In this presentation we cover: 1.The carwow dealer website 2. carwow as a marketplace and how we attract customers 3. How we can help you hit both your targets & model mix 4. An update on industry regulations 5. What the future of retailing will hold and why it will be good for dealers.

2. Agenda
Don’t wait until the end of August - get ready now!
Focus on stock sales in Q2 2018 to ensure you run out
smoothly
Keep your carwow stock feed up to date and we’ll make
sure your cars are seen by customers looking for that
specific car
1
2
3
The carwow dealer website Chris Manning
4
5
Lead generation Alex Rose
Planning your QTR strategically Karen Hilton
Regulation changes Jon Davies
Future of car retailing John Miele

3. What we’ve done to develop
our dealer site
Chris Manning

4. "carwow is the most trusted site for
drivers, dealers and manufacturers all
around the world.”

5. To be the number
one choice for
new car buyers,
from research
through to
purchase.
To make our
products available
to drivers, dealers
and manufacturers
all around the
world through an
international
platform.
To drive customer
loyalty, beyond
buying a new car.
To provide
actionable data
and insight to
dealers and the
industry, to drive
behaviour in a
simple, accessible
way.
Four Strategic Pillars
1

6. “The dealers’ dashboard is a workflow
management tool, providing its
customers with the data and tools they
need to find new business, progress
sales, comprehensively report on and
improve their performance”

7. Promising leads

8. See who reported an order

9. What car are they talking about?

10. Read receipts

11. What’s
in the
pipeline?

13. What carwow does to make
your leads come in
Alex Rose

15. What makes a marketplace
successful?

16. What are the variables in our
marketplace?
Dealerships
● Location (and overall coverage)
● Appetites to sell (and targets)
● Trading terms / margin structures
● Lead times, availability and stock
● Current model mix and lifecycle
● Ability to convert enquirers into buyers
(most importantly)
Car buyers
● Opinion / appetite for that model
● Other models being considered
● Sensitivity to lead times and availability
● What’s on offer outside of carwow?
● How is the car being advertised?
● How willing buyers are to travel
All of these variables apply across over 400 models on sale today,
in factory, stock, used and leasing guises!

17. The Trading team use this
information to make
advertising decisions and
direct leads to the ‘right’
dealerships

18. The toolkit: 1. The algorithm
● Algorithm selects dealers to offer based on:
a. Location
b. Message responsiveness
c. Message helpfulness rating
d. Call handling
e. Reviews
f. Enquirer-to-sale conversion
● Dealers that perform well on these criteria
receive more offers. The better the dealer, the
more visibility they get
● We control ‘the rules’ that the algorithm follows

19. The toolkit: 2. Digital Marketing
● carwow manages a Google search
account with over 400k keywords
● Avg monthly spend over £600k
● This spend is tightly controlled by:
a. Postcode area
b. Model
c. Even by derivative and engine
● It’s all driven by conversion rate: the
better our dealerships are at selling
that model, the more leads we will
deliver in that region

20. The toolkit: 3. Speaking to 4m people
● carwow has a database of 3.9m potential
new car buyers
● For each user we know:
a. What they’ve configured and how far
down the purchase funnel they are
b. Did they buy before
c. Where they live
d. Often, what they currently drive
● We use this information to surface the right
deals, at the right time
● (This is the April carwow news round up,
segmented by the value of the cars they’re
interested in)

21. The toolkit: 4. On-website promotion
● Specific deals are highlighted to carwow
users to drive additional enquiries to
dealerships
● This is most common when the deal is
time-sensitive (such as Black Friday
events)
● The earlier carwow knows about these,
the more leads we can drive for your
brand
● Coming soon: dealer short-term offer
promotion!

