trends shaping the automotive remarketing industry melinda zabritski
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Experian Public.
Traveling the open road: Discovering the trends that are shaping the automotive remarketing industry
Melinda Zabritski | Experian Automotive
2 © 2013 Experian Information Solutions, Inc. All rights reserved.
Experian Public.
What’s on the road today
What’s being registered and in demand
How are consumers financing
The return of the leasing market
What’s being leased
What’s coming off lease
Discussion points
3 © 2013 Experian Information Solutions, Inc. All rights reserved.
Experian Public.
Vehicles in
Operation March 31, 2013
247.4M
Used Vehicle
Sales (37.6M)
Scrapped
Vehicles
(12.3M)
Vehicle Changes over 12 months: 26.9M (11%) (scrapped + new sales)
Vehicle Movements: 76.3M (31.1%) (used sales + address changes)
Vehicles in
Operation March 31, 2012
245.1M
What’s on the road today
Source: Experian Automotive
4 © 2013 Experian Information Solutions, Inc. All rights reserved.
Experian Public.
14.87%
11.88%
9.14%
8.28%
5.66%
5.59%
5.29%
5.00%
4.44%
3.89%
3.45%
3.06%
3.01%
2.72%
2.70%
2.14%
1.71%
1.55%
1.38%
1.02%
Pickup - Full Sized
Mid Range Car - Standard
Small Car - Economy
Mid Range Car - Lower
SUV - Lower Mid Range
Van - Mini
Pickup - Small
CUV - Entry Level
Mid Range Car - Premium
Upscale - Near Luxury
SUV - Large
CUV - Mid Range
SUV - Entry Level
Sport Car - Touring
Upscale - Luxury
Van - Full Sized
CUV - Premium
Traditional Car
Small Car - Budget
Sport Car - Premium
Top 20 segments on the road
96.8% of all vehicles
Source: Experian Automotive
5 © 2013 Experian Information Solutions, Inc. All rights reserved.
Experian Public.
7.3 7.6 7.7 7.8 7.7
10.0 10.3 10.6 10.8 10.9
0
2
4
6
8
10
12
Q2 2009 Q2 2010 Q2 2011 Q2 2012 Q2 2013
Rolling 15 MY Avg Age All
Average age of vehicles on the road today
Source: Experian Automotive
6 © 2013 Experian Information Solutions, Inc. All rights reserved.
Experian Public.
0
2
4
6
8
10
12
14
16
20
14
20
12
20
10
20
08
20
06
20
04
20
02
20
00
19
98
19
96
19
94
19
92
19
90
19
88
19
86
19
84
19
82
19
80
19
78
19
76
19
74
19
72
19
70
19
68
Mil
lio
ns
VIO by model year
Source: Experian Automotive
50.9% of all VIO is
MY2008-2000
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Experian Public.
11.53 12.75 14.33 7.82
37.00 37.61 37.95
20.58
0
10
20
30
40
50
60
2010 2011 2012 YTD 2013
Mil
lio
ns
Total vehicle registrations
New Used
Market growth in light truck & passenger cars
Source: Experian Automotive
8 © 2013 Experian Information Solutions, Inc. All rights reserved.
Experian Public.
$702 $712
$667
$636 $647
$682
$751
$560
$580
$600
$620
$640
$660
$680
$700
$720
$740
$760
Q2 2007 Q2 2008 Q2 2009 Q2 2010 Q2 2011 Q2 2012 Q2 2013
Bil
lio
ns
Total outstanding loan balance
Growth in lending balances
Source: Experian Automotive
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Experian Public.
1.88% 1.97%
2.23%
2.59% 2.66% 2.52%
1.71%
0.86%
0.00%
0.50%
1.00%
1.50%
2.00%
2.50%
3.00%
2006 2007 2008 2009 2010 2011 2012 YTD2013
Annual repossession rate
Turnover due to repossessions
Source: Experian Automotive
10 © 2013 Experian Information Solutions, Inc. All rights reserved.
Experian Public.
What new segments are consumers purchasing?
11.8%
11.8%
11.8%
10.5%
10.2%
5.8%
3.8%
3.7%
3.6%
3.4%
3.3%
3.2%
3.1%
2.8%
2.3%
1.7%
1.7%
1.6%
1.4%
1.1%
Pickup - Full Sized
Small Car - Economy
CUV - Entry Level
Mid Range Car - Standard
Mid Range Car - Lower
CUV - Mid Range
Van - Mini
SUV - Lower Mid Range
Alt Power - Hybrid Car
Upscale - Near Luxury
CUV - Premium
Mid Range Car - Premium
Small Car - Budget
SUV - Entry Level
Sport Car - Touring
SUV - Large
Van - Full Sized
Pickup - Small
Upscale - Luxury
SUV - Premium Large
Growth since 2010
Small Car-Budget ↑ 95%
CUV Entry Level ↑ 66%
SUV Lower Mid ↑ 197%
Hybrid ↑ 145%
Source: Experian Automotive
11 © 2013 Experian Information Solutions, Inc. All rights reserved.
Experian Public.
101%
72%
65%
46% 41%
38% 34%
24%
17% 17%
0
50
100
150
200
250
300
350
400
450
500
0%
20%
40%
60%
80%
100%
120%
Alt Power- Hybrid
Car
CUV -EntryLevel
CUV - MidRange
CUV -Premium
Small Car- Budget
Upscale -Ultra
Sport Car- UltraLuxury
SUV -Premium
Large
Sport Car- Premium
Upscale -Near
Luxury
Th
ou
sa
nd
s
Growth 2010 - 2013 Q2 13 registrations
Top demand used vehicle segments
Source: Experian Automotive
12 © 2013 Experian Information Solutions, Inc. All rights reserved.
