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Market Overview
Q1 2018
Philip Nothard - Head of External Relations
T H E V E H I C L E L I F E C Y C L E
Who we are
Cox Automotive
AGENDA
• Retail
• Wholesale
• Funding
• Dealers
• Outlook
Cox Automotive Market Overview - Q1 2018
Retail
Q1 finished fourth highest in a decade whilst diesel share continues to decline
45%
36%
44%
35%
43%
32%
45% 44% 43% 43%
40% 40% 39%
38% 38%
51%
59%
52%
61%
53%
63%
51% 52% 53% 52%
55% 55% 55%
57% 57%
4% 6%
4% 4% 4% 5% 4% 4% 4% 5% 5% 5% 5% 5% 6%
0
100,000
200,000
300,000
400,000
500,000
600,000
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Jan 17 Jan 18 Feb 17 Feb 18 Mar 17 Mar 18 Apr 17 May 17 Jun 17 Jul 17 Aug 17Sept 17 Oct 17 Nov 17 Dec 17
RegistrationVolume(k)
FuelShare(%) New Registrations - fuel type
Diesel Petrol AFV Registrations 2017 Registrations 2018
Retail
Average advertised prices increase of 4.3% YoY in Q1 and return to January ‘18 performance
March
‘16
£11,832
March
‘17
£12,476
March
‘18
£13,018
£8,000
£9,000
£10,000
£11,000
£12,000
£13,000
£14,000
£15,000
£16,000
£17,000Averageadvertisedprice
Retail Used Car Price Performance
(as listed on Motors.co.uk)
2016 2017 2018
Retail
Petrol volumes ease -6.3% YoY in Q1 whereas diesel reduces by -3.1%
88216
72172
8100782800
72629
78376
January February March
Diesel
2017 2018
87386
73188
82747
77490
71593
78808
January February March
Petrol
2017 2018
Retail Used Volumes
(as listed on Motors.co.uk)
Retail
Hybrid volumes increase +33.7% in Q1 YoY, in contrast, EV declines by -14.1%, although volumes remain low
1726 1676
19752055
2343
2790
January February March
Hybrid
2017 2018
367
332
411
356
314
283
January February March
EV
2017 2018
Retail Used Volumes
(as listed on Motors.co.uk)
Retail
2017 - average days in stock reduced in Q1 in line with expectations as demand improves into spring
45
58
54
48 49
44
46
48
51
47
49
43
57
55
45
47
40
45 45
47
44 45
37
49
43
38
40
31
36
38
42
37 36
0
10
20
30
40
50
60
70
4x4 Convertible Coupe Estate Large Lower
Medium
Medium MPV Prestige Small Supermini
Retail days in stock Q1 ‘17
(as listed on Motors.co.uk)
January February March
Retail
2018 - days in stock reduced overall in Q1, with the lowest level of improvement in prestige
49
60
50 51
55
48 49
51 52
49 49
44
57
50
47
49
39
42
47
50
42 43
41
52
44 43 44
36
39
43
48
38 39
0
10
20
30
40
50
60
70
4x4 Convertible Coupe Estate Large Lower
Medium
Medium MPV Prestige Small Supermini
Retail days in stock Q1 ‘18
(as listed on Motors.co.uk)
January February March
Retail
YoY the average days in stock increased by two days in Q1 with exception of Coupe reducing by -6%
43 42
55
51
44
46
39
42
44
47
43 4445 45
56
48 47
49
41
43
47
50
43 44
0
10
20
30
40
50
60
Retail days in stock Q1 ‘17 vs. ‘18
(as listed on Motors.co.uk)
2017 2018
Retail
Q1 stock volumes remain stable, albeit with increased days in stock for Diesel and Hybrid vehicles
Vehicle Views
Q1 ‘18– 50% of total
Q1 ‘17– 51% of total
Stock Volume
Q1 ‘18 - 54% of total
Q1 ‘17– 56% of total
Days in stock
Q1 ‘18– 47 days
Q1 ‘17– 45 days
Diesel Petrol Hybrid ElectricHybrid
Stock Volume
Q1 ‘18 – 45% of total
Q1 ‘17– 43% of total
Stock Volume
Q1 ’18 – 1.04% of total
Q1 ‘17– 1.02% of total
Stock Volume
Q1 ‘18– 0.22% of total
Q1 ‘17– 0.28% of total
Vehicle Views
Q1 ‘18– 1.10% of total
Q1 ‘17– 0.99% of total
Vehicle Views
Q1 ‘18– 48% of total
Q1 ‘17– 47% of total
Vehicle Views
Q1 ‘18– 0.36% of total
