trends shaping the automotive remarketing industry melinda zabritski

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Experian Public.

Traveling the open road: Discovering the trends that are shaping the automotive remarketing industry

Melinda Zabritski | Experian Automotive

2 © 2013 Experian Information Solutions, Inc. All rights reserved.

Experian Public.

What’s on the road today

What’s being registered and in demand

How are consumers financing

The return of the leasing market

What’s being leased

What’s coming off lease

Discussion points


Experian Public.

Vehicles in

Operation March 31, 2013

247.4M

Used Vehicle

Sales (37.6M)

Scrapped

Vehicles

(12.3M)

Vehicle Changes over 12 months: 26.9M (11%) (scrapped + new sales)

Vehicle Movements: 76.3M (31.1%) (used sales + address changes)

Vehicles in

Operation March 31, 2012

245.1M

What’s on the road today

Source: Experian Automotive


Experian Public.

14.87%

11.88%

9.14%

8.28%

5.66%

5.59%

5.29%

5.00%

4.44%

3.89%

3.45%

3.06%

3.01%

2.72%

2.70%

2.14%

1.71%

1.55%

1.38%

1.02%

Pickup - Full Sized

Mid Range Car - Standard

Small Car - Economy

Mid Range Car - Lower

SUV - Lower Mid Range

Van - Mini

Pickup - Small

CUV - Entry Level

Mid Range Car - Premium

Upscale - Near Luxury

SUV - Large

CUV - Mid Range

SUV - Entry Level

Sport Car - Touring

Upscale - Luxury

Van - Full Sized

CUV - Premium

Traditional Car

Small Car - Budget

Sport Car - Premium

Top 20 segments on the road

96.8% of all vehicles



Experian Public.

7.3 7.6 7.7 7.8 7.7

10.0 10.3 10.6 10.8 10.9

0

2

4

6

8

10

12

Q2 2009 Q2 2010 Q2 2011 Q2 2012 Q2 2013

Rolling 15 MY Avg Age All

Average age of vehicles on the road today



Experian Public.

0

2

4

6

8

10

12

14

16

20

14

20

12

20

10

20

08

20

06

20

04

20

02

20

00

19

98

19

96

19

94

19

92

19

90

19

88

19

86

19

84

19

82

19

80

19

78

19

76

19

74

19

72

19

70

19

68

Mil

lio

ns

VIO by model year


50.9% of all VIO is

MY2008-2000


Experian Public.

11.53 12.75 14.33 7.82

37.00 37.61 37.95

20.58

0

10

20

30

40

50

60

2010 2011 2012 YTD 2013

Mil

lio

ns

Total vehicle registrations

New Used

Market growth in light truck & passenger cars



Experian Public.

$702 $712

$667

$636 $647

$682

$751

$560

$580

$600

$620

$640

$660

$680

$700

$720

$740

$760

Q2 2007 Q2 2008 Q2 2009 Q2 2010 Q2 2011 Q2 2012 Q2 2013

Bil

lio

ns

Total outstanding loan balance

Growth in lending balances



Experian Public.

1.88% 1.97%

2.23%

2.59% 2.66% 2.52%

1.71%

0.86%

0.00%

0.50%

1.00%

1.50%

2.00%

2.50%

3.00%

2006 2007 2008 2009 2010 2011 2012 YTD2013

Annual repossession rate

Turnover due to repossessions



Experian Public.

What new segments are consumers purchasing?

11.8%

11.8%

11.8%

10.5%

10.2%

5.8%

3.8%

3.7%

3.6%

3.4%

3.3%

3.2%

3.1%

2.8%

2.3%

1.7%

1.7%

1.6%

1.4%

1.1%

Pickup - Full Sized

Small Car - Economy

CUV - Entry Level

Mid Range Car - Standard

Mid Range Car - Lower

CUV - Mid Range

Van - Mini

SUV - Lower Mid Range

Alt Power - Hybrid Car

Upscale - Near Luxury

CUV - Premium

Mid Range Car - Premium

Small Car - Budget

SUV - Entry Level

Sport Car - Touring

SUV - Large

Van - Full Sized

Pickup - Small

Upscale - Luxury

SUV - Premium Large

Growth since 2010

Small Car-Budget ↑ 95%

CUV Entry Level ↑ 66%

SUV Lower Mid ↑ 197%

Hybrid ↑ 145%



Experian Public.

101%

72%

65%

46% 41%

38% 34%

24%

17% 17%

0

50

100

150

200

250

300

350

400

450

500

0%

20%

40%

60%

80%

100%

120%

Alt Power- Hybrid

Car

CUV -EntryLevel

CUV - MidRange

CUV -Premium

Small Car- Budget

Upscale -Ultra

Sport Car- UltraLuxury

SUV -Premium

Large

Sport Car- Premium

Upscale -Near

Luxury

Th

ou

sa

nd

s

Growth 2010 - 2013 Q2 13 registrations

Top demand used vehicle segments



Experian Public.

