JANUARY 2020 www.mediagrouponlineinc.com

The Industry Drags Itself Across the 17-Million Mark Again Despite all the red numbers in the table on page 4, especially among the largest light-vehicle brands and manufacturers, the US auto industry was able to achieve a fifth consecutive year of total sales exceeding 17 million units, or 17.11 million, exactly.

Being the end of a quarter, , Ford, FCA and Tesla published their sales numbers, and the traditional Big Three ended the year with fewer units sold than for 2018.

Among the “Big Three” Japanese automakers, only Hyundai- had a positive December and a respectable 2019 while Toyota’s 2018 unit sales decreased 1.8% and continues to reel from many internal issues.

It’s likely the smaller brands and manufacturers, collectively, overcame the deficits of the biggest automakers just to push the industry across the 17-million unit line.

Among the outstanding brand performances, Lincoln, at +12.7% for December, certainly helped Ford’s total numbers to be With five consecutive years of 17 million+ sales, 2020 is likely better. Volvo was the big winner, increasing December sales to be a very interesting year as manufacturers focus on both by 40% over December 2018. Most dealers of Kia (+8.0%), keeping the traditional internal combustion vehicles rolling off Mitsubishi (+10.3%), Audi (+13.6%) and Porsche (+15.8%) had to the assembly lines and advancing the pending age of electric be happy with their monthly performances. vehicles.

A New Year – New Success Strategies Comcast Cable’s 11-member Automotive Advisory Council, with many more vendors than just traditional media and ad which consists of digital, data and marketing analytics experts agencies. These may include digital media agencies, data and highly experienced advertising professionals, offered three analysts and technology vendors providing new data-gathering trends for 2020 that forward-thinking dealerships will want to and consumer-facing systems and tools. consider and adopt. 3. Creative ad content must convey an exclusive benefit of 1. A 21st century cost-efficiency media-buying model buying from a dealership The era of ratings for media buying will rapidly move closer to One of the oldest concepts in advertising is still relevant during its end during 2020. The new model is a data-centric approach, 2020: Consumers don’t care “what you are,” but “why they using impressions. There will be more opportunities to gather should buy from you,” or the famous, “What’s in it for me?” real-time, almost totally accurate data from set-top boxes and It’s time (past time) for dealerships to stop boasting about the other technologies to find and engage directly with the right size of their inventory, etc. and clearly communicate the most consumers. beneficial reason(s) a consumer should buy from one dealership than another. 2. Progressive dealerships accelerate their digital transformation Dealerships that expect to thrive into the 21st century will need a dedicated professional and/or staff to establish relationships

1 JANUARY 2020 www.mediagrouponlineinc.com

MARKETING FORWARD EXCELLENT REPUTATION SCORES FOR is just 26% of survey participants said they were very confident LARGE DEALER GROUPS, PART 3 during their car-buying journey, and failing to plan their financing in advance was a major reason for 27% of consumers. This is part 3 of Media Group Online’s series about the ’s Reputation Scores as presented in More than half of the survey respondents, or 52%, said they Reputation.com’s 2019 Automotive Reputation Report. Part 3 spend the most time (and frustratingly so) engaging with the focuses on large publicly and privately held dealer groups. Part finance department to finalize the numbers and sign paperwork. 2 in the December 2019 Automotive Update Report shared the top 10 brands according to their Reputation Scores. The specific portion of the financing step that confuses many consumers is prequalifying. According to the survey, 88% Of the 11 dealer groups included in the report, Hendrick understand this is different than the preapproval process; Automotive was first with a Reputation Score of 722 (the however, only half said they would want to prequalify their average per dealership in the group). For comparison, vehicle financing. had the largest Reputation Score, or 672, among the 28 auto brands ranked. The study’s authors concluded many consumers think prequalifying will affect their credit score, which is not the case. Although Hendrick Automotive was first overall, AutoNation Prequalification only indicates an estimated loan amount for had the largest Visibility Score, or 84%, and Engagement Score, which the consumer would qualify, but without providing any or 98%; however, Hendrick’s Sentiment Score of 77% was the verified personal financial data. largest. For a preapproval, a consumer must submit personal financial Look for the Reputation Scores of the top dealerships in part 4 data that is then independently verified in addition to his or her in the February 2020 Automotive Update Report. credit score. A lender then approves the consumer for an exact loan amount.

