U.S. New Vehicle Industry Overview - 2017 Trends to Watch
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U.S. New Vehicle Industry Overview - 2017 Trends to Watch Confidential. © 2017 IHS MarkitTM. All Rights Reserved. 2 Annual New Vehicle Registrations – It’s All Relative Confidential. © 2017 IHS MarkitTM. All Rights Reserved. 3 Industry plateauing: U.S. sales forecasted at 16.8 to 17.1 million U.S. Light-Vehicle Sales 17.6 17.0 17.1 16.9 16.8 17.3 million 17.110.4 17.3 17.2 17.1 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Source: July 2017 IHS Markit Forecast Confidential. © 2017 IHS MarkitTM. All Rights Reserved. 4 Ramifications of Plateauing Increased Greater Higher Higher fleet pressure on emphasis on incentive mix sales and F&I conquesting spend depts. Confidential. © 2017 IHS MarkitTM. All Rights Reserved. 5 Light trucks dominate: they will account for 66% of new sales by 2020 Car-Light Truck Vehicle Sales Split by Year Car Light Truck 17.3 million 66% 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Source: July 2017 IHS Markit Forecast Confidential. © 2017 IHS MarkitTM. All Rights Reserved. 6 New players and growth in high-end shoppers will drive the luxury segment to double by 2020 Luxury-Non-Luxury Vehicle Sales Split by Year (in millions) 2.1 2.1 2.1 2.3 2.3 1.9 1.9 1.9 2.5 1.8 1.6 1.5 1.4 1.4 1.2 Total Non-Luxury Total Luxury 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Confidential. © 2017 IHS MarkitTM. All Rights Reserved. Source: July 2017 IHS Markit Forecast 7 SUVs/CUVs—Growth Continues Confidential. © 2017 IHS MarkitTM. All Rights Reserved. 8 SUV/CUV share takes the crown at 41.7% U.S. New Vehicle Registrations Market Share by Body Style 45% 40% 41.7% 35% 30% 28.0% 25% 20% Body Style U.S. Market Share 15% 15.5% 10% 5.1% 5% 4.4% 2.3% 0% 2012 2013 2014 2015 2016 2017* Sport Utility Sedan Pickups Van Hatchback Coupe IHS Markit Registration Type: Total * July 2017 CYTD Confidential. © 2017 IHS MarkitTM. All Rights Reserved. 9 More than half of all luxury sales are SUV/CUVs SUV/CUV Market Share – Luxury and Mainstream 60% 55% 54.1% 50% 45% 41.7% 40% 40.1% 35% 30% SUV/CUV SUV/CUV U.S. Market Share 25% 20% 2012 2013 2014 2015 2016 2017* Industry Luxury Mainstream * July 2017 CYTD IHS Markit Registration Type: Total Confidential. © 2017 IHS MarkitTM. All Rights Reserved. 10 SUV/CUV loyalty dominates, with almost two thirds of households acquiring another one Body Type Loyalty 70% 65% 2012 2013 2014 60% 2015 2016 2017* 52% 49% 50% 50% 40% 33% 30% 26% 20% 10% 0% Total Sport Utility Industry Sedan Pickups Van Hatchback Note: “Total Sport Utility” includes SUV, CUV and ”Truck Wagon” *June 2017 CYTD Confidential. © 2017 IHS MarkitTM. All Rights Reserved. 11 SUV/CUV Dominance* § #1 body type in new registrations § #1 body type for body type loyalty § #1 and #2 and #3 models in industry (Rogue, CR-V and RAV4) after three full size pickups § #1 segment in industry (non-luxury compact CUV) § #1 segment in mainstream (same) § #1 and #2 segments in luxury (luxury midsize and compact CUV) *Based on IHS Markit new vehicle registration data Confidential. © 2017 IHS MarkitTM. All Rights Reserved. 12 SUV/CUV Dominance* (Continued) § #1, 2 and 3 model May 2017 CYTD for: BMW, Buick, Jeep, Land Rover and Subaru § #1 and 2 May CYTD for: Acura, Cadillac, Lexus, Mitsubishi, Porsche and Volvo § #1 May CYTD for Audi, Honda, Jaguar, Lincoln, Mazda, Nissan and Toyota *Based on IHS Markit new vehicle registration data Confidential. © 2017 IHS MarkitTM. All Rights Reserved. 13 Pickup Competition Confidential. © 2017 IHS MarkitTM. All Rights Reserved. 14 Fullsize pickup share of industry has climbed more than two percentage points from its low point in 2009 13.3% 13.1% 14% 12.6% 12.3% 11.9% 12.1% 12.2% 11.5% 11.6% 11.2% 12% 10.7% 10% 8% 6% Share of U.S. Industry 4% 2% 0% 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 July 2017 CYTD NON LUXURY FULL SIZE HALF TON PICKUP NON LUXURY FULL SIZE 3 QTR TO 1 TON PICKUP Confidential. © 2017 IHS MarkitTM. All Rights Reserved. 