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TOP INSIGHTS SHAPING THE AUTOMOTIVE INDUSTRY ISABELLE HELMS, VP, RESEARCH & MARKET INTELLIGENCE JONATHAN SMOKE, CHIEF ECONOMIST

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Page 1: TOP INSIGHTS SHAPING THE AUTOMOTIVE INDUSTRY · top insights shaping the automotive industry isabelle helms, vp, research & market intelligence jonathan smoke, chief economist

TOP INSIGHTS

SHAPING THE AUTOMOTIVE INDUSTRY

ISABELLE HELMS, VP, RESEARCH & MARKET INTELLIGENCE

JONATHAN SMOKE, CHIEF ECONOMIST

Page 2: TOP INSIGHTS SHAPING THE AUTOMOTIVE INDUSTRY · top insights shaping the automotive industry isabelle helms, vp, research & market intelligence jonathan smoke, chief economist

THE ECONOMY

Page 3: TOP INSIGHTS SHAPING THE AUTOMOTIVE INDUSTRY · top insights shaping the automotive industry isabelle helms, vp, research & market intelligence jonathan smoke, chief economist

3.02.82.32.2

4.23.5

-10.0

-8.0

-6.0

-4.0

-2.0

0.0

2.0

4.0

6.0

8.0

10.0

Real Gross Domestic Product (SAAR) % Growth by Quarter

ECONOMIC EXPANSION ACCELERATED IN 2018

Source: United States Bureau of Economic Analysis

GROWTH SLOWED IN Q3 FROM VERY STRONG Q2; BEST 2 QUARTERS SINCE 2014

Page 4: TOP INSIGHTS SHAPING THE AUTOMOTIVE INDUSTRY · top insights shaping the automotive industry isabelle helms, vp, research & market intelligence jonathan smoke, chief economist

STRONG JOB GROWTH AND NEW LOWS IN UNEMPLOYMENT

Source: BLS

2018 SAW 2.6 MILLION JOBS CREATED OR 220K VS. 182K AVERAGE IN 2017 AND 195K AVERAGE IN 2016

-1000

-800

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n-14

Sep

-14

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ep-1

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Sep

-18

Monthly Job Creation

0.0

2.0

4.0

6.0

8.0

10.0

12.0

14.0

16.0

18.0

Jan-

00A

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Unemployment RatesHeadline Unemployment % (U3) Underemployment Rate % (U6)

Page 5: TOP INSIGHTS SHAPING THE AUTOMOTIVE INDUSTRY · top insights shaping the automotive industry isabelle helms, vp, research & market intelligence jonathan smoke, chief economist

$51,630

$(6,241)

$(901)

$44,488

$53,430

$(6,243)

$(1,008)

$46,179

$(10,000)

$-

$10,000

$20,000

$30,000

$40,000

$50,000

$60,000

Income Taxes Interest Payments Buying Power

Per Capita Income and Buying Power2017 2018

TAX REFORM BOOSTED DISPOSABLE PERSONAL INCOME

Source: US Bureau of Economic Analysis Personal Income and Consumption

LOWER TAX RATES EFFECTIVELY ALLOWED AVERAGE INCOME GAINS TO TRANSLATE INTO EQUIVALENT GAINS IN SPENDING

Page 6: TOP INSIGHTS SHAPING THE AUTOMOTIVE INDUSTRY · top insights shaping the automotive industry isabelle helms, vp, research & market intelligence jonathan smoke, chief economist

NEW VEHICLE SALES

Page 7: TOP INSIGHTS SHAPING THE AUTOMOTIVE INDUSTRY · top insights shaping the automotive industry isabelle helms, vp, research & market intelligence jonathan smoke, chief economist

NEW VEHICLE SALES MANAGED A SLIGHT GAIN IN 2018

Source: Cox Automotive, January 2019

17.2

8

9

10

11

12

13

14

15

16

17

18

1968

1970

1972

1974

1976

1978

1980

1982

1984

1986

1988

1990

1992

1994

1996

1998

2000

2002

2004

2006

2008

2010

2012

2014

2016

2018

LIGHT VEHICLE SALES OUTLOOK (MILLIONS)

Page 8: TOP INSIGHTS SHAPING THE AUTOMOTIVE INDUSTRY · top insights shaping the automotive industry isabelle helms, vp, research & market intelligence jonathan smoke, chief economist

7%FLEET SALES UP

OEMS PULLED THE FLEET LEVER IN 2018

RETAIL SALES DOWNVS.

