Blue Book MARKET REPORT

FIRST QUARTER 2016 Chintan Talati Joanna Pinkham  Brenna Robinson Michelle Behar Sr. Director, Public Relations Sr. Public Relations Manager Sr. Public Relations Manager Public Relations Coordinator 210.884.3675 | [email protected] 404.568.7135 | [email protected] 909.225.4643 | [email protected] 909.241.5441 | [email protected] IN THIS ISSUE: › Fuel Prices See Large Fluctuation in First Quarter of 2016 › Used- Values Report Little Seasonal Impact › High Performance Outperform All Segments, Electric Vehicles Continue Significant Decline...MORE Fuel Prices See Large Fluctuation in First Quarter of 2016

Fuel Prices Regular All Formulations Retail Gasoline $4.00

$3.75

$3.50

$3.25

$3.00

$2.75

Prices Fuel $2.50

$2.30 $2.25 $2.08 $2.03 $2.00

$1.75 CY 2014 CY 2015 CY 2016 $1.50 Jan Jan Feb Mar Mar Apr May Jun Jun Jul Aug Aug Sep Oct Oct Nov Dec Dec

Source: U.S. Energy Information Administration

• Consumers saw large fluctuations in the average cost per gallon of fuel in the first quarter of 2016. Fuel prices started the year at $2.03 per gallon in WHILE FUEL PRICES ARE STILL AT SUPPRESSED January, fell to an average of $1.72 per gallon by mid-February and have since rebounded by 36 LEVELS, WE ARE SEEING SEASONAL TRENDS cents, or 21 percent, to $2.08 per gallon in April. • Year-to-date, the average price per gallon of fuel is up 5 cents, or 2.4 percent. Year-over-year, CONSISTENT WITH PREVIOUS YEARS AND EXPECT the average price per gallon of fuel is down 33 cents, or 14 percent. Year-to-date, fuel prices are FUEL PRICES TO CONTINUE TO RISE AT A SLOW currently up 6 cents, or 3 percent. • Low fuel prices continue to spur demand in BUT STEADY PACE INTO SUMMER MONTHS. larger SUV and truck segments while driving fewer consumers toward fuel-efficient hybrid SEAN FOYIL, KELLEY BLUE BOOK ANALYST segments. Used-Car Values Report Little Seasonal Impact

• Average auction values for used 1-to 3-year-old vehicles Auction Values, 2016 YTD declined 1.3 percent, or roughly $235, in the first quarter of $20,000

2016. The average used-car value at the end of Q1 finished $19,500 1.5 percent lower than where it did this time last year. • One of the most notable differences that we saw this year $19,000 is the lack of an upward swing in values during the first $18,500

quarter. Typically, the used-car market sees an uptick in $18,000 CY 2014 values in the range of 2 to 4 percent, whereas in 2016, we $17,500 actually experienced a slight 1 percent decrease. CY 2015

Auction Value $17,000 • An abundance of volume across the country in the CY 2016 $16,500 auction lanes continues to be one of the key forces putting downward pressure on auction prices. $16,000 • Kelley Blue Book Field Analysts have reported the auction $15,500 landscape as being overly saturated and overstocked with $15,000 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 3- to 5-year-old lease return vehicles. This excess supply has Source: Kelley Blue Book Automotive Insights, 1- to 3-year-old vehicles put a damper on the spring market, as the typical buying frenzy seen during tax return season was short-lived. High Performance Vehicles Outperform All Segments, Electric Vehicles Continue Significant Decline

• In the first quarter of 2016, the high YTD Change by Segment performance and segments High Performance Car 2.9% outperformed all segments, increasing by 2.9 Sports Car 2.5% percent and 2.5 percent respectively. Mid-size Car 1.1% • The top performing car in the high 0.9% performance car and sports car Luxury High Performance Car 0.6% segments were the Corvette Stingray Mid-size 0.3% (up 2.5 percent) and the Full-size Car 0.0% Challenger (up 4 percent). -0.1% • Electric and hybrid vehicles continued to -0.5% underperform the rest of the market in the High-end -1.0% first quarter, declining by 7.5 percent and 4.9 Mid-size SUV/ -1.3% percent respectively. Full-Size SUV/Crossover -1.3% • The top performing vehicles in the Compact SUV/Crossover -1.4% electric and hybrid segments are the Subcompact SUV/Crossover -1.5% BMW i8 (down 2.3 percent) and the Luxury Sports Car -1.7% Insight (down 4.4 percent). Full-size Pickup Truck -1.8% Luxury Full-size SUV/Crossover -2.6% Luxury Compact SUV/Crossover -3.4% Luxury Car -3.5% Luxury Mid-size SUV/Crossover -3.9% -4.1% Entry-level Luxury Car -4.4% Hybrid/Alternative Energy Car -4.9% Electric -7.5%

-10% -8% -6% -4% -2% 1% 3% 5% Source: Kelley Blue Book Automotive Insights, 1- to 3-year-old vehicles

WITH LOW FUEL PRICES CONTINUING TO DRIVE DOWN DEMAND FOR MORE FUEL-EFFICIENT VEHICLES, CONSUMERS ARE LESS WORRIED ABOUT PAYING AT THE PUMP AND MORE CONCERNED WITH OTHER FACTORS WHEN CHOOSING THEIR NEXT VEHICLE. AS A RESULT, HIGH PERFORMANCE, SUV AND CROSSOVER, AS WELL AS TRUCK SEGMENTS CONTINUE TO OUTPERFORM. SEAN FOYIL, KELLEY BLUE BOOK ANALYST

