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
November 2018
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. AGENDA
• Retail
• Wholesale
• Funding
• Dealers
• Outlook

4. Retail
YTD 2.22m new cars registered and the November market down by -3.0%. Given the challenging headwinds and uncertainty faced
throughout the year, it remains in line with the forecast of 2.38m (-6.5%)
45%
36%
44% 35%
43%
32%
45%
31%
44%
32%
43%
32% 43%
32%
40% 30%
40%
29%
39% 32% 38% 32%
51%
59%
52% 61%
53%
63%
51% 64%
52%
62%
53%
62%
52%
62%
55% 62%
55%
64%
56%
61%
57%
61%
4%
6%
4% 4%
4%
5%
4%
6%
4% 6%
4%
7%
6% 7%
5%
8%
5%
7%
5% 7%
5% 7%
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
426,170
338,834
158,192 153,599
163,541 158,639
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 2017 2018 2017 2018 2017 2018
January February March April May June July August September October November
Registrationvolumes
New Registrations - fuel type
Diesel Petrol AFV

5. Activity indicates franchised dealers saw an increase on October 2018 stock levels, bringing volume in line with November 2017
whilst supermarket stock levels were up both MoM and YoY
Retail
Nov ‘17
Nov ‘18
Franchised
Supermarket
Independent
64
63
64
44
45
45
1,637
1,689
1,724
38
41
45
42
45
22
NOV ‘17
OCT ‘18
NOV ‘18
NOV ‘17
OCT ‘18
NOV ‘18
42
28
22
Nov ‘17
Nov ‘17
Oct ‘18
Nov ‘18
Nov ‘17
Oct ‘18
Oct ‘18
Nov ‘18
Oct ‘18
Nov ‘18
Nov ‘17
Oct ‘18
Nov ‘18
Nov ‘17
Oct ‘18
Nov ‘18
Stock Volume
by Dealership Type
Avg. Days in Stock
by Dealership Type

6. Smaller Vehicles saw an increase vs. last year, with Supermini seeing the largest increase at 4 days. Conversely, larger vehicles sold
quicker, as did prestige and convertibles
Retail
Top 10 Fastest Selling Makes/Models Ave. Days in Stock by Vehicle Sector
4X4 40 37
SECTOR NOV ’17 NOV ‘18
CONVERTIBLE 45 42
COUPE 43 44
ESTATE 42 38
LARGE 44 41
LOWER MEDIUM 36 39
MEDIUM 39 40
MPV 41 41
PRESTIGE 42 38
SMALL 40 41
SUPERMINI 37 41
HYUNDAI i800 18
HYUNDAI IONIQ 24
FORD GALAXY
VOLVO XC60 26
VOLVO XC90 27
VOLKSWAGEN T-ROC 27
DACIA DUSTER 28
HYUNDAI TUCSON 28
DACIA SANDERO STEPWAY 28
VOLVA V40 29
MAKE/MODEL NOV ‘18
25

7. Retail
Volumes decreased for diesel models while days in stock shortened by 3 days. Petrol vehicles days in stock increased by 3 days
as volumes and views both increased
Vehicle Views
Nov '18 - 52% of total
Nov '17– 50% of total
Stock Volume
Nov '18 - 47% of total
Nov ‘17– 55% of total
Days in stock
Nov '18 – 39 days
Nov '17 – 42 days
Diesel Petrol Hybrid ElectricHybrid
Stock Volume
Nov '18 - 51% of total
Nov '17– 43% of total
Stock Volume
Nov '18 – 1.18% of total
Nov '17– 1.08% of total
Stock Volume
Nov '18 – 0.14% of total
Nov '17– 0.23% of total
Vehicle Views
Nov '18 – 1.18% of total
Nov '17– 1.46% of total
Vehicle Views
Nov '18 - 47% of total
Nov '17– 48% of total
Vehicle Views
Nov '18 – 0.38% of total
Nov '17– 0.43% of total
Days in stock
Nov '18 – 40 days
Nov '17 – 37 days
Days in stock
Nov '18 – 38 days
Nov '17– 40 days
Days in stock
Nov '18 – 33 days
Nov '17– 39 days

8. Retail
Retail
• Franchised dealers saw an increase on October 2018 stock levels, bringing volume in line with
November 2017
• Independent dealers stock levels remained static month-on-month but slightly up year-on-year
• Supermarket stock levels are higher than both last month and last year
• Stock turn in November 2018 for Franchised and Independent dealers was broadly in line with
last year
• Whilst in line with last year, there was significant improvement with Supermarket sales month-
on-month

10. Wholesale
The wholesale volumes fall in line with seasonal expectations. In turn, the average selling price increased by 1%
month-on-month to £6,305
Nov ‘16
£6,052
Nov ‘17
£6,500
Nov ‘18
£6,305
£-
£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
Auction Wholesale Price
2016 2017 2018

