July 28, 2020

COVID-19 AUTOMARKET UPDATE

Jonathan SmokeChief Economist, Cox Automotive

COVID-19 LOCAL IMPACT ASSESSMENT

Source: Cox Automotive

CONTINUING CLAIMS AT 16.2 MILLION NATIONALLY

Source: Department of Labor

CONSUMER SENTIMENT DOWN AGAIN LAST WEEKMorning Consult’s Index of Consumer Sentiment on Monday was down 24.2% since February 29

Source: Morning Consult

114.23113.8

81.23

85.87

60

70

80

90

100

110

120

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

4/8/20

4/15/20

4/22/20

4/29/20

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5/20/20

5/27/20

6/3/20

6/10/20

6/17/20

6/24/20

7/1/20

7/8/20

7/15/20

7/22/20

ICS Value (7-Day Average)

CONSUMER SENTIMENT VARIES ACROSS MAJOR MARKETS

Since February 29th Since July 20th

Source: Morning Consult

6

Consumers remain on edge with new challenges popping up every week

Consumer Level of Concern

16% 8% 13%

28%21% 23%

57%71% 65%

Early Outbreak(March)

Shelter in Place(Late March-April)

Reopening(May-Mid June)

Not very/Not at all Somewhat Extremely/Very

Source: 2020 Cox Automotive COVID-19 Consumer Impact Study

Q9. How concerned are you about the coronavirus overall?Q27a6. Will having virtual/at-home learning for your child(ren) impact your or your spouse’s employment situation?

6

12% 9% 11%

20% 20% 19%

68% 70% 70%

June26-27

July10-11

July24-25

↑

↑↑

↑

↑

43%of households with children entering virtual learning expect to see it impact their employment

From: Wave 15 Survey: July 24-25

7Source: 2020 Cox Automotive COVID-19 Consumer Impact Study

The number of in-market shoppers has dropped by ¼ since the start of COVID-19

% OF CONSUMERS IN-MARKET TO PURCHASE A VEHICLE WITHIN THE NEXT 6 MONTHS

Early Outbreak(March)

20%Shelter in Place

(Late March - April)

20%Reopening

(May – Mid June)

17%

15%(July 24-25)

Q4. Now as of today, when do you think you will be in the market to purchase or lease a vehicle?

17%

34% 33% 29% 29% 29%

EarlyOutbreak(March)

Shelter inPlace (Late

March-April)

Reopening(May-Mid

June)

June26-27

July10-11

July24-25

Source: 2020 Cox Automotive COVID-19 Consumer Impact Study 8

Uncertainty plagues over half of those delaying their purchase

Delaying Vehicle Purchase/Lease*

*Among 6-month auto intendersQ10. Have you done, or do you think you will do any of the following because of the coronavirus? *Note: Added “have done” in Wave 4 Q4aa. How would you complete the following sentence? “Right now is a ______ time to buy a vehicle?” (Options: perfect, smart, scary, stupid, pointless, other)

Factors At Work• Spike in COVID-19 cases• Uncertain financial stability• Fewer miles traveled• Civil unrest• General uncertainty in the market

From: Wave 15 Survey: July 24-25

55%of those delaying a vehicle purchase call this an “uncertain” time to buy a vehicle

38%of shoppers not delaying a vehicle purchase still call this a “good” time to buy a vehicle

↑

RETAIL SALES RECOVERY ESTIMATES

Source: Cox Automotive

-16.6%

-17.1%

21.3%

-70.0%

-60.0%

-50.0%

-40.0%

-30.0%

-20.0%

-10.0%

0.0%

10.0%

20.0%

30.0%

1/8/20

20

1/15/2

020

1/22/2

020

1/29/2

020

2/5/20

20

2/12/2

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2/19/2

020

2/26/2

020

3/4/20

20

3/11/2

020

3/18/2

020

3/25/2

020

4/1/20

20

4/8/20

20

4/15/2

020

4/22/2

020

4/29/2

020

5/6/20

20

5/13/2

020

5/20/2

020

5/27/2

020

6/3/20

20

6/10/2

020

6/17/2

020

6/24/2

020

7/1/20

20

7/8/20

20

7/15/2

020

7/22/2

020

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

New Used

ZERO PERCENT FINANCING DECREASES

Source: Cox Automotive

0.00%

5.00%

10.00%

15.00%

20.00%

25.00%

Jan-

17

Feb-

17

Mar

-17

Apr-

17

May

-17

Jun-

17

Jul-1

7

Aug-

17

Sep-

17

Oct

-17

Nov

-17

Dec

-17

Jan-

18

Feb-

18

Mar

-18

Apr-

18

May

-18

Jun-

18

Jul-1

8

Aug-

18

Sep-

18

Oct

-18

Nov

-18

Dec

-18

Jan-

19

Feb-

19

Mar

-19

Apr-

19

May

-19

Jun-

19

Jul-1

9

Aug-

19

Sep-

19

Oct

-19

Nov

-19

Dec

-19

Jan-

20

Feb-

20

Mar

-20

Apr-

20

May

-20

Jun-

20

Jul-2

0

0% APR Finance Share

NEW SALES HAMPERED BY SUPPLY

Source: Cox Automotive

2,000,000

2,200,000

2,400,000

2,600,000

2,800,000

3,000,000

3,200,000

3,400,000

3,600,000

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

Active New Vehicle Inventory by Week

2019 Active Inventory 2020 Active Inventory

USED INVENTORY DOWN

Source: Cox Automotive

0.0 Days

20.0 Days

40.0 Days

60.0 Days

80.0 Days

100.0 Days

120.0 Days

140.0 Days

160.0 Days

02/0

1/20

02/0

5/20

02/0

9/20

02/1

3/20

02/1

7/20

02/2

1/20

02/2

5/20

02/2

9/20

03/0

4/20

03/0

8/20

03/1

2/20

03/1

6/20

03/2

0/20

03/2

4/20

03/2

8/20

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1/20

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5/20

04/0

9/20

04/1

3/20

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7/20

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1/20

04/2

5/20

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9/20

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3/20

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7/20

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1/20

05/1

5/20

05/1

9/20

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3/20

05/2

7/20

05/3

1/20

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4/20

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8/20

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2/20

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6/20

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0/20

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4/20

06/2

8/20

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2/20

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07/1

4/20

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8/20

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2/20

07/2

6/20

Inve

ntor

y Da

ys' S

uppl

y

Days Supply Wholesale Inventory and Retail Inventory

Rolling 7 Day Supply Retail Rolling 7 day Supply Wholesale

USED PRICES AT NEW HIGH POINTS

Source: Cox Automotive

80%

85%

90%

95%

100%

105%

110%

115%

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

MY 2017 Retail and Wholesale Price Indices (wk1=100)

2019 Retail Index 2020 Retail Index 2019 Wholesale Index 2020 Wholesale Index

SALES IMPACT VARIES BY DMA AS EVIDENCED BY UNIQUE CREDIT APPS

April 5th July 26th

Source: Cox Automotive

COX AUTOMOTIVE LEADING INDICATORS

• Leads on Autotrader were up 52% y/y in July through Saturday and on Kelley Blue Book up 27%; both are strong but losing some momentum

• Dealer.com continues to see both New and Used Vehicle Form Submissions outperform, and used lost momentum over the weekend

• Dealertrack unique credit applications on same-store basis were down 11% y/y last week, which was a declining trend from the prior week

• Xtime saw a 15% decrease y/y last week in consumers having their cars serviced, which was a slight decline from the prior week