Blue Book MARKET R EPORT

Blue Book

MARKET REPORT

Andrew Nicolai

Director, Public Relations 949.293.5241 | andrew.nicolai@

Brenna Buehler

Senior Manager, Public Relations 909.225.4643 | brenna.buehler@

FIRST QUARTER 2018

Nichole Mrasek

Senior Manager, Public Relations 679.429.7627 | nichole.mrasek@

Wholesale Market Showed Strength in Q1 2018 with New Tax Bill Driving Up Demand

? The used-car market remained strong in the first quarter of 2018, falling only 0.6 percent compared to 2017, when Kelley Blue Book? Auction Values fell 2 percent, or $332 per unit. The recent change in the tax bill provided many consumers with a considerable amount of disposable income for purchasing vehicles and influenced high demand for buyers at auction.

? Retention values for 1- to 3-year-old vehicles climbed 0.1 percent in Q1, ending the quarter with a 0.2 percent year-over-year gain. Wholesale retention values are looking to stay strong up until the start of summer, and then they generally drop quickly from seasonal factors.

? Market value disparity between cars and SUVs/crossovers were evident in Q1 2018, as cars experienced an 8.8 percent decrease year-over-year in retention values, while SUVs/crossovers saw a 5.7 percent increase year-over-year. Relatively low retail fuel prices and a stable economy has favored SUVs/crossovers in recent years and this trend is expected to continue. Used-car values in the second quarter of 2018 are expected to follow in a similar trend to 2017, but the drop may be delayed due to the current strength in demand.

? Hybrid and electric vehicles distinctively saw the biggest increase in wholesale values in Q1 2018, due to their increasing popularity and demand amidst increasing gas prices, ending the quarter up 14.4 percent for electric vehicles and 7.9 percent for hybrid vehicles.

? MINI and FIAT experienced the highest increase in year-over-year retention values among non-luxury brands in Q1 2018, with MINI at an impressive 13 percent and FIAT at 9 percent, driven by unusually high demand compared to 2017. On the luxury side, BMW and Cadillac experienced a moderate 5 percent increase in year-over-year retention values among luxury brands, followed closely by Jaguar, up 4 percent. These luxury brands have a competitive mix of cars and SUVs in their lineups, which helps drive these gains.

? The U.S. Energy Information Administration forecasted regular gasoline retail prices are expected to be an average of $2.71 per gallon during the summer driving season, up compared to last year's average of $2.41 per gallon.

Auction Value

$22,000 $21,000 $20,000 $19,000 $18,000 $17,000 $16,000 $15,000

Jan

Feb

Mar

Auction Values, 2018 YTD

CY 2016 CY 2017 CY 2018

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec

Source: Kelley Blue Book Automotive Insights, 1- to 3-year-old vehicles

Retained Value (Auction Value/MSRP)

Retained Value, 2018 YTD

62%

CY 2016

CY 2017

60%

CY 2018

58%

56%

54%

52%

50%

Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec

Source: Kelley Blue Book Automotive Insights, 1- to 3-year-old

vehicles

Retained Value, MY 2017

Subcompact Car Full-size Car Mid-size Car

Entry-level Luxury Car Compact Car

Full-size Pickup Truck Minivan

Sports Car Subcompact SUV/Crossover

Luxury Car Compact SUV/Crossover Mid-size SUV/Crossover

Average Van

Full-size SUV/Crossover Hybrid/Alternative Energy Car

Electric Vehicle Luxury Compact SUV/Crossover

High-end Luxury Car Luxury Full-size SUV/Crossover

High Performance Car Luxury Mid-size SUV/Crossover

Mid-size Pickup Truck Luxury Sports Car

Luxury High Performance Car Sporty Compact Car

58% 58% 59%

62% 62% 63%

64% 67% 67% 67% 67% 68% 68% 69% 69% 69% 69% 70% 71% 72% 73% 75% 76% 77% 78% 80%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% Source: Kelley Blue Book Automotive Insights, Model Year 2016 Vehicles