1%

Source: Bobit // Kelly Blue Book // Autodata

THE MARKET’S RELATIVE STRENGTH HAS BEEN

SUPPORTED BY GROWTH IN FLEET SALES

FLEETING STRATEGY

Page 9: TOP INSIGHTS SHAPING THE AUTOMOTIVE INDUSTRY · top insights shaping the automotive industry isabelle helms, vp, research & market intelligence jonathan smoke, chief economist

USED VEHICLE SALES

Page 10: TOP INSIGHTS SHAPING THE AUTOMOTIVE INDUSTRY · top insights shaping the automotive industry isabelle helms, vp, research & market intelligence jonathan smoke, chief economist

33

34

35

36

37

38

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40

Jan-13

Mar-13

May-13

Jul-13

Sep-13

Nov-13

Jan-14

Mar-14

May-14

Jul-14

Sep-14

Nov-14

Jan-15

Mar-15

May-15

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Sep-15

Nov-15

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Mar-16

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Jan-17

Mar-17

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Jul-17

Sep-17

Nov-17

Jan-18

Mar-18

May-18

Jul-18

Sep-18

Nov-18

Millions

USED SALES REACHED A NEW PEAK

Source: Cox Automotive Estimates based on IHS Markit Registrations

USED VEHICLE REGISTRATIONS (ANNUALIZED VOLUME)

Page 11: TOP INSIGHTS SHAPING THE AUTOMOTIVE INDUSTRY · top insights shaping the automotive industry isabelle helms, vp, research & market intelligence jonathan smoke, chief economist

DECLINE OF CARS NOT REFLECTED IN WHOLESALE MARKET VOLUMES

Source: Autodata, Manheim

THE SUV REIGNS SUPREME IN NEW VEHICLE SALES WHILE CARS STILL DOMINATED THE USED CAR MARKET

50%

11%

33%

6%

0%

10%

20%

30%

40%

50%

60%

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Manheim Sales by CategoryCAR PICKUP SUV VAN

30%

16%

49%

5%

0%

10%

20%

30%

40%

50%

60%

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

New Vehicle Sales by CategoryCAR PICKUP SUV VAN

Page 12: TOP INSIGHTS SHAPING THE AUTOMOTIVE INDUSTRY · top insights shaping the automotive industry isabelle helms, vp, research & market intelligence jonathan smoke, chief economist

INTEREST RATES AND PAYMENTS

Page 13: TOP INSIGHTS SHAPING THE AUTOMOTIVE INDUSTRY · top insights shaping the automotive industry isabelle helms, vp, research & market intelligence jonathan smoke, chief economist

0

1

2

3

4

5

6

7

8

9

%

Interest RatesNew Auto 60 Mo New Auto 48 Mo Used Auto 36 Mo US 10 Year Treasury Fed Discount Rate

“BEST AVAILABLE” AUTO RATES AT SEVEN-YEAR HIGH

Source: Bankrate.com, US Federal Reserve, Bloomberg

THE DISCOUNT RATE ENDED 2018 UP 1% WHILE BEST AVAILABLE AUTO RATES WERE UP MORE AND UP 2.4% FROM ABSOLUTE LOW

Page 14: TOP INSIGHTS SHAPING THE AUTOMOTIVE INDUSTRY · top insights shaping the automotive industry isabelle helms, vp, research & market intelligence jonathan smoke, chief economist

PAYMENT INFLATION IMPACTED CONSUMERS

Source: Cox Automotive/Dealertrack

$350

$400

$450

$500

$550

$600

2014 2015 2016 2017 2018

LeaseLoanUsed

MONTHLY PAYMENT PAYMENT DIFFERENCES

$20

$40

$60

$80

$100

$120

$140

$160

2014 2015 2016 2017 2018

Lease VS. UsedNew Loan VS. LeaseNew Loan VS. Used

Page 15: TOP INSIGHTS SHAPING THE AUTOMOTIVE INDUSTRY · top insights shaping the automotive industry isabelle helms, vp, research & market intelligence jonathan smoke, chief economist

