Vehicle Market Insights Manheim Used Vehicle Value Index Call - July 8, 2020

Jonathan Smoke & Zo Rahim Special Guest: Whitney Gerkin

1 INVENTORY

RETAIL

FINANCIAL

MOBILITY COVID-19 Market Update Covid-19 Local Impact Assessment

Source: Cox Automotive 4 Continuing Claims At 19.3 Million Nationally

Source: U.S. Department of Labor 5 Consumer Sentiment Moves Down Again

Morning Consult’s Index of Consumer Sentiment on Monday was down 23.4% since February 29

ICS Value (7-Day Average) 120 114.23 113.8 110

100

90

86.81 80 81.23

70

60

Source: Morning Consult 6 New Vehicle Sales Down But Recovering

Total New % Change y/y 40%

30%

20%

10%

0%

-10%

-20%

-30%

-40%

-50%

Jul-08 Jul-13 Jul-18

Jan-06 Jan-11 Jan-16

Jun-06 Jun-11 Jun-16

Oct-09 Oct-14 Oct-19

Apr-07 Apr-12 Apr-17

Sep-07 Feb-08 Sep-12 Feb-13 Sep-17 Feb-18

Dec-08 Dec-13 Dec-18

Aug-10 Aug-15

Nov-06 Nov-11 Nov-16

Mar-10 Mar-15 Mar-20

May-09 May-14 May-19

Source: BEA 7 New Vehicle Market Share Performance – 1H 2020

CHEVROLET 0.59 -1.65

KIA 0.47 -0.65

MAZDA 0.36 -0.19

HYUNDAI 0.29 BMW -0.19

TESLA 0.28 MITSUBISHI -0.10

RAM 0.22 -0.10

JEEP 0.17 -0.08

TOYOTA 0.17 -0.07

GMC 0.14 -0.05

LINCOLN 0.12 -0.02

SUBARU 0.12 AUDI -0.02

VOLVO 0.07 FORD -0.02

VOLKSWAGEN 0.06 JAGUAR -0.01

LEXUS 0.05 -0.01

LAND ROVER 0.02 ACURA 0.00

0.00 0.10 0.20 0.30 0.40 0.50 0.60 0.70 -2.00 -1.50 -1.00 -0.50 0.00

Source: Cox Automotive 8 New Vehicle Market Share Performance – 1H 2020

Full-size Pickup 2.41 Compact -1.83

Mid-size SUV/ 1.36 Mid-size Car -0.82

Subcompact SUV/Crossover 1.12 -0.80

Mid-size 0.68 -0.62

Luxury Compact SUV/Crossover 0.22 Full-size Car -0.53

Luxury Mid-size SUV/Crossover 0.17 -0.44

Compact SUV/Crossover 0.07 -0.30

Luxury Full-size SUV/Crossover 0.03 Entry-level Luxury Car -0.27

High-end Luxury Car 0.01 Full-size SUV/Crossover -0.24

Electric Vehicle 0.00 Hybrid/Alternative Energy Car -0.20

0.00 0.50 1.00 1.50 2.00 2.50 3.00 -2.20 -1.70 -1.20 -0.70 -0.20 0.30

Source: Cox Automotive 9 Retail Sales Recovery Estimates

Y/Y % Change in 7-Day Moving Average of Retail Sales

New Used 30.0%

20.0%

10.0%

0.0%

-10.0%

-20.0%

-30.0%

-40.0%

-50.0%

-60.0%

-70.0%

1/6 2/3 2/7 3/2 3/6 4/3 4/7 5/1 5/5 5/9 6/2 6/6 7/4

1/10 1/14 1/18 1/22 1/26 1/30 2/11 2/15 2/19 2/23 2/27 3/10 3/14 3/18 3/22 3/26 3/30 4/11 4/15 4/19 4/23 4/27 5/13 5/17 5/21 5/25 5/29 6/10 6/14 6/18 6/22 6/26 6/30

Source: Cox Automotive 10 Update: Manheim’s Shift to All-Digital

Whitney Gerkin Digital Marketplace Director Manheim ACCESSING MANHEIM INVENTORY TODAY

SIMULCAST DIGITAL BLOCKS (In-Lane Bidding)

MANHEIM.COM OVE / PRIVATE STORES MANHEIM EXPRESS

12 OPERATIONAL UPDATES SINCE GOING ALL-DIGITAL

Welcomed sellers back on the block at all locations.