15 Fullsize Pickup is one of the most profitable categories in the industry, rivaled only by fullsize SUVs 2016 CY Total New U.S. Estimated Net Profit Estimated 2016 Net Model* Registrations Per Unit Profit from PU Model F SERIES 774,963 $8,000 $6,199,704,000 SILVERADO 581,050 $8,000 $4,648,400,000 RAM 472,646 $8,000 $3,781,168,000 *Models include all series; models are light duty only Confidential. © 2017 IHS MarkitTM. All Rights Reserved. 16 Although Silverado has been #2 every year for the past ten years, through seven months in 2017 it leads Ram by less than 28,000 Units 900,000 800,000 700,000 600,000 500,000 400,000 300,000 200,000 New Vehicle Registrations 100,000 0 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 July 2017 CYTD F SERIES 639,549 480,059 389,981 500,391 545,191 600,081 709,711 700,095 727,846 774,963 485,539 RAM 356,271 245,260 175,276 189,741 234,683 279,827 341,630 422,922 432,986 472,646 288,534 SILVERADO 614,938 469,655 315,325 366,857 411,730 415,399 476,081 523,809 596,749 581,050 316,197 Confidential. © 2017 IHS MarkitTM. All Rights Reserved. 17 And Ram has outsold Silverado in three of the first seven months of 2017 90,000 80,000 70,000 60,000 50,000 40,000 30,000 20,000 Total New Registrations 10,000 0 May- May- Jan-2016 Feb-2016 Mar-2016 Apr-2016 Jun-2016 Jul-2016 Aug-2016 Sep-2016 Oct-2016 Nov-2016 Dec-2016 Jan-2017 Feb-2017 Mar-2017 Apr-2017 Jun-2017 Jul-2017 2016 2017 F SERIES 54,339 60,691 65,683 63,973 70,273 66,072 60,196 66,790 66,193 62,280 66,080 72,393 65,506 63,916 74,089 66,218 77,734 69,870 68,022 RAM 32,812 38,685 41,170 36,712 41,368 38,816 36,966 41,939 47,757 42,976 35,387 38,058 39,321 37,977 43,134 39,880 47,480 40,838 39,860 SILVERADO 44,387 45,445 45,644 47,241 48,690 47,855 54,555 53,644 48,638 50,290 45,133 49,528 38,417 52,197 43,080 40,800 45,240 48,295 48,113 Registration Type: Total Confidential. © 2017 IHS MarkitTM. All Rights Reserved. Note: Data are for complete model, including all series (for example, Ford includes F includes Ford example, (for series all including model, complete for are Data Note: spends less per unit than either competitor either than unit per less spends TheSilverado andRam are anincentives in Fordconsistentlybattle,while Confidential. © 2017 IHS IHS 2017 © Confidential. Incentive Spend Per Unit 1000 2000 3000 4000 5000 6000 7000 8000 0 Markit Jan-15 TM . All Rights Reserved. Feb-15 Mar-15 Apr-15 Incentive spend metric includes consumer rebates, discount financing, lease rate subvention, residual exposure, dealer allowa May-15 Jun-15 Jul-15 Aug-15 Sep-15 Oct-15 Nov-15 - 150, F 150, Dec-15 - 250 and F and 250 Jan-16 - Feb-16 350) Mar-16 Apr-16 May-16 Jun-16 Jul-16 Aug-16 Sep-16 Oct-16 nce RAM s, volume bonus payments and contests. Nov-16 Dec-16 Jan-17 Silverado Feb-17 Mar-17 Apr-17 Data source: source: Data May-17 F - Series Jun-17 Autodata Jul-17 18 19 Four years ago Ram consistently ranked fourth on brand loyalty, but in the past six quarters it has been near to or equal to the GMC Sierra 80 70 60 50 40 30 Brand Loyalty % 20 F150 Silverado 1500 RAM 1500 Sierra 1500 10 0 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 2012 2013 2014 2015 2016 2017 Confidential. © 2017 IHS MarkitTM. All Rights Reserved. 20 Ram Pickup has had a positive C/D ratio with each of its three primary competitors every quarter since the start of 2015 7 6 5 4 3 2 1 Conquest/Defection Ratio 0 1 2 3 4 1 2 3 4 1 2 2015 2016 2017 Ram 1500 vs. Silverado 1500 4.33 2.57 2.15 1.91 1.63 1.54 2.17 2.56 2.51 2.66 Ram 1500 vs. Sierra 1500 5.72 2.49 2.44 1.9 1.97 1.85 2.15 2.45 2.02 2.45 Ram 1500 vs. F1500 4.76 4.53 2.74 2.1 2.26 1.7 2.26 1.78 1.83 1.69 Confidential. © 2017 IHS MarkitTM. All Rights Reserved. 21 Silverado 1500 and Sierra 1500 households are three times as likely to defect to a midsize pickup as Ram 1500 or F-150 households 8.0% 4.0% 7.0% 3.5% 6.0% 3.0% 5.0% 2.5% 4.0% 2.0% 1.5% 3.0% 1.0% 2.0% 0.5% 1.0% Percent of Defections to Midsize Pickup Segment 0.0% 0.0% 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 2012 2013 2014 2015 2016 2017 2012 2013 2014 2015 2016 2017 Sierra 1500 2 dr Silverado 1500 2 dr Silverado 1500 Sierra 1500 Ram 1500 Ford F-150 Silverado 1500 4 dr Sierra 1500 4 dr Confidential.