Q1 ‘17– 0.45% of total
Days in stock
Q1 ‘18– 43 days
Q1 ‘17– 43 days
Days in stock
Q1 ‘18– 45 days
Q1 ‘17– 41 days
Days in stock
Q1 ‘18– 41 days
Q1 ‘17– 52 days
Retail
The data – Summary
Retail• Overall, stock volumes are similar YoY, but it has taken slightly longer to sell vehicles
in Q1 2018 compared to 2017 except for Small and Supermini, which remained the
same
• The adverse weather conditions experienced March ‘18 could be a factor in the YoY
stock variances
• Franchise dealers and supermarkets have been hit hardest, despite the slight dip in
stock compared to the previous year
• Supermarkets have more stock YoY, with franchises and independents’ stock
remaining consistent
• Days in stock is up for all models but overall the market remains stable
• Smaller, lower value, vehicles have taken less time to sell than larger, more prestige
ones YoY and month-on-month throughout Q1 2018
*all plates and mileages
Cox Automotive Market Overview - Q1 2018
Wholesale
Average auction wholesales prices increase 9.4% in March YoY whilst Q1 follows seasonal expectation
March ’16
£5,544
March ’17
£5,911
March ’18
£6,529
£4,000
£4,500
£5,000
£5,500
£6,000
£6,500
£7,000
£7,500
£8,000
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Averagewholesaleprice Auction Wholesale Price
2016 2017 2018
Wholesale
January ‘18 highest diesel % share at 35% and volume in 3-years whilst February and March ‘18 volumes ease
32%
34%
34%
33%
32%
35%
35%
33%
32%
January February March
DieselVolumes
Wholesale Used Volumes – Diesel
2016 2017 2018
*% denotes share of total quarter volume for the fuel type
Wholesale
Petrol % share remains stable throughout Q1 and ahead of ‘17 in both January & February as volumes ease
31%
32%
37%
31% 31%
38%
33%
32%
35%
January February March
PetrolVolumes
Wholesale Used Volumes – Petrol
2016 2017 2018
*% denotes share of total quarter volume for the fuel type
Wholesale
Top 3 remain constant with the Qashqai substituting the BMW 3 Series in 4th best-seller in Q1 2018
Wholesale best sellers
Top 10 Q1 2017 Top 10 Q1 2018
Wholesale
Wholesale
The data – Summary
• The market continues to remain strong, especially on the 3-year-old
product up to 60k miles and ready to retail stock
• Conversion ratios have remained very strong throughout the quarter
• Higher mileage and sub-standard vehicles are increasingly tougher to
find buyers
• Late plate and low mileage product entering the market in higher
volumes and are in good demand currently
• Scrappage schemes continue to starve to starve the wholesale
market of cheaper, higher mileage vehicles
• Positive growth for part exchange volumes, with double-digit growth
in March ‘18 at 17.5%* compared to February ‘18
*all plates and mileages
Cox Automotive Market Overview - Q1 2018
Funding
Average cost per unit hits £7,042 in 2018, ahead of 2017 by 4.2% in Q1 with an older profile of vehicles
March
‘17
£6,816
March
‘18
£7,042
£6,400
£6,500
£6,600
£6,700
£6,800
£6,900
£7,000
£7,100
£7,200
£7,300
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Averagecostofunit Average Cost of Unit (£)
2017 Ave. Cost of Unit 2018 Ave. Cost of Unit
Funding
Average holding days -2.9 in March ‘18 as overall Q1 average increase by 2.8 days was driven by January performance
March
‘17
57.8
March
‘18
54.9
30
35
40
45
50
55
60
65
70
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Averageholdingdays
Average Holding Days
2017 2018
Stock
funding
Funding