Welcomed buyers to preview vehicles on the lot at all locations.

Piloting in-lane bidding "Digital Blocks" at select locations.

13 DIGITAL WHOLESALE IS STRONG

Manheim’s sales rates are now higher than pre-COVID levels.

January through June, Manheim experienced 1.5+ million digital transactions, which is more than 20% higher than the same period in 2019.

OVE sales were up nearly 70 percent in June compared to last year.

Source: Manheim Data 14 MANHEIM DIGITAL COVID-19 SNAPSHOT

6 in 10

DEALERS SAY THAT SIMULCAST IS 8300+ WORKING AS A BUYERS MADE FIRST REPLACEMENT TIME PURCHASES ON SIMULCAST STATS: MANHEIM DIGITAL MARKETPLACE 23,000 SIMULCAST SALES OCCURRED ON A SINGLE DAY IN JUNE, A RECORD ON THE ~40% PLATFORM IS THE INCREASE IN USAGE OF SIMULCAST 8200+ REMOTE SELLER SINCE VEHICLES SOLD IN A MARCH 16 WEEK AT MANHEIM PA IN JUNE, 900 HIGHER THAN SAME WEEK 2019

15 SIMULCAST ATTENDANCE & BIDDING ARE ON THE RISE

Simulcast Attendance & Bidding in 2020 400 10.0

350 9.0 8.0 Offer Unique Per Bids 300 7.0 250 6.0 200 5.0

150 4.0 3.0 100

2.0 Attendees Attendees PerLane 50 1.0 0 0.0

Attendees Per Lane Bids Per Unique Offer

Source: Manheim Data 16 “The system is really easy and I really enjoy it. I'll be honest. I was one of the biggest skeptics against it because I really hadn't tried it and I couldn't get over the idea of bidding online. But since I've done it the last few weeks I do like it. The more I use it, the more I like it.”

-Manheim Dealer Client • Wholesale remain heavily digital for the foreseeable future.

We’re going all-in on vehicle imaging. WHAT’S NEXT FOR WHOLESALE? New vehicle tracking technologies will make it easier to locate and preview inventory.

In-lane bidding is contingent on safety first. 19

Manheim Used Vehicle Value Index

Concept: A single measure of used vehicle price change that is independent of underlying segment shifts in the characteristics of vehicles being sold

Steps: All Manheim U.S. sales Classify by market segment Account for differences in mileage Weight to provide smoother segment mix Seasonally adjust Record-Setting Rebound In Wholesale Prices

Prices in June increased 8.95% from May 2020 and were up 6.3% compared to June 2019

155

150 149.3

145

140

135

130

125

120

115

110

105

100

95 January 1995 = 100 90 Jan-95 Jan-98 Jan-01 Jan-04 Jan-07 Jan-10 Jan-13 Jan-16 Jan-19

Source: Manheim/Cox Automotive 20 Used Vehicle Values Back to Pre-Covid Strength

Year-over-year price performance stronger than average

25%

20%

15%

10% 6.3% 5%

0%

-5%

-10%

-15% Jan-96 Jan-99 Jan-02 Jan-05 Jan-08 Jan-11 Jan-14 Jan-17 Jan-20

Source: Manheim/Cox Automotive 21 Manheim Index versus Mix & Quality Adjusted New Vehicle Price with 3 ½ year Lag

Used vehicle prices back above the historical new vehicle price relationship trend

60%

55%

50%

45%

40%

35%

30% Jan-95 Jan-97 Jan-99 Jan-01 Jan-03 Jan-05 Jan-07 Jan-09 Jan-11 Jan-13 Jan-15 Jan-17 Jan-19

Source: Bureau of Labor Statistics, Manheim/Cox Automotive 22 Wholesale Used Vehicle Prices vs. New Vehicle Prices

Manheim Non-Adjusted Price (LHS) Average new vehicle transaction price per KBB (RHS) $15,500 $41,000

