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Manheim Index Quarterly Conference Call – September 2017
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 shifts in mileage
Weight to provide unchanging mix
Seasonally adjust
3
Steps:
A single measure of used vehicle price change that is independent of underlying shifts in the characteristics of vehicles being sold
Concept:
134.9
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 At Record Levels
4Source: Manheim, Cox Automotive
January 1995 = 100
September saw a 2.8% increase from August and 6.3% increase from September 2016
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
Manheim Index versus Mix & Quality Adjusted New Vehicle Price with 3 ½ year Lag
5Source: Bureau of Labor Statistics, Manheim, Cox Automotive
After recent increases, used prices have shifted above the new vehicle price trend
30%
32%
34%
36%
38%
40%
42%
Jan-13 Jan-14 Jan-15 Jan-16 Jan-17
Manheim Index Straight Average
Wholesale Used as % of New Vehicle Transaction Price
6Source: Manheim, Kelley Blue Book, Cox Automotive
Adjusted for mix and mileage, wholesale prices as a % of new below 2013-2014
Underlying Average Price Trends
7Source: Manheim, Kelley Blue Book, Cox Automotive
Y/Y new prices now up only 1% while wholesale up 6% and inflation up 1.9%
$27,000
$28,000
$29,000
$30,000
$31,000
$32,000
$33,000
$34,000
$35,000
$36,000
$9,500
$10,000
$10,500
$11,000
$11,500
$12,000
$12,500
$13,000
$13,500
Jan-12
Mar-12
May-12
Jul-1
2 Sep-12
Nov-12
Jan-13
Mar-13
May-13
Jul-1
3 Sep-13
Nov-13
Jan-14
Mar-14
May-14
Jul-1
4 Sep-14
Nov-14
Jan-15
Mar-15
May-15
Jul-1
5 Sep-15
Nov-15
Jan-16
Mar-16
May-16
Jul-1
6 Sep-16
Nov-16
Jan-17
Mar-17
May-17
Jul-1
7 Sep-17
ManheimIndex$Amount(LHS) ManheimNon-AdjustedPrice(LHS) AveragenewvehicletransactionpriceperKBB(RHS)
Prices Are Higher and Retention Values Are Now Flat Y/Y
8Source: Kelley Blue Book Auction Values as a % of MSRP and New Vehicle Sales Weighted
Even adjusting for MSRP and fixing the basket of vehicles results in flat trend
(1 to 3 year old models)45%
50%
55%
60%
65%
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Ret
aine
d Va
lue
as %
of M
SRP
CY 2015 CY 2016 CY 2017
6.3% 4.4%
2.3%
6.4% 9.1%
6.0% 8.9%
-10%
-5%
0%
5%
10%
15%
20%
25%
30%
35%
40%
Industry Compact cars Midsize cars Luxury cars Pickups SUV/CUV Vans
1 year2 years3 years4 years
Percent Change in Wholesale Prices for Major Market Segments
9Source: Manheim, Cox Automotive
All segments saw year-over-year gains in September
Summary of Harvey and Irma Damage and Expected Impact
10
• At least 600,000 vehicles severely damaged or scrapped
• Subtracted approximately .3-.4 from August SAAR, which came in at 16.0
• 400,000 vehicles should be replaced over September, October, and November
• 30-40% of replacements will be new vehicle sales; rest will be used
• Boost to new and used vehicle sales through November
• Surge in rental demand impacting expansion in rental fleet
• Tighter wholesale supply expected to last 2-3 months
• Wholesale used vehicle values expected to increase for 2-3 months
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
38%
16%
41%
5% 0%
10%
20%
30%
40%
50%
60%
2009 2010 2011 2012 2013 2014 2015 2016 2017
New Vehicle Sales by CategoryCAR PICKUP SUV VAN
53%
11%
31%
6%
Manheim Sales in September
Car
Pickup
SUV
Van
Model years 2014-2015 currently show the least amount of depreciation
Wholesale Price Curves
12Source: Manheim, Cox Automotive
$0
$5,000
$10,000
$15,000
$20,000
$25,000
$30,000
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Average Prices by Recent Model Years, September 2014-2017Sep-14 Sep-15 Sep-16 Sep-17
$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
2014
2015
2016
2017
Average Auction Price – Rental Risk Units
(mix and mileage adjusted)
Source: Manheim, Cox Automotive
Average price for rental risk units sold in September up 4% y/y and up 2% from August
13
42,255
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 September was 6% above a year ago
14
Exploring the Impact of Rental on Manheim Index
Source: Manheim, Cox Automotive
Rental units pull up prices slightly but do not cause much change in trend
15
-3.00%
-2.00%
-1.00%
0.00%
1.00%
2.00%
3.00%
4.00%
5.00%
6.00%
Jan-
14
Mar
-14
May
-14
Jul-1
4 Se
p-14
No
v-14
Ja
n-15
M
ar-1
5 M
ay-1
5 Ju
l-15
Sep-
15
Nov-
15
Jan-
16
Mar
-16
May
-16
Jul-1
6 Se
p-16
No
v-16
Ja
n-17
M
ar-1
7 M
ay-1
7 Ju
l-17
Month/Month Price Change, Manheim Index vs xRental Manheim Index
Manheim Index NSA m/m xRental NSA m/m
$10,500
$11,000
$11,500
$12,000
$12,500
$13,000
$13,500
1/1/14
4/1/14
7/1/14
10/1/14
1/1/15
4/1/15
7/1/15
10/1/15
1/1/16
4/1/16
7/1/16
10/1/16
1/1/17
4/1/17
7/1/17
Manheim Index vs xRental Mainheim Index
Manheim Index NSA xRental NSA
Manheim Market Report (MMR) Vehicle Insights
Source: Manheim, Cox Automotive
The top selling cars in September at Manheim showed appreciation in the last 30 days (Sep 1- October 1) and lower than normal depreciation in last year based on their MMRs
16
Sales Rank Source(Rank) Category Subcategory Vehicle 1-Oct Past30Days LastYear CurrentDep L12MDep/Mo2422 1 All Van CompactVan 2017KIASEDONA4DWAGONLX $19,300 $19,300 $20,000 0.0% -0.3%1745 2 All MidsizeCar MidsizeCarPremium 2015NISSANALTIMA4C4DSEDANS $11,050 $11,000 $11,100 0.5% 0.0%1044 3 All Luxury LuxuryCarPremium 2015MERCEDES-BENZCCLASS4DSEDANC3004MATIC $23,500 $24,400 $29,300 -3.7% -1.6%822 4 All CompactCar CompactCarPremium 2016FORDFUSIONFWD4DSEDANSE $13,250 $13,150 $13,050 0.8% 0.1%766 5 All MidsizeCar MidsizeCarPremium 2014NISSANALTIMA4C4DSEDANS $9,825 $9,750 $10,250 0.8% -0.3%158 1Dealer Dealer Luxury LuxuryCarEntry 2007LEXUSES3504DSEDAN $5,700 $5,850 $7,400 -2.6% -1.9%1241 1Lease Lease MidsizeCar MidsizeCarPremium 2015NISSANALTIMA4C4DSEDANS $11,050 $11,000 $11,100 0.5% 0.0%204 1Rental Rental MidsizeCar MidsizeCarPremium 2016NISSANALTIMA4C4DSEDANS $12,400 $12,300 $13,800 0.8% -0.8%
