Covering Fourth Quarter, 2007 Volume 13, Number 1 Chicago Auto Outlook TM

Sponsored by: Chicago Automobile Trade Association

Market Expected to Struggle in ’08; Strong Recovery Likely to Follow The economic events that have unfolded unemployment, falling housing values, the market a big boost. In conjunction over the past several months have not excessive consumer debt, slowing eco- with the inevitable cyclical recovery in been good news for the area automotive nomic growth, and high gas prices. Not sales, the emergence of mass market market. Questions about where the mar- an encouraging scenario, to be sure. advanced powertrain technologies (i.e., ket has been, and more important, where lithium-ion battery powered and plug in it is headed are primary concerns. Fol- Reasons for some hope during 2008 hybrids) could provide greatly enhanced lowing is a concise summary of key It would be a surprise if the area market motivation for consumers to enter the trends in the area market, with an em- moved higher in ‘08. But despite the new vehicle market. phasis on expected results during 2008. likely decline, we believe there are a few reasons why the market is not headed for It’s almost guaranteed that higher gas 2008 Forecast a collapse. Affordability for new vehicles prices and greater environmental con- Auto Outlook projects that area new retail remains at very respectable levels. Lower sciousness are here to stay. The industry car and light truck registrations will fall interest rates, aggressive pricing, and is on the cusp of a massive product 4.1% from 2007 to 2008. As discussed in personal income gains should help keep launch that addresses these emerging the previous issue of Auto Outlook, the a new vehicle purchase a viable proposi- trends. Just like high definition and flat market has now moved below its trend tion for many area consumers. In addi- panel screens have led to soaring televi- levels as economic events have taken a tion, economic conditions are expected sion sales over the past few years, new predictable toll on new vehicle sales. to improve somewhat during the second technologies will transform the automo- half of the year, while impressive new bile, and ignite sales for years to come. 2007 Wrap Up products should entice many shoppers to Area new retail light vehicle registrations take the new vehicle purchase plunge. Reporting of Indiana Data On Hold last year totaled 299,753 units, a drop of Due to processing delays at the Indiana 3.2%. The decline was in line with our Market poised to take off by 2010 DMV, new vehicle registration data is projection at the beginning of the year. Auto Outlook believes that within two unavailable for the state. All area regis- years, the weakness in sales in 2008 will tration figures cited in this issue include Reasons why the market will struggle be a distant memory. The pieces are in the six Illinois counties only. Data for the The list of negative forces impacting the place for the new vehicle market to take Indiana counties will be added as soon market in 2008 is long. Here are the big- off by 2010. After several years of slug- as it becomes available. gest threats: tight credit markets. rising gish sales, replacement demand will give Chicago Area New Retail Light Vehicle Market Summary Winners in Chicago Area Market Industry Summary Top 10 Brands - Percent Change in Registrations New Retail Light Vehicle Registrations 2007 vs. 2006

Kia 28.0% Forecast % Chg. Mkt. Share 2007 2008 '07 to '08 2008 Nissan 17.2% TOTAL 299,753 287,412 -4.1% 0.0% Lincoln 16.7% Mazda 13.9% Car 164,890 160,951 -2.4% 56.0% Light Truck 134,863 126,461 -6.2% 44.0% GMC 13.4%

Saturn 10.2% Traditional Domestic 117,615 106,924 -9.1% 37.2% Infiniti 10.2% Japanese 135,733 133,909 -1.3% 46.6% European 30,677 31,309 2.1% 10.9% Honda 6.2% Korean 15,728 15,270 -2.9% 5.3% Hyundai 5.7% Jeep 2.9% Traditional Domestic consists of vehicles sold by , Ford, and Chrysler, and excludes import nameplates. 0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0% Source for historical data: AutoCount, an Experian Company. % change in registrations - ytd '07 vs. ytd '06