$39,000 $14,500

$37,000

$13,500 $35,000

$12,500 $33,000

$31,000 $11,500

$29,000

$10,500 $27,000

$9,500 $25,000 Jan-12 Jan-13 Jan-14 Jan-15 Jan-16 Jan-17 Jan-18 Jan-19 Jan-20

Source: Manheim/Cox Automotive 23 2020 Weekly Price Trend More Than Recovered

2020 spring bounce ended abruptly as COVID-19 pandemic hit the US but prices more than recovered in weeks since 3-Year-Old Model MMR Index by Week

2014-2016 2017 2018 2019 2020 110.0%

105.0%

100.0%

95.0%

90.0%

85.0%

80.0% 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52

Source: Manheim/Cox Automotive 24 Retention Values Ended June Up 1.9% Relative to 2019

Relative to MSRP and fixing the basket of vehicles by what was sold leaves residuals following similar pattern

63%

61%

59%

57%

55%

53%

51%

49%

47% CY 2018 CY 2019 CY 2020 (1 to 3 year-old models)

45% Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Source: Kelley Blue Book/Cox Automotive 25 Percent Change in Wholesale Prices for Major Market Segments

Most major segments saw year-over-year gains in June

22% 1 year 2 years 3 years 17% 4 years

12% 9.7%

7% 6.3% 5.9% 4.6% 4.0%

1.8% 2%

-3% -3.5%

-8% Industry Compact Midsize cars Luxury cars Pickups SUV/CUV

Source: Manheim/Cox Automotive 26 Average Auction Price – Rental Risk Units

Average price for rental risk units sold in June up 3.4% y/y and up 8.9% m/m

17,000 2016 2017 16,500 2018 2019 16,000 2020

15,500

15,000

14,500

14,000

13,500

13,000 1 2 3 4 5 6 7 8 9 10 11 12

Source: Manheim/Cox Automotive 27 Distribution of Rental Risk Vehicles

2018 Q2 2019 Q2 2020 Q2 Number of unique year, make, model, body configurations 3,023 3,337 3,090 sold

Share accounted for top 10 YMMB 13.5% 12.0% 14.0%

Share accounted for top 25 YMMB 22.9% 22.3% 25.9%

Number of YMMB to reach 50% share 109 106 86

Source: Manheim/Cox Automotive 28 Average Mileage – Rental Risk Units Sold at Auction

Average mileage for rental risk units in June was down 7% compared to a year ago and down 6% m/m

60,000

55,000

50,000

45,000

43,473 40,000

35,000

30,000

25,000

20,000 Jan-03 Jan-05 Jan-07 Jan-09 Jan-11 Jan-13 Jan-15 Jan-17 Jan-19

Source: Manheim/Cox Automotive 29 Rental Risk Units Sold by Condition

100%

90%

80%

70%

60% 5.0 4.0 - 4.9 50% 3.0 - 3.9 2.0 - 2.9 40% 0 - 1.9

30%

20%

10%

0% 2015 Q4 2016 Q2 2016 Q4 2017 Q2 2017 Q4 2018 Q2 2018 Q4 2019 Q2 2019 Q4 2020 Q2

Source: Manheim/Cox Automotive 30 Rental Risk Units Sold by Make

100%

90%

80% All other 70% 60% VW 50% Chrysler Hyundai 40% Dodge 30% Nissan Ford 20%

10%

0% 2015 2016 2016 2016 2016 2017 2017 2017 2017 2018 2018 2018 2018 2019 2019 2019 2019 2020 2020 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2

Source: Manheim/Cox Automotive 31 Rental Risk Units Sold by Segment

100%

90%

80%

70%

60% Van SUV

50% Pickup

40% Luxury Car Midsize Car

30%

20%

10%

0% 2015 2016 2016 2016 2016 2017 2017 2017 2017 2018 2018 2018 2018 2019 2019 2019 2019 2020 2020 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2

Source: Manheim/Cox Automotive 32 Manheim Market Report (MMR) Vehicle Insights

All top selling vehicles in June at Manheim saw higher prices over the last 30 days (June 1 – July 1). Prices year- over-year saw mostly lower than normal depreciation, but a few vehicles sold for more than year-ago prices.