The average age of vehicles funded increases YOY whilst both mileage and cost per unit increase
YTD 2017
6.7 years
Ave. Age Funded
61,417
Ave. Mileage
YTD 2018
7.3 years
Ave. Age Funded
61,861
Ave. Mileage
Cox Automotive Market Overview - Q1 2018
Dealers
Overall a challenging quarter, as 69% of dealers surveyed reported a YoY decline in margin retention and stock availability in Q1
19%
70%
14%
24%
27%
14%
60%
12%
69%
40%
59%
69%
21%
18%
17%
36%
14%
17%
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Q1 Physical Footfall activity compared to last year?
Q1 On-line activity compared to last year?
Q1 retained margins compared to last year?
Q1 finance penetration compared to last year?
Q1 retail/consumer demand compared to last year?
Q1 stock availability compared to last year?
Increased/Better Decreased/Worse About the same
Dealers
73% of dealers surveyed reported a decrease in overage used cars, and a quarter indicated an increase in new car consignment stock
25%
28%
12%
6%
67%
59%
68%
73%
8%
13%
20%
21%
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
New Cars - Consignment stock
New Cars - Overage
Used Cars - Days in stock
Used Cars - Overage
Increased Decreased About the same
Dealers
56% of dealers report optimism about the economic conditions as Q1 of 2018 closes in contrast to daily pressures
22%
45%
33%
22%
45%
33%
56%
20%
24%
0%
10%
20%
30%
40%
50%
60%
Improving Declining About the same
%respondents What are your expectations for economic conditions over the
coming months (as a proxy for demand)?
Jan-18 Feb-18 Mar-18
Dealers
Expectations of pressure on sourcing stock over the coming months increased throughout Q1
23%
43%
34%
18%
45%
37%
16%
50%
34%
0%
10%
20%
30%
40%
50%
60%
Improving Declining About the same
%respondents
What are your expectations for sourcing used vehicles over
the coming months (as a proxy for supply)?
Jan-18 Feb-18 Mar-18
Dealers
Pre-registrations and Scrappage triggering pressures in Q1 for dealers
NO
14%
YES
86%
Target pressures and lead
times causing higher levels of
pre-registrations
NO
40%
YES
60%
Scrappage causing a
shortage of sub 2K trade cars
Cox Automotive Market Overview - Q1 2018
Outlook
Our viewpoint – 2018 the retail market
Strong appetite for vehicle
insight from dealers, to
support both buying and
selling
Used cars sales to
improve with consumers
confused over updated
tax rules for new vehicles
Retail
Dealers urged to adjust
stock volumes to match
consumer demand for
smaller used cars
Outlook
Our viewpoint – 2018 the wholesale market
An increase in the diversity
of stock acquisition through
physical and digital channels
An increasing desire for
enhanced imagery and
'ready for retail’
inventory
Scale operations will drive
demand for refurb and
retail-ready through
efficiency and logistics
costs
Wholesale
Outlook
Our viewpoint – 2018 the funding market
Cash flow and digital
integration remain
priority for dealers in
the year ahead
Ease and flexibility
remains key for
dealers
Dealers are looking for
complementary sources
to ensure they have
sufficient liquidity to buy
the stock they need
Funding
Outlook
Our viewpoint – 2018 the Dealers market
Further dealership
consolidation in line with
the long term trend of
declining franchised
dealer numbers
Challenging new car
market whilst
uncertainty remains
Improved analytical
understanding of an ever
diverse sector, to help find
and price stock better
Dealers
THANK YOU