Used segments with declining demand

-12%

-10%

-8%

-6%

-4%

-2%

0%Upscale -

LuxurySport Car -

UpperPremium

SUV -Lower Mid

Range

TraditionalCar

Van - Mini Pickup -Small

Van - FullSized

306k 26k

548k 190k

505k

494k 195k



Experian Public.

0%

1%

2%

3%

4%

5%

6%

7%

8%

9%

Used vehicle sales by model year (H1 2013)


Experian Public.

$456 $446

$458 $458 $456 $459

$343 $332

$344 $347 $349 $349

$200

$250

$300

$350

$400

$450

$500

$10

$12

$14

$16

$18

$20

$22

$24

$26

$28

2008 2009 2010 2011 2012 YTD 2013

Th

ou

san

ds

Average new finance amount Average used finance amount

Average new payment Average used payment

Shifts in consumer financing



Experian Public.

63

62

63 63

64

65

59

57

58

59

60 60

52

54

56

58

60

62

64

66

2008 2009 2010 2011 2012 YTD 2013

New term Used term

Average terms on new and used financing



Experian Public.

46

69.8 68.1 66.2

0

10

20

30

40

50

60

70

80

2004 2009 2011 2012

Vehicles purchased new

36.7

50.7 46.8

0

10

20

30

40

50

60

70

80

2004 2009 2011

Vehicles purchased used

Average length of ownership

16 Source: Experian Automotive


Experian Public.

23.02% 24.14% 24.40%

17.68%

23.79% 23.62% 24.40%

27.64%

0%

5%

10%

15%

20%

25%

30%

Q2 2006 Q2 2007 Q2 2008 Q2 2009 Q2 2010 Q2 2011 Q2 2012 Q2 2013

New lease share of the new finance market

Return of the leasing market

Average new lease payment $414

Average new lease term 35 months



Experian Public.

Which states have highest share of new leasing



Experian Public.

12.5%

11.6%

11.4%

9.5%

8.7%

6.9%

6.4%

4.3%

4.2%

3.8%

3.4%

3.2%

2.7%

2.0%

1.7%

1.5%

1.1%

0.8%

0.7%

0.7%

MID RANGE CAR - STANDARD

CUV - ENTRY LEVEL

MID RANGE CAR - LOWER

UPSCALE - NEAR LUXURY

SMALL CAR - ECONOMY

CUV - MID RANGE

CUV - PREMIUM

SUV - LOWER MID RANGE

UPSCALE - LUXURY

MID RANGE CAR - PREMIUM

PICKUP - FULL SIZED

ALT POWER - HYBRID CAR

VAN - MINI

SUV - PREMIUM LARGE

SMALL CAR - BUDGET

SUV - ENTRY LEVEL

SPORT CAR - TOURING

SPORT CAR - PREMIUM

UPSCALE - PREMIUM

PICKUP - SMALL

Top leased new segments in 2013



Experian Public.

3.7%

3.1% 3.0%

2.5% 2.3%

2.2% 2.1% 2.0% 2.0% 2.0%

0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

3.0%

3.5%

4.0%

Top leased new models by share of market



Experian Public.

0

5

10

15

20

25

30

35

40

45

Th

ou

sa

nd

s

ACCORD CIVIC CAMRY ALTIMA CR-V

Top 5 leased vehicles coming due

129k 318K



Experian Public.

703

654

690 691

745

600

620

640

660

680

700

720

740

760

ACCORD ALTIMA CAMRY CIVIC CR-V

Average credit scores on consumers financing MY2010 vehicles in H1 2013

What do these buyers look like?


Experian Public.

$330

$339

$323

$291

$340

$275

$285

$295

$305

$315

$325

$335

$345

$5,000

$7,000

$9,000

$11,000

$13,000

$15,000

$17,000

$19,000

$21,000

ACCORD ALTIMA CAMRY CIVIC CR-V

Amount financed Monthly payment

Financing on MY2010 vehicles in H1 2013



Experian Public.

In summary

Strong industry with continued growth as sales/registrations increase and vehicles last longer

Healthy finance market with low charge-offs and increased balances

Low sales/registrations of 2009 will continue to plague market with inventory shortages for the next 24+ months

Growth is occurring in the lower level economy & budget class vehicles

As vehicle prices/amount finance increases monthly payment remain flat with increased term and low rates

trends shaping the automotive remarketing industry melinda zabritski

Business

experian public

vehicles source

scrapped vehicles

used vehicle sales

vehicle changes

open road

lending balances source

model year source