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MARKET REPORTBlue Book

Andrew Nicolai Director, Public Relations949.293.5241 | [email protected]

Wholesale Market Showed Strength in Q1 2018 with New Tax Bill Driving Up Demand

FIRST QUARTER 2018

• The used-car market remained strong in the first quarter of 2018, falling only 0.6 percent compared to 2017, when Kelley Blue Book® Auction Values fell 2 percent, or $332 per unit. The recent change in the tax bill provided many consumers with a considerable amount of disposable income for purchasing vehicles and influenced high demand for buyers at auction.

• Retention values for 1- to 3-year-old vehicles climbed 0.1 percent in Q1, ending the quarter with a 0.2 percent year-over-year gain. Wholesale retention values are looking to stay strong up until the start of summer, and then they generally drop quickly from seasonal factors.

• Market value disparity between cars and SUVs/crossovers were evident in Q1 2018, as cars experienced an 8.8 percent decrease year-over-year in retention values, while SUVs/crossovers saw a 5.7 percent increase year-over-year. Relatively low retail fuel prices and a stable economy has favored SUVs/crossovers in recent years and this trend is expected to continue. Used-car values in the second quarter of 2018 are expected to follow in a similar trend to 2017, but the drop may be delayed due to the current strength in demand.

• Hybrid and electric vehicles distinctively saw the biggest increase in wholesale values in Q1 2018, due to their increasing popularity and demand amidst increasing gas prices, ending the quarter up 14.4 percent for electric vehicles and 7.9 percent for hybrid vehicles.

• MINI and FIAT experienced the highest increase in year-over-year retention values among non-luxury brands in Q1 2018, with MINI at an impressive 13 percent and FIAT at 9 percent, driven by unusually high demand compared to 2017. On the luxury side, BMW and Cadillac experienced a moderate 5 percent increase in year-over-year retention values among luxury brands, followed closely by Jaguar, up 4 percent. These luxury brands have a competitive mix of cars and SUVs in their lineups, which helps drive these gains.

• The U.S. Energy Information Administration forecasted regular gasoline retail prices are expected to be an average of $2.71 per gallon during the summer driving season, up compared to last year’s average of $2.41 per gallon.

Brenna Buehler Senior Manager, Public Relations 909.225.4643 | [email protected]

Nichole Mrasek Senior Manager, Public Relations679.429.7627 | [email protected]

$15,000

$16,000

$17,000

$18,000

$19,000

$20,000

$21,000

$22,000

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

Auct

ion

Valu

e

Auction Values, 2018 YTD

CY 2016

CY 2017

CY 2018

Source: Kelley Blue Book Automotive Insights, 1- to 3-year-old vehicles

2 BLUE BOOK MARKET REPORT FIRST QUARTER 2018

50%

52%

54%

56%

58%

60%

62%

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

Reta

ined

Val

ue (A

uctio

n Va

lue/

MSR

P)

