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)
Source: Cox Automotive
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)
Source: Cox Automotive
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
Source: Cox Automotive
-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%
Jan-96 Jan-99 Jan-02 Jan-05 Jan-08 Jan-11 Jan-14 Jan-17 Jan-20
Source: Manheim/Cox Automotive
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
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
$16,500
$17,500
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)
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
Source: Manheim/Cox Automotive
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
Source: Manheim/Cox Automotive
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
Source: Manheim/Cox Automotive
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
Source: Manheim/Cox Automotive
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
Source: Manheim/Cox Automotive
42,550
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
27
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
28
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
2020Q3
All other
Mazda
Kia
Jeep
VW
Chrysler
Hyundai
Dodge
Toyota
Nissan
Ford
Chevrolet
29
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
2020Q3
Van
SUV
Sports Car
Pickup
Luxury Car
Midsize Car
Compact Car
30
Manheim Market Report (MMR) Vehicle Insights
Source: Manheim/Cox Automotive
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
Source: Cox Automotive
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
Source: Manheim/Cox Automotive
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
Source: Manheim/Cox Automotive
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
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
1-Year-Old Model MMR Index by Week
2014-2016 2017 2018 2019 2020
36
Luxury Prices Move Higher Than Non-Luxury In September
Source: Manheim/Cox Automotive
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
Source: Manheim/Cox Automotive
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
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
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
@SmokeonCars
@autosanalyst