“Welcome to the latest Market Insight Overview from Cox Automotive.  Every month, we provide automotive industry professionals with unique intelligence, supported by invaluable insight and market sentiment from our customers, that goes beyond the headlines to uncover what’s driving the new and used car sectors from wholesale, retail and funding perspectives. We hope our holistic analysis arms you with the essential knowledge needed to navigate the fast-paced, ever-changing automotive market.” PHILIP NOTHARD Customer Insight & Strategy Director - UK

1. Market Insight Overview
April 2019
P H I L I P N O T H A R D
C u s t o m e r I n s i g h t & S t r a t e g y D i r e c t o r - U K

2. Cox Automotive
Market Overview
“Welcome to the latest Market Insight Overview from Cox Automotive.
Every month, we provide automotive industry professionals with
unique intelligence, supported by invaluable insight and market
sentiment from our customers, that goes beyond the headlines to
uncover what’s driving the new and used car sectors from
wholesale, retail and funding perspectives. We hope our holistic
analysis arms you with the essential knowledge needed to
navigate the fast-paced, ever-changing automotive market.”
PHILIP NOTHARD
Customer Insight & Strategy Director - UK

3. Agenda
• Retail
• Wholesale
• Funding
• Outlook

4. RETAIL

5. Retail
While April’s new car figures may look disappointing, context is key, and when you take the prevailing
economic and industry-specific headwinds into account, a fall of -2.7% year-to-date is actually a fairly solid
performance
45%
36% 29% 44% 35% 30%
30%
43%
32%
26% 31% 29%
44%
32%
32%
43% 32% 43%
32% 40%
30%
40%
29% 39% 32% 38% 32% 38%
51%
59% 64%
52% 61% 65%
65%
53%
63%
68% 64% 65%
52% 62%
52%
53%
62% 52%
62% 55%
62%
55%
64%
56%
61%
57% 61%
57%
4%
6% 7%
4% 4% 6%
6%
4%
5%
6%
6%
6%
4% 6%
6%
4%
7% 6%
7%
5%
8%
5%
7% 5%
7% 5% 7%
6%
174,564
163,615161,013
83,115 80,805 81,969
562,337
474,069
458,054
152,076
167,911161,064
186,265192,649
243,454
234,945
161,997163,898
76,433
94,094
426,170
338,834
158,192153,599
163,541158,639152,473
144,089
0
100,000
200,000
300,000
400,000
500,000
600,000
2017 2018 2019 2017 2018 2019 2017 2018 2019 2017 2018 2019 2017 2018 2017 2018 2017 2018 2017 2018 2017 2018 2017 2018 2017 2018 2017 2018
January February March April May June July August September October November December
Registrationvolumes
New Registrations - fuel type % share
Diesel Petrol AFV

6. Retail
SMMT show new car registrations down -4.1% in April, while the consumer confidence index in the UK held
steady at -13 in April 2019, slightly below market expectations of -12
-5 -6 -6 -7 -5 -10 -12 -10 -9 -10 -12 -13 -9 -10 -7 -9 -7 -9 -10 -7 -9 -10 -13 -14 -14 -13 -13 -13
2.9%
-0.3%
8.4%
-19.8%
-8.5%
-4.8%
-9.3%
-6.4%
-9.3%
-4.6% -5.0%
-14.4%
-6.3%
-2.8%
-15.7%
10.4%
3.4%
-3.5%
1.2%
23.1%
-20.5%
-2.9% -3.0%
-5.5%
-1.6%
1.4%
-3.4% -4.1%
-25.0%
-20.0%
-15.0%
-10.0%
-5.0%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
(16)
(14)
(12)
(10)
(8)
(6)
(4)
(2)
0
Jan-
17
Feb-
17
Mar-
17
Apr-
17
May-
17
Jun-
17
Jul-17 Aug-
17
Sep-
17
Oct-
17
Nov-
17
Dec-
17
Jan-
18
Feb-
18
Mar-
18
Apr-
18
May-
18
Jun-
18
Jul-18 Aug-
18
Sep-
18
Oct-
18
Nov-
18
Dec-
18
Jan-
19
Feb-
19
Mar-
19
Apr-
19
NewCarRegistrations(%YoY)
ConsumerConfidence
Consumer Confidence Index vs. New Vehicle Registrations
Series2 Series1

