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KELLEY BLUE BOOK BRAND WATCH: NON-LUXURY SEGMENT TOPLINE REPORT

1st Quarter 2019 WHAT IS BRAND WATCH TM?

Brand Watch, a shopper perception study, reveals trends in vehicle consideration among new consumers and provides insight into factors that influence purchase decisions.

BRAND AND MODEL LEVEL BRAND-LEVEL STUDY PERCEPTION STUDY MODEL-LEVEL STUDY 135,000+ interviews 75,000+ interviews Since 2007 Since 2012

Captures brand and model Tracks 12 factors important Respondents are in-market consideration & familiarity to shoppers across all models for a new vehicle and and 6 segments recruited from KBB.com among new-car shoppers

WHAT CAN BRAND WATCH TM DO? Identify key factors driving vehicle purchase decisions and measure OEM brand equity within and across segments

OBJECTIVES/MEASURES What is important to How brands and models perform on How demographic consumers when shopping factors most important to shoppers for a new vehicle within and across segments groups differ BRAND WATCH: NON -LUXURY CONSIDERATION America’s love for SUVs shows no sign of slowing down. Almost two-thirds of new-car shoppers consider an SUV, despite a rising average transaction price (ATP) of $38K for midsize and $29K for compact SUV. In Q1, SUV sales increased 5% year-over-year (YoY). Still, are not dead. Despite a decline in consideration and sales, roughly 1 in 2 people put a car on their consideration list.

WHAT ARE OVERALL SEGMENT PREFERENCES 64% AMONG NON-LUXURY 45% 24% 6% SHOPPERS? SUVs Cars Pickups WHICH BRANDS LEAD IN NON- WHICH MODELS ARE CONSIDERED WHICH FACTORS ARE MOST LUXURY CONSIDERATION? MOST AMONG NON-LUXURY IMPORTANT TO NON-LUXURY SHOPPERS? CONSUMERS? #1 1 Durability/ #2 CR-V #1 #7 Reputation 2 Reliability #3 Ford RAV4 #4 F-150 3 Interior #2 Safety #5 4 Honda #8 Layout Accord #6 5 #7 Forester Honda #3 Affordability #9 Technology #8 6 Civic #9 Toyota 7 Camry #10 Exterior 8 Silverado #4 Driving #10 #11 Comfort Styling Toyota 9 1500 #12 Highlander 10 Honda #13 #5 Driving Ruggedness Subaru Pilot Performance #11 #14 Outback 11 #15 Toyota 12 Tacoma Prestige/ #16 #6 Fuel Efficiency #12 13 Sophistication #16 CX-5 Ford #18 14 Explorer #19 Toyota 15 Source: KBB Brand Watch Survey, Q4-2018/Q1-2019, Corolla (ties indicate identical values to the tenth of a point) A CLOSER LOOK: OVERALL NON - LUXURY SEGMENT CONSIDERATION The segment was the only segment posting YoY growth in consideration, thanks to new entries, including the and Jeep Gladiator that went on sale in the hot midsize truck segment in Q1 2019. The Detroit 3 and Toyota are planning to refresh their offerings to capitalize on the big demands and profitability of trucks from now into early 2020.

# Honda CR-V was not only the No. 1 most considered 1 CR-V # 64% 62% 64% 1 SUV, it was the most considered vehicle among all the #2 RAV4 segments. CR-V was also the 3rd best-selling SUV with #3 Forester relatively low incentives ($1800). Subaru also spends Top 5 Top 11th

SUVS little on incentives, yet the has been in the #4 Highlander top 5 for the past 11 quarters. Forester and the redesigned Q1 '18 Q3-Q4 '18 Q4'18-Q1'19 12th #5 Pilot Outback were 11th and 12th in sales during Q1 2019.

# 1 Accord #1 It’s been 6 quarters since Accord and Civic held the 47% 47% #2 Civic No. 1 & 2 spot in consideration. Despite being 3rd 45% in consideration, is the best-selling #3 Camry Top 5 Top car in America, with Corolla following closely in 3rd. CARS #4 Corolla Ford showed up with Mustang as the only domestic vehicle in the top 5. Q1 '18 Q3-Q4 '18 Q4'18-Q1'19 #5 Mustang

#1 F-150 Pickup sales in Q1 were up YoY by 5%. Ford $ held a significant sales lead in 2019, more #2 Silverado 1500 22% 24% than $100K+ ahead of Ram and Chevrolet.

19% #3 Tacoma Toyota won the 2019 KBB.com Brand Top 5 Top #4 Ram 1500 Image Award for Best Trucks with strong PICKUPS Q1 '18 Q3-Q4 '18 Q4'18-Q1'19 consumer perception from America’s best- #5 Tundra selling midsize truck Tacoma and Tundra.

# 1 Odyssey With only 6% consideration and only 3% in #2 Sienna #1 actual sales, the is shrinking to a niche segment. Despite being #1 in consideration, #3 Pacifica

7% 6% 6% 5 Top Odyssey was only 21% of sales, while Grand #4 Grand Caravan Caravan was No. 1 in sales, with about 35% Q1 '18 Q3-Q4 '18 Q4'18-Q1'19 21% MINIVANS minivan market share. #5 Sedona

Source: KBB Brand Watch Survey, Q1-2018 to Q4-2018/Q1-2019 A CLOSER LOOK: OVERALL NON - LUXURY BRAND CONSIDERATION

Toyota distanced itself from Honda to hold its 1st place in consideration for 4 quarters in a row. Toyota beat Ford with its 2nd ever KBB.com Brand Image Award (BIA) for Best Overall Truck. Toyota reduced incentives spend. In fact, over the past year, Toyota’s incentives remained relatively low ($2000) and comparable to Honda’s ($1700). In contrast, FCA brands have had some of the highest incentives among all non- luxury brands - ($5700), Ram ($5600) & ($4300).