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Cox Automotive Market Overview - Q1 2018

  • 1. Market Overview Q1 2018 Philip Nothard - Head of External Relations
  • 2. T H E V E H I C L E L I F E C Y C L E Who we are Cox Automotive
  • 3. AGENDA • Retail • Wholesale • Funding • Dealers • Outlook
  • 5. Retail Q1 finished fourth highest in a decade whilst diesel share continues to decline 45% 36% 44% 35% 43% 32% 45% 44% 43% 43% 40% 40% 39% 38% 38% 51% 59% 52% 61% 53% 63% 51% 52% 53% 52% 55% 55% 55% 57% 57% 4% 6% 4% 4% 4% 5% 4% 4% 4% 5% 5% 5% 5% 5% 6% 0 100,000 200,000 300,000 400,000 500,000 600,000 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Jan 17 Jan 18 Feb 17 Feb 18 Mar 17 Mar 18 Apr 17 May 17 Jun 17 Jul 17 Aug 17Sept 17 Oct 17 Nov 17 Dec 17 RegistrationVolume(k) FuelShare(%) New Registrations - fuel type Diesel Petrol AFV Registrations 2017 Registrations 2018
  • 6. Retail Average advertised prices increase of 4.3% YoY in Q1 and return to January ‘18 performance March ‘16 £11,832 March ‘17 £12,476 March ‘18 £13,018 £8,000 £9,000 £10,000 £11,000 £12,000 £13,000 £14,000 £15,000 £16,000 £17,000Averageadvertisedprice Retail Used Car Price Performance (as listed on Motors.co.uk) 2016 2017 2018
  • 7. Retail Petrol volumes ease -6.3% YoY in Q1 whereas diesel reduces by -3.1% 88216 72172 8100782800 72629 78376 January February March Diesel 2017 2018 87386 73188 82747 77490 71593 78808 January February March Petrol 2017 2018 Retail Used Volumes (as listed on Motors.co.uk)
  • 8. Retail Hybrid volumes increase +33.7% in Q1 YoY, in contrast, EV declines by -14.1%, although volumes remain low 1726 1676 19752055 2343 2790 January February March Hybrid 2017 2018 367 332 411 356 314 283 January February March EV 2017 2018 Retail Used Volumes (as listed on Motors.co.uk)
  • 9. Retail 2017 - average days in stock reduced in Q1 in line with expectations as demand improves into spring 45 58 54 48 49 44 46 48 51 47 49 43 57 55 45 47 40 45 45 47 44 45 37 49 43 38 40 31 36 38 42 37 36 0 10 20 30 40 50 60 70 4x4 Convertible Coupe Estate Large Lower Medium Medium MPV Prestige Small Supermini Retail days in stock Q1 ‘17 (as listed on Motors.co.uk) January February March
  • 10. Retail 2018 - days in stock reduced overall in Q1, with the lowest level of improvement in prestige 49 60 50 51 55 48 49 51 52 49 49 44 57 50 47 49 39 42 47 50 42 43 41 52 44 43 44 36 39 43 48 38 39 0 10 20 30 40 50 60 70 4x4 Convertible Coupe Estate Large Lower Medium Medium MPV Prestige Small Supermini Retail days in stock Q1 ‘18 (as listed on Motors.co.uk) January February March
  • 11. Retail YoY the average days in stock increased by two days in Q1 with exception of Coupe reducing by -6% 43 42 55 51 44 46 39 42 44 47 43 4445 45 56 48 47 49 41 43 47 50 43 44 0 10 20 30 40 50 60 Retail days in stock Q1 ‘17 vs. ‘18 (as listed on Motors.co.uk) 2017 2018
  • 12. Retail Q1 stock volumes remain stable, albeit with increased days in stock for Diesel and Hybrid vehicles Vehicle Views Q1 ‘18– 50% of total Q1 ‘17– 51% of total Stock Volume Q1 ‘18 - 54% of total Q1 ‘17– 56% of total Days in stock Q1 ‘18– 47 days Q1 ‘17– 45 days Diesel Petrol Hybrid ElectricHybrid Stock Volume Q1 ‘18 – 45% of total Q1 ‘17– 43% of total Stock Volume Q1 ’18 – 1.04% of total Q1 ‘17– 1.02% of total Stock Volume Q1 ‘18– 0.22% of total Q1 ‘17– 0.28% of total Vehicle Views Q1 ‘18– 1.10% of total Q1 ‘17– 0.99% of total Vehicle Views Q1 ‘18– 48% of total Q1 ‘17– 47% of total Vehicle Views Q1 ‘18– 0.36% of total Q1 ‘17– 0.45% of total Days in stock Q1 ‘18– 43 days Q1 ‘17– 43 days Days in stock Q1 ‘18– 45 days Q1 ‘17– 41 days Days in stock Q1 ‘18– 41 days Q1 ‘17– 52 days
