Post on 28-Jun-2020
Vehicle Market InsightsManheim Used Vehicle Value Index Call - April 7, 2020
J o n a t h a n S m o k e & Z o R a h i m
S p e c i a l G u e s t s : Z a c h H a l l o w e l l &
B e n F l u s b e r g
1
INVENTORY
RETAIL
FINANCIAL
MOBILITY
COVID-19 Market Update
4
Covid-19 State Impact Varies Per County (Cases per Million)
Source: CDC
5
Weekly Initial Claims Hit Record Levels
Source: U.S. Department of Labor
6
Consumer Sentiment Declined Steeply in March
Source: Morning Consult
0
20
40
60
80
100
120
140
1/1/20 1/8/20 1/15/20 1/22/20 1/29/20 2/5/20 2/12/20 2/19/20 2/26/20 3/4/20 3/11/20 3/18/20 3/25/20 4/1/20
ICS Value (7-Day Average)
Morning Consult’s Index of Consumer Sentiment on Monday was down 28% since March 1
7
Retail Trend Estimate - New
Source: Cox Automotive
-65.6%
-80.0%
-70.0%
-60.0%
-50.0%
-40.0%
-30.0%
-20.0%
-10.0%
0.0%
10.0%
20.0%
30.0%
2/1
/20
20
2/3
/20
20
2/5
/20
20
2/7
/20
20
2/9
/20
20
2/1
1/2
020
2/1
3/2
020
2/1
5/2
020
2/1
7/2
020
2/1
9/2
020
2/2
1/2
020
2/2
3/2
020
2/2
5/2
020
2/2
7/2
020
2/2
9/2
020
3/2
/20
20
3/4
/20
20
3/6
/20
20
3/8
/20
20
3/1
0/2
020
3/1
2/2
020
3/1
4/2
020
3/1
6/2
020
3/1
8/2
020
3/2
0/2
020
3/2
2/2
020
3/2
4/2
020
3/2
6/2
020
3/2
8/2
020
3/3
0/2
020
4/1
/20
20
4/3
/20
20
4/5
/20
20
4/7
/20
20
4/9
/20
20
4/1
1/2
020
4/1
3/2
020
4/1
5/2
020
4/1
7/2
020
DAILY NEW RETAIL % CHG YoY vs SAME DAY OF WEEK
YoY % Chg 2019 YoY % Chg 2020
8
New Vehicle Sales Slide Swiftly In March
Source: BEA
-50%
-40%
-30%
-20%
-10%
0%
10%
20%
30%
40%
Mar
-06
Au
g-0
6
Jan
-07
Jun
-07
No
v-07
Ap
r-0
8
Sep
-08
Feb
-09
Jul-
09
Dec
-09
May
-10
Oct
-10
Mar
-11
Au
g-1
1
Jan
-12
Jun
-12
No
v-12
Ap
r-1
3
Sep
-13
Feb
-14
Jul-
14
Dec
-14
May
-15
Oct
-15
Mar
-16
Au
g-1
6
Jan
-17
Jun
-17
No
v-17
Ap
r-1
8
Sep
-18
Feb
-19
Jul-
19
Dec
-19
May
-20
Total New % Change y/y
9
New Vehicle Sales Slide Swiftly In March
Source: Motor Intelligence
-70%
-60%
-50%
-40%
-30%
-20%
-10%
0%
% Change Y/Y
10
New Vehicle Sales Slide Swiftly In March
Source: Cox Automotive
-70%
-60%
-50%
-40%
-30%
-20%
-10%
0%
% Change Y/Y
11
Retail Trend Estimate - Used
Source: Cox Automotive
-63.5%
-80.0%
-60.0%
-40.0%
-20.0%
0.0%
20.0%
40.0%
2/1
/20
20
2/3
/20
20
2/5
/20
20
2/7
/20
20
2/9
/20
20
2/1
1/2
020
2/1
3/2
020
2/1
5/2
020
2/1
7/2
020
2/1
9/2
020
2/2
1/2
020
2/2
3/2
020
2/2
5/2
020
2/2
7/2
020
2/2
9/2
020
3/2
/20
20
3/4
/20
20
3/6
/20
20
3/8
/20
20
3/1
0/2
020
3/1
2/2
020
3/1
4/2
020
3/1
6/2
020
3/1
8/2
020
3/2
0/2
020
3/2
2/2
020
3/2
4/2
020
3/2
6/2
020
3/2
8/2
020
3/3
0/2
020
4/1
/20
20
4/3
/20
20
4/5
/20
20
4/7
/20
20
4/9
/20
20
4/1
1/2
020
4/1
3/2
020
4/1
5/2
020
4/1
7/2
020
DAILY USED RETAIL % CHG YoY vs SAME DAY OF WEEK
YoY % Chg 2019 YoY % Chg 2020
The Step Change to All-Digital
Zach Hallowell
VP, Manheim Digital
13
ACCESSING MANHEIM INVENTORY
MANHEIM.COM OVE / PRIVATE STORES MANHEIM EXPRESS
PHYSICAL SALES SIMULCAST DIGITAL BLOCKS
14
OF LANES AT
MANHEIM SITES
ARE DIGITAL
IN 2020
52%OF INVENTORY SOLD
TO A DIGITAL BUYER
IN 2020
2.3M+VEHICLES SOLD
TO A
DIGITAL BUYERS
IN 2019
18M+BIDS IN A DIGITAL
CHANNEL
IN 2019
150,000MONTHLY UNIQUE
VISITORS TO DIGITAL
CHANNELS IN
2019
25%
STATS: MANHEIM DIGITAL MARKETPLACE
MANHEIM DIGITAL SNAPSHOT
15