Rank Source(Rank) Category Subcategory Vehicle 1-Jul Past 30 Days Last Year Current Dep L12M Dep/Mo 1 All SUV SUV Midsize 2017 AWD 4D SUV 2.5L SV $15,800 $15,550 $16,000 1.6% -0.1% 2 All Compact Car Compact Car Premium 2017 4D SE $9,925 $9,750 $10,700 1.8% -0.6% 3 All SUV SUV Entry 2017 FWD 4D SUV 1.5L SE $13,450 $13,250 $13,950 1.5% -0.3% 4 All Compact Car Compact Car Premium 2017 4D SEDAN SV $9,875 $9,675 $10,400 2.1% -0.4% 5 All Pickup Pickup Heavy Duty Full 2019 RAM 2500 4WD V8 CREW CAB 6.4L BIG HORN $38,500 $37,800 $36,800 1.9% 0.4% 1 Dealer Dealer Midsize Car Midsize Car Premium 2014 PASSAT 4C TDSL 4D SEDAN TDI SE $9,600 $9,425 $9,525 1.9% 0.1% 1 Lease Lease SUV SUV Midsize 2017 NISSAN ROGUE AWD 4D SUV 2.5L SV $15,800 $15,550 $16,000 1.6% -0.1% 1 Rental Rental Midsize Car Midsize Car Entry 2018 4D SEDAN LT $12,950 $12,650 $13,900 2.4% -0.6%

Source: Manheim/Cox Automotive 33 Sales Impact Varies by DMA As Evidenced By Unique Credit Apps

April 5th July 5th

Source: Cox Automotive 34 Appendix

35 Weekly Price Trend Similar For Non-Luxury

Slightly stronger declines followed by stronger recovery

Non-Luxury 3-Year-Old Model MMR Index by Week

2014-2016 2017 2018 2019 2020 110.0%

105.0%

100.0%

95.0%

90.0%

85.0%

80.0% 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52

Source: Manheim/Cox Automotive 36 Weekly Price Trend Less Severe For Luxury

Luxury vehicles have outperformed by not declining as much and now seeing similar strength

Luxury 3-Year-Old Model MMR Index by Week

2014-2016 2017 2018 2019 2020 105.0%

100.0%

95.0%

90.0%

85.0%

80.0% 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52

Source: Manheim/Cox Automotive 37 Weekly Price Trend Now Strong for One-Year-Old Vehicles

One-year-old vehicle prices were very stable throughout most of 2019 but had a rough March and April

1-Year-Old Model MMR Index by Week

2014-2016 2017 2018 2019 2020 105.0%

100.0%

95.0%

90.0%

85.0%

80.0% 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52

Source: Manheim/Cox Automotive 38 Luxury Prices Move Higher Than Non-Luxury In June

Luxury prices in June were up 7% compared to June 2019, while non-luxury prices increased 6%

Luxury Non-Luxury 150 146.2

140

130

124.4 120

110

100

90

January 2000 = 100 80 Jan-00 Jan-02 Jan-04 Jan-06 Jan-08 Jan-10 Jan-12 Jan-14 Jan-16 Jan-18 Jan-20

Source: Manheim/Cox Automotive 39 Prices Improve In June

Electric car prices in June were up 5% compared to June 2019

Electric Car 140

120 107.5

100

80

60

40

20

January 2015 = 100 0 Jan-15 Jan-16 Jan-17 Jan-18 Jan-19 Jan-20

Source: Manheim/Cox Automotive 40 Rise of SUV Not Yet Fully Reflected in Wholesale Market

The SUV reigns supreme in new vehicle sales while cars still dominated the used car market

New Vehicle Sales by Category Manheim Sales by Category

CAR PICKUP SUV VAN CAR PICKUP SUV VAN 60% 60%

50% 50% 50% 44% 40% 40% 39%

30% 30%

25% 20% 20% 20% 12% 10% 10%

5% 5% 0% 0% 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Source: Manheim/Cox Automotive 41 Thank You

Jonathan Smoke & Zo Rahim Economic Industry Insights

[email protected] [email protected]

@SmokeonCars

@autosanalyst

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