The Kia Approved Used Car Programme / Dealer Profitability European Networking Group, January 24th, 2017

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Annual new car sales 1.9 - 2.6m Used car sales 6.2 – 7.7m Annual new car sales 1.9 - 2.7m Used car sales 4.8 – 6.7m % of dealer’s profit is derived from Used Cars & F& I income 36 different brands actively compete to sell new and used cars

in the UK

Nationally, 50 % of dealer’s profit is derived from Used Cars & F& I income

Snapshot of the UK Car Market

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Annual new car sales 1.9 - 2.6m Used car sales 6.2 – 7.7m More than 90% of most brands enquiries come from the net. 50% of Car Buyers don’t contact the Dealer before visiting. 60% of all car searches are conducted between 18.00 and 21.00 % of dealer’s profit is derived from Used Cars & F& I income Less than 10% of consumers know the brand they want to buy before

they start their search. 85 % of consumers take less than 6 weeks to do their research

More than 80% of Dealer’s used car sales are made within 1 hour’s drive of the Dealership.

The importance of the Internet…..

Data, courtesy of Autotrader

The origins of the Kia Approved Used Car Program..... 2008 / 2009.....The RECESSION..... Think the unthinkable.....

Used car programme comparison.

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Manufacturer Manufacturer Manufacturer Manufacturer Manufacturer Manufacturer Manufacturer

Ford Direct Toyota Approved Used

Warranty Offer 12 months/20,000

mile or balance of

manufacturers

warranty, whichever is

longer.

2yrs unlimited

mileage

Back to Original

period / 100,000miles

Keep remainder of the original 3

year 60,000 mile warranty or

extend the warranty to cover 12

months/Unlimited mileage12

months unlimited

12 months See notes below Keep remainder of the

original 5 year warranty. If

the vehicle is older than five

years then a 12 month

warranty is supplied.

Maximum Car Age 4 Years 1 year 18 months 7 years 5 years No mention on web page? No mention on web page?

Maximum Car

Mileage

60,000 miles 20,000 miles 18,000 miles 100,000 miles 60,000 miles 100,000 milesNo mention on web page?

Preparation Standard Multi point Inspection Multi point

Inspection

Multi point Inspection Multi point Inspection Multi point Inspection Multi point inspection Multi point inspection

Exchange Benefit 30 day exchange 30 day/1000 Mile

exchange

60 day exchange 30 day/500 Mile exchange 30 day/1000 Mile

exchange

30 day/1000 Mile

exchange

30 day/1000 Mile exchange

All Makes

Programme

No No No Non Toyota's receive similar

level of cover.

Yes No No

Recovery/Breakdown

Cover

12 months AA

Assistance

2yr Ford Assistance 2 year RAC inc

European Cover

12 months AA 12 months Citroen

Roadside Assistance

Volkswagen Assistance12 Months RAC assistance

Additional Benefits: 7 day free insurance 7 day insurance 7 day insurance HPI & NMR check HPI & NMR check HPI & NMR check HPi & NMR check

HPi Check HPi & NMR check HPi & NMR check

Check on Vauxhall

recall register

Tamper proof

hologram. Free

Transfer of any

remaining

breakdown cover

and warranty if

vehicle sold.

O% Finance for up to

48 months on

Specific models - with

no dealer subsidy.

Hologram bearing the

Kia motif

Automatically become a

member of Club Toyota for 12

months. (entitles the customer

to take advantage of exclusive

offers and promotions.)

Comments Every Network Q

Vauxhall registered to

2nd owner only under

12 months old with

less than 30,000

miles now supplied

with lifetime 100,000

mile warranty

90 day Sale or Return

Programme on

Campaign vehicles.

90 Day Free stocking

on Non campaign

vehicles

Depending on the age of

the vehicle there are two

warranty's supplied. For

cars up to 3 years and

100K it will have an all

component Warranty. All

vehicles over 3 years of

age and under 100,000

miles will have an

Approved Warranty.

If Original new Car warranty

has expired, then a 12

month Approved Warranty

will be supplied.

Warranty CAR Care Plan Car Care Plan In House Mondial TWG/RAC

Used Car Warranty Scheme

Aon are the underwriters. Not

sure if Toyota administer in

house

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2009 New Car Sales, 31,800

2016 New Car Sales, 89,000

A Brand on the move, despite the

fluctuations of the market…..

Rental Company ‘Buy Backs’

Brand ‘Buys-Back’ rental

cars and ‘Refurbishes / reconditions

cars

Brand sells cars to Dealers

/ 3rd parties , via

various sales channels

Brand sell cars on ‘Buy-Back’

Deal to Rental

Company

Congruent

with New Car Strategy

Robust De-fleet process

Engage with Market Makers Cars are ‘Ready to Retail’

Some thoughts and learnings…..

We only sell cars to Kia Dealers – no 3rd parties

The Kia Approved Used Car Program

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2016 - a year of recognition.

Used Car of the Year – The Kia

Sportage

2016, carbuyer, Used Car of the Year, the Kia cee’d

Transparency…..?

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How old do you

want it to be?

How old is this horse?

Residual Value, A segment

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Residual Value, B segment

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Residual Value, C MPV segment

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Residual Value, C SUV segment

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55

57

59

61

63

65

67

69

71

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Jan-16 Feb-16 Mar-16 Apr-16 May-16 Jun-16 Jul-16 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16

SPORTAGE 1.7

CRDi ISG 2 5drManufactuer A

Manufactuer B

Manufactuer C

Manufactuer D

Sportage 1.7 CRDi RV 1 Year 10K 2016

Residual Value, D SUV segment

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Residual Values, all segments

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Annual new car sales 1.9 - 2.6m Used car sales 6.2 – 7.7m The average Kia Dealer sold 54 Kia Approved used cars last

year. The average Dealer made just under £1,000 GP % of dealer’s profit is derived from Used Cars & F& I income The average Kia Dealer turned their used car stock, every 47

days

The ‘average’ Kia Approved Used Car

Dealer…..

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