BEFORE COVID-19: THE RISE OF DIGITAL
Source: Manheim/Cox Automotive
Shift from Physical
to Digital Sales
Increased Adoption
of Digital Platforms
& Mobile Apps
Increased Usage of
MMR & Mobile Scans 51.5 53.0
18.7 20.1
0.0
20.0
40.0
60.0
80.0
2018 2019
Mill
ions
MMR Lookups VIN Scans
39% 43% 48% 52%
0%
20%
40%
60%
80%
100%
2017 2018 2019 2020 YTD W13
Digital Physical
0.0
50.0
100.0
150.0
200.0
2012 2013 2014 2015 2016 2017 2018 2019
Tho
usan
ds
Mobile Total Digital
16
BEFORE COVID-19: CLIENT SENTIMENT
Source: Manheim/Cox Automotive
80%of dealers have been
doing at least some pre-
sale research digitally
3/4say digital tools make
it easier to prepare for
the auction and
enhances their work.
2/3say digital tools have a
positive impact
Dealers Expect Growth Across Various Digital Channels
Dealers expect wholesale
digital buying to grow over
30% in the next year.
17
POST COVID-19: BUYERS AND SELLERS ARE ADAPTING TO DIGITAL ONLY
Source: Manheim/Cox Automotive
40% of dealers say that Simulcast has been an
excellent replacement
34% of Simulcast buyers since March 16 were first-time buyers
on the platform in 2020
“We prefer to buy in person if possible,
you get a better feel for the inventory, [but]
shifting online for now it’s a good thing.”
Simulcast Remote Seller Logins Simulcast Bids
“Beginning of a new
ERA!!! I like it a lot.”
“Not super happy
about it. But at least
I can still buy.”
Manheim Used Vehicle Value Index
All Manheim U.S. sales
Classify by market segment
Account for differences in mileage
Weight to provide smoother segment mix
Seasonally adjust
18
Steps:
A single measure of used vehicle price
change that is independent of underlying
segment shifts in the characteristics of
vehicles being sold
Concept:
19
Wholesale Prices Decline In March
Source: Manheim/Cox Automotive
141.9
90
95
100
105
110
115
120
125
130
135
140
145
150
Jan-95 Jan-98 Jan-01 Jan-04 Jan-07 Jan-10 Jan-13 Jan-16 Jan-19
January 1995 = 100
Prices in March decreased 1.10% versus February 2020 and were up 4.4% compared to March 2019
20
Used Vehicle Values Off Lows
Year-over-year price performance stronger than average
4.4%
-15%
-10%
-5%
0%
5%
10%
15%
20%
25%
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 stay above the historical new vehicle price relationship trend
30%
35%
40%
45%
50%
55%
60%
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
Source: Manheim/Cox Automotive
$25,000
$27,000
$29,000
$31,000
$33,000
$35,000
$37,000
$39,000
$41,000
$9,500
$10,000
$10,500
$11,000
$11,500
$12,000
$12,500
$13,000
$13,500
$14,000
$14,500
Jan
-12
Ap
r-1
2
Jul-
12
Oct
-12
Jan
-13
Ap
r-1
3
Jul-
13
Oct
-13
Jan
-14
Ap
r-1
4
Jul-
14
Oct
-14
Jan
-15
Ap
r-1
5
Jul-
15
Oct
-15
Jan
-16
Ap
r-1
6
Jul-
16
Oct
-16
Jan
-17
Ap
r-1
7
Jul-
17
Oct
-17
Jan
-18
Ap
r-1
8
Jul-
18
Oct
-18
Jan
-19
Ap
r-1
9
Jul-
19
Oct
-19
Jan
-20
Manheim Non-Adjusted Price (LHS) Average new vehicle transaction price per KBB (RHS)
23
2020 Spring Bounce Was Short-Lived
Week 11 was the official peak in values
Source: Manheim/Cox Automotive
80.0%
85.0%
90.0%
95.0%
100.0%
105.0%
110.0%
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
3-Year-Old Model MMR Index by Week
2014-2016 2017 2018 2019 2020
24
How does MMR currently work?