Covering Fourth Quarter, 2007 Page 3

Segment Watch Mid Size and Compact SUV Segments Post Big Gains

The prospects of $3 per gallon (or higher) Change in Segment Market Share - 2007 vs. 2006 gasoline prices for the foreseeable future have some industry pundits predicting the Mid Size Crossover SUV 2.0 death of the SUV, and a dramatic shift in Compact SUV 2.0 demand towards sub compact cars. Entry Car 1.1 Without question, higher fuel prices are Standard Mid Size Car 0.8 having an impact on the types of vehicles purchased, but as illustrated by the graph Sub 0.7 to the right, SUVs are still in high demand Mid Size Luxury SUV 0.7 among Chicago Area consumers. Com- Full Size Pickup 0.1 bined market share for Compact and Mid Full Size Luxury SUV 0.0 Size Crossover SUVs increased four share Sports Car -0.1 points from 2006 to 2007. Looking to the Full Size Van -0.1 future, we believe the option of hybrid and diesel powertrains will provide some sup- Near -0.2 port to Full Size SUV sales. Compact Pickup -0.2 Full Size SUV -0.5 The table below shows the top sellers by Luxury Car -0.8 market segment during all of 2007. Lexus Sport Compact Car -1.0 RX was the best-selling Luxury SUV in the Mini Van -1.1 area market, while Toyota Camry was the Standard Mid Size Car leader. Mid Size SUV -1.5 Large Mid Size Car -1.7 Data: AutoCount, an Experian Company. -2.0 -1.5 -1.0 -0.5 0.0 0.5 1.0 1.5 2.0 2.5 Change in market share

Top Selling Models in Each Segment - Chicago Area New Retail Registrations, 2007 Annual Totals and Market Share of Segment Cars Entry Sub Compact Sporty Compact Standard Mid Size Model Regs. Share Model Regs. Share Model Regs. Share Model Regs. Share Nissan Versa 2599 25.5 Honda Civic 9473 17.5 Ford Mustang 2047 40.2 Toyota Camry 10993 23.4 Toyota Yaris 2283 22.4 Toyota Corolla/Matrix 8168 15.1 Scion TC 1826 35.8 Honda Accord 8744 18.6 Chevrolet Aveo 2057 20.2 Chevrolet Cobalt 4016 7.4 Mitsubishi Eclipse 634 12.4 Nissan Altima 6806 14.5 Honda Fit 1399 13.7 Ford Focus 3547 6.5 Hyundai Tiburon 402 7.9 Pontiac G6 4285 9.1 Hyundai Accent 770 7.5 Toyota Prius 3499 6.4 Pontiac GTO 174 3.4 Hyundai Sonata 3377 7.2 Large Mid Size Near Luxury Luxury Sports Car Model Regs. Share Model Regs. Share Model Regs. Share Model Regs. Share 4795 23.5 BMW 3-Series 3030 16.1 BMW 5-Series 1583 13.9 Chevrolet Corvette 838 29.5 2124 10.4 Lexus ES 3015 16.0 DTS 1231 10.8 Pontiac Solstice 284 10.0 Dodge Charger 2115 10.4 Acura TL 2342 12.4 Lexus LS 1093 9.6 Porsche 911 275 9.7 Chrysler 300 1822 8.9 Infiniti G 2004 10.6 Mercedes E-Class 936 8.2 Nissan 350 Z 272 9.6 Toyota Avalon 1784 8.7 Audi A4 1324 7.0 Mercedes S-Class 860 7.5 Saturn Sky 269 9.5 Light Trucks Compact Pickup Full Size Pick Up Mini Van Full Size Van Model Regs. Share Model Regs. Share Model Regs. Share Model Regs. Share Chevrolet Colorado 989 21.1 Ford F-Series 4997 34.2 Honda Odyssey 6648 34.5 Chevrolet Express 1875 47.2 Toyota Tacoma 973 20.7 Chevrolet Silverado 4392 30.1 Toyota Sienna 3950 20.5 Ford E-Series 1584 39.9 Honda Ridgeline 813 17.3 Dodge Ram 1615 11.1 Dodge Caravan 2864 14.9 GMC Savana 306 7.7 Ford Ranger 752 16.0 GMC Sierra 1185 8.1 Chrysler T & C 2281 11.8 Dodge Dakota 495 10.5 Toyota Tundra 1035 7.1 Nissan Quest 1070 5.6 Compact SUV Mid Size SUV/Crossover SUV Full Size SUV Mid and Full Size Luxury SUV Model Regs. Share Model Regs. Share Model Regs. Share Model Regs. Share Honda CRV 6931 19.9 Honda Pilot 3443 9.7 Chevrolet Tahoe 2239 28.1 Lexus RX 3794 18.7 Toyota RAV4 4594 13.2 Hyundai Santa Fe 3323 9.4 Chevrolet Suburban 1258 15.8 Acura MDX 2570 12.7 Ford Escape 3832 11.0 Toyota Highlander 2871 8.1 Ford Expedition 1063 13.3 1341 6.6 Chevrolet Equinox 2834 8.1 Chevrolet TrailBlazer 2657 7.5 GMC Yukon 922 11.6 Acura RDX 1180 5.8 Saturn Vue 1994 5.7 Nissan Murano 2577 7.3 GMC Yukon XL 725 9.1 BMW X5 1141 5.6 Page 4 Chicago Auto Outlook