2 BLUE BOOK MARKET REPORT FIRST QUARTER 2018

Year-over-Year Point Change, Retained Value

Luxury High Performance Car -12%

Mid-size Pickup Truck

-7%

Sporty Compact Car

-5%

Luxury Sports Car

-5%

High Performance Car

-5%

Luxury Mid-size SUV/Crossover

0%

Luxury Full-size SUV/Crossover

0%

Full-size SUV/Crossover

-1%

Van

2%

Mid-size SUV/Crossover

-1%

Luxury Compact SUV/Crossover

-1%

Average

0%

Sports Car

-1%

Full-size Pickup Truck

-3%

High-end Luxury Car

-1%

Compact SUV/Crossover

2%

Hybrid/Alternative Energy Car

7%

Subcompact SUV/Crossover

0%

Minivan

1%

Entry-level Luxury Car

-3%

Compact Car

1%

Full-size Car

1%

Mid-size Car

0%

Luxury Car

6%

Subcompact Car

4%

Electric Vehicle

20%

-16%

-6%

4%

14%

24%

Source: Kelley Blue Book Automotive Insights, Model Year 2016 vs 2015

3 BLUE BOOK MARKET REPORT FIRST QUARTER 2018

Electric Vehicle Hybrid/Alternative Energy Car

Compact Car Sports Car

Subcompact SUV/Crossover Van

Subcompact Car Compact SUV/Crossover

Mid-size Car Sporty Compact Car Full-size Pickup Truck

Full-size Car High Performance Car

Minivan Average Mid-size Pickup Truck High-end Luxury Car Luxury Car Luxury Sports Car Mid-size SUV/Crossover Luxury Compact SUV/Crossover Luxury Mid-size SUV/Crossover Entry-level Luxury Car Full-size SUV/Crossover Luxury Full-size SUV/Crossover Luxury High Performance Car

-10%

Q1 to Date Change (%) by Segment

7.9% 4.5% 3.7% 1.8% 1.1% 0.8% 0.6% 0.3% 0.1% -0.1% -0.1% -0.5% -1.2% -1.5% -1.7% -1.8% -2.2% -2.5% -2.7% -2.9% -3.2% -3.7% -3.9% -4.1% -6.4%

14.4%

-5%

0%

5%

10%

15%

20%

Source: Kelley Blue Book Automotive Insights, 1 to 3 year old

vehicles

MINI Scion Mitsubishi Honda Nissan Dodge Chevrolet Toyota Hyundai Ford

Kia Mazda Subaru

Ram BMW Mercedes-Benz Volkswagen Jeep Average GMC Porsche smart Acura Cadillac Land Rover Audi Genesis Buick Chrysler Lexus Lincoln INFINITI Volvo Jaguar

FIAT Alfa Romeo

-22.0%

-17.0%

Q1 to Date Change (%) by Manufacturer

-10.5% -12.0%

-0.3% -0.6% -0.9% -1.0% -1.4% -1.5% -1.7% -1.9% -2.3% -2.4% -2.5% -2.5% -2.6% -3.2% -3.7% -3.8% -3.9% -4.0% -4.4% -4.5% -4.6% -4.9% -5.0% -5.3% -6.3%

1.3% 1.2% 0.5% 0.5% 0.5% 0.4% 0.2% 0.2%

5.9% 5.8%

-7.0%

-2.0%

3.0%

8.0%

13.0%

Source: Kelley Blue Book Automotive Insights, 1 to 3 year old vehicles

4 BLUE BOOK MARKET REPORT FIRST QUARTER 2018

MINI Subaru Honda Mazda Toyota

Jeep GMC Average Ford Chevrolet Dodge

Kia Nissan Hyundai Chrysler

Ram Volkswagen

Mitsubishi FIAT

0.0%

Retained Value, MY 2017

Non-Luxury Brands

77% 75% 73% 69% 68% 68% 64% 63% 63% 63% 61% 61% 61% 59% 58% 57% 57% 57% 53%

10.0%

20.0%

30.0%

40.0% 50.0% 60.0% 70.0% 80.0% 90.0% Source: Kelley Blue Book Automotive Insights, Model Year 2016

5 BLUE BOOK MARKET REPORT FIRST QUARTER 2018

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