22. The perfect storm: Mercedes GLC
The perfect storm: excellent supply and stock in Q1 2018, dealer back-end
bonus on GLC, wintry weather pushing demand for SUVs, high-performers
within dealer network.
The goal: maximise GLC lead volumes to carwow dealerships
Online ad spend in Q1
£25,000
(Geographical coverage the
only limiting factor)
Email campaign:
37,000
Recipients in two separate
bursts
Algorithm:
c.10%
Of dealer network ‘throttled’
due to poor lead conversion
Result: 450 sales in Q1, 18% of all retail sales for this model

23. A mixed picture: Nissan LEAF
Online ad spend in Q1
£6,000
Despite high interest
generated by Leaf launch
Email campaign:
67,000
Recipients as part of
‘sponsored’ manufacturer
activity
Algorithm:
c.25%
Of dealer network ‘throttled’
due to poor lead conversion
(caused by long lead times)
Challenging conditions: excellent reviews for new model, but long lead
times, need to ‘clear out’ previous-generation stock models, mixed dealer
performance and coverage
The goal: generate the ‘right’ amount of LEAF leads, for the ‘right’
dealerships
Result: 75 sales in Q1, but run-out Leaf stock successfully closed out

24. You can help us to help you...
We can tell a lot from our data but we can’t tell everything. We can further refine our strategy
with your help:
● How many cars you want to sell this month/quarter on carwow?
● Which cars are oversupplied (don’t forget to give us your stock) and which have long lead
times? On which model do you need more leads?
● What are the most significant elements of your manufacturer’s quarterly campaigns or terms
of business?
● Are there any launches coming up (even new trims/engines) that we can market for you?
● Are you planning any dealer events this month?
This all goes ‘into the machine’ so the more you tell us, the better we can serve you!

25. How we can help with your
model mix
Karen Hilton

26. So how do we apply that to selling
cars on carwow?
Sales can still be broken down into three
easy steps: the opportunities to do
business, how well you convert them and
the output number of sales
How many of you apply this funnel to your
carwow sales each month?
Opportunities to do business
Sales target
Conversion
rate

27. Working out what you need carwow to
deliver
Opportunities to do business
Sales target: 100
Walk-ins Renewals Aftersales Marketing
50 120 50 100
Conversion rate
50% 25% 2% 5%
25 30 51
In the bank: 61
Gap: 39

28. Opportunities to do business - 325
carwow target: 39
So you need to sell +39 cars this QTR?
carwow can help
The simplest way being to provide the
volume of enquiries required to close your
gap to target
Conversion
rate
12%

29. Questions to ask yourself
● What stock do I have available or easy access to?
● Which models unlock additional margin as part of my margin structure?
● What level of profitability do I need to retain overall?
● Where am I focusing my marketing spend this QTR, does that leave
some models with a lack of exposure?
Questions to ask carwow
● Which models are in the highest demand?
● Which models are more reliant on stock, and how much stock does
carwow have?
● What does pricing for model X look like in my region?
● How good am I at conquesting from other brands in my region?
The smarter dealers take it a step
further though
39
units to close
the gap

30. Example: Audi dealer, North West
10
units
Quattro focus
39
units to close
the gap
15
units
Conquest BMW
4 series locally
8
units entry-level
A1 stock
6
units
A6/7 leasing focus

31. Questions to ask yourself
● What stock do I have available or easy access to?
● Which models unlock additional margin as part of my margin structure?
● What level of profitability do I need to retain overall?
● Where am I focusing my marketing spend this QTR, does that leave
some models with a lack of exposure?
Questions to ask carwow
● Which models are in the highest demand?
● Which models are more reliant on stock, and how much stock does
carwow have?
● What does pricing for model X look like in my region?
● How good am I at conquesting from other brands in my region?
Take 5 mins to write your
plan for Q2
xx
units to close
the gap

32. Quarterly planning template
Questions to ask yourself
What stock do I have available or easy
access to?
Which models unlock additional margin as
part of my margin structure?
What level of profitability do I need to
retain overall?
Where am I focusing my marketing spend
this QTR, does that leave some models
with a lack of exposure?Sales target: ___
Walk-ins Renewals Aftersales Marketing
__ __ __ __
Conversion rate
__% __% __% __%
__ __ ____
In the bank: __
Gap: __
Opportunities to do business

33. Quarterly planning template
__
units
________________
focus
___
units to close
the gap
__
units
Conquest
________________
__
units
________________
stock
__
units
________________
focus