Chicago Area Retail Car and Light Truck Registrations - History and Forecast Registrations Market Share Units Percent Change Share (%) Change Forecast Forecast Forecast Forecast 2006 2007 2008 '06 to '07 '07 to '08 2006 2007 2008 '06 to '07 '07 to '08

TOTAL 309,761 299,753 287,412 -3.2% -4.1%

Domestic Brands 132,344 117,615 106,924 -11.1% -9.1% 42.7 39.2 37.2 -3.5 -2.0 Japanese Brands 130,830 135,733 133,909 3.7% -1.3% 42.2 45.3 46.6 3.1 1.3 European Brands 32,293 30,677 31,309 -5.0% 2.1% 10.4 10.2 10.9 -0.2 0.7 Korean Brands 14,294 15,728 15,270 10.0% -2.9% 4.6 5.2 5.3 0.6 0.1

Acura 7,856 7,193 6,620 -8.4% -8.0% 2.5 2.4 2.3 -0.1 -0.1 Audi 2,773 2,805 2,856 1.2% 1.8% 0.9 0.9 1.0 0.0 0.1 BMW 7,350 7,155 7,738 -2.7% 8.1% 2.4 2.4 2.7 0.0 0.3 Buick 5,546 4,327 3,729 -22.0% -13.8% 1.8 1.4 1.3 -0.4 -0.1 Cadillac 5,975 4,733 4,532 -20.8% -4.2% 1.9 1.6 1.6 -0.3 0.0 Chevrolet 36,604 31,942 29,139 -12.7% -8.8% 11.8 10.7 10.1 -1.1 -0.6 Chrysler 7,955 7,210 6,095 -9.4% -15.5% 2.6 2.4 2.1 -0.2 -0.3 Dodge 13,623 11,748 10,859 -13.8% -7.6% 4.4 3.9 3.8 -0.5 -0.1 Ford 28,496 25,249 22,285 -11.4% -11.7% 9.2 8.4 7.8 -0.8 -0.6 GMC 4,819 5,467 5,357 13.4% -2.0% 1.6 1.8 1.9 0.2 0.1 Honda 34,522 36,664 36,921 6.2% 0.7% 11.1 12.2 12.8 1.1 0.6 Hummer 1,194 669 585 -44.0% -12.6% 0.4 0.2 0.2 -0.2 0.0 Hyundai 11,498 12,149 11,651 5.7% -4.1% 3.7 4.1 4.1 0.4 0.0 Infiniti 3,182 3,507 3,796 10.2% 8.2% 1.0 1.2 1.3 0.2 0.1 Isuzu 119 93 81 -21.8% -12.9% 0.0 0.0 0.0 0.0 0.0 Jaguar 595 475 480 -20.2% 1.1% 0.2 0.2 0.2 0.0 0.0 Jeep 7,441 7,656 6,931 2.9% -9.5% 2.4 2.6 2.4 0.2 -0.2 Kia 2,796 3,579 3,619 28.0% 1.1% 0.9 1.2 1.3 0.3 0.1 Land Rover 1,611 1,590 1,508 -1.3% -5.2% 0.5 0.5 0.5 0.0 0.0 Lexus 10,587 10,455 9,818 -1.2% -6.1% 3.4 3.5 3.4 0.1 -0.1 Lincoln 1,978 2,309 2,287 16.7% -1.0% 0.6 0.8 0.8 0.2 0.0 Mazda 4,722 5,379 5,037 13.9% -6.4% 1.5 1.8 1.8 0.3 0.0 Mercedes 5,444 5,569 5,668 2.3% 1.8% 1.8 1.9 2.0 0.1 0.1 Mercury 3,505 2,726 2,178 -22.2% -20.1% 1.1 0.9 0.8 -0.2 -0.1 MINI 1,484 1,171 1,249 -21.1% 6.7% 0.5 0.4 0.4 -0.1 0.0 Mitsubishi 3,019 2,986 2,971 -1.1% -0.5% 1.0 1.0 1.0 0.0 0.0 Nissan 17,533 20,547 20,473 17.2% -0.4% 5.7 6.9 7.1 1.2 0.2 Pontiac 9,929 7,761 