RANK BRAND CONSIDERATION 1 41% 2 35% Honda maintained 2nd place, though its >20% #2 3 29% consideration dropped 3 percentage points YoY. Ford cemented its commitment to 4 25% electrification, announcing its $11-billion investment in EVs 5 18% and partnership with EV pickup truck maker, 6 14% Rivian, to speed its own development of an EV pickup. 7 12% 8 10% 9-20% held steady in 6th place, though 9 10% Rogue’s sales dipped 20% YoY. Jeep may 10 10% get more consideration with the Gladiator 11 9% pickup truck joining the lineup. Will this be the magic bullet to push Jeep up 12 7% the consideration ladder given that SUVs and trucks are the hot segments right now? 13 6% 14 5% 15 3% Although 14th in consideration, Ram <8% 16 1% was 9th in overall Q1 sales, with a 15% increase YoY. Ram confirmed that it will 16 1% produce a midsize truck to fill a gap in 18 1% its lineup. 19 0.1%

Source: KBB Brand Watch Survey, Q4-2018/Q1-2019 Q: Please select at most 5 vehicles that you are currently shopping A CLOSER LOOK: TOP CONSIDERED NON - LUXURY MODELS OVERALL SUVs are still top of mind for new-vehicle shoppers. In Q1, eight of the top 15 vehicles considered was a utility vehicle. Toyota showcased its diverse lineup and consumer appeal with 5 vehicles (RAV4, Camry, Highlander, Tacoma & Corolla) in the top 15. Consumers alsolove and . The only domestic brands on the board were Ford and Chevrolet for their iconic full-size pickup trucks.

#1 #2 #3 #4 #5

CR-V RAV4 F-150 ACCORD FORESTER Compact SUV Compact SUV Fullsize Truck Midsize Car Compact SUV #6 #7 #8 #9 #10

CIVIC CAMRY SILVERADO 1500 HIGHLANDER PILOT Midsize Car Fullsize Truck Midsize SUV Midsize SUV #11 #12 #13 #14 #15

TOP 15 MODELS OUTBACK TACOMA CX-5 EXPLORER COROLLA Midsize SUV Midsize Truck Compact SUV Midsize SUV Compact Car

Ford Explorer was the only Compact SUVs have dominated Cars are not dead! And domestic SUV in the mix at 14th consumers’ consideration for based on the popularity place. However, it was the 5th 10 quarters in a row. The 4 top and reliability of Honda best-selling SUV, which is best-selling SUVs happens to be and Toyota cars, this probably attributed to the in the same segment (Rogue, segment is here to stay. $5700 in incentives as Equinox, CR-V and RAV4). Camry, Civic, Corolla, and Accord remain the best-selling sedans in Ford sells down the current America. model to make way for the new one. Source: KBB Brand Watch Survey, Q4-2018/Q1-2019 A CLOSER LOOK: FACTORS OF IMPORTANCE DRIVING NON- LUXURY VEHICLE CONSIDERATION Affordability jumped in importance by 6%, and Fuel Efficiency by 9% YoY as consumers look for ways to save money. As gas prices and ATPs have risen, value brands like Honda and Hyundai are top of mind when people shop for a new car. Emotional factors gained in importance for shoppers who value Technology, Exterior Styling, and Prestige/Sophistication.

TOP RANKED RANK FACTOR IMPORTANCE BRAND #2 #3 Honda was the big winner at the New 1 Durability/Reliability 84% Toyota Subaru York Auto Show with three 2019 KBB Brand Image Awards. Honda won Best 2 Safety 71% Honda Toyota Overall, Best Value, and Most Refined Brand. Subaru took home the 3 Affordability 65% Mazda Honda Most Trusted Brand Award, an attribute the brand has worked

TOP 5 4 Driving Comfort 62% Honda Chrysler to instill in consumers’ minds.

5 Driving Performance 54% Subaru Ram

Mazda was KBB’s 2019 BIA 6 Fuel Efficiency 48% Hyundai Mazda winner for the Best Performance #1 Brand. Mazda's reputation as a 7 Reputation 48% Subaru Toyota performance brand is well 8 Interior Layout 39% Mazda Honda deserved because its cars are the most fun-to-drive in their 9 Technology 38% Ram GMC segments.

10 Exterior Styling 33% Ram GMC Ram was No.1 in Interior Layout and 11 Ruggedness 27% Ram Subaru is well positioned in 2nd place for several factors (Technology, Exterior Prestige/ 12 11% GMC Subaru Styling, and Ruggedness). Sophistication

Source: KBB Brand Watch Survey, Q4-2018/Q1-2019 Q: Please review the list below and rate how important are each of the factors to you in deciding on your next new car BRAND WATCH TOPLINE For all sales or client success inquiries, please contact: OEM Sales Analytics Consulting [email protected]

For all other inquiries, please contact: [email protected] [email protected]