8 KEY MARKET TRENDSFOR 2018

1

Source: United States Bureau of Economic Analysis, Cox Automotive Forecast

Economic Expansion Will Continue With Accelerating Momentum

2

-4.0

-3.0

-2.0

-1.0

0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

8.0

9.0

10.0

194

8

194

9

195

0

195

1

195

2

195

3

195

4

195

5

195

6

195

7

195

8

195

9

196

0

196

1

196

2

196

3

196

4

196

5

196

6

196

7

196

8

196

9

197

0

197

1

197

2

197

3

197

4

197

5

197

6

197

7

197

8

197

9

198

0

198

1

198

2

198

3

198

4

198

5

198

6

198

7

198

8

198

9

199

0

199

1

199

2

199

3

199

4

199

5

199

6

199

7

199

8

199

9

200

0

200

1

200

2

200

3

200

4

200

5

200

6

200

7

200

8

200

9

201

0

201

1

201

2

201

3

201

4

201

5

201

6

201

7

201

8F

Annual %

Change

US ECONOMIC GROWTH SINCE WORLD WAR II

Recession Real GDP Growth (Annual)

2

#1: E

CO

NO

MIC

MO

ME

NT

UM

Source: BEA New Vehicle Sales, Bobit Fleet Sales, and IHS Markit Registrations (history); Cox Automotive forecast

Auto Market Growth Is Plateauing With Used Still Gaining

33

#2: T

OTA

L V

EH

ICL

E S

ALE

S

VEHICLE SALES BY YEAR AND TYPE, ACTUAL AND FORECAST

11.8 12.9 13.6 14.4 14.3 14.2 13.9 13.6

2.72.7 2.8 3.0 3.1 3.0 2.9 2.8

37.6 35.836.7

38.0 38.6 39.4 39.5 39.5

0.0

10.0

20.0

30.0

40.0

50.0

60.0

2012 2013 2014 2015 2016 2017 2018F 2019F

Mil

lio

ns

New - Retail New - Fleet Used

Source: Autodata Days’ Supply, United States Bureau of Economic Analysis New Lt. Vehicle SAAR

The New Vehicle Market Now In Relatively Healthier Position

44

#3: N

EW

VE

HIC

LE

MA

RK

ET

61

54 53

59 59 60 60

66 73 6810.0

11.4 11.6

14.1

15.7

17.0 17.3 17.0 16.617.4

0.0

2.0

4.0

6.0

8.0

10.0

12.0

14.0

16.0

18.0

20.0

0

20

40

60

80

100

120

140

Jan

-09

Mar

-09

May

-09

Jul-

09

Sep

-09

No

v-0

9

Jan

-10

Mar

-10

May

-10

Jul-

10

Sep

-10

No

v-1

0

Jan

-11

Mar

-11

May

-11

Jul-

11

Sep

-11

No

v-1

1

Jan

-12

Mar

-12

May

-12

Jul-

12

Sep

-12

No

v-1

2

Jan

-13

Mar

-13

May

-13

Jul-

13

Sep

-13

No

v-1

3

Jan

-14

Mar

-14

May

-14

Jul-

14

Sep

-14

No

v-1

4

Jan

-15

Mar

-15

May

-15

Jul-

15

Sep

-15

No

v-1

5

Jan

-16

Mar

-16

May

-16

Jul-

16

Sep

-16

No

v-1

6

Jan

-17

Mar

-17

May

-17

Jul-

17

Sep

-17

No

v-1

7

Jan

-18

Mar

-18

May

-18

Ligh

t V

ehic

le S

AA

R (

mill

ion

s)

Day

s Su

pp

ly

New Vehicle Days' Supply vs SAAR

Days Supply SAAR

Source: Motor Intelligence/Autodata new sales by segment, IHS Market registrations, Cox Automotive analysis

