Industry Trends Live Q2 2012
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Industry Trends Live Q2 2012

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The slides from Mitchell International's Q2 webinar that took place on May 2nd. The Industry Trends webinar series highlights the metrics presented in the quarterly Industry Trends Report. To view the ...

The slides from Mitchell International's Q2 webinar that took place on May 2nd. The Industry Trends webinar series highlights the metrics presented in the quarterly Industry Trends Report. To view the report: http://www.mitchell.com/industry-trends-report/index.asp

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  • Slow new vehicle purchases, lower than normal lease rates and rental fleets keeping their cars to 35,000 miles instead of 25,000 miles helped drive late model used car demand to record high levels. This also drove total loss rates down to 15.2% in 2011, lower than they had been in a decade
  • Low lease prices helped push BMW to this spot. And This will mean an increase in aluminum structure repair (in 5”s and 7’s) that you will see in the future
  • With the majority being private party transfers, dent and scratch repair programs offered in the finance department of dealers have fallen, so small repairs on late model used will increasingly be customer pay

Industry Trends Live Q2 2012 Industry Trends Live Q2 2012 Presentation Transcript

  • Industry Trends Report Wrap-upGreg HornVice President, Industry RelationsMay 2, 2012
  • Our agenda • Update on Mitchell KPI’s • A review of the Industry Trends feature article • A deeper dive on what’s happening with severity (particularly in Texas) • New car sales rate update • In the news • New technology • Chinese knock off update5/1/2012 | Page 2 Confidential and Proprietary. ©2011 Mitchell International, Inc.
  • Mitchell Key Performance Indicators Confidential and Proprietary. ©2011 Mitchell International, Inc.
  • Confidential and Proprietary. ©2011 Mitchell International, Inc.
  • Confidential and Proprietary. ©2011 Mitchell International, Inc.
  • Confidential and Proprietary. ©2011 Mitchell International, Inc.
  • Third Party APD coverage Confidential and Proprietary. ©2011 Mitchell International, Inc.
  • Confidential and Proprietary. ©2011 Mitchell International, Inc.
  • Confidential and Proprietary. ©2011 Mitchell International, Inc.
  • Confidential and Proprietary. ©2011 Mitchell International, Inc.
  • | Page 11 Confidential and Proprietary. ©2011 Mitchell International, Inc.
  • The sample size • I looked at a robust sample size of just under 1.5 million random estimates. • I used ‘aged’ estimates from our ‘data pool’ that were more than 90 days old, so I could be reasonably certain that the estimates reviewed were ‘final’ with all supplements applied. • The estimates selected for the sample were for repairable vehicles only, because the cynic in me believes there are certain appraisers who will ‘load up’ estimates so that an estimate for an obvious total loss adds up to the amount needed to total a vehicle.| Page 12 Confidential and Proprietary. ©2011 Mitchell International, Inc.
  • The findings • A review of the detail of the hourly operations showed that frame labor averaged $54.05 per hour, with Domestic vehicles having the highest hourly frame/unibody labor rate. • The average hourly operation to pull and square the unibody after set up was just under 3.2 hours, indicating a fairly modest pull. • Interestingly, when split out by vehicle type, traditional ladder frame light duty trucks averaged over 5 hours of pulling and squaring after set up. • Asian vehicles had a straightening frequency 12 percent higher than European or Domestic makes.| Page 13 Confidential and Proprietary. ©2011 Mitchell International, Inc.
  • Rising severity?| Page 14 Confidential and Proprietary. ©2011 Mitchell International, Inc.
  • What is happening with collision severity? 3,200.00 3,100.00 3,000.00 2,900.00 USA Collision Avg Gross $ TEXAS Collision Avg Gross $ 2,800.00 2,700.00 2,600.00 May-11 Dec-10 Dec-11 Apr-11 Jun-10 Oct-10 Oct-11 Aug-10 Nov-10 Jan-11 Mar-11 Jun-11 Aug-11 Nov-11 Jan-12 Mar-12 Jul-10 Sep-10 Feb-11 Jul-11 Sep-11 Feb-12| Page 15 Confidential and Proprietary. ©2011 Mitchell International, Inc.