11. Diesel wholesale prices declined marginally by -2.8% from October while petrol eased by -0.5% in October; with
minor average combined overall variance from £7,530 in October to £7,531 in November
Wholesale Used Prices by Fuel Type
Wholesale
£4,543 £4,483 £4,445 £4,423
Aug '18 Sept '18 Oct '18 Nov '18
Petrol
£8,258
£7,867 £7,702 £7,488
Aug '18 Sept '18 Oct '18 Nov '18
Diesel

12. 15%
21%
33%
9%
21%
15%
41%
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
Travelling further for stock Self-sourcing through classifieds Buying from
additional/alternative wholesale
Buying lower grade stock than
normal
Accepting lower margins for
grade 1 / retail ready vehicles
Fast tracking vehicle preparation
to facilitate quicker stock turn
over
No change
In what ways have you altered your buying behaviour in the last two months due to used car stock shortages?
One in ten admit to buying lower grade stock than they normally would, while 15% have been fast-tracking vehicle
preparation to facilitate quicker stock turnover
*State of the market dealer October ‘18
Wholesale

13. Just over 50% of the dealers agreed with the statement ‘demand is currently outstripping supply in the used car
market’
*State of the market dealer October ‘18
Wholesale
34%
52%
14%
0%
10%
20%
30%
40%
50%
60%
No Yes Unsure
Do you agree with the sentiment ‘demand is currently outstripping supply in the used car market?’

14. Wholesale
Wholesale
The data – Summary
• Wholesale volumes fall in line with seasonal expectations. In turn, the average selling price
increased by 1% month-on-month to £6,305, while average vehicle mileage held steady at 62,414
• Dealer Auction reported that average vehicle prices were up year-on-year to £5,028
• Supply was a major focus for retailers in November, with many choosing to widen their stock
profile to increase buying opportunities
• Despite pressures in the new car market and the much-discussed consumer uncertainty caused by
Brexit, dealers remain cautiously optimistic about the months ahead
• As new car supply returns to the market, we expect to see wholesale volume increase from
January, although demand for the ready-to-retail stock is likely to remain high

16. Funding
Wholesale stock funding remained steady across the board, with the average cost per unit increasing 2% to £7,881 from
October
Nov ‘16
£6,869
Nov ‘17
£6,957
Nov ‘18
£7,881
£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

17. Funding
Average holding days Increased marginally with November at 61 days – three days more than experienced in November 2017
Nov ‘17
58
Nov ‘18
61
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

18. Stock funding
Funding
The average age of funded units increased to 6.0 years from 5.9 years in the same period last year whereas mileage increased
from 59,791 to 61,177
November 2017
5.9 years
Ave. Age Funded
59,791
Ave. Mileage
November 2018
6.0 years
Ave. Age Funded
61,177
Ave. Mileage

19. Funding
Half of the dealers responding said they used a wholesale finance package or Stocking Plan versus 38% who opt to use their
own capital
38%
0%
9%
3%
50%
0% 10% 20% 30% 40% 50% 60%
Own capital (cash)
Bank Loan
Overdraft
Informal Loan (e.g. Friend/Family)
Wholesale finance package (e.g. NextGear Capital, MotoNovo, BCA, Lombard, etc)
Which is your dominant source of funding for buying used vehicles for resale?
*State of the market dealer October ‘18

20. Funding
Nine in ten dealers say they use more than one source of funding, with wholesale finance and own capital dominating the
options chosen
*State of the market dealer October ‘18
47%
0%
6%
0%
47%
0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50%
Own capital (cash)
Bank Loan
Overdraft
Informal Loan (e.g. Friend/Family)
Wholesale finance package (e.g. NextGear Capital, MotoNovo, BCA, Lombard, etc)
Which of the following funding sources do you employ for buying used vehicles for resale?

22. Dealers
The Market Overview Survey cited 29% of dealers* report margin pressures and 74% cited the current demand for used vehicle stock either the same or
worsening compared to 2017. Whereas over half [53%] reported a decline in physical footfall
17%
32%
23%
32%
23%
26%
53%
32%
29%
23%
42%
32%
30%
36%
48%
45%
35%
42%
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 November ‘18

23. Dealers
The Market Overview Survey indicated dealers* support the data indicating the strength of the used vehicle market, with 71% reporting decrease or no change
in overage stock volumes. One in three cited an increase in new car consignment stock
33%
25%
30%
29%
33%
45%
27%
26%
34%
30%
43%
45%
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 November ‘18

24. Dealers
29% of dealers* responding to the Market Overview Survey indicated sourcing stock will toughen whereas 45% cite no change and 32% are positive about the
economy in the months ahead as we enter 2019
32%
32%
36%
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 November ‘18
26%
29%
45%
What are your expectations for sourcing used vehicles
over the coming months?
(as a proxy for supply)
Improving Declining About the same

26. Outlook
Our viewpoint – 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

27. Outlook
Our viewpoint – 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

28. Outlook
Our viewpoint – 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

29. Outlook
Our viewpoint – Dealer 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

30. PHILIP NOTHARD
Customer Insight & Strategy Director – UK
Philip.Nothard@CoxAuto.co.uk
@PhilipN_Auto
@CoxAutomotiveUK