AUTO LENDING

Page 16: TOP INSIGHTS SHAPING THE AUTOMOTIVE INDUSTRY · top insights shaping the automotive industry isabelle helms, vp, research & market intelligence jonathan smoke, chief economist

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

35.0%

$0.0

$20.0

$40.0

$60.0

$80.0

$100.0

$120.0

$140.0

$160.0

$180.0

04:Q

104

:Q2

04:Q

304

:Q4

05:Q

105

:Q2

05:Q

305

:Q4

06:Q

106

:Q2

06:Q

306

:Q4

07:Q

107

:Q2

07:Q

307

:Q4

08:Q

108

:Q2

08:Q

308

:Q4

09:Q

109

:Q2

09:Q

309

:Q4

10:Q

110

:Q2

10:Q

310

:Q4

11:Q

111

:Q2

11:Q

311

:Q4

12:Q

112

:Q2

12:Q

312

:Q4

13:Q

113

:Q2

13:Q

313

:Q4

14:Q

114

:Q2

14:Q

314

:Q4

15:Q

115

:Q2

15:Q

315

:Q4

16:Q

116

:Q2

16:Q

316

:Q4

17:Q

117

:Q2

17:Q

317

:Q4

18:Q

118

:Q2

18:Q

3

Billio

ns

Auto Loan Origination $ by Credit Score<620 620-659 660-719 720-759 760+ <620%

EASIER LENDING SUPPORTED PEAK AUTO SALES; LENDING EXPANDED IN Q3

Source: New York Federal Reserve Consumer Credit Panel/Equifax

LENDING GREW BY 4.6% Y/Y IN Q3 BY 10% GAINS IN SUBPRIME AND 8% GAINS IN 760+ $ VOLUMES

Page 17: TOP INSIGHTS SHAPING THE AUTOMOTIVE INDUSTRY · top insights shaping the automotive industry isabelle helms, vp, research & market intelligence jonathan smoke, chief economist

USED CAR PRICES

Page 18: TOP INSIGHTS SHAPING THE AUTOMOTIVE INDUSTRY · top insights shaping the automotive industry isabelle helms, vp, research & market intelligence jonathan smoke, chief economist

4.3%

-15%

-10%

-5%

0%

5%

10%

15%

20%

25%

Jan-96 Jan-97 Jan-98 Jan-99 Jan-00 Jan-01 Jan-02 Jan-03 Jan-04 Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 Jan-16 Jan-17 Jan-18

USED VEHICLE VALUES SAW ANOTHER ABOVE AVERAGE YEAR

Source: Manheim

YEAR-OVER-YEAR PRICE PERFORMANCE ON MANHEIM USED VEHICLE VALUE INDEX HAS BEEN STRONGER THAN AVERAGE

Monthly Average = 1.3%

Page 19: TOP INSIGHTS SHAPING THE AUTOMOTIVE INDUSTRY · top insights shaping the automotive industry isabelle helms, vp, research & market intelligence jonathan smoke, chief economist

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 Week2014 2015 2016 2017 2018

THREE-YEAR-OLD VEHICLES SAW ABNORMAL SUMMER APPRECIATION

Source: Manheim

11 WEEKS OF APPRECIATION IN THE SUMMER BROUGHT PRICES TO A NEW EQUILIBRIUM REFLECTING AN AVERAGE 2% INCREASE IN VALUE

Page 20: TOP INSIGHTS SHAPING THE AUTOMOTIVE INDUSTRY · top insights shaping the automotive industry isabelle helms, vp, research & market intelligence jonathan smoke, chief economist

AFFORDABLE CARS OUTPERFORMED THE USED CAR MARKET

Source: Manheim

PERCENT CHANGE IN MANHEIM INDEX YEAR-OVER-YEAR IN 2018

4.7%

5.8%

4.2%

0.9%

3.5%4.0%

6.7%

0%

1%

2%

3%

4%

5%

6%

7%

8%

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

Page 21: TOP INSIGHTS SHAPING THE AUTOMOTIVE INDUSTRY · top insights shaping the automotive industry isabelle helms, vp, research & market intelligence jonathan smoke, chief economist

TARIFFS

Page 22: TOP INSIGHTS SHAPING THE AUTOMOTIVE INDUSTRY · top insights shaping the automotive industry isabelle helms, vp, research & market intelligence jonathan smoke, chief economist