FINANCING STILL STYMIES CONSUMERS Fifty-seven percent of survey respondents would like dealerships The financing step in the car-buying process is still a major to improve the financing step with simple, open explanations of hurdle for consumers, according to the September 2019 Capital financing options and other steps in the process. One Auto Navigator survey. A surprising, but consistent, finding

TOP DEALER GROUPS BY AVERAGE REPUTATION SCORE PER DEALERSHIP, JULY 2019

AVG. REPUTATION ENGAGEMENT DEALER GROUP VISIBILITY SCORE SENTIMENT SCORE SCORE SCORE

Hendrick Automotive 722 77% 91% 77% AutoNation 704 84% 98% 68% Group1 696 77% 89% 72% Sonic Automotive 693 78% 86% 70% Asbury Automotive Group 673 77% 95% 64% Penske 656 63% 83% 76% Lithia 641 74% 55% 68% Ken Garff Automotive 638 69% 82% 65% Larry H. Miller 636 76% 81% 62% Berkshire Hathaway Automotive 618 67% 67% 69% Greenway Automotive 592 70% 47% 63% Reputation.com, September 2019

2 JANUARY 2020 www.mediagrouponlineinc.com

ROAD SIGNS THE CYBERTRUCK IS SOON TO HAVE MANY RIVALS Elon Musk and his Cybertruck may have been receiving all the media coverage about the future of electric pickup trucks (despite the “unbreakable” windows that broke), but many more are expected to hit the market during 2021 when the Cybertruck will first be available.

Although many of the major, traditional automakers have been skeptical and wary of Musk, he has proven to be a serious player with his Tesla brand and his Cybertruck generated 200,000 reservations during the first three days after the announcement.

No doubt, the other manufacturers planning electric pickups took notice of the consumer interest. After all, on average, a bit more than 3 million pickups with internal combustion engines are sold in the US annually.

Some of these other players in the electric pickup sandbox include major automakers, such as General Motors, as well as a number of startups, Corp., , ROBOTIC CHARGING STATIONS MAY Hercules Electric Vehicles and Atlis Motor Vehicles – and SOLVE MAJOR ELECTRIC VEHICLE maybe the best known startup, , which has investment dollars from Ford and Amazon. CHALLENGE Although transformative transportation technologies, such as Industry eyes are also on Lordstown Motors Corp. since it electric vehicles (EVs) and autonomous vehicles (AVs), may bought the former GM assembly plant in Lordstown, OH and still seem like some future innovations, many companies are expects to hire many of the auto workers who lost their jobs working on various aspects of these technologies to overcome when the plant closed. their common challenges.

Collectively, these companies estimate they will produce as The process of charging an electric vehicle has been one of many as 250,000 EV pickups per year by 2024, although some those challenges. To date, charging would either occur at home industry analysts think this is a highly ambitious goal and 70,000 or at a charging station, conveniently located similar to a gas per year may be a more realistic expectation. pump. Many are concerned about the time it will take to charge an EV, especially on the road, as consumers will expect the process to require no more time than to fill a tank with gasoline.

Volkswagen may have solved this problem, or at least presented the world with a possible solution: an autonomous EV charging robot. It is approximately half the size of a gas pump and comes to an EV instead of requiring the EV owner to drive to a charging station.

Parking garages, large companies and even the parking lots at a shopping mall, amusement park or sports facility could employ a number of these robots to roam among the cars to charge those that request some juice.

3 JANUARY 2020 www.mediagrouponlineinc.com

MONTHLY AUTOMOBILE SALES CHART NOTE: General Motors, Ford, Fiat Automobiles (FCA) and Tesla announced their light-vehicle sales for Q4 2019. Their brands are included in this month’s sales table and reflect actual sales.