34. The effect of regulatory
change on the industry
Jon Davies

37. It’s part of a trend which
will only increase
Source: JATO Dynamics Ltd

38. New European Driving
Cycle NEDC
Worldwide Harmonised
Light Vehicle Test
Procedure WLTP
+
Real Driving Emissions
RDE

39. WLTP Timeline
September 2017
WLTP will officially apply
to new types of cars (new
types of cars are vehicle
models that are
introduced on the market
for the first time)
September 2018
WLTP will officially apply
to all new car
registrations
January 2019
All cars in dealerships
should have WLTP CO2
values only
Source: wltpfacts.eu

40. How much higher are the
WLTP CO2 figures?
Source: SMMT New Car CO2 Report 2017
The WLTP is likely to produce a higher CO2 figure in many
situations, possibly as much as 20% for some vehicles,
compared with the NEDC.
The Society of Motor Manufacturers and Traders

41. Source:wltpfacts.eu
What is the Real Driving Emissions
(RDE) test?

42. RDE is all about NOx
(and basically it is the cap by which the Euro 6 NOx
emission limit would be allowed to be exceeded in
real world driving)

43. The RDE test kits (PEMS) are very
attractive and don’t look like an
industrial hoover at all
Source: Millbrook

44. What are the RDE regulations and
timings?
Source: Millbrook
NOx conformity factor of 2.1
ie. allows emissions levels to be exceeded by
110% (2.1x)
Eg. a car with a NOx limit of 80mg/km can be
168 mg/km
Applies since 1st September 2017 for new car
types
Applies to all types from 1st September 2019
NOx conformity factor of 1.0 (plus an error
margin of 0.5) - ie. has to meet the emissions
levels
Eg. a car with a NOx limit of 80mg/km can be
80 mg/km
Applies from 1st September 2020 for new car
types
Applies to all types from 1st September 2021
RDE Step 1 RDE Step 2

45. In sum, laboratory WLTP and real
world RDE should mean
figures are a lot more accurate

46. And what does this mean for
UK car taxation?
A vehicle’s CO2 emissions impacts two elements of UK taxation at the moment
Vehicle Excise Duty (VED)
Benefit in Kind (for company car
drivers)
Source: gov.uk, clm

47. There are three key dates
Source: gov.uk, WhatCar, clm, wltpfacts.eu
April 2018
VED and BIK increase for
diesels from 1st April
September 2018
WLTP testing in place for
all cars (with CO2 values
WLTP backtranslated to
NEDC) - ie. disrupted
competitiveness
April 2020
Taxation based
on WLTP CO2
figures

48. A bit more on the back-translation bit
Taxation bandings stay the same as April but the CO2 figure is likely to change
because
All cars are being tested under WLTP and
this has to be correlated/back-translated (yep, that’s a word) to NEDC
And this will likely be slightly higher than current NEDC values - meaning a
proportion of customers will pay more tax from 1st September
Source: wltpfacts.eu “new cars that are type-approved under WLTP will have WLTP-CO2 values as well as higher (updated) NEDC-CO2
values compared to the current NEDC”

49. How much higher are the NEDC back-
translated to the original NEDC figures?
Detailing its early insight into the findings a spokesperson
described WLTP as “a seismic change in the automotive
industry”, adding: “We have observed that NEDC correlated
CO2 figures are higher than previous NEDC tested values, and
the disparity could be greater than the industry expected.
“Furthermore, our initial findings suggest that the NEDC
correlated values are resulting in higher purchase and
ownership taxes for the end user in some cases.
“This is something the industry needs to be aware of as the
competitive landscape is changing.”
JATO, April 2018
Source: AM Online

50. So what does that mean for the next
few years?
2017 2018 2019 2020
01/04/2018
Increase to diesel
VED & BIK
Taxation
Testing
Showroom
materials
NEDC
WLTP (all vehicles)WLTP (new vehicles)
01/01/2019
Dealerships have
to start showing
WLTP figures in
the showroom
01/04/2020
VED & BIK finally
(!) change to
WLTP from NEDC
01/09/201801/09/2017
RDE Step 1 (new vehicles) RDE Step 1 (all vehicles)
01/09/2019
RDE Step 2 (all)
01/09/2020
01/09/2018
CO2 adjusted to WLTP
(but backtranslated to
NEDC)