2 BLUE BOOK MARKET REPORT FIRST QUARTER 2016 Used-Vehicle Values Report Accelerated Decline in Fourth Quarter

Retained Value, MY 2015 Y-o-Y Point Change, Retained Value

Mid-size Pickup Truck 88% Mid-size Pickup Truck -2% High Performance Car -12% High Performance Car 85% Luxury High Performance Car -6% Luxury High Performance Car 85% Luxury Full-size SUV/Crossover 1% Luxury Full-size SUV/Crossover 82% Luxury Sports Car -4% Luxury Sports Car 81% Luxury Mid-size SUV/Crossover -5% Luxury Mid-size SUV/Crossover 78% Luxury Compact SUV/Crossover -2% Luxury Compact SUV/Crossover 78% Full-Size SUV/Crossover 11% Full-Size SUV/Crossover 76% Mid-size SUV/Crossover -1% Mid-size SUV/Crossover 74% Sports Car -2%

Sports Car 74% High-end Luxury Car -5%

High-end Luxury Car 73% Compact SUV/Crossover -6%

Compact SUV/Crossover 72% Subcompact SUV/Crossover -3%

Subcompact SUV/Crossover 71% Full-size Pickup Truck -2% Average 71% Minivan 1% Full-size Pickup Truck 67% Entry-level Luxury Car -8% Minivan 67% Luxury Car -6% Van Entry-level Luxury Car 66% -8% Compact Car -8% Luxury Car 65% Mid-size Car -6% Van 64% Full-size Car 0% Compact Car 63% Subcompact Car -6% Mid-size Car 62% Hybrid/Alternative Energy Car -9% Full-size Car 62% -8% Subcompact Car 60% -15.0% -10.0% -5.0% 0.0% 5.0% 10.0% 15.0% Hybrid/Alternative Energy Car 60% Source: Kelley Blue Book Automotive Insights, Model-Year 2015 vs 2014 Electric Vehicle 55%

0% 20% 40% 60% 80% 100% Source: Kelley Blue Book Automotive Insights, 2015 Model-Year Vehicles

• For 2015 model-year vehicles, the mid-size pickup truck segment is outperforming all segments with an average value retention rate of 88 percent. Leading this segment are the Tacoma and Colorado at 97.7 percent and 82.1 percent respectively. • All SUV and crossover segments performed at or above the overall segment value retention rate average, while most car segments underperformed the segment average. • Top Performing SUV/Crossover by Segment: • Compact SUV/Crossover: Wrangler, 89.8 percent • Mid-size SUV/Crossover: , 86.6 percent • Full-size SUV/Crossover: GMC Yukon, 79.3 percent • Subcompact SUV/Crossover: Jeep Renegade, 77.1 percent

Appendix

Top 5 Performing Segments: SEGMENT Q1 Change (%) High Performance Car 2.9% Sports Car 2.5% Mid-size Car 1.1% Compact Car 0.9% Luxury High Performance Car 0.6% MY 2013-2015, Kelley Blue Book® Auction Value

Bottom 5 Performing Segments: SEGMENT Q1 Change (%) Electric Vehicle -7.5% Hybrid/Alternative Energy Car -4.9% Entry-level Luxury Car -4.4% Van -4.1% Luxury Mid-size SUV/Crossover -3.9% MY 2013-2015, Kelley Blue Book® Auction Value

3 BLUE BOOK MARKET REPORT FIRST QUARTER 2016 Appendix, Continued

Top 5 Performing SEGMENT Q1 Change (%) 1.9% Lincoln 1.1% Dodge 0.6% 0.4% Honda 0.1% MY 2013-2015, Kelley Blue Book® Auction Value

Bottom 5 Performing Brands: SEGMENT Q1 Change (%) BMW -5.9% Volvo -5.1% -4.5% -4.3% -4.3% MY 2013-2015, Kelley Blue Book® Auction Value

Top 10 Performing Models: MAKE MODEL Q1 Change (%) 5.4% 4.4% 4.3% 4.3% 4.1% 4.1% 4.0% 3.9% Chrysler Town & Country 3.9% 3.6% MY 2013-2015, Kelley Blue Book® Auction Value

Bottom 10 Performing Models: MAKE MODEL Q1 Change (%) -19.3% Touareg -12.6% BMW i3 -12.5% Ram C/V -12.1% Mercedes-Benz B-Class -11.9% Kizashi -11.5% -11.2% 911 -11.0% Suzuki Grand Vitara -10.4% Ram C/V Tradesman -10.2% MY 2013-2015, Kelley Blue Book® Auction Value

These statements set forth in this publication are the opinions of the authors and are subject to change without notice. This publication has been prepared for informational purposes only. Kelley Blue Book assumes no responsibility for errors or omissions.

About Kelley Blue Book (www.kbb.com) Founded in 1926, Kelley Blue Book, The Trusted Resource®, is the vehicle valuation and information source trusted and relied upon by both consumers and the . Each week the company provides the most market-reflective values in the industry on its top-rated website KBB.com, including its famous Blue Book® Trade-In Values and Fair Purchase Price, which reports what others are paying for new and used this week. The company also provides vehicle pricing and values through various products and services available to car dealers, auto manufacturers, finance and insurance companies, and governmental agencies. Kelley Blue Book’s KBB.com ranked highest in its category for equity by the 2015 Harris Poll EquiTrend® study and has been named Online Auto Shopping Brand of the Year for four consecutive years. Kelley Blue Book Co., Inc. is a Cox Automotive ™ company.

4 BLUE BOOK MARKET REPORT FIRST QUARTER 2016