DECEMBER % CHANGE FROM % CHANGE FROM 2018 RANK AUTO BRAND 2019 YEAR TO DATE 2019 DECEMBER 2018 YEAR TO DATE #1 Ford 209,386 +0.6% 2,293,984 -3.7% #2 190,798 -4.9% 1,958,925 -3.8% #3 Toyota 172,047 -7.2% 2,085,234 -2.0% #4 Honda 120,433 -12.9% 1,450,785 +0.3% #5 Nissan 93,538 -28.4% 1,227,973 -8.7% #6 74,653 -7.2% 923,291 -5.1% #7 Ram 73,098 +7.2% 703,023 +17.7% #8 Hyundai 64,720 -0.6% 688,771 +3.2% #9 Subaru 62,364 -3.4% 700,117 +2.9% #10 GMC 58,365 -5.4% 564,946 +1.5% #11 Kia 51,229 +8.0% 615,338 +4.4% #12 BMW 35,746 +4.0% 324,826 +4.4% #13 Lexus 35,325 -0.6% 298,114 -0.1% #14 Mercedes-Benz* 35,279 -2.4% 357,729 +1.0% #15 32,203 -1.0% 422,886 -7.9% #16 Volkswagen 27,877 -13.0% 363,322 +2.6% #17 26,491 +2.4% 278,552 -7.3% #18 Audi 25,850 +13.6% 224,111 +0.4% #19 Tesla 18,600 -7.0% 223,200 +34.5% #20 16,133 -3.8% 157,385 -1.0% #21 16,069 -10.9% 206,929 0.0% #22 15,478 -7.6% 156,246 +1.0% #23 Chrysler 13,887 +11.8% 126,971 -23.5% #24 Lincoln 12,994 +12.7% 112,204 +8.3% #25 Volvo 12,360 +40.0% 108,234 +10.1% #26 11,243 -37.8% 117,708 -21.2% #27 Land Rover 10,490 -1.2% 94,736 +2.8% #28 Mitsubishi 9,915 +10.3% 121,046 +2.5% #29 Porsche 4,733 +15.8% 61,568 +7.6% #30 Jaguar 3,311 -4.4% 31,051 +1.9% #31 Mini 2,310 -17.4% 36,092 -17.4%

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DECEMBER % CHANGE FROM % CHANGE FROM 2018 RANK AUTO BRAND 2019 YEAR TO DATE 2019 DECEMBER 2018 YEAR TO DATE #32 Genesis 2,225 +262.4% 21,233 +105.9% #33 Maserati 925 -2.0% 11,100 -0.9% #34 Fiat 467 -52.5% 9,200 -40.7% #35 Lamborghini§ 232 +16.0% 2,784 +74.5% #36 McLaren§ 180 +52.5% 2,286 +67.1% #37 Bentley§ 169 -2.9% 2,028 -2.0% #38 Rolls-Royce§ 110 +1.9% 1,320 +1.9% #39 Other† 328 +2.2% 3,936 +2.2%

General Motors 280,710 -5.5% 2,887,046 -2.3% Corporation 222,380 +1.3% 2,406,188 -3.2% Toyota Motor 207,372 -6.1% 2,383,348 -1.8% Corporation Fiat Chrysler 197,143 -0.2% 2,214,763 -1.4% Automobiles American Honda Motor 136,566 -12.0% 1,608,170 +0.2% Company Hyundai-Kia 118,174 +4.4% 1,325,342 +4.6% Automotive Group Nissan Motor Company/Infiniti / 114,696 -27.3% 1,466,727 -9.0% Mitsubishi Volkswagen Group‡ 58,861 -0.7% 653,813 +2.4% BMW Group 38,166 +2.4% 362,238 +1.8% Mercedes-Benz USA 35,279 -2.7% 358,409 +0.8% Jaguar/Land Rover 13,801 -2.0% 125,787 +2.6% TOTAL 1,543,471 -5.2% 17,108,156 -1.2%

Source: Automotive News, January 2020 Media Village Website: * Includes Mercedes-Benz vans https://www.mediavillage.com/article/effectvs-automotive-advisory-council-highlights-three-major-trends-for-2020/?utm_ † Includes Aston Martin, Ferrari and Lotus estimates source=Effectv%27s+Automotive+Advisory+Council+Highlights+Three+Major+Trends+for+2020&utm_medium=email&utm_campaign=nl-daily ‡ Includes Audi, Bentley, Porsche and Volkswagen brands, Reputation.com Website: but not Lamborghini https://d24wdr9t5wf9v7.cloudfront.net/wp-content/uploads/2019/08/2019_Auto_Reputation_Report_0818.pdf?x86073 § Automotive News estimates Automotive News has stopped listing Smart sales Cision (PR Newswire) Website: © 2020 Media Group Online, Inc. All rights reserved. https://www.prnewswire.com/news-releases/lack-of-confidence-continues-to-weigh-on-car-shoppers-300962901.html?tc=eml_cleartime Automotive News Website: https://www.autonews.com/fi-blog/prequalified-or-preapproved-confusion-online-slows-process-store

https://www.autonews.com/sales/eight-electric-pickup-truck-manufacturers-load-us-market-2021

https://www.autonews.com/sales/us-sales-slip-52-dec-saar-dips-below-17m

CNET Website: https://www.cnet.com/roadshow/news/volkswagen-electric-car-charging-robots-autonomous/

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