The CUV Continues Its Rise But Will Face More Nearly-new Competition

55

#4: T

HE

SH

IFT

EV

OLV

ES

OFF-LEASE MATURITIES SEGMENT SHARE

0%

10%

20%

30%

40%

50%

60%

Jan

-09

Jun

-09

No

v-0

9

Ap

r-1

0

Sep

-10

Feb

-11

Jul-

11

Dec

-11

May

-12

Oct

-12

Mar

-13

Au

g-1

3

Jan

-14

Jun

-14

No

v-1

4

Ap

r-1

5

Sep

-15

Feb

-16

Jul-

16

Dec

-16

May

-17

Oct

-17

Mar

-18

SHARE OF NEW LIGHT VEHICLE SALES

CUV Car Van SUV Pickup

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

2016 2017 2018 2019 2020

CAR CUV SUV PICKUP VAN

Source: Federal Reserve, Bankrate.com, Bloomberg

“Best Available” Auto Rates Jumped at the End of April, Moderated Since

66

#5: IN

TE

RE

ST

RA

TE

S

0

1

2

3

4

5

6

7

8

9

%

Interest Rates

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

Credit Access Continues To Tighten, Impacting Composition Of Buyers

77

#6: C

RE

DIT

TIG

HT

EN

ING

34.3%

52.0%

20.4%

16.3%13.9%

10.2%

20.5%

14.2%

10.7% 6.2%

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%

80.0%

90.0%

100.0%

18-35 Total US

Super Prime (>=720) Prime (660-719) Near Prime (620-659)

Subprime (530-619) Deep Subprime (<530) Unscorable

MILLENNIALS VS ALL ADULTS

Source: Federal Reserve Bank Senior Loan Officer Survey, Equifax Vantage Score Distribution of Active Credit Consumers December

2017

-30

-20

-10

0

10

20

30

40

Apr-

11

Aug-1

1

De

c-1

1

Apr-

12

Aug-1

2

De

c-1

2

Apr-

13

Aug-1

3

De

c-1

3

Apr-

14

Aug-1

4

De

c-1

4

Apr-

15

Aug-1

5

De

c-1

5

Apr-

16

Aug-1

6

De

c-1

6

Apr-

17

Aug-1

7

De

c-1

7

Apr-

18

Net Percentage of Domestic Banks Tightening Standards for Auto Loans

Net Percentage of Domestic Banks Reporting Stronger Demand for Auto Loans

Source: Manheim, Kelley Blue Book, Cox Automotive

Strong Spring for Used Vehicle Prices and Abnormal Late June Bump

88

#7: U

SE

D V

EH

ICL

E P

RIC

ES

MANHEIM USED VEHICLE VALUE INDEX (SA) BY MONTH 2016-2018

3-YEAR-OLD MODEL INDEX BY WEEK RETENTION VALUES ON 1 TO 3 YEAR

OLD MODELS

115.0

120.0

125.0

130.0

135.0

140.0

Jan

-16

Ma

r-1

6

Ma

y-1

6

Jul-

16

Se

p-1

6

No

v-1

6

Jan

-17

Ma

r-1

7

Ma

y-1

7

Jul-

17

Se

p-1

7

Nov-1

7

Jan

-18

Ma

r-1

8

Ma

y-1

8

80.0%

85.0%

90.0%

95.0%

100.0%

105.0%

110.0%

1 4 7 10 13 16 19 22 25 28 31 34 37 40 43 46 49 52

2015 2016 2017 201845%

47%

49%

51%

53%

55%

57%

59%

61%

63%

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

CY 2016CY 2017CY 2018

9

What are the top

factors holding your

business back?

F R A N C H I S E D E A L E R R A N K

1 Market Conditions 47%

2 Competition 36%

3 Credit Availability for Consumers 24%

3 OEM Mandates/Restrictions 24%

5 Limited Inventory 23%

5 Expenses 23%

I N D E P E N D E N T D E A L E R R A N K

1 Market Conditions 42%

2 Limited Inventory 41%

3 Credit Availability for Consumers 40%

4 Expenses 26%

5 Competition 25%