Zach Hallowell, AVP and GM, RMS Automotive presents Global Trends / Challenges in Used Vehicle Remarketing at the 4th Auto Remarketing Forum in India

1. MANAGING WHOLESALE VEHICLES IN A DATA WORLD
Information is the oil of the 21st century,
and analytics is the combustion engine.
- Peter Sondergaard Gartner Research

2. RMS AUTOMOTIVE – ZACH HALLOWELL, GM
• General Manager of RMS Automotive
• Directs overall global activities of RMS to ensure optimum
efficiency and productivity to maximize growth, profitability and
customer satisfaction.
• Extensive experience in the global wholesale automotive industry,
having spent 15+ years developing and evolving Wholesale
Automotive SaaS platforms
• Named inventor of numerous patents related to vehicle lifecycle
management, electronic marketplaces and third party vehicle
inspection processes.
• Graduate of Middlebury College, Major in Political Science

3. ABOUT COX AUTOMOTIVE

4. 42017 Cox Automotive, Inc. Confidential & Proprietary
COX AUTOMOTIVE SCALE
Vehicle Values Sold Annually
through Manheim
$51B+
Unique
Visitors
Monthly on 13,000+ Dealer Websites
47.7M+
Source: 2015 Dealer.com internal reporting January - Dec 2015
3 of 4
Cars Sold in the US & Canada
Source: Dealertrack internal reporting, Q2 2015
Touching
Source: Manheim Financial Reporting, 2015
50,000+
73% Of All US
Car Buyers
Source: 2016 Car Buyer Journey Study, IHS Polk
Use Autotrader or KBB.com
(Wholesale & retail dealers, OEMs)
Source: FP&A July 2014–July 2015
Dealer Clients
Across 6 Continents
GLOBAL DMS CLIENTS
COUNTRIES90+
3.8M+ Monthly Service
Appointments
Source: 2016 Xtime internal reporting
Xtime 2016 Monthly Average
30,000+
Source: Cox Automotive Internal Reporting, October 2015
Team Members Globally
Financed Titles Managed
By Dealertrack
46M+
Source: Dealertrack Internal Reporting, Q4 2015
A leading provider of products and services that connect the automotive ecosystem worldwide

5. COX AUTOMOTIVE ORGANIZATIONAL STRUCTURE
RETAIL
SOLUTIONS
MEDIA
SOLUTIONS
FINANCIAL
SOLUTIONS
INVENTORY
SOLUTIONS INTERNATIONAL

6. OUR FOCUS
EVOLVE
STREAMLINE SIMPLIFY
WHOLESALE RETAIL
Inventory Management,
Sourcing and Disposition
Floor Planning &
Business Administration
REVOLUTIONIZE
Shopping With A Connected
Consumer Experience
Ownership and Service
Experience

7. RMS AUTOMOTIVE OVERVIEW
• RMS Automotive is a key strategic partner to Global OEMs, Captives and other large vehicle portfolio owners, providing
vibrant marketplaces, transparency and insights to optimize clients’ portfolio values
• We offer technology to manage the complete vehicle lifecycle, from new car build to used car sale. Through automation and
data science we help our clients maximize returns and reduce risk
3.5M+
VEHICLES
PROCESSED
850K+
VEHICLES
SOLD
40+
CURRENCIES
HANDLED
30+
LANGUAGES
SUPPORTED

8. WHAT WE DO
3RD PARTY DATA
• VIN decoding
• Vehicle history reports
• Peer retail sales and lease maturities
CONSIGNOR DATA
• Build data
• Original sale (lease, loan, cash, rental)
• Non-Cox wholesale transactions
Vehicle Stages
Plan & Order Build & Sale In-Service Pre-term Return Remarket Re-retail
Vehicle Lifecycle
Product Modules
Vehicle
Origination
Vehicle
In-Service
Vehicle
Pre-Term
Vehicle
Return
Vehicle
Remarketing Rapid Retail
Vehicle
Order
RMS Automotive Solution
Data Driven
Decisioning
Insights Optimization
WHOLESALE
• Supply/demand, transaction prices
• Valuation – past, present, future
Retail
• Supply/demand, list prices
• Valuation – past, present, future
(through Analytics Hub)

9. TRENDS WE WATCH
WHOLESALE
INVENTORY TIDAL
WAVE ABOUT TO
HIT
DIGITAL RETAILING
COMING FAST AND
FURIOUS
MARGIN
COMPRESSION
AFFECTING EVERY
DEALER
OPEN PLATFORMS
BECOMING
TECHNOLOGY OF
CHOICE
MEDIA
LANDSCAPE
CHANGING
RAPIDLY

