“Welcome to the latest The Market Landscape from Cox Automotive. 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 Insight & Strategy Director

1. The Market Landscape
Date:
Philip Nothard – Insight & Strategy Director
© Copyright Cox Automotive UK Limited 2020
July 2020

2. Presentation Overview
/ Current Market
• New Cars – UK
• Used Cars – UK
• New & Used – EU/International
/ US Recovery
/ Dealer sentiment
/ Outlook

3. Current Market
New Cars - UK

4. New car market - UK
Registrations currently down -41.9% YTD and the SMMT reforecast it to be -30.0% down by end of 2020
• Lost 600k registrations during COVID-19
• Social distancing measures continuing to create efficiency
and production constraints for OEMs
• SMMT reduce the 2020 full year outlook to -30%,
representing in excess of £20 billion of lost sales
• Rental operations benefit from increased demand
• The U.K. Government missed an opportunity for market
stimulus
• September market building slowly – unseasonal market
Registrations 2019 vs. 2020
161,013
81,969
458,054
161,064
183,724
223,421
157,198
149,279
79,594
254,684
4,321
20,247
145,377
174,887
-7.29%
-2.90%
-44.40%
-97.32%
-88.98%
-34.90%
11.30%
-120%
-100%
-80%
-60%
-40%
-20%
0%
20%
0
50,000
100,000
150,000
200,000
250,000
300,000
350,000
400,000
450,000
500,000
Jan Feb Mar Apr May Jun Jul
2019 2020 YoY % +/-

5. Current Market
Used Cars - UK

6. Wholesale activity
Motor Traders appetite continues pre and post lockdown
• The pent up demand observed throughout June to mid-July is showing signs of easing
• Wholesale volumes remain strong although poor condition cars are tougher
• Used wholesale values show signs of easing as initial pent-up demand levels

7. A period of volatility ahead for values
The market proceeds with caution
• Values returned to a more normal level - market stabilising
• An unseasonal market – market proceeding with caution into Q3/4
• Pressure on more expensive cars but tempered by lower volumes in the market
Source: cap hpi
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec YTD
2020 -0.2 0.6 1.1 -2.2 0.0 0.0 0.3 0.4 0.0
2019 -1.7 -0.7 -0.6 -0.9 -2.3 -3.1 -2.1 -2.2 -1.0 0.4 -0.6 -0.6 -13.6
2018 -1.1 -0.2 1.0 0.4 -0.8 -1.3 -0.6 -0.7 -0.3 0.0 -0.6 -1.5 -3.4
2017 -1.6 -0.6 -0.0 -0.1 -1.6 -1.5 -1.4 -0.5 -0.2 0.5 -1.2 -2.0 -7.3
2016 -1.8 -0.5 0.4 0.1 -1.4 -1.9 -1.0 -1.6 -0.7 -0.2 -1.3 -2.0 -7.7
2015 -2.2 -0.3 0.1 0.0 -1.7 -1.6 -1.4 -1.2 -0.6 -0.7 -2.2 -2.6 -8.3
2014 -0.7 -0.2 0.5 0.5 -1.7 -1.6 -0.9 -1.0 -0.5 -0.7 -2.0 -3.1 -5.1
2013 -1.5 -0.1 0.2 0.3 -1.8 -1.9 -1.4 -1.6 -0.8 0.3 -1.1 -1.9 -7.8
2012 0.0 0.5 1.0 -1.0 -1.8 -1.7 -1.0 -0.2 -0.4 -0.3 -1.2 -1.8 -4.1
2011 1.0 1.4 0.6 -0.9 -4.6 -3.8 -2.9 -1.4 -1.7 -1.4 -1.5 -1.8 -10.7
2010 0.4 -1.0 0.9 0.7 -0.5 -3.9 -3.2 -3.0 -2.4 -0.0 -3.1 -1.5 -9.6
2009 -3.8 -0.2 3.3 6.8 0.1 0.0 1.1 1.6 1.7 -0.1 -3.0 -4.2 9.0
2008 -1.8 -0.6 -1.2 -1.0 -2.5 -4.5 -4.1 -4.9 -3.3 -4.1 -3.5 -3.0 -20.6
% CAP clean achievedBlack Book 3yr/60k movements

8. Current Market
New and Used – EU/International

9. New & Used car market – EU/International
European market facing -25% decline in sales in 2020
• UK recovers in July with a +11.3% and minimal tactical registration activity
• Majority of the global automotive sector in the red
• Concerns increase for the U.K. new car market as we approach the Brexit deadline
• The E.U. will potentially experience a decline of 3 million units in 2020, down from 12.8 million in 2019 to 9.6 million - -25%
Source: INDICATA Market Watch COVID-19 June 20Source: SMMT and Marklines
1,200,000
396,300
314,900
179,000
174,887
165,000
144,400
136,500
117,900
72,900
72,500
48,300
44,500
30,300
22,700
22,600
21,200
19,800
19,000
18,900
15,200
9,800
8,400
-12.2%-13.7%
-5.4%
3.9%
11.3%
-4.9%
10.1%
-11.0%
1.1%
-31.3%
-12.8%-11.9%
-1.3%
-39.3%
-4.0%
-11.3%
-14.1%
-9.4%
13.4%
-35.8%
-17.5%
6.5%
10.2%
-50.0%
-40.0%
-30.0%
-20.0%
-10.0%
0.0%
10.0%
20.0%
0
200,000
400,000
600,000
800,000
1,000,000
1,200,000
1,400,000
US
JapanGerm
anyFrance
UKCanada
Korea
Italy
SpainM
exico
AustraliaPolandBelguimArgentinaSweden
SwitzerlandIreland
Czech
RepDenm
ark
South
AfricaPortugalNorw
ayUkraine
YoY+/-%
June2020registrationvolumes
Global New Car Registrations (July 2020)
Jul-20 Volume Jul-20 +/-YoY
36.2%
10.8%
31.6%
76.2%
9.7%
14.0%
34.9%
7.7%
31.6%
15.3%
-6.4%
3.7%
-20.0%
-10.0%
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
70.0%
80.0%
90.0%
Portugal
Poland
Denm
ark
TurkeyNetherlands
Sw
eden
Austria
Germ
any
Italy
Belguim
France
UK
%changeYoY
Used Car Sales (June 2020)
Country