7,467 -21.8% -3.8% 3.2 2.6 2.6 -0.6 0.0 Porsche 898 845 740 -5.9% -12.4% 0.3 0.3 0.3 0.0 0.0 Saab 1,021 763 724 -25.3% -5.1% 0.3 0.3 0.3 0.0 0.0 Saturn 5,279 5,818 5,480 10.2% -5.8% 1.7 1.9 1.9 0.2 0.0 Subaru 3,206 2,525 2,239 -21.2% -11.3% 1.0 0.8 0.8 -0.2 0.0 Suzuki 1,712 1,573 1,570 -8.1% -0.2% 0.6 0.5 0.5 -0.1 0.0 Toyota/Scion 44,372 44,811 44,383 1.0% -1.0% 14.3 14.9 15.4 0.6 0.5 Volkswagen 7,563 7,171 7,375 -5.2% 2.8% 2.4 2.4 2.6 0.0 0.2 Volvo 3,093 2,514 2,384 -18.7% -5.2% 1.0 0.8 0.8 -0.2 0.0 Others 461 619 587 34.3% -5.2% 0.1 0.2 0.2 0.1 0.0

Historical Data Source: AutoCount, an Experian Company

The table above presents Auto Outlook’s forecast for new retail light vehicle registrations in the Chicago Area. Projections are based on a detailed analysis of competitive dynamics in the new vehicle market, including consumer tastes, new vehicle product plans, and manufacturers’ sales targets. As with any forecast, please keep in mind that the projections are subject to some uncertainty. This is especially true in today’s hotly competitive automotive market, where market fortunes can change abruptly. Covering Fourth Quarter, 2007 Page 5

Brand Scoreboard Kia, Nissan, and Lincoln Post the Biggest Percentage Increases in 2007

The graph below shows the percentage change in new retail light vehicle registrations for all of 2007 versus 2006. Brands with the highest increases in registrations are at the top of the graph. Kia had the highest percentage increase last year, up 28.0%. Other strong performers were Nissan, Lincoln, Mazda, GMC, Saturn, and Infiniti. Data source: AutoCount, an Experian Company.

Percent Change in New Retail Light Vehicle Registrations - 2007 vs. 2006

Kia 28.0% Nissan 17.2% Lincoln 16.7% Mazda 13.9% GMC 13.4% Saturn 10.2% Infiniti 10.2% Honda 6.2% Hyundai 5.7% Jeep 2.9% Mercedes 2.3% Audi 1.2% Toyota/Scion 1.0% Mitsubishi -1.1% Lexus -1.2% Land Rover -1.3% BMW -2.7% Volkswagen -5.2% Porsche -5.9% Suzuki -8.1% Acura -8.4% Chrysler -9.4% Ford -11.4% Chevrolet -12.7% Dodge -13.8% Volvo -18.7% Jaguar -20.2% Cadillac -20.8% MINI -21.1% Subaru -21.2% Pontiac -21.8% Buick -22.0% Mercury -22.2% Saab -25.3% Hummer -44.0%