Source: Manheim
MMR represents the wholesale value of distinct Year-Make-Model-Styles (YMMS), adjusted for vehicle attributes like mileage, AutoGrade™ condition and exterior color.
MMR is powered by a non-editorialized, statistical analysis of in-lane and digital wholesale vehicle transactions that are facilitated by Manheim, and it’s updated daily.
MMR uses a dynamic look-back period. MMR starts with transactions from the prior 30 days and extends back further as needed based on recent auction volumes.
MMR is not a simple average. To reflect today’s value rather than a historic average, MMR accounts for upward/downward trend of transaction prices over look-back period.
25
How does MMR currently work?
Source: Manheim
26
How does MMR currently work?
Source: Manheim
27
Manheim.com links to daily MMR Retention trend
Source: Manheim
https://publish.manheim.com/en/whats-new/daily-mmr-retention.html
Requires Manheim log-in credentials
28
Retention Values Ended March Down 0.2% Relative to 2019
Relative to MSRP and fixing the basket of vehicles by what was sold leaves residuals swinging from up to down
Source: Kelley Blue Book/Cox Automotive
(1 to 3 year-old models)
45%
47%
49%
51%
53%
55%
57%
59%
61%
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
CY 2018 CY 2019 CY 2020
29
Percent Change in Wholesale Prices for Major Market Segments
Most major segments saw year-over-year gains in March
Source: Manheim/Cox Automotive
4.4%
1.6%
-1.4%
6.4%
1.0%
4.7%
-2.6%
-8%
-3%
2%
7%
12%
17%
22%
Industry Compact cars Midsize cars Luxury cars Pickups SUV/CUV Vans
1 year
2 years
3 years
4 years
30
Average Auction Price – Rental Risk Units
Average price for rental risk units sold in March up 7.3% y/y and up 3.0% m/m
Source: Manheim/Cox Automotive
13,000
13,500
14,000
14,500
15,000
15,500
16,000
16,500
17,000
1 2 3 4 5 6 7 8 9 10 11 12
2016
2017
2018
2019
2020
31
Distribution of Rental Risk Vehicles
Source: Manheim/Cox Automotive
2018 Q1 2019 Q1 2020 Q1
Number of unique
year, make, model,
body configurations
sold
3,005 3,030 3,390
Share accounted for
top 10 YMMB 13.1% 11.7% 11.8%
Share accounted for
top 25 YMMB 23.3% 22.0% 21.4%
Number of YMMB to
reach 50% share 108 114 113
32
Average Mileage – Rental Risk Units Sold at Auction
Average mileage for rental risk units in March was up 1% compared to a year ago and down 12% m/m
Source: Manheim/Cox Automotive
45,897
20,000
25,000
30,000
35,000
40,000
45,000
50,000
55,000
60,000
Jan-03 Jan-05 Jan-07 Jan-09 Jan-11 Jan-13 Jan-15 Jan-17 Jan-19
33
Rental Risk Units Sold by Condition
Source: Manheim/Cox Automotive
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2015Q4
2016Q1
2016Q2
2016Q3
2016Q4
2017Q1
2017Q2
2017Q3
2017Q4
2018Q1
2018Q2
2018Q3
2018Q4
2019Q1
2019Q2
2019Q3
2019Q4
2020Q1
5.0
4.0 - 4.9
3.0 - 3.9
2.0 - 2.9
0 - 1.9
34
Rental Risk Units Sold by Make
Source: Manheim/Cox Automotive
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2015Q4
2016Q1
2016Q2
2016Q3
2016Q4
2017Q1
2017Q2
2017Q3
2017Q4
2018Q1
2018Q2
2018Q3
2018Q4
2019Q1
2019Q2
2019Q3
2019Q4
2020Q1
All other
Mazda
Kia
Jeep
VW
Chrysler
Hyundai
Dodge
Toyota
Nissan
Ford
Chevrolet
35
Rental Risk Units Sold by Segment
Source: Manheim/Cox Automotive
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2015Q4
2016Q1
2016Q2
2016Q3
2016Q4
2017Q1
2017Q2
2017Q3
2017Q4
2018Q1
2018Q2
2018Q3
2018Q4
2019Q1
2019Q2
2019Q3
2019Q4
2020Q1
Van
SUV
Sports Car
Pickup
Luxury Car
Midsize Car
Compact Car
36
Manheim Market Report (MMR) Vehicle Insights
Source: Manheim/Cox Automotive
Top selling vehicles in March at Manheim saw accelerating depreciation rates in the last 30 days (March 5 – April
4) with top rental vehicle declining the most. Prices year-over-year saw mostly higher than normal depreciation.