Experian Public.
Used segments with declining demand
-12%
-10%
-8%
-6%
-4%
-2%
0%Upscale -
LuxurySport Car -
UpperPremium
SUV -Lower Mid
Range
TraditionalCar
Van - Mini Pickup -Small
Van - FullSized
306k 26k
548k 190k
505k
494k 195k
Source: Experian Automotive
13 © 2013 Experian Information Solutions, Inc. All rights reserved.
Experian Public.
0%
1%
2%
3%
4%
5%
6%
7%
8%
9%
Used vehicle sales by model year (H1 2013)
14 © 2013 Experian Information Solutions, Inc. All rights reserved.
Experian Public.
$456 $446
$458 $458 $456 $459
$343 $332
$344 $347 $349 $349
$200
$250
$300
$350
$400
$450
$500
$10
$12
$14
$16
$18
$20
$22
$24
$26
$28
2008 2009 2010 2011 2012 YTD 2013
Th
ou
san
ds
Average new finance amount Average used finance amount
Average new payment Average used payment
Shifts in consumer financing
Source: Experian Automotive
15 © 2013 Experian Information Solutions, Inc. All rights reserved.
Experian Public.
63
62
63 63
64
65
59
57
58
59
60 60
52
54
56
58
60
62
64
66
2008 2009 2010 2011 2012 YTD 2013
New term Used term
Average terms on new and used financing
Source: Experian Automotive
16 © 2013 Experian Information Solutions, Inc. All rights reserved.
Experian Public.
46
69.8 68.1 66.2
0
10
20
30
40
50
60
70
80
2004 2009 2011 2012
Vehicles purchased new
36.7
50.7 46.8
0
10
20
30
40
50
60
70
80
2004 2009 2011
Vehicles purchased used
Average length of ownership
16 Source: Experian Automotive
17 © 2013 Experian Information Solutions, Inc. All rights reserved.
Experian Public.
23.02% 24.14% 24.40%
17.68%
23.79% 23.62% 24.40%
27.64%
0%
5%
10%
15%
20%
25%
30%
Q2 2006 Q2 2007 Q2 2008 Q2 2009 Q2 2010 Q2 2011 Q2 2012 Q2 2013
New lease share of the new finance market
Return of the leasing market
Average new lease payment $414
Average new lease term 35 months
Source: Experian Automotive
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Experian Public.
Which states have highest share of new leasing
Source: Experian Automotive
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Experian Public.
12.5%
11.6%
11.4%
9.5%
8.7%
6.9%
6.4%
4.3%
4.2%
3.8%
3.4%
3.2%
2.7%
2.0%
1.7%
1.5%
1.1%
0.8%
0.7%
0.7%
MID RANGE CAR - STANDARD
CUV - ENTRY LEVEL
MID RANGE CAR - LOWER
UPSCALE - NEAR LUXURY
SMALL CAR - ECONOMY
CUV - MID RANGE
CUV - PREMIUM
SUV - LOWER MID RANGE
UPSCALE - LUXURY
MID RANGE CAR - PREMIUM
PICKUP - FULL SIZED
ALT POWER - HYBRID CAR
VAN - MINI
SUV - PREMIUM LARGE
SMALL CAR - BUDGET
SUV - ENTRY LEVEL
SPORT CAR - TOURING
SPORT CAR - PREMIUM
UPSCALE - PREMIUM
PICKUP - SMALL
Top leased new segments in 2013
Source: Experian Automotive
20 © 2013 Experian Information Solutions, Inc. All rights reserved.
Experian Public.
3.7%
3.1% 3.0%
2.5% 2.3%
2.2% 2.1% 2.0% 2.0% 2.0%
0.0%
0.5%
1.0%
1.5%
2.0%
2.5%
3.0%
3.5%
4.0%
Top leased new models by share of market
Source: Experian Automotive
21 © 2013 Experian Information Solutions, Inc. All rights reserved.
Experian Public.
0
5
10
15
20
25
30
35
40
45
Th
ou
sa
nd
s
ACCORD CIVIC CAMRY ALTIMA CR-V
Top 5 leased vehicles coming due
129k 318K
Source: Experian Automotive
22 © 2013 Experian Information Solutions, Inc. All rights reserved.
Experian Public.
703
654
690 691
745
600
620
640
660
680
700
720
740
760
ACCORD ALTIMA CAMRY CIVIC CR-V
Average credit scores on consumers financing MY2010 vehicles in H1 2013
What do these buyers look like?
23 © 2013 Experian Information Solutions, Inc. All rights reserved.
Experian Public.
$330
$339
$323
$291
$340
$275
$285
$295
$305
$315
$325
$335
$345
$5,000
$7,000
$9,000
$11,000
$13,000
$15,000
$17,000
$19,000
$21,000
ACCORD ALTIMA CAMRY CIVIC CR-V
Amount financed Monthly payment
Financing on MY2010 vehicles in H1 2013
Source: Experian Automotive
24 © 2013 Experian Information Solutions, Inc. All rights reserved.
Experian Public.
In summary
Strong industry with continued growth as sales/registrations increase and vehicles last longer
Healthy finance market with low charge-offs and increased balances
Low sales/registrations of 2009 will continue to plague market with inventory shortages for the next 24+ months
Growth is occurring in the lower level economy & budget class vehicles
As vehicle prices/amount finance increases monthly payment remain flat with increased term and low rates