  • 13. Retail The data – Summary Retail• Overall, stock volumes are similar YoY, but it has taken slightly longer to sell vehicles in Q1 2018 compared to 2017 except for Small and Supermini, which remained the same • The adverse weather conditions experienced March ‘18 could be a factor in the YoY stock variances • Franchise dealers and supermarkets have been hit hardest, despite the slight dip in stock compared to the previous year • Supermarkets have more stock YoY, with franchises and independents’ stock remaining consistent • Days in stock is up for all models but overall the market remains stable • Smaller, lower value, vehicles have taken less time to sell than larger, more prestige ones YoY and month-on-month throughout Q1 2018 *all plates and mileages
  • 15. Wholesale Average auction wholesales prices increase 9.4% in March YoY whilst Q1 follows seasonal expectation March ’16 £5,544 March ’17 £5,911 March ’18 £6,529 £4,000 £4,500 £5,000 £5,500 £6,000 £6,500 £7,000 £7,500 £8,000 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Averagewholesaleprice Auction Wholesale Price 2016 2017 2018
  • 16. Wholesale January ‘18 highest diesel % share at 35% and volume in 3-years whilst February and March ‘18 volumes ease 32% 34% 34% 33% 32% 35% 35% 33% 32% January February March DieselVolumes Wholesale Used Volumes – Diesel 2016 2017 2018 *% denotes share of total quarter volume for the fuel type
  • 17. Wholesale Petrol % share remains stable throughout Q1 and ahead of ‘17 in both January & February as volumes ease 31% 32% 37% 31% 31% 38% 33% 32% 35% January February March PetrolVolumes Wholesale Used Volumes – Petrol 2016 2017 2018 *% denotes share of total quarter volume for the fuel type
  • 18. Wholesale Top 3 remain constant with the Qashqai substituting the BMW 3 Series in 4th best-seller in Q1 2018 Wholesale best sellers Top 10 Q1 2017 Top 10 Q1 2018
  • 19. Wholesale Wholesale The data – Summary • The market continues to remain strong, especially on the 3-year-old product up to 60k miles and ready to retail stock • Conversion ratios have remained very strong throughout the quarter • Higher mileage and sub-standard vehicles are increasingly tougher to find buyers • Late plate and low mileage product entering the market in higher volumes and are in good demand currently • Scrappage schemes continue to starve to starve the wholesale market of cheaper, higher mileage vehicles • Positive growth for part exchange volumes, with double-digit growth in March ‘18 at 17.5%* compared to February ‘18 *all plates and mileages
  • 21. Funding Average cost per unit hits £7,042 in 2018, ahead of 2017 by 4.2% in Q1 with an older profile of vehicles March ‘17 £6,816 March ‘18 £7,042 £6,400 £6,500 £6,600 £6,700 £6,800 £6,900 £7,000 £7,100 £7,200 £7,300 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Averagecostofunit Average Cost of Unit (£) 2017 Ave. Cost of Unit 2018 Ave. Cost of Unit
  • 22. Funding Average holding days -2.9 in March ‘18 as overall Q1 average increase by 2.8 days was driven by January performance March ‘17 57.8 March ‘18 54.9 30 35 40 45 50 55 60 65 70 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Averageholdingdays Average Holding Days 2017 2018