-50.0% -40.0% -30.0% -20.0% -10.0% 0.0% 10.0% 20.0% 30.0% 40.0% Page 6 Chicago Auto Outlook

Market Tracker Japanese Brands Gain 2.8 Market Share Points During 2007

Production cutbacks, scaled back incen- Traditional Domestic brand market share Among Japanese brands, Nissan (includ- tives, a less than optimal product mix, declined 3.2 share points from 2006 to ing Infiniti) had the largest increase, up 1.1 and a bloated cost structure prior to the 2007. GM share fell 1.8 points, while Ford share points. Korean brand share in- new UAW agreement reached last sum- and Chrysler were down 0.9 and 0.5 of a creased 0.6 of a point. mer have taken a predictable toll on point, respectively. Market share figures Traditional Domestic brand market share include import brands owned by GM and Source: AutoCount, an Experian Company. during this decade. And as shown on the Ford. See table below graph. graph below, the trend continued in 2007.

Change in Segment Market Share - 2007 vs. 2006

4.0

3.0 2.8

2.0 1.1 0.9 1.0 0.7 0.6 0.1 0.0 0.1 0.0 0.0 -0.2 -0.1 -0.2 -1.0 -0.5 -0.9

-2.0 -1.8

-3.0 -3.2 -4.0

GM VW MB Big 3 Ford Other Euro. BMW Ford Other Japan. Toyota Honda Nissan Korean Chrysler

Brands included above: Big 3: GM (Buick, Cadillac, Chevrolet, GMC, Hummer, Pontiac, and Saturn), Ford (Ford, Lincoln, and Mercury), Chrysler (Chrysler, Dodge, and Jeep). Japanese: Toyota (Toyota, Lexus, and Scion), Honda (Honda and Acura), Nissan (Nissan and Infiniti), Other (Isuzu, Mazda, Mitsubishi, Subaru, and Suzuki). European: VW (Audi, Bentley, and Volkswagen), BMW (BMW, Rolls Royce, and Mini), MB (Mercedes Benz), Ford (As- ton Martin, Jaguar, Land Rover, and Volvo), Other (Ferrari, Lotus, Maserati, and Saab). Korean: Hyundai and Kia.

Chicago Area Top Ten Scoreboard Chevrolet Gains Ground on Second Place Honda

THIRD QUARTER, 2007 FOURTH QUARTER, 2007 change in The table to the left shows the top ten Rank Make Market Share Rank Make Market Share mkt. share selling brands in the Chicago Area 1 Toyota/Scion 15.1% 1 Toyota/Scion 14.1% -1.0% new retail light vehicle market during 2 Honda 12.8% 2 Honda 12.3% -0.5% the Third and Fourth Quarters of last year, as well as the change in market 3 Chevrolet 10.1% 3 Chevrolet 11.6% 1.5% share. Chevrolet gained 1.5 share 4 Ford 8.5% 4 Ford 8.7% 0.2% points and moved to within 0.7 of a 5 Nissan 7.4% 5 Nissan 6.7% -0.7% point of second place Honda. 6 Hyundai 4.6% 6 Dodge 3.9% 0.4% 7 Dodge 3.5% 7 Hyundai 3.6% -1.0% Source: AutoCount, an Experian 8 Lexus 3.3% 8 Lexus 3.1% -0.2% Company. 9 Pontiac 2.7% 9 Jeep 2.6% 0.2% 10 Volkswagen 2.6% 10 BMW 2.5% 0.3% Covering Fourth Quarter, 2007 Page 7

Top Selling Models Toyota Camry Best Selling Model in Chicago Area Market During 2007

The graph below shows new retail registrations for the top 30 selling models in the Chicago Area market during 2007. Toyota Camry was the top seller last year, with two other Toyota models joining Camry in the top 10. Source: AutoCount, an Experian Company.

