A high-level helicopter view of the current ‘state of the market’ from across the Cox Automotive UK business - identifying industry trends and key messages.

1. Market Overview
August 2018
Philip Nothard

2. T H E V E H I C L E L I F E C Y C L E
Cox Automotive
Who we are

3. AGENDA
• Retail
• Wholesale
• Funding
• Dealers
• Outlook

5. Retail
Year-to-date registrations down -4.2% as August rises 23.1% in the second smallest month of the year, with 94,094 units registered
45%
36%
44% 35%
43%
32%
45%
31%
44%
32%
43%
32% 43%
32%
40% 30%
51%
59%
52% 61%
53%
63%
51% 64%
52%
62%
53%
62%
52%
62%
55% 62%
4%
6%
4% 4%
4%
5%
4%
6%
4% 6%
4%
7%
6% 7%
5%
8%
174,564
163,615
83,115 80,805
562,337
474,069
152,076
167,911
186,265 192,649
243,454
234,945
161,997 163,898
76,433
94,094
0
100,000
200,000
300,000
400,000
500,000
600,000
2017 2018 2017 2018 2017 2018 2017 2018 2017 2018 2017 2018 2017 2018 2017 2018
January February March April May June July Aug
Registrationvolumes
New Registrations - fuel type
Diesel Petrol AFV

6. Retail
A stable retail market, with the average sold prices of £14,370 (up +0.4% vs. July 2018 and +4.4% on August 2017)
Aug ‘16
£11,133
Aug ‘17
£13,764
Aug ‘18
£14,370
£9,000
£10,000
£11,000
£12,000
£13,000
£14,000
£15,000
January February March April May June July August September October November December
Averageadvertisedprice
Retail Used Car Price Performance
(as listed on Motors.co.uk)
2016 2017 2018

7. Retail
In contrast to previous months, demand for larger vehicles - including 4x4s and Estates - was stronger YoY than for Small and Superminis
40 41
43
45
41
44
39 40 41 41
39 3938 37 37
40
37
39
35 36 36
40 40 39
0
5
10
15
20
25
30
35
40
45
50
Overall 4x4 Convertible Coupe Estate Large Lower Medium Medium MPV Prestige Small Supermini
Numberofdays
Retail days in stock August ‘17 vs. ‘18
(as listed on Motors.co.uk)
Aug-17 Aug-18

8. Retail
Diesel vehicles sold six days faster than the same period last year, reflecting a rebalancing of supply and demand
Vehicle Views
Aug '18 - 51% of total
Aug '17– 49% of total
Stock Volume
Aug '18 - 49% of total
Aug '17– 57% of total
Days in stock
Aug '18 – 38 days
Aug '17 – 44 days
Diesel Petrol Hybrid ElectricHybrid
Stock Volume
Aug '18 - 49% of total
Aug '17– 42% of total
Stock Volume
Aug '18 – 1.32% of total
Aug '17– 1.09% of total
Stock Volume
Aug '18 – 0.20% of total
Aug '17– 0.28% of total
Vehicle Views
Aug '18 – 1.12% of total
Aug '17– 1.35% of total
Vehicle Views
Aug '18 - 47% of total
Aug '17– 49% of total
Vehicle Views
Aug '18 – 0.42% of total
Aug '17– 0.43% of total
Days in stock
Aug '18 – 37 days
Aug '17 – 37 days
Days in stock
Aug '18 – 41 days
Aug '17– 39 days
Days in stock
Aug '18 – 38 days
Aug '17– 47 days

9. Retail
Retail• Overall, with a YoY reduction in days in stock, vehicles sold on average 3% quicker in August 2018 vs.
August 2017 (down two days to 38 days), while the average sold prices of vehicles held steady at
£14,370 (up 4.4% on August 2017)
• Despite ongoing media pressures, diesel vehicles continued to sell well (six days faster than the same
period last year), while petrol vehicles remained on forecourts for an average of 37 days (the same as
last year)
• In contrast, hybrids sold two days slower (41 days) than last year
• Both Franchise and Independent dealers saw a decrease in days in stock in August 18 versus last year
whilst supermarkets saw an increase in days in stock of 5 days versus last year
• In contrast to previous months, demand for larger vehicles - including 4x4s and estates - was
comparatively strong YoY, outperforming Small and Superminis in relative terms

11. Wholesale
The wholesale market remained more buoyant than the same period last year, up 3.6% although average prices down by 11% month on month
Aug ‘16
£6,067
Aug ‘17
£6,265
Aug ‘18
£6,493
£4,500
£5,000
£5,500
£6,000
£6,500
£7,000
£7,500
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Averagewholesaleprice
Auction Wholesale Price
2016 2017 2018

12. Wholesale
Diesel wholesale prices rise 3.4% while petrol rose by 6.1% in August 2018; an average of £271 overall
Wholesale Used Prices August ‘17 vs. ‘18
£4,460
£4,730
2017 2018
Petrol
£8,063 £8,335
2017 2018
Diesel