Rank Source(Rank) Category Subcategory Vehicle 4-Apr Past 30 Days Last Year Current Dep L12M Dep/Mo
1 All SUV SUV Midsize 2017 NISSAN ROGUE AWD 4D SUV 2.5L SV $14,300 $14,600 $16,150 -2.1% -1.0%2 All Compact Car Compact Car Premium 2017 NISSAN SENTRA 4D SEDAN SV $8,525 $8,725 $10,500 -2.3% -1.6%
3 All SUV SUV Entry 2019 HYUNDAI SANTA FE AWD 4D SUV 2.4L SE $18,550 $18,750 $20,200 -1.1% -0.7%
4 All Compact Car Compact Car Premium 2017 HYUNDAI ELANTRA 4D SEDAN SE $8,750 $8,925 $10,450 -2.0% -1.4%5 All SUV SUV Midsize 2017 CHEVROLET EQUINOX AWD 4C FFV 4D SUV LT $12,850 $13,100 $15,700 -1.9% -1.5%
1 Dealer Dealer Midsize Car Midsize Car Premium 2015 NISSAN ALTIMA 4C 4D SEDAN S $5,875 $6,025 $8,675 -2.5% -2.7%
1 Lease Lease SUV SUV Midsize 2017 CHEVROLET EQUINOX AWD 4C FFV 4D SUV LT $12,850 $13,100 $15,700 -1.9% -1.5%
1 Rental Rental Van Van Compact 2019 DODGE GRAND CARAVAN FFV MINIVAN GT $16,000 $16,700 $20,900 -4.2% -2.0%
37
Sales Impact Varies by DMA As Evidenced By Unique Credit Apps
Source: Cox Automotive
Appendix
38
39
Weekly Price Trend More Severe For Non-Luxury
Stronger appreciation turned into stronger depreciation
Source: Manheim/Cox Automotive
80.0%
85.0%
90.0%
95.0%
100.0%
105.0%
110.0%
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
Non-Luxury 3-Year-Old Model MMR Index by Week
2014-2016 2017 2018 2019 2020
40
Weekly Price Trend Less Severe For Luxury
Luxury vehicles have outperformed by not declining as much so far
Source: Manheim/Cox Automotive
80.0%
85.0%
90.0%
95.0%
100.0%
105.0%
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
Luxury 3-Year-Old Model MMR Index by Week
2014-2016 2017 2018 2019 2020
41
Weekly Price Trend Off the Most for One-Year-Old Vehicles
One-year-old vehicle prices were very stable throughout most of 2019 but have had a rough March
Source: Manheim/Cox Automotive
80.0%
85.0%
90.0%
95.0%
100.0%
105.0%
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
1-Year-Old Model MMR Index by Week
2014-2016 2017 2018 2019 2020
42
Luxury Prices Move Higher Than Non-Luxury In March
Source: Manheim/Cox Automotive
Luxury prices in March were up 6.4% compared to March 2019, while non-luxury prices increased 2.8%
January 2000 = 100
120.4
137.8
80
90
100
110
120
130
140
150
Jan-00 Jan-02 Jan-04 Jan-06 Jan-08 Jan-10 Jan-12 Jan-14 Jan-16 Jan-18 Jan-20
Luxury Non-Luxury
43
112.2
0
20
40
60
80
100
120
140
Jan-15 Jan-16 Jan-17 Jan-18 Jan-19 Jan-20
Electric Car
Electric Car Prices Improve In March
Source: Manheim/Cox Automotive
Electric car prices in March were up 22.8% compared to March 2019
January 2015 = 100
44
Shifting Consumer Preferences Not Reflected in Wholesale Market Volumes
The SUV reigns supreme in new vehicle sales while cars still dominated the used car market
Source: Manheim/Cox Automotive
45%
11%
39%
5%
0%
10%
20%
30%
40%
50%
60%
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Manheim Sales by Category
CAR PICKUP SUV VAN
26%
19%
50%
5%0%
10%
20%
30%
40%
50%
60%
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
New Vehicle Sales by Category
CAR PICKUP SUV VAN
45
Tax Refunds by Week in Recent Years
Source IRS
$0.0
$50.0
$100.0
$150.0
$200.0
$250.0
$300.0
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15
Bill
ions
Amount of Refunds (Cumulative)
2014 2015 2016 2017 2018 2019 2020
46
Thank You
Jonathan Smoke & Zo RahimEconomic Industry Insights
jonathan.smoke@coxautoinc.com
zohaib.rahim@coxautoinc.com
@SmokeonCars
@autosanalyst