51. One other thing
Euro 6

52. Euro 6 regulations tighten over the next
6 years, in conjunction with changes to
WLTP
This one is big, manufacturers have to register Euro 6b cars
before the end of August this year

53. There might be a couple of
exceptions, but your manufacturer will
let you know
The government (DfT) have
given manufacturers an
indication that they might
be able to derogate some
of their volume (these will all be
Euro 6b)
Derogate = to deviate
from a set of rules

54. What’s the impact?
Customers Dealers Manufacturers
More likely to get closer to
their brochure metrics
Confusion over different
metrics
E.g. WLTP back-translated CO2 from
September 2018, WLTP published in
showrooms from January 2019 but
taxation still based on NEDC back-
translated until 2020 (clear, thought
so)
Pressure on dealers &
OEM’s to sell Euro 6b
stock before August 31st
2018
Challenge to explain
WLTP/NEDC differences
to customers
Revised competitive
landscape (EV range, CO2,
fuel consumption)
Confusion will likely will lead
to lack of trust in OEMs
OEM’s will likely spec cars
differently
Likely loss of aftersales
accessory sales to
aftermarket providers

55. Suggestions for dealer
groups wanting to take
advantage

56. Suggestions
Make sure you fully understand this and cascade to your
teams (so they feel confident discussing with customers)
Don’t wait until the end of August - get ready now!
Focus on stock sales in Q2 2018 to ensure you run out
smoothly
Keep your carwow stock feed up to date and we’ll make
sure your cars are seen by customers looking for that
specific car
1
2
3
Make sure you fully understand this and cascade to your
teams (so they feel confident discussing with customers)
Don’t wait until the end of August - get ready now! Focus on
stock sales in Q2 2018 to ensure you run out smoothly
Keep your carwow stock feed up to date and we’ll make sure
your cars are seen by customers looking for that specific car

57. How we see the future of
retailing and why dealers
will be ok?
John M

58. A lot of scary headlines...

59. Are they right?

60. Who is a new car buyer?
55
Average age of a new car buyer in
the UK
24
Average age of an Uber passenger
vs.

61. What do the following companies all
have in common?
They all tried to make dealerships obsolete – they all failed

62. OEMs are looking to sell direct too...

63. Going from clicks to bricks...
85% of retail sales touched physical stores

64. Why does carwow put dealerships at
the heart of car buying?
(It’s not out of the goodness of our hearts!)

65. 80% of customers still visit dealerships
Based on hundreds of thousands of car buyers

66. Marketplace dynamics

67. How do NSCs make their money?
80%
Dealers
20%
Direct Customers (e.g
Leasing/Rental Co’s)

68. How does it currently work?
Manufacturer & NSC Dealer Customers
What happens if you remove the dealer?

69. A world without a dealer network
A
● Cash flow takes a hit
○ Currently dealers pay for the cars whether there is a physical customer or not
○ Customers will pay on delivery
○ No longer guaranteed revenue
● Additional risk to an OEMs balance sheet
○ Courtesy cars, demonstrators, tactical registrations (if legally allowed), logistical costs
■ Ties up cash in the assets
○ Increases the liabilities of the company
● Potential loss in market share if new distribution model fails - who will move first?
● Decreases market capitalisation
○ Lowers share price
○ Makes it a lot harder to raise money for future investment

70. What does that mean?
OEMs that can’t invest in future technology will perish!

71. So, there’s nothing to worry about then?
A
● Maybe not for a few years, but...
● Not all dealers will survive
○ More consolidation - Vauxhall
○ Extremely competitive marketplace and you need to nail it!
○ Bricks and mortar alone will lose
○ Clicks and bricks will win
○ NSCs will need to hit targets still and will want to work with dealers that help them
achieve that
• Quality of sales process will be more important than ever and margin will be
apportioned accordingly
• As Mobility as a Service (MaaS) increases, dealer groups can hold an advantage over
manufacturers by offering a range of cars across multiple brands