  • Comprehensive severity is not showing the same trend 3,500.00 3,000.00 2,500.00 2,000.00 USA Comp Avg Gross $ 1,500.00 TEXAS Comp Avg Gross $ 1,000.00 500.00 0.00 Dec-10 Jun-11 Dec-11 Apr-11 May-11 Jun-10 Oct-10 Oct-11 Aug-10 Nov-10 Jan-11 Mar-11 Aug-11 Nov-11 Jan-12 Mar-12 Jul-10 Sep-10 Feb-11 Jul-11 Sep-11 Feb-12| Page 16 Confidential and Proprietary. ©2011 Mitchell International, Inc.
  • APD severity trend is similar to Collision 2,550.00 2,500.00 2,450.00 2,400.00 2,350.00 2,300.00 USA APD Avg Gross $ 2,250.00 TEXAS APD Avg Gross $ 2,200.00 2,150.00 2,100.00 2,050.00 Dec-10 Oct-11 Dec-11 Apr-11 May-11 Jun-10 Oct-10 Aug-10 Nov-10 Jan-11 Mar-11 Jun-11 Aug-11 Nov-11 Jan-12 Mar-12 Jul-10 Sep-10 Feb-11 Jul-11 Sep-11 Feb-12| Page 17 Confidential and Proprietary. ©2011 Mitchell International, Inc.
  • Texas collision estimate breakdown 1,800.00 1,600.00 1,400.00 1,200.00 1,000.00 Avg Part $ 800.00 Avg Paint Mat $ 600.00 Avg Labor $ 400.00 200.00 0.00 Dec-10 Dec-11 Aug-10 Mar-11 Apr-11 May-11 Aug-11 Mar-12 Jun-10 Oct-10 Sep-11 Oct-11 Nov-10 Jan-11 Jun-11 Nov-11 Jan-12 Jul-10 Sep-10 Feb-11 Jul-11 Feb-12| Page 18 Confidential and Proprietary. ©2011 Mitchell International, Inc.
  • New & used vehicle trends and the effect on total losses| Page 19 Confidential and Proprietary. ©2011 Mitchell International, Inc.
  • New Vehicle Sales for 2011 • Globally, Car makers sold 77.7 Million vehicles • That’s 8,900 every hour! • The largest fleet purchaser in the U.S.? Enterprise Holdings • US sales finished the year at 2011 volume of about 13.4 million vehicles, 10 percent higher than 2010 • Robust new vehicle sales in March, 1.4 million for the month, highest since 2007, means we are tracking close to a 15 million SAAR| Page 20 Confidential and Proprietary. ©2011 Mitchell International, Inc.
  • The top selling luxury brand in the US• BMW’s U.S. sales rose 15 percent to 26,834 in December, for an annual total of 247,907• Mercedes said its sales last month climbed 28 percent to 25,701, pushing its tally for the year to 245,192.• U.S. sales at Lexus dropped 13 percent last year to 198,552 units - - the first time volume dropped below 200,000 units since 1999. Confidential and Proprietary. ©2011 Mitchell International, Inc.
  • Used Vehicle• Used vehicle sales totaled 38,792,169 for all of 2011, up 5.2 percent from the prior year.• December volume surged 11.98 percent, to 3,142,513.• The year, as a whole saw a surge in private party, or consumer-to- consumer, sales, especially in the final months of 2011. Confidential and Proprietary. ©2011 Mitchell International, Inc.
  • In the news5/1/2012 | Page 23 Confidential and Proprietary. ©2011 Mitchell International, Inc.
  • Honda to recycle Hybrid battery parts• Honda said on Tuesday it would start the worlds first mass-production process to extract rare-earth metals from used car• Honda has partnered Japan Metals & Chemicals to begin extracting rare-earth metals from nickel-metal hydride batteries collected from used hybrid vehicles at its dealers around the world.• China produces about 95 percent of global rare-earth supplies and has ratcheted up export controls, sending prices soaring.• The newly developed process enables the extraction of more than 80 percent of rare-earth metals in nickel- metal hydride batteries. It plans to also use the process for other parts, feeding the extracted metals back to its products. Confidential and Proprietary. ©2011 Mitchell International, Inc.
  • PA 12 resin shortage • A explosion and fire in Marl, Germany disrupted supply of a critical resin used in brake components • The global automotive industry faces a “severe” shortage of a resin used to make fuel and brake components that may interrupt production “in the next few weeks,” according to TI Automotive Ltd.25 Confidential and Proprietary. ©2011 Mitchell International, Inc.
  • New developments in vehicle technology5/1/2012 | Page 26 Confidential and Proprietary. ©2011 Mitchell International, Inc.
  • The new aluminum bodied SL• The new Mercedes-Benz SL is 308 pounds lighter than its predecessor thanks to a brand new body design made almost entirely from aluminum.• Expressed in numbers, the body shell weight is made up of: 44 percent cast aluminum, 17 percent aluminum sections, 28 percent aluminum sheet metal, 8 percent steel and 3 percent other materials.• Only the A-pillars and the windshield frame are made of steel with high- strength steel tubing inside for rollover protection. | Page 27 Confidential and Proprietary. ©2011 Mitchell International, Inc.