7. Retail
52% of dealers that responded to the Monthly Market Survey* reported a YoY margin decline in April, while
3% said margins had stayed the same, and just 15% reported an improvement
*State of the market dealer survey April ‘19
8%
45%
15%
19%
11%
33%
48%
26%
52%
31%
56%
19%
44%
29%
33%
50%
33%
48%
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Physical Footfall activity compared to last year?
On-line activity compared to last year?
Retained margins compared to last year?
Finance penetration compared to last year?
Retail/consumer demand compared to last year?
Stock availability compared to last year?
Increased/Better Declined/Worse About the same

8. Retail
Challenges continue to face the new car market, as 57% of dealers indicate an increase in consignment stock.
Used car strength shows signs of softening in April’s Monthly Market Survey,* as 57% of dealers cite an
increase in overage days in stock
*State of the market dealer survey April ‘19
57%
57%
48%
40%
29%
24%
16%
28%
14%
19%
36%
32%
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
New Cars - Consignment stock
New Cars - Overage
Used Cars - Days in stock
Used Cars - Overage
Increased Decreased About the same

9. Retail
52% of dealers remain positive over the economic condition over the coming months whilst 56% are optimistic
that sourcing stock will improve, as cited in the April Monthly Market Survey*
*State of the market dealer survey April ‘19
11%
37%
52%
What are your expectations for economic conditions over
the coming months?
(as a proxy for demand)
Improving Declining About the same
22%
22%
56%
What are your expectations for sourcing used vehicles
over the coming months (as a proxy for supply)?
Improving Declining About the same

10. RETAIL
• While new car registration in the fleet market was up 2.9% in April, we know that this was largely driven by daily
rentals, while traditional fleet and business sales are down around 9% YTD. This is a trend we expect to see
continue
• Traditionally a quieter month than March, this April was also affected by the sunny weather over Easter, which
undoubtedly affected consumer demand
• Reports that following Q1, there is increased activity and demand for marketing campaigns based on pre-
registrations volumes, particularly from the European brands
• New car sales remain a key part of the story as an overall indicator of demand and a source of used inventory
• Looking ahead, the used car market remains robust and stable, and while we expect a softer market than we
saw in Q1, we know there’s still plenty of consumer demand for the right used cars
• Continued penalties on diesel vehicles in the new car market has also led to purchase deferrals as consumers
wait for a greater choice of hybrid and electric vehicles from 2020 onwards
Summary

11. WHOLESALE

12. Wholesale
Manheim saw vehicle volumes up slightly MoM, while the overall average price increased by 2.2%, although this
is more likely to reflect a change in stock-mix than vehicle values
Apr ‘18
£6,623
Apr ‘19
£5,636
£-
£1,000
£2,000
£3,000
£4,000
£5,000
£6,000
£7,000
£8,000
£9,000
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Averagewholesaleprice(allvehicles)
Auction Wholesale Price
2018 2019

13. Wholesale
Average price
£5,636
2.2% MoM
Average age
87months
-0.6% MoM
Average mileage
69,368
1.1% MoM
Average mileage for fleet vehicles sold through wholesale increased 22% YoY and 2.4% MoM whilst the overall
mileages rose 15% YoY and 1.1% MoM

14. Wholesale
Diesel
Wholesale Used Prices by Fuel Type
Petrol
£4,389
-13.4% YoY
Diesel
£6,753
-13.8% YoY
AVF
£10,424
4.1% YoY
As with March’s data, April showed a YoY increase in the average price of alternative fuel vehicles, whilst both
petrol and diesel eased further as the reduction in the fleet product continues to influence the profile of vehicles