13. Wholesale
August new car registration increase of 23.1% reinforced by 61% of dealers surveyed*, reporting potential pre-registration activity
*State of the market dealer July ‘18
82%
0%
4%
14%
0% 10% 20% 30% 40% 50% 60% 70% 80% 90%
YES
NO
Don't know
What is WLTP
Should the introduction of WLTP have been
scheduled to avoid the September plate change
period?
61%
20%
6%
13%
0% 10% 20% 30% 40% 50% 60% 70%
YES
NO
Don't know
What is WLTP
Will you be pre-registering stock this month to
overcome WLTP-related issues?
The impact of WLTP

14. Wholesale
Overwhelming nine in 10 dealers* (91%) also believe WLTP and the economic climate has resulted in a lower September order bank
*State of the market dealer survey July ‘18
91%
9%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
YES NO
Has the current economic climate and WLTP created a lower September order take at this point compared to
last year?

15. Wholesale
Wholesale
The data – Summary
• Diesel vehicles continued to make ground despite ongoing market pressures, as average wholesale
prices increased by 3.4% on 2017 at £8,335. Petrol also remained positive, up 6.1% to £4,730
• Dealer Auction reported the average selling price of vehicles remained steady at £4,607 whilst
volumes increased 11%
• Vendors have been willing to sell vehicles for less to offload stock during the month of August but
could toughen in September as demand increases
• The market is holding steady and volumes coming through the lanes continue to interest buyers,
especially car supermarkets who have been tempted by the varied mix of brands on offer
• Supply shortages in the new car market, caused by the pressures of the WLTP regulations, will help
increase demand in used cars for the short to medium term, potentially beyond the year-end

17. Funding
9.6% year on year increase in the average cost per unit, to £7,396 (from £6,746 In August 2017)
Aug ’16
£6,901
Aug ’17
£6,746
Aug ’18
£7,396
£6,000
£6,500
£7,000
£7,500
£8,000
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Averagecostofunit
Average Cost of Unit (£)
2016 2017 2018

18. Funding
Average holding days increased marginally from July to 60 days – two days more than experienced in August 2017
Aug ‘17
58
Aug ‘18
60
30
35
40
45
50
55
60
65
70
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Averageholdingdays
Average Holding Days
2017 2018

19. Stock funding
Funding
The average age of funded units decreased to 5.8 years from 6.1 years in the same period last year, signifying the demand for newer models on forecourts
August 2017
6.1 years
Ave. Age Funded
59,957
Ave. Mileage
August 2018
5.8 years
Ave. Age Funded
59,787
Ave. Mileage

21. Dealers
43% of dealers* report margin pressures as half indicate stock availability toughening compared to the same period 2017
32%
45%
30%
34%
35%
10%
39%
24%
43%
19%
25%
50%
29%
31%
27%
47%
40%
40%
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 Decreased/Worse About the same
*State of the market dealer survey August ‘18

22. Dealers
Nearly half of dealers* indicate a reduction in consigned stock as WLTP forces registration activity and a third report used car overage reduction
28%
39%
32%
29%
48%
44%
23%
32%
24%
17%
45%
39%
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*State of the market dealer survey August ‘18

23. Dealers
32% of dealers* support indications that sourcing ‘ready to retail’ stock will toughen and mixed opinion towards the economy in the final quarter of the year
30%
28%
42%
What are your expectations for economic
conditions over the coming months?
(as a proxy for demand)
Improving Declining About the same
*State of the market dealer survey August ‘18
28%
32%
40%
What are your expectations for sourcing used
vehicles over the coming months?
(as a proxy for supply)
Improving Declining About the same

25. Outlook
Our viewpoint – 2018 the retail market
Strong appetite for vehicle
insight from dealers, to
support both buying and
selling
Used cars sales to improve
as consumers are confused
over updated tax rules for
new vehicles
Retail
Dealers urged to adjust
stock volumes to match
consumer demand for
smaller used cars

26. Outlook
Our viewpoint – 2018 the wholesale market
An increase in the diversity of
stock acquisition through
physical and digital channels
An increasing desire for
enhanced imagery and
'ready for retail’ inventory
Scale operations will drive
demand for refurb and retail-
ready through efficiency and
logistics costs
Wholesale

27. Outlook
Our viewpoint – 2018 the funding market
Cash flow and digital
integration remain
priority for dealers in
the year ahead
Ease and flexibility
remains key for
dealers
Dealers are looking for
complementary sources to
ensure they have sufficient
liquidity to buy the stock
they need
Funding

28. Outlook
Our viewpoint – 2018 the Dealers market
Further dealership
consolidation in line with
the long term trend of
declining franchised dealer
numbers
Dealers
Improving the digital retailing
experience and enabling
consumers to do more online
to provide a competitive edge
is increasingly important
Challenging environment
of evolving technology
and ever changing
consumer expectations

29. THANK YOU