FRANCHISE DEALERS WORRY ABOUT IMPORT TARIFFS

OVERALL Q4 2018 Q3 2018

Positive Impact 10% 11%

No Impact 51% 51%

Negative Impact 39% 38%

FRANCHISE

Positive Impact 9% 9%

No Impact 34% 35%

Negative Impact 57% 56%

INDEPENDENT

Positive Impact 11% 11%

No Impact 56% 57%

Negative Impact 33% 32%

Dealer Sentiment Index Q4 2018Dealer Sentiment Index Q4 2018

Q: Which of the following best describes the impact on your business’ profitability next quarter if tariffs are imposed on imported vehicles and parts?

Source: Cox Automotive Dealer Sentiment Index Q4 2018

Page 23: TOP INSIGHTS SHAPING THE AUTOMOTIVE INDUSTRY · top insights shaping the automotive industry isabelle helms, vp, research & market intelligence jonathan smoke, chief economist

THE US MARKET IS HEAVILY DEPENDENT ON A COMPLEX GLOBAL SUPPLY CHAIN

Source: Cox Automotive estimates based on IHS Markit Registrations

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

35.0%

COMPACT CAR LUXURY CUV VAN PICKUP MIDSIZE CAR SUV

USA MEXICO+CANADA JAPAN SOUTH KOREA EUROPE

COMPOSITION OF NEW VEHICLES SOLD IN THE US BY MAJOR SEGMENTS AND MAJOR REGIONS OF ORIGIN

Page 24: TOP INSIGHTS SHAPING THE AUTOMOTIVE INDUSTRY · top insights shaping the automotive industry isabelle helms, vp, research & market intelligence jonathan smoke, chief economist

EACH BRAND’S EXPOSURE TO TARIFFS DIFFERS

Source: Cox Automotive

100% 99%

89%

81%76%

64% 64% 62%

53% 53% 53%51% 49% 48%

46%

36% 34% 33% 31%29%

27%

18%14%

7%

0%0% 1%

11%

19%24%

36% 36% 38%

47% 47% 47%49% 51% 52%

54%

64% 66% 67% 69%71%

73%

82%86%

93%

100%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Domestic Share Import Share

ALFA ROMEOASTON MARTIN

AUDIBENTLEYFERRARI

FIATGENESISJAGUAR

LAMBORGHINILAND ROVER

LOTUSMASERATI

MAZDAMCLAREN

MINIPORSCHE

ROLLS ROYCESMARTCAR

VOLVO

… B A S E D O N N O N - U S A P R O D U C T I O N

Page 25: TOP INSIGHTS SHAPING THE AUTOMOTIVE INDUSTRY · top insights shaping the automotive industry isabelle helms, vp, research & market intelligence jonathan smoke, chief economist

DIGITAL RETAILING

Page 26: TOP INSIGHTS SHAPING THE AUTOMOTIVE INDUSTRY · top insights shaping the automotive industry isabelle helms, vp, research & market intelligence jonathan smoke, chief economist

“I AM SATISFIED WITH…”

77%Test Drive

73%Interactions with

Sales people

59%Interactions with

F&I Department

46%Length of Process

Source: 2018 Cox Automotive Car Buyer JourneyBase: Total 2018 (n=1,755)

Q102. How satisfied were you with each of the following? Please use a scale from 1 to 10 where 10 means ‘Extremely satisfied” and 1 means “Not at all satisfied”.% Satisfied (8-10)

Page 27: TOP INSIGHTS SHAPING THE AUTOMOTIVE INDUSTRY · top insights shaping the automotive industry isabelle helms, vp, research & market intelligence jonathan smoke, chief economist

Source: Cox Automotive Future of Digital Retail Study (November 2017)

want to do one or more steps of

the purchase process online

%

Page 28: TOP INSIGHTS SHAPING THE AUTOMOTIVE INDUSTRY · top insights shaping the automotive industry isabelle helms, vp, research & market intelligence jonathan smoke, chief economist

Average time saved on the deal

by completing steps online

30 MINUTESSource: 2018 Cox Automotive Car Buyer Journey

CBJ: Heavy DR 2018 (n=85), Non DR 2018 (n=1,438) Q1521. Approximately how much time did you spend with the dealership/seller where you purchased/leased your vehicle?