Top 30 Selling Models in Chicago Area New Retail Light Vehicle Market - 2007

Toyota Camry

Honda Civic

Honda Accord

Toyota Corolla/Matrix

Honda CRV

Nissan Altima

Honda Odyssey

Ford F-Series

Chevrolet Impala

Toyota RAV4

Chevrolet Silverado

Pontiac G6

Chevrolet Cobalt

Toyota Sienna

Ford Escape

Lexus RX

Ford Focus

Toyota Prius

Honda Pilot

Hyundai Sonata

Hyundai Santa Fe

BMW 3-Series

Nissan Sentra

Lexus ES

Toyota Highlander

Dodge Caravan

Chevrolet Equinox

Volkswagen Jetta

Chevrolet TrailBlazer

Nissan Versa

0 2000 4000 6000 8000 10000 12000 Page 8 Chicago Auto Outlook

Luxury Segment Close Up In Depth Analysis of the Chicago Area Luxury Segment

The graphs and tables on this page and the following page provide a concise, thorough review of the Chicago Area luxury segment. Each graph and table is accompanied by an explanation of what is displayed, and bottom line assessment of primary conclusions. Data Source: AutoCount, an Experian Company.

22.0% Monthly luxury segment market share 20.0% 18.0%

16.0% 14.0%

12.0% Trendline 10.0%

8.0%

Luxury segment market share 6.0%

4.0%

Jul-05 Jul-06 Jul-07 Jan-05Feb-05Mar-05Apr-05May-05Jun-05 Aug-05Sep-05Oct-05Nov-05Dec-05Jan-06Feb-06Mar-06Apr-06May-06Jun-06 Aug-06Sep-06Oct-06Nov-06Dec-06Jan-07Feb-07Mar-07Apr-07May-07Jun-07 Aug-07Sep-07Oct-07Nov-07Dec-07 Months Explanation: The graph shows luxury segment share of the Chicago Area new retail light vehicle market between January of 2005 and December of 2007 (see following page for brands included in luxury segment). Bottom line: As shown by the trendline, luxury seg- ment market share has remained essentially unchanged during the past two years.

Lincoln Others 4.6% 7.4% Lexus 20.9% European Volvo 5.0% Audi 5.6%

Japanese

Area Infiniti U.S. 7.0% Acura 14.4% Domestic Cadillac 9.5% Mercedes BMW 0.0% 25.0% 50.0% 11.2% 14.3% Share of luxury market

Explanation: The graph shows market share results for Explanation: The pie chart shows market share figures for the top Domestic, Japanese, and European brands in the area and nine selling brands in the Chicago Area during all of 2007. “Others” U.S. Markets during 2007. Bottom line: Japanese luxury consists of Jaguar, Land Rover, Porsche, and Saab. Bottom line: brands sell at relatively higher rates in the Chicago Area Lexus is the area retail luxury segment leader, with market share of than they do in the U.S. Area Domestic and European 20.9% during 2007. Acura was second with a 14.4% share, followed brand market shares in the area are below National levels. by BMW, Mercedes, Cadillac, and Infiniti. Covering Fourth Quarter, 2007 Page 9

Luxury Segment Close Up In Depth Analysis of the Chicago Area Luxury Segment (continued)

2007 Retail Market Share Area % change in Top selling model Key new product Brand Area U.S. regs.-'06 to '07 in area during 2007 introduction during '08 Acura 14.4% 10.5% -8.4% TL TL and TSX late in year Audi 5.6% 5.1% 1.2% A4 Redesigned A4 BMW 14.3% 16.6% -2.7% 3-Series New 1-Series Cadillac 9.5% 9.9% -20.8% Escalade Redesigned CTS Infiniti 7.0% 7.0% 10.2% G35/G37 EX Crossover Jaguar 1.0% 0.9% -20.2% XJ XF Land Rover 3.2% 2.7% -1.3% Range Rover Sport No new products Lexus 20.9% 18.6% -1.2% RX Redesigned LX570 Lincoln 4.6% 6.3% 16.7% MKX All new MKS Sedan Mercedes 11.2% 13.6% 2.3% C-Class Redesigned C-Class Porsche 1.7% 1.8% -5.9% Cayene No new products Saab 1.5% 1.7% -25.3% 9-3 No new products Volvo 5.0% 5.3% -18.7% XC90 All new C30; red. V70

Explanation: The table above provides a summary of key facts and figures for luxury brands. Market share figures are a percent of the overall luxury vehicle market in the area and US. markets. Bottom line: Acura market share in the area last year was 14.4%, well above its 10.5% share in the Nation. Lincoln had the highest percent increase in area registrations last year, up 16.7%.