Retained Value, 2018 YTD

CY 2016

CY 2017

CY 2018

Source: Kelley Blue Book Automotive Insights, 1- to 3-year-old vehicles

80%

78%

77%

76%

75%

73%

72%

71%

70%

69%

69%

69%

69%

68%

68%

67%

67%

67%

67%

64%

63%

62%

62%

59%

58%

58%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90%

Sporty Compact Car

Luxury High Performance CarLuxury Sports Car

Mid-size Pickup Truck

Luxury Mid-size SUV/Crossover

High Performance Car

Luxury Full-size SUV/Crossover

High-end Luxury CarLuxury Compact SUV/Crossover

Electric Vehicle

Hybrid/Alternative Energy Car

Full-size SUV/CrossoverVan

AverageMid-size SUV/Crossover

Compact SUV/Crossover

Luxury Car

Subcompact SUV/CrossoverSports Car

Minivan

Full-size Pickup Truck

Compact Car

Entry-level Luxury Car

Mid-size CarFull-size Car

Subcompact Car

Retained Value, MY 2017

Source: Kelley Blue Book Automotive Insights, Model Year 2016 Vehicles


20%

4%

6%

0%

1%

1%

-3%

1%

0%

7%

2%

-1%

-3%

-1%

0%

-1%

-1%

2%

-1%

0%

0%

-5%

-5%

-5%

-7%

-12%

-16% -6% 4% 14% 24%

Electric VehicleSubcompact Car

Luxury CarMid-size CarFull-size Car

Compact CarEntry-level Luxury Car

MinivanSubcompact SUV/Crossover

Hybrid/Alternative Energy CarCompact SUV/Crossover

High-end Luxury CarFull-size Pickup Truck

Sports CarAverage

Luxury Compact SUV/CrossoverMid-size SUV/Crossover

VanFull-size SUV/Crossover

Luxury Full-size SUV/CrossoverLuxury Mid-size SUV/Crossover

High Performance CarLuxury Sports Car

Sporty Compact CarMid-size Pickup Truck

Luxury High Performance Car

Year-over-Year Point Change, Retained Value

Source: Kelley Blue Book Automotive Insights, Model Year 2016 vs 2015


-10.5%-6.3%

-5.3%-5.0%-4.9%-4.6%-4.5%-4.4%-4.0%-3.9%-3.8%-3.7%-3.2%-2.6%-2.5%-2.5%-2.4%-2.3%-1.9%-1.7%-1.5%-1.4%-1.0%-0.9%-0.6%-0.3%