15. WHOLESALE
Summary
• WLTP uncertainty sees higher mileage cars hit the used market
• There is likely to be an influx of ex Manufacturer and Rental vehicles into the market soon which should ease
the sourcing situation for Franchised Dealers and Car Supermarkets, but Fleet vehicles will remain in short
supply throughout Q2
• Expectations that vehicle volumes will hold steady, and it’s likely that sensitivity around price will remain, as
both vendors and buyers adjust their expectations based on current market values
• Dealer-Auction.com report a 12% YoY increase in volume, a reflection of the increasing popularity of online
wholesale channels
• Older Grade 4 and 5 cars have struggled to find homes because of the reconditioning investment, but
ultimately Dealers have had to try and fill empty forecourt spaces
• Supply has improved in April and although the wholesale market has softened, there has been no material
reduction in conversion rates that can occur in Q2, which suggests a current balance of supply and demand

16. FUNDING

17. Funding
The average vehicle value drops slightly to £7,759 (down £200 MoM) whilst the average value in 2019
remains ahead of both 2018 and 2017
Apr ‘17
£6,974
Apr ‘18
£7,134
Apr ‘19
£7,759
£6,000
£6,500
£7,000
£7,500
£8,000
£8,500
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Average Cost of Unit (£)
2017 2018 2019

18. Funding
The average number of days in stock dropped to 56.4 (down -3.4 MoM), returning to levels experienced
in 2018 and 2017
Apr ‘17
56
Apr ‘18
56
Apr ‘19
56
30
35
40
45
50
55
60
65
70
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Average Holding Days
2017 2018 2019

19. Funding
Almost one in three dealers are planning to increase their Alternative Fuel Vehicle (AFV) stock as a
result of the newly introduced Ultra Low Emission Zone (ULEZ) and anticipated rollout of Clear Air
Zones (CAZ)
*State of the market dealer survey March ‘19
3%
17%
11%
28%
15%
13%
13%
0% 5% 10% 15% 20% 25% 30%
Reduction in customer footfall
Reduction in pre-Euro 6 diesel stock
Reduction in pre-Euro 4 petrol stock
Increase inAlternative Fuel Vehicles (AFV) stock
Introduction of lowemission scheme related promotions/ incentives
No anticipated impact
Don’t know
The new Ultra Low Emission Zone (ULEZ) begins in London on April 8. Similar schemes in major cities around the UK will
follow within the next 12 months. What impact, if any, do you think these schemes will have on your used car business?

20. Funding
The average age of funded units reduced marginally from the 6.5 years in 2018 to 6.1 years, while the
average mileage increased to just over 60,000
April 2018
6.5 years
Ave. Age Funded
59,987
Ave. Mileage
April 2019
6.1 years
Ave. Age Funded
60,634
Ave. Mileage

21. OUTLOOK

22. Retail Outlook
Our viewpoint – 2019 the retail market
Dealers investing in PPC
advertising to drive sales
as consumers turn to
online for their next
vehicle
Increasing appetite for
Manufacturers and
Dealers to embrace
eCommerce
Demand grows for
advanced vehicle
imagery solutions to
drive online buyer
confidence

23. Wholesale Outlook
Our viewpoint – 2019 the wholesale market
Demand for retail-ready
stock will drive efficiencies in
vehicle services, assisted by
enhanced imagery
Buyers will expect increased
transparency to drive stock
confidence, leading to more
detailed vehicle descriptions
and assurance checks
An increasingly agnostic
approach to physical and
digital sales streams will
emerge to complement
changing buyer behaviours

24. Funding Outlook
Our viewpoint – 2019 the funding market
A strong appetite for growth
means cash flow remains a
priority for dealers
Ease and flexibility
remains key for dealers
An increased focus on
digital integration is helping
dealers to purchase stock
hassle free from a variety
of sources

25. PHILIP NOTHARD
Customer Insight & Strategy Director – UK
Philip.Nothard@CoxAuto.co.uk
@PhilipN_Auto
@coxautomotiveUK
THANK YOU
/PhilipNothard
/CoxAutomotiveUK
/philipnothard
/cox-automotive-uk