Lexus RX 3794 Lincoln BMW 3-Series 3030

Lexus ES 3015 Land Rover Acura MDX 2570 Lexus Acura TL 2342

Infiniti G 2004 Mercedes BMW 5-Series 1583 BMW Cadillac Escalade 1341

Audi A4 1324 Porsche Cadillac CTS 1303 Audi Lexus IS 1264

Cadillac DTS 1231 Acura Acura RDX 1180 Infiniti BMW X5 1141

Acura TSX 1111 Cadillac Lexus LS 1093 Volvo Mercedes C-Class 973

Mercedes E-Class 936 Jaguar Land Rover Range Rover 935 Saab Mercedes ML-Class 888 -80.0% -40.0% 0.0% 40.0% 0 1000 2000 3000 4000 Registrations % chg. in regs ('07 vs. '05) Explanation: The graph shows the top selling models in the Chi- Explanation: The graph shows the two year percent change in cago Area luxury market during 2007, based on new retail regis- registrations from 2005 to 2007 Bottom line: Lincoln and Land trations. Bottom line: Lexus RX was the top seller in the area last Rover were the only two brands to record an increase in registra- year, followed by BMW 3-Series. tions over the two year period. Page 10 Chicago Auto Outlook

Long Term Sales Trends Cyclical Market Indicators Point to Improving Sales by 2009

Given the multitude of negative economic 2007 to 2008, and then increase by as the low point for a downward sales cycle factors weighing on the area’s new vehi- much as 6% in both 2009 and 2010. is now higher than 15 million units, which cle market, the near term sales outlook the market is expected to approach in (i.e., one year) is mixed, at best. But as The cyclical nature of new vehicle sales, 2008. In addition, 2008 will probably discussed on page one, and as evi- and the expectation of a recovery by the mark the third consecutive year for new denced by the graph below, the longer end of this decade is illustrated in the vehicle sales to be below trend line lev- term prospects are much better. accompanying graph. It dramatically els. By 2010 or 2011, the market should shows the up and down cyclical pattern be well on its way to returning to trend As even casual auto industry watchers new vehicle sales have followed in the line levels, which should be right around know, sales tend to move up and down in U.S. market over the past 37 years. Our the 17 million unit level. cyclical patterns. And after several years conclusion that sales should be poised to of gradually softer conditions, it would make a healthy recovery by the end of Conclusion: The multitude and severity appear as though the current downturn this decade is demonstrated by looking of economic challenges confronting the has just about run its course. After a at the three “trend lines.” The overall market in 2008 will very likely lead to a likely decline again this year, the market trend has moved steadily upward, and decline in sales. But the longer term mar- has an excellent chance of a rebound in importantly, the same is true for trends in ket outlook is decidedly positive. sales by 2009. Auto Outlook is predicting the cyclical peaks and troughs. In fact, that new retail light vehicle registrations the trend line for the market troughs por- in the area will decline by 4.1% from tends that, in the worst case scenario,

U.S. New Light Vehicle Sales—Long Term Perspective

20

18 Trend Peaks

16 Overall Trend

14 Unit Sales (millions) 12 Trend Troughs

10

Actual sales

8 1973 1974 1979 1983 1984 1989 1993 1994 1999 2003 2004 1970 1971 1972 1975 1976 1977 1978 1980 1981 1982 1985 1986 1987 1988 1990 1991 1992 1995 1996 1997 1998 2000 2001 2002 2005 2006 2007 2008 Years

The graph shows four data series from 1970 to 2008 (’08 figures are projected): 1. Actual new vehicle sales. 2. The Overall Sales Trend. 3. Trend Peaks, which is the trend line for the four cyclical sales peaks. 4. Trend Troughs, which is the trend line for the cyclical sales troughs. Source: CNW Marketing Research, Inc. Covering Fourth Quarter, 2007 Page 11

County Scoreboard Will County Market Posts Small Increase in 2007

The tables on this page provide a thor- barometer to evaluate the performance Part 2 presents data for Domestic ough summary of each of the Chicago of your dealership. brands, and the top 10 selling car and Area’s six Illinois county new retail light light truck brands in the Chicago Area. vehicle markets. The unique county-level Part 1 below shows registration data and The top ranked county in each category information provides a valuable perspec- light truck market share during all of is shaded. tive on local market performance, and a 2006 and 2007.