0.2%0.2%0.4%0.5%0.5%0.5%1.2%1.3%

5.8%5.9%

-22.0% -17.0% -12.0% -7.0% -2.0% 3.0% 8.0% 13.0%

Alfa RomeoFIAT

JaguarVolvo

INFINITILincoln

LexusChrysler

BuickGenesis

AudiLand Rover

CadillacAcurasmart

PorscheGMC

AverageJeep

VolkswagenMercedes-Benz

BMWRam

SubaruMazda

KiaFord

HyundaiToyota

ChevroletDodgeNissanHonda

MitsubishiScionMINI

Q1 to Date Change (%) by Manufacturer

Source: Kelley Blue Book Automotive Insights, 1 to 3 year old vehicles

-6.4%-4.1%-3.9%-3.7%-3.2%-2.9%-2.7%-2.5%-2.2%-1.8%-1.7%-1.5%-1.2%

-0.5%-0.1%-0.1%

0.1%0.3%0.6%0.8%1.1%

1.8%3.7%

4.5%7.9%

14.4%

-10% -5% 0% 5% 10% 15% 20%

Luxury High Performance CarLuxury Full-size SUV/Crossover

Full-size SUV/CrossoverEntry-level Luxury Car

Luxury Mid-size SUV/CrossoverLuxury Compact SUV/Crossover

Mid-size SUV/CrossoverLuxury Sports Car

Luxury CarHigh-end Luxury Car

Mid-size Pickup TruckAverageMinivan

High Performance CarFull-size Car

Full-size Pickup TruckSporty Compact Car

Mid-size CarCompact SUV/Crossover

Subcompact CarVan

Subcompact SUV/CrossoverSports Car

Compact CarHybrid/Alternative Energy Car

Electric Vehicle

Q1 to Date Change (%) by Segment

Source: Kelley Blue Book Automotive Insights, 1 to 3 year old vehicles


53%

57%

57%

57%

58%

59%

61%

61%

61%

63%

63%

63%

64%

68%

68%

69%

73%

75%

77%

0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% 70.0% 80.0% 90.0%

FIAT

Mitsubishi

Volkswagen

Ram

Chrysler

Hyundai

Nissan

Kia

Dodge

Chevrolet

Ford

Average

GMC

Jeep

Toyota

Mazda

Honda

Subaru

MINI

Retained Value, MY 2017Non-Luxury Brands

Source: Kelley Blue Book Automotive Insights, Model Year 2016


-4%

-3%

-2%

-2%

-1%

0%

0%

0%

1%

1%

1%

1%

2%

2%

3%

3%

4%

9%

13%

-6.0% -1.0% 4.0% 9.0% 14.0%

Subaru

GMC

Chevrolet

Volkswagen

Mitsubishi

Toyota

Honda

Ram

Ford

Kia

Jeep

Hyundai

Average

Nissan

Dodge

Mazda

Chrysler

FIAT

MINI

Year-over-Year Point Change, Retained ValueNon-Luxury Brands



59%

59%

65%

66%

68%

68%

69%

70%

70%

71%

72%

73%

77%

80%

92%

0.0% 20.0% 40.0% 60.0% 80.0% 100.0%

Buick

Lincoln

INFINITI

Cadillac

Mercedes-Benz

Audi

Volvo

Alfa Romeo

BMW

Average

Jaguar

Acura

Lexus

Land Rover

Porsche

Retained Value, MY 2017Luxury Brands

Source: Kelley Blue Book Automotive Insights, Model Year 2016


-12%

-6%

-4%

-4%

-3%

-2%

-1%

-1%

-1%

1%

1%

2%

4%

5%

5%

-15% -10% -5% 0% 5% 10%

Alfa Romeo

Volvo

INFINITI

Mercedes-Benz

Land Rover

Audi

Lexus

Average

Acura

Buick

Lincoln

Porsche

Jaguar

Cadillac

BMW

Year-over-Year Point Change, Retained ValueLuxury Brands



$1.50

$1.75

$2.00

$2.25

$2.50

$2.75

$3.00

$3.25

$3.50

$3.75

$4.00

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

Fuel

Pric

es

Fuel PricesRegular Retail Gasoline

2015

2016

2017

2018

Source: U.S. Energy Information Administration

$2.65

Year Chart (Hi/Lo) Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Year2018 $2.55 $2.59 $2.592017 $2.37 $2.30 $2.32 $2.42 $2.39 $2.36 $2.31 $2.38 $2.63 $2.51 $2.55 $2.49 $2.422016 $1.98 $1.76 $1.93 $2.11 $2.25 $2.36 $2.21 $2.18 $2.22 $2.25 $2.18 $2.28 $2.142015 $2.14 $2.22 $2.46 $2.47 $2.72 $2.80 $2.79 $2.67 $2.41 $2.29 $2.18 $2.04 $2.43

Average Fuel Prices By Month ($)


MAKE Q1 Change (%)MINI 5.9%Scion 5.8%Mitsubishi 1.3%Honda 1.2%Nissan 0.5%

MAKE Q1 Change (%)Alfa Romeo -10.5%FIAT -6.3%Jaguar -5.3%Volvo -5.0%INFINITI -4.9%

Bottom 5 Performing Brands - Auction Value

MY 2015 - 2017, Kelley Blue Book Auction Value


Top 5 Performing Brands - Auction Value

SEGMENT Q1 Change (%)Electric Vehicle 14.4%Hybrid/Alternative Energy Car 7.9%Compact Car 4.5%Sports Car 3.7%Subcompact SUV/Crossover 1.8%

SEGMENT Q1 Change (%)Luxury High Performance Car -6.4%Luxury Full-size SUV/Crossover -4.1%Full-size SUV/Crossover -3.9%Entry-level Luxury Car -3.7%Luxury Mid-size SUV/Crossover -3.2%

Top 5 Performing Segments - Auction Value


Bottom 5 Performing Segments - Auction Value



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 automotive industry. Each week the company provides market-reflective values on its top-rated website KBB.com, including its famous Blue Book® Trade-In Values and Kelley Blue Book® Price Advisor tool, which provides a range for what consumers can reasonably expect to pay for a vehicle in their area. Car owners looking to sell immediately can also get a redeemable, transaction-ready offer with Kelley Blue BookSM Instant Cash Offer. 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 launched its first international consumer-facing site in 2017. Kelley Blue Book is a Cox Automotive brand.

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 Cox Automotive Cox Automotive Inc. makes buying, selling and owning cars easier for everyone. The global company’s 34,000-plus team members and family of brands, including Autotrader®, Dealer.com®, Dealertrack®, Kelley Blue Book®, Manheim®, NextGear Capital®, VinSolutions®, vAuto® and Xtime®, are passionate about helping millions of car shoppers, 40,000 auto dealer clients across 100+ countries and many others throughout the automotive industry thrive for generations to come. Cox Automotive is a subsidiary of Cox Enterprises Inc., a privately-owned, Atlanta-based company with revenues exceeding $20 billion. coxautoinc.com

MAKE MODEL Q1 Change (%)MINI Countryman 24.5%BMW i3 22.2%Mercedes-Benz B-Class 20.1%Kia Cadenza 17.0%Kia Forte 12.0%Dodge Viper 10.6%Ram C/V Tradesman 10.0%Ford Focus 9.9%Toyota Prius 9.5%Chevrolet Express 2500 Cargo 8.8%

MAKE MODEL Q1 Change (%)Jaguar XF -11.9%BMW i8 -10.4%Cadillac XTS -9.5%INFINITI Q70 -9.2%Audi R8 -8.0%Lincoln Navigator -7.8%Ford Expedition -7.8%INFINITI Q50 -7.5%Kia K900 -7.3%Volkswagen Tiguan -6.9%



Top 10 Performing Models - Auction Value

Bottom 10 Performing Models - Auction Value

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