

145

150

155

160

165

170

Jan-95 Jan-98 Jan-01 Jan-04 Jan-07 Jan-10 Jan-13 Jan-16 Jan-19

January 1995 = 100

Prices in September decreased 1.58% from August 2020 and were up 15.2% compared to September 2019

18

Used Vehicle Values Showing Seasonal Strength

Year-over-year price performance stronger than average

15.2%

-15%

-10%

-5%

0%

5%

10%

15%

20%

25%



19

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%

65%

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

20

Wholesale Used Vehicle Prices vs. New Vehicle Prices


$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

$16,500

$17,500


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

21

80.0%

85.0%

90.0%

95.0%

100.0%

105.0%

110.0%

115.0%

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

2020 Weekly Price Trend Continues Fall Decline

After 16 weeks of price appreciation, weekly values continue to see a fairly typical fall decline


22

Retention Values Ended September Up 5.5% Relative to 2019

Retention values are up 5.5 percentage points compared to last year at the beginning of October

Source: Kelley Blue Book/Cox Automotive

(1 to 3 year-old models)

50%

52%

54%

56%

58%

60%

62%

64%

66%

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

CY 2018 CY 2019 CY 2020

23

Percent Change in Wholesale Prices for Major Market Segments

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


15.2%

5.2%

7.1%

17.5%

25.9%

11.9%

0.8%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

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

1 year

2 years

3 years

4 years

24

Average Auction Price – Rental Risk Units

Average price for rental risk units sold in September up 5.4% y/y and down 4% m/m


13,000

14,000

15,000

16,000

17,000

18,000

19,000

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

2016

2017

2018

2019

2020

25

Distribution of Rental Risk Vehicles


2018 Q3 2019 Q3 2020 Q3

Number of unique

year, make, model,

body configurations

sold

2,980 3,496 3,903

Share accounted for

top 10 YMMB 11.1% 12.7% 16.9%

Share accounted for

top 25 YMMB 20.6% 23.6% 30.0%

Number of YMMB to

reach 50% share 132 106 75

26

Average Mileage – Rental Risk Units Sold at Auction

Average mileage for rental risk units in September was down 9% compared to a year ago and up 8% m/m


42,550

20,000

25,000

30,000

35,000

40,000

45,000

50,000

55,000

60,000


27

Rental Risk Units Sold by Condition


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

28

Rental Risk Units Sold by Make


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

2020Q3

All other

Mazda

Kia

Jeep

VW

Chrysler

Hyundai

Dodge

Toyota

Nissan

Ford

Chevrolet

29

Rental Risk Units Sold by Segment


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

2020Q3

Van

SUV

Sports Car

Pickup

Luxury Car

Midsize Car

Compact Car

30

Manheim Market Report (MMR) Vehicle Insights


Price trends on top selling vehicles in September at Manheim was very consistent over the last 30 days

(September 1 – October 1). Prices year-over-year also saw appreciation while higher than normal depreciation

was evident in the last 30 days for most.

Rank Source(Rank) Category Subcategory Vehicle 1-Oct Past 30 Days Last Year Current Dep L12M Dep/Mo

1 All SUV SUV Midsize 2017 NISSAN ROGUE AWD 4D SUV 2.5L SV $15,150 $15,450 $14,650 -1.9% 0.3%2 All SUV SUV Entry 2017 FORD ESCAPE FWD 4D SUV 1.5L SE $13,050 $13,300 $12,700 -1.9% 0.2%

3 All SUV SUV Midsize 2017 FORD EXPLORER 4WD V6 4D SUV XLT $24,000 $24,400 $23,100 -1.6% 0.3%

4 All Compact Car Compact Car Premium 2017 NISSAN SENTRA 4D SEDAN SV $9,625 $9,800 $9,250 -1.8% 0.3%5 All Midsize Car Midsize Car Entry 2017 VOLKSWAGEN JETTA 4D SEDAN S $10,600 $10,800 $9,600 -1.9% 0.9%

1 Dealer Dealer Pickup Pickup Lite Duty Full 2018 FORD F150 4WD V8 FFV CREW CAB 5.0L XLT $32,200 $32,700 $27,800 -1.5% 1.3%

1 Lease Lease SUV SUV Midsize 2017 NISSAN ROGUE AWD 4D SUV 2.5L SV $15,150 $15,450 $14,650 -1.9% 0.3%

1 Rental Rental Midsize Car Midsize Car Entry 2019 CHEVROLET MALIBU 4D SEDAN LT $13,650 $14,100 $14,500 -3.2% -0.5%

31

Sales Impact Varies by DMA As Evidenced By Unique Credit Apps


April 5th October 4th

Appendix

32

33

Weekly Price Trend Similar For Non-Luxury

Slightly stronger declines followed by stronger recovery and now declining at a slightly higher pace


80.0%

85.0%

90.0%

95.0%

100.0%

105.0%

110.0%

115.0%

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

34

Weekly Price Trend Less Severe For Luxury

Luxury vehicles have outperformed by not declining as much and now seeing smaller declines


80.0%

85.0%

90.0%

95.0%

100.0%

105.0%

110.0%

115.0%

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

35

Weekly Price Trend for One-Year-Old Vehicles

One-year-old vehicle prices fell more in March and April but now seeing smaller declines


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

1-Year-Old Model MMR Index by Week

2014-2016 2017 2018 2019 2020

36

Luxury Prices Move Higher Than Non-Luxury In September


Luxury prices in September were up 17% compared to September 2019, while non-luxury prices increased 14%

January 2000 = 100

136.2

156.4

80

90

100

110

120

130

140

150

160

170

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

37

114.2

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 Up In September


Electric car prices in September were up 8% compared to September 2019

January 2015 = 100

38

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


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

24%

21%

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

39

Thank You

Jonathan Smoke & Zo RahimEconomic Industry Insights

[email protected]

[email protected]

@SmokeonCars

@autosanalyst

Vehicle Market Insights · OFFSITE WHOLESALE IS SETTING NEW RECORDS ... Q4 2016 Q1 2016 Q2 2016 Q3...

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