Page 29: TOP INSIGHTS SHAPING THE AUTOMOTIVE INDUSTRY · top insights shaping the automotive industry isabelle helms, vp, research & market intelligence jonathan smoke, chief economist

WHAT CONSUMERS WANT VS. WHAT THEY DO TODAY

71% 43% 51%

% of buyers who did at

least one step online

away from dealership56% 25% 14%

Note: Search, Service dept tour, and Vehicle orientation not includedBase: Total n=2550

B4a-B12. Which of these would you most prefer to do [per step]?

find info on incentives, trade-in value,

info on add-ons, trade-in offer

apply for financing, notified of

financing qualification

select add-ons, four square,

make a deposit, finalize price

Source: Cox Automotive Future of Digital Retail Study (November 2017) //

2018 Cox Automotive Car Buyer Journey

GET INFORMATION

ABOUT THE DEAL

UNDERSTAND &

SECURE FINANCINGSTRUCTURE

THE DEAL

Page 30: TOP INSIGHTS SHAPING THE AUTOMOTIVE INDUSTRY · top insights shaping the automotive industry isabelle helms, vp, research & market intelligence jonathan smoke, chief economist

more likely to buy from a

dealership that allows them to

complete steps of the vehicle

purchase online

Base: Total n=2550, D1. If a dealership offered the following options for purchasing/leasing a vehicle, how would each impact your decision to purchase/lease from that particular dealership, if at all? Source: Cox Automotive Future of Digital Retail Study (November 2017)

%

Page 31: TOP INSIGHTS SHAPING THE AUTOMOTIVE INDUSTRY · top insights shaping the automotive industry isabelle helms, vp, research & market intelligence jonathan smoke, chief economist

FIXED OPERATIONS

Page 32: TOP INSIGHTS SHAPING THE AUTOMOTIVE INDUSTRY · top insights shaping the automotive industry isabelle helms, vp, research & market intelligence jonathan smoke, chief economist

Source: 2018 Cox Automotive Service Industry Study

70% of consumers who purchased or leased from a

dealer did not return for service in the past year

Page 33: TOP INSIGHTS SHAPING THE AUTOMOTIVE INDUSTRY · top insights shaping the automotive industry isabelle helms, vp, research & market intelligence jonathan smoke, chief economist

1estimate based on revenue calculations from NADA Data 2017: Annual Report and the 2018 Cox Automotive Service Industry Study.2 Based on an estimated 16,800 franchise dealers in the United States

$266Bannual lost revenue

across all franchise dealers1

$15.9Mannual lost revenue

per franchise dealer2

Page 34: TOP INSIGHTS SHAPING THE AUTOMOTIVE INDUSTRY · top insights shaping the automotive industry isabelle helms, vp, research & market intelligence jonathan smoke, chief economist

Source: 2018 Cox Automotive Service Industry Study

1. Total cost is NOT reasonable

2. NOT a convenient location

3. They will overcharge me

4. Unreasonable labor charges

5. Unreasonable parts charges

Cost and Location Are the Top Barriers to Retention

TOP REASONS WHY CONSUMERS

DON’T USE DEALER OF PURCHASE

FOR SERVICE

Page 35: TOP INSIGHTS SHAPING THE AUTOMOTIVE INDUSTRY · top insights shaping the automotive industry isabelle helms, vp, research & market intelligence jonathan smoke, chief economist

• Source: Cox Automotive Consumer Community, 2018

60% of consumers are more willing to

travel further for service

54% of consumers are willing

to pay more for service

IF THE PROVIDER OFFERED ENHANCED SERVICES (on left)…

ENHANCEMENTS:

Request service visit add-ons online

Review/approve estimates electronically

Ride-sharing services provided

Valet service

Guaranteed loaner vehicle

Minimal-click scheduling via mobile device

Video or pictures of recommended service

Online bill pay

In-lane bill pay via mobile device

Page 36: TOP INSIGHTS SHAPING THE AUTOMOTIVE INDUSTRY · top insights shaping the automotive industry isabelle helms, vp, research & market intelligence jonathan smoke, chief economist

Ultimately, Consumers Want Ease!