10. MANAGING WHOLESALE VEHICLES IN A DATA WORLD
The Wholesale Market Challenge in the US

11. FUTURE VOLUMES
INFRASTRUCTURE CANNOT HANDLE VOLUMES
+4mm
All time high new
vehicle leases in
2015
+17.5mm
All time high new
vehicle sales in
2015
32%
New car lease
penetration &
growing
Need to go further
upstream in vehicle
lifecycle
Increase online
market share
Rise in
Leasing
Global
Platform
4.6M3.6M+
3.1 M

12. EXAMPLE – GROWTH IN ONE CLIENT’S LEASE MATURITIES
0
5,000
10,000
15,000
20,000
25,000
30,000
Jan Feb Mar April May Jun Jul Aug Sep Oct Nov Dec
Maturiteis
Monthly Lease Maturities
2016 2017 2018
55%
Growth

13. How do we solve this structural problem?

14. DATA SCIENCE DRIVING DECISIONS IN THE USED
CAR BUSINESS
Intuition Based Decision Making is a Guessing Game
Data Driven Insights + Intuition = Perfect Blend
Golden Gut Outcome(s)
Data Science
+ Analytics
Intuition

15. RMS AUTOMOTIVE – DATA OPTIMIZATION GOALS
Set the right price
In the right channels To the right buyers
With the right recon

16. REMARKETING TODAY VS. FUTURE
SEPARATE DECISIONS
• Location
• Recon
• Pricing
HOLISTIC DECISIONS
• Channel, Location,
Recon, Pricing
• Right dealers to target
with marketing
Downstream
ON-LINE
Upstream
CLOSED
Upstream
OPEN
Grounding
DEALER
Downstream
IN-LANE
Upstream
Downstream
RMS VISION FOR FUTURE
CURRENT CASCADING PROCESS
Grounding
DEALER
OPTIMIZATION
Pricing
Channel
Location
Recon

17. OPTIMIZATION
Set vehicle floor
price by adjusting
for:
• Content
• Color
• Location
• Condition
• Carfax
• Supply & demand
Recommend
reconditioning
based on:
• Recon costs
• Expected sale
price lift
• Business
objectives
Recommend
pull-ahead(s)
based on:
• Residual values
• Forecast supply &
demand
• Forecast sale price
Determine best
channel or auction
given:
• Projected price
• Transport costs
• Depreciation
• Supply & demand
• Business
constraints
Find dealers that
meet your vehicle
needs based on:
• Dealer buying
activity (e.g.
purchases, bids,
searches)
• Dealer inventory
• Retail supply &
demand
Channel
Optimization
Recon
Optimization
Pull Ahead
Optimization
AutoMatch
Optimization
Pricing
Optimization

18. HOW CLIENTS ARE USING DATA AND ANALYTICS
TO IMPROVE THE REMARKETING PROCESS
RMS Floor price
Japanese OEM
Non-Captive
200
100
0
92.7% 93.3%
0
200
100
99.8% 100.1%
0
100
200
43.4%42.9%
100
200
0
101.1% 101.6%
Japanese OEM Sell-through
(Sold/Offered)
Japanese OEM Retention
(Sale price/MMR)
Non-Captive Sell-through
(Sold/Offered)
Non-Captive Retention
(Sale price/MMR)

19. • Reach clarity on
critical decisions
• Creatively use new
sources of data
• Use analytics to
assess options and
estimate value
• Make Data-Driven
Decisions
• Quickly source and
experiment with
new data
• Monitor results and
adjust decision making
The sophistication to …
The combination of Data with
Insights and Optimization
DISRUPTING REMARKETING THROUGH DATA
Businesses make thousands of decisions
a day. Most are routine.
Velocity
Depreciation
VIN Specific
Remarketing
Disrupting

21. RMS AUTOMOTIVE
Transacting vehicles in multiple countries and growing, RMS Automotive, a
Cox Automotive Brand, delivers a global enterprise software solution that
enables its commercial clients to manage their portfolios across the
complete vehicle lifecycle – from new car build to used car sale. Through
automation and data science, RMS Automotive provides VIN-specific
recommendations for accurate vehicle pricing as well as optimal
reconditioning and inventory distribution. These services deliver real-time
integration with a client’s platform, faster remarketing time, reduced
depreciation/cost of capital, improved residuals, and reduction in wholesale
losses. For more information about RMS Automotive, visit
www.rmsautomotive.com or http://rmsautomotive.eu/