COUNTY BY COUNTY - PART 1 Registrations - Annual Totals Percent Change Unit Change Light Truck Market Share (%) 2006 to 2006 to Change 2006 2007 2007 2007 2006 2007 '06 to '07 Cook, IL 161,695 156,645 -3.1% -5,050 41.3 42.3 1.0 Du Page, IL 48,315 46,178 -4.4% -2,137 43.1 44.6 1.5 Kane, IL 19,860 19,278 -2.9% -582 47.8 49.1 1.3 Lake, IL 37,017 35,029 -5.4% -1,988 45.9 48.1 2.2 McHenry, IL 13,510 12,926 -4.3% -584 49.9 52.9 3.0 Will, IL 29,364 29,697 1.1% 333 49.7 50.2 0.5

COUNTY BY COUNTY - PART 2 Market Share Summary Domestic Brands Top Ten Selling Brands in Area-2007 Change Toyota/ 2006 2007 '06 to '07 Scion Honda Chevrolet Ford Nissan Dodge Hyundai Lexus Pontiac Jeep Cook, IL 42.9 39.5 -3.4 15.6 11.5 10.4 8.3 6.9 4.7 3.9 3.6 2.9 2.4 Du Page, IL 38.1 33.5 -4.6 16.6 12.9 8.4 7.4 6.7 2.4 3.9 4.9 2.3 2.1 Kane, IL 44.7 40.8 -3.9 14.7 11.5 12.9 8.2 8.0 3.9 4.2 2.8 2.4 2.7 Lake, IL 36.2 34.0 -2.2 16.3 12.2 9.9 6.1 5.1 3.3 2.7 5.1 1.8 3.2 McHenry, IL 50.2 48.5 -1.7 12.8 13.2 12.6 10.6 6.2 5.4 5.0 2.1 3.2 3.8 Will, IL 53.2 48.8 -4.4 11.8 11.6 13.1 11.1 6.1 4.8 5.1 2.5 2.9 3.0

Percent Change in County New Retail Light Vehicle Registrations Share of Chicago Area Market 2007 vs. 2006 2007

McHenry, IL 4.3% 2.0% Kane, IL 0.0% 6.4% Will, IL -2.0% 9.9% -4.0% -6.0% Cook, IL -8.0% Lake, IL 11.7% 52.3% -10.0% -12.0%

Will, IL Du Page, IL Kane, IL Cook, IL Lake, IL 15.4% McHenry, IL Du Page, IL Page 12 Chicago Auto Outlook

Chicago Area Market vs. U.S.. Area Market Decline in 2007 in Line With U.S.

Area Market U.S. Market Market Growth % change in registrations -3.2% -3.4% 2007 vs. 2006 Car Market Share Car share of industry retail light vehicle 55.0% 48.2% registrations - 2007 Domestic Brand Market Share Domestic brand share of industry retail light 40.8% 45.5% vehicle registrations - 2007 Top Selling Retail Brands Top selling light vehicle brands and market share - Fourth Quarter 2007 First Toyota/Scion 14.1% Toyota/Scion 16.1% Second Honda 12.3% Chevrolet 12.0% Third Chevrolet 11.6% Ford 11.5% Fourth Ford 8.7% Honda 10.3% Fifth Nissan 6.7% Nissan 6.4% Sixth Dodge 3.9% Dodge 5.3% Seventh Hyundai 3.6% GMC 3.2% Eighth Lexus 3.1% Jeep 3.0% Ninth Jeep 2.6% Hyundai 2.9% Tenth BMW 2.5% Chrysler 2.4%

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