• Source: KBB Ownership Study

MUST HAVES

DIFFERENTIATING FEATURES

UNDERLYINGMOTIVATIONS

Peace of mind

Ultra-convenientStress-free

Predictive

Flexibility PersonalizedTransparency

Saves money Saves effortSaves time

Page 37: TOP INSIGHTS SHAPING THE AUTOMOTIVE INDUSTRY · top insights shaping the automotive industry isabelle helms, vp, research & market intelligence jonathan smoke, chief economist

MOBILITY

Page 38: TOP INSIGHTS SHAPING THE AUTOMOTIVE INDUSTRY · top insights shaping the automotive industry isabelle helms, vp, research & market intelligence jonathan smoke, chief economist

“Having Transportation is Necessary, but Owning a

Vehicle is Not”% Agree

35% 39%↑2015 2018

Source: 2018 Cox Automotive Evolution of Mobility Study

Page 39: TOP INSIGHTS SHAPING THE AUTOMOTIVE INDUSTRY · top insights shaping the automotive industry isabelle helms, vp, research & market intelligence jonathan smoke, chief economist

Source: 2018 Cox Automotive Evolution of Mobility Study

…in 5 years …in 10 years

28% 35%

“Consumers’ Primary Mode of TransportationWill Not Be a Personally-Owned Vehicle”

(among dealers)

Page 40: TOP INSIGHTS SHAPING THE AUTOMOTIVE INDUSTRY · top insights shaping the automotive industry isabelle helms, vp, research & market intelligence jonathan smoke, chief economist

Source: 2018 Cox Automotive Evolution of Mobility Study

93%72%

Share of Miles Traveled byPersonally-Owned Vehicle

Future Scenario:Wide Accessibility

of Alternatives*

Today:Limited Accessibility

of Alternatives*

-23%

*transportation alternatives: public transportation, ride-hailing, car-sharing, & vehicle subscription

Page 41: TOP INSIGHTS SHAPING THE AUTOMOTIVE INDUSTRY · top insights shaping the automotive industry isabelle helms, vp, research & market intelligence jonathan smoke, chief economist

Car Subscription*: 0.2%

Ride-hailing: 2.1%

Car sharing: 0.5%

Car subscription*: 9.5%

Ride-hailing: 1.3%

Car sharing: 1.1%

+4,650%

-38%

+120%

Source: 2018 Cox Automotive Evolution of Mobility Study

Share of Miles Traveled by Alternative Ownership Models

Future Scenario:Wide Accessibility

of Alternatives

Today:Limited Accessibility

of AlternativesChange:

*Defined as Multi-vehicle Luxury Subscription

Transportation alternatives: public transportation, ride-hailing, car-sharing, & vehicle subscription

Page 42: TOP INSIGHTS SHAPING THE AUTOMOTIVE INDUSTRY · top insights shaping the automotive industry isabelle helms, vp, research & market intelligence jonathan smoke, chief economist

Source: 2018 Cox Automotive Evolution of Mobility Study

Dealer Motivators for Offering Car Subscription / Car Sharing Solutions (in descending order)

To create NEW revenue streams

To appeal to a NEW consumer base

To appeal to younger consumers

To stay relevant

To prepare for the future

12

34

5

75%of dealers believe there are

benefits to offering car subscription / car-sharing services

Page 43: TOP INSIGHTS SHAPING THE AUTOMOTIVE INDUSTRY · top insights shaping the automotive industry isabelle helms, vp, research & market intelligence jonathan smoke, chief economist

Source: 2018 Cox Automotive Evolution of Mobility Study

Dealer Barriers For Offering Car Subscription / Car-Sharing (in descending order)

Not enough knowledge about how to set it up

Concern that it would cost more to incorporate than it would be worth

It would require too many resources to change the business model

Need for outside support to get it off the ground

It’s too different from the current dealership model

12

34

5

83%of dealers believe there are

challenges to ramping up a car subscription / car-sharing service

Page 44: TOP INSIGHTS SHAPING THE AUTOMOTIVE INDUSTRY · top insights shaping the automotive industry isabelle helms, vp, research & market intelligence jonathan smoke, chief economist

44Source: 2018 Cox Automotive Evolution of Mobility Study

Ideal Partner Among Franchise Dealers Who Plan

to Adopt a Fleet-Based Model

Third party/specialty company

Technology-only company

OEM/Franchise & third party/specialty company

OEM/Franchise

10%

4%

46%

33%

None, I’d prefer to do it myself 6%