  • 23. Stock funding Funding The average age of vehicles funded increases YOY whilst both mileage and cost per unit increase YTD 2017 6.7 years Ave. Age Funded 61,417 Ave. Mileage YTD 2018 7.3 years Ave. Age Funded 61,861 Ave. Mileage
  • 25. Dealers Overall a challenging quarter, as 69% of dealers surveyed reported a YoY decline in margin retention and stock availability in Q1 19% 70% 14% 24% 27% 14% 60% 12% 69% 40% 59% 69% 21% 18% 17% 36% 14% 17% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Q1 Physical Footfall activity compared to last year? Q1 On-line activity compared to last year? Q1 retained margins compared to last year? Q1 finance penetration compared to last year? Q1 retail/consumer demand compared to last year? Q1 stock availability compared to last year? Increased/Better Decreased/Worse About the same
  • 26. Dealers 73% of dealers surveyed reported a decrease in overage used cars, and a quarter indicated an increase in new car consignment stock 25% 28% 12% 6% 67% 59% 68% 73% 8% 13% 20% 21% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% New Cars - Consignment stock New Cars - Overage Used Cars - Days in stock Used Cars - Overage Increased Decreased About the same
  • 27. Dealers 56% of dealers report optimism about the economic conditions as Q1 of 2018 closes in contrast to daily pressures 22% 45% 33% 22% 45% 33% 56% 20% 24% 0% 10% 20% 30% 40% 50% 60% Improving Declining About the same %respondents What are your expectations for economic conditions over the coming months (as a proxy for demand)? Jan-18 Feb-18 Mar-18
  • 28. Dealers Expectations of pressure on sourcing stock over the coming months increased throughout Q1 23% 43% 34% 18% 45% 37% 16% 50% 34% 0% 10% 20% 30% 40% 50% 60% Improving Declining About the same %respondents What are your expectations for sourcing used vehicles over the coming months (as a proxy for supply)? Jan-18 Feb-18 Mar-18
  • 29. Dealers Pre-registrations and Scrappage triggering pressures in Q1 for dealers NO 14% YES 86% Target pressures and lead times causing higher levels of pre-registrations NO 40% YES 60% Scrappage causing a shortage of sub 2K trade cars
  • 31. Outlook Our viewpoint – 2018 the retail market Strong appetite for vehicle insight from dealers, to support both buying and selling Used cars sales to improve with consumers confused over updated tax rules for new vehicles Retail Dealers urged to adjust stock volumes to match consumer demand for smaller used cars
  • 32. Outlook Our viewpoint – 2018 the wholesale market An increase in the diversity of stock acquisition through physical and digital channels An increasing desire for enhanced imagery and 'ready for retail’ inventory Scale operations will drive demand for refurb and retail-ready through efficiency and logistics costs Wholesale
  • 33. Outlook Our viewpoint – 2018 the funding market Cash flow and digital integration remain priority for dealers in the year ahead Ease and flexibility remains key for dealers Dealers are looking for complementary sources to ensure they have sufficient liquidity to buy the stock they need Funding
  • 34. Outlook Our viewpoint – 2018 the Dealers market Further dealership consolidation in line with the long term trend of declining franchised dealer numbers Challenging new car market whilst uncertainty remains Improved analytical understanding of an ever diverse sector, to help find and price stock better Dealers