  • What is “Sky Active Technology?• Features a lowered temperature before combustion and increasing combustion speed, meaning less time for knock to develop. To make this happen, SKYACTIV uses very high compression ratios (in gasoline engines) to generate power efficiently.• The technology so uses direct- injection under very high pressure, compared to most current engines, the previous 2.0L engine uses 43 lbs. of fuel pressure, while the new SKYACTIV 2.0L is at 2,900 psi.• 15-percent lower fuel consumption and CO2 emissions while achieving 15-percent more torque at higher rpm Confidential and Proprietary. ©2011 Mitchell International, Inc.
  • BMW thermal management A/COn an icy winter morning, your carsinterior isnt always the most pleasantplace to sit. Your hands and toes get cold,and the screen and side windows do theirbest to ice or steam up. Likewise, on a hotday, you want that interior as cool aspossible.BMWs two-zone climate control systemwill help on both counts, concentratingheat to quickly defrost the windscreenand warm your feet when its cold, andusing solar compensation--which adjuststhe airflow depending on the intensityand angle of the sun--to deliver coolblasts of air to where ever is mosteffective on those hot and humid days. Confidential and Proprietary. ©2011 Mitchell International, Inc.
  • Bi-Xenon Headlamps• Bi-Xenon Headlights refers to HID (High Intensity Discharge) Xenon headlights that offer both low and high beam lighting from a two headlight system• A bi-xenon system eliminates the need for a separate halogen high beam bulb/lens by either moving the xenon bulb within the lens or by moving a shield up or down in front of the bulb• A bi-xenon system typically features dynamic headlight leveling and on some vehicles direction adjustability. Confidential and Proprietary. ©2011 Mitchell International, Inc.
  • The Toyota version of the Mood RingSome of the actions the system can take includeproducing more safety reminders if the driverseems distracted or even directly controlling thecar either by braking or steering to avoid anobstacle.An angry driver, for example, could be alerted of apotential hazard such as a child crossing the roadmuch earlier than a driver who is in a calm orneutral state.The system can detect which direction the driver isfacing so could warn of a hazard located in theopposite direction that the driver is looking in.The technology works by using sensors that takereadings from 238 separate points all over thedriver’s face and calculates the emotions equally.Toyota engineers explained that the technology isstill in its infancy though we could see someelements of it in Toyota’s cars in around six years. Confidential and Proprietary. ©2011 Mitchell International, Inc.
  • Driving by the seat of your pants!The Cadillac XTS Safety Alert Seat• The XTS features industry first drivers seat that vibrates to warn drivers of crash threats while driving and parking.• The patented Cadillac Safety Alert Seat generates vibrating pulse patterns on the left and/or right side of the lower bolster to alert the driver of potential dangers, such as drifting from a traffic lane or toward nearby objects while parking.• Threats from the front and rear trigger pulses on both sides of the seat. Confidential and Proprietary. ©2011 Mitchell International, Inc.
  • Volkswagen Electric Sun visor• A sun status sensor and a sensor that determines the eye position of the driver both feed signals to the computer• The computer calculates the point of sunlight entry within the viewing angle of the drivers eyes.• The computer then produces a dark "spot" in the glass). The spot moves across the windshield as the car changes direction Confidential and Proprietary. ©2011 Mitchell International, Inc.
  • Now for a Quick Poll… Which technology do you think is the most useful? A. Thermal management A/C B. Bi Xenon Headlights C. Toyota Mood Technology D. Cadillac Seat alert E. VW electric sun visor5/1/2012 | Page 34 Confidential and Proprietary. ©2011 Mitchell International, Inc.
  • Dodge Dart Wireless Charging Pad Confidential and Proprietary. ©2011 Mitchell International, Inc.
  • Chinese market update5/1/2012 | Page 36 Confidential and Proprietary. ©2011 Mitchell International, Inc.
  • Hyundai copy5/1/2012 | Page 37 Confidential and Proprietary. ©2011 Mitchell International, Inc.
  • JAC 4R3 Confidential and Proprietary. ©2011 Mitchell International, Inc.