10. US Recovery
What’s ahead
Daily new COVID-19 cases, hospitalizations and deaths are now on the decline, but active case risk
remains very high in many places
Consumer sentiment improved slightly last week for the first time this summer.
The latest data show 16.1 million on unemployment benefits, which represents 10.6% of February’s
job total. The number on continuing claims is expected to decline again when reported later this
week.
The recovery in the auto market has lost momentum to start August.
Cox Automotive leading indicators are mixed relative to last week and the month of July.
Manheim sales recovery has faded as supply has normalized and prices have set new records.
Average new auto rates remain better than February across all credit tiers, but they have started
August slightly higher.
The recession began in Q1 as the economy shrank 5.0% on an annualized basis and the second
quarter report followed with a 32.9% decline. Full recovery in activity is not likely without a vaccine,
and job recovery will be challenging until the virus is contained.
The summer poses additional risks from the pandemic not being over, civil unrest over racial
injustice, politics leading to the presidential election, stubborn unemployment, uncertainty over
more stimulus and additional unemployment benefits, and deteriorating credit conditions.

11. Dealer Sentiment

12. Stock profile and pricing
Majority of dealers taking a calm and sensible view of their pricing strategies, despite the pressure they inevitably feel to get cash
flowing back into their businesses
Source: Cox Automotive dealer sentiment survey May 2020

13. Auction intentions
Half of the dealers who responded were using online platforms prior to Covid-19, but there’s no doubt the lockdown has accelerated
adoption amongst those yet to embrace digital auctions
Source: Cox Automotive dealer sentiment survey May 2020

14. Consumer behaviour
The pandemic has caused many consumer behaviours to change or accelerated those already taking place. Automotive retail is not
exempt from this shift
Source: Cox Automotive dealer sentiment survey May 2020

15. Business performance
Health is top of this list for dealers as we continue to navigate this global pandemic, but no surprise to see cashflow ranking a close
second
Source: Cox Automotive dealer sentiment survey May 2020

16. Content links
Click through to read further insight outputs from this sentiment survey
Press releases
• Dealers to hold firm on used car prices
• Dealer sentiment points towards multi-channel future
• Cash flow and health dominate dealers’ concerns
Viewpoint
• Stock profile plans highlight the need for data and insight
• How changing consumer behaviours are guiding dealer business plans

17. Outlook

18. 2,268,287
1,932,748
1,696,984
1,504,345
-
500,000
1,000,000
1,500,000
2,000,000
2,500,000
1 2 3 4 5 6 7 8 9 10 11 12
2020 new car registrations (original forecast) 2020 new car registrations (V-shape)
2020 new car registrations (W-shape) 2020 new car registrations (U-shape)
New car volumes scenarios
UK 2020
• We originally forecast 2.27m new car registrations
• In the “W-shape” recovery we expect, down 24.6%
• Concurs with SMMT forecast (-25%) issued after
May actuals released, showing -89% YoY decline
• Actual recovery will be determined by:
• When and how can dealers trade again?
• Will there be sufficient consumer demand?
• How many vehicles will be supplied?
In all scenarios, Apr -97.3%,
May -89.00% & June down 34.9%

19. Used car volume scenarios
UK 2020
• We originally forecast 7.99m used car transactions
• In the “W-shape” recovery we expect, down 19%
• No 3rd party views published and no actuals yet
published for 2020 Q1, showing March impact
• Less impact on used than new as not relying on
production that was already constrained
• Actual recovery will be determined by:
• When and how can dealers trade again?
• Will there be sufficient consumer demand?
• How many vehicles will be supplied?
7,990,742
7,094,275
6,405,049
5,998,461
-
1,000,000
2,000,000
3,000,000
4,000,000
5,000,000
6,000,000
7,000,000
8,000,000
1 2 3 4 5 6 7 8 9 10 11 12
2020 used car transactions (original forecast) 2020 used car transactions (V-shape)
2020 used car transactions (W-shape) 2020 used car transactions (U-shape)
In all scenarios, assumed Mar down
40%, Apr down 90%, May down 50%

20. A challenging economic outlook
A quarter of the UK GDP lost in March and April
• Rising unemployment from 3.9% to 9%
• Annual house prices change from 2% to -3.1%
• Furlough costing UK government £14bn every month
• Crisis expected to cost the UK £300bn April 20/21
• Crisis-related packages will cost £130bn this year
Source: OECD/Statista
Projected change in GDP in 2020
Ø Increase taxes
Ø Decrease spending
Ø More borrowing