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
July 2018
Philip Nothard

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

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

5. Retail
Diesel continues to experience pressure with further YoY volume decline of -24.4%, countered by an increase in petrol of 20.1%
45%
36%
44% 35%
43%
32%
45% 31%
44%
32%
43%
32% 43% 32%
51%
59%
52% 61%
53%
63%
51% 64%
52% 62%
53%
62%
52% 62%
4%
6%
4% 4%
4%
5%
4%
6%
4% 6%
4%
7%
6% 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
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
January February March April May June July
Registrationvolumes
New Registrations - fuel type
Diesel Petrol AFV

6. Retail
The UK's used car market will reach 7.86 million units in 2018, if current market trends stay on track
Click here to download the graph as a pdf

7. Retail
Stable retail market , with the average sold prices of vehicles up 1% to £14,314 (up 6% year on year)
July ‘16
£11,673
July ’17
£13,557
July ‘18
£14,314
£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

8. Retail
Overall days in stock increased marginally, weighted greatly by both Estate and Large, but not consistent across all sectors
39
37
45
42
37
41
35
38 38
41
40
39
40
39
44
41 41
45
38
39
41
40
39
38
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 July ‘17 vs. ‘18
(as listed on Motors.co.uk)
Jul-17 Jul-18

9. Retail
Diesel vehicles saw a slight reduction in days in stock, despite less stock listed compared to July ‘17
Vehicle Views
July ‘18 - 51% of total
July ‘17– 50% of total
Stock Volume
July ‘18 - 50% of total
July ‘17– 57% of total
Days in stock
July ‘18 – 40 days
July ‘17 – 43 days
Diesel Petrol Hybrid ElectricHybrid
Stock Volume
July ‘18 - 49% of total
July ‘17– 41% of total
Stock Volume
July ‘18 – 1.18% of total
July ‘17– 1.19% of total
Stock Volume
July ‘18 – 0.19% of total
July ‘17– 0.27% of total
Vehicle Views
July ‘18 – 1.02% of total
July ‘17– 1.34% of total
Vehicle Views
July ‘18 - 47% of total
July ‘17– 49% of total
Vehicle Views
July ‘18 – 0.40% of total
July ‘17– 0.44% of total
Days in stock
July ‘18 – 38 days
July ‘17 – 36 days
Days in stock
July ‘18 – 41 days
July ‘17– 38 days
Days in stock
July ’18 – 52 days
July ‘17– 48 days

10. Retail
Dealers maintain better mix of petrol and diesel stock in July 2018 as consumers become more prepared to buy diesel again
Retail
• Supermarkets have increased their average stock volume by +15% relative to
July ‘17
• Franchise and independent dealers have maintained consistent stock volumes
year-on-year
• Supermarkets sold vehicles four days slower compared to July ‘17
• Independents have sold vehicles three days faster year-on-year
• Franchise performance remained consistent both month-on-month and
compared to last year
• Larger and more prestige vehicles sold slower than other types

12. Wholesale
Strong increases in the price of sold vehicles, up 7% to £7,298 (from £6,816 in June) - a 15% increase on the same period last year
July ‘16
£5,918
July ‘17
£6,345
July ‘18
£7,298
£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

13. Wholesale
Diesel wholesale prices rise 11.5% while petrol rose by 23.1% in July 2018; an average of £984 overall
£8,191
£9,132
2017 2018
Diesel
£4,451
£5,477
2017 2018
Petrol
Wholesale Used Prices July ‘17 vs. ‘18

14. Wholesale
35% of dealers are not aware of when WLTP comes in to force; two-thirds are unclear on what it means for new car sales
*State of the market dealer survey June ‘18
45%
39%
33%
86%
47%
65%
55%
61%
67%
14%
53%
35%
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Are the brands you represent being helpful in providing information on WLTP
and what it means for your business?
Are you up to speed on the timetable for the implementation of WLTP?
Are you clear on what WLTP actually means your new car sales after the
September deadline?
Do you think there will be tactical registrations taking place to register WLTP
impacted vehicles ahead of the September deadline?
For the brands you represent are you seeing supply shortages as a result of
carmakers holding back cars to get them to meet the new WLTP test?
Are you aware Worldwide Harmonised Light Vehicle Test Procedure (WLTP)
regime that comes into effect in September?
Respondent percentage
What do you know about WLTP
YES NO

15. Wholesale
Wholesale
The data – Summary
• The market remains steady in terms of volume, demand for vehicles is heating up and
dealers are now willing to pay more for quality vehicles that match their requirements
• July signaled a positive upturn in demand for ready to retail vehicles, offering dealers
and vendors positivity as we head towards Q4
• Volumes of vehicles coming through the lanes also remained stable, in line with the
previous month
• Dealer Auction reports a 2% month on month increase in the average selling price of
vehicles to £4,630, in addition to a 10% increase in volumes through the online lanes

17. Funding
The average cost per unit increased 17.9% year-on-year to £7,530, the highest observed in a 31-month period
July ‘16
£7,047
July ‘17
£6,837
July ‘18
£7,530
£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 to 59 - two more than experienced in July 2017
July ‘17
57
July ‘18
59
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
1 month decrease on the average age of vehicles funded, and the average mileage holds above 60k
July 2017
6.1 years
Ave. Age Funded
60,447
Ave. Mileage
July 2018
6.0 years
Ave. Age Funded
60,100
Ave. Mileage

21. Dealers
On-line activity bucks the trend in July 2018, with 53% of dealers surveyed* reporting an increase compared to this time in 2017
14%
53%
15%
15%
10%
7%
67%
25%
60%
60%
72%
63%
19%
22%
25%
25%
18%
30%
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 July ‘18

22. Dealers
As days in stock and overage increases for used cars, the inception of WLTP in September keeps overage new car stock to a minimum*
71%
21%
70%
67%
17%
11%
18%
15%
12%
68%
12%
18%
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 July ‘18

23. Dealers
60% of dealers* report that the economic outlook is no worse whilst 27% believe it could deteriorate and 13% optimistic about improvement
13%
27%
60%
0%
10%
20%
30%
40%
50%
60%
70%
80%
Improving Declining About the same
%respondents
What are your expectations for economic conditions over the coming months?
(as a proxy for demand)
*State of the market dealer survey July ‘18

24. Dealers
Whilst 70% of dealers* expect sourcing stock to remain tough due to the impact of WLTP and high values, a fifth believe it could worsen
10%
20%
70%
0%
10%
20%
30%
40%
50%
60%
70%
80%
Improving Declining About the same
%respondents
What are your expectations for sourcing used vehicles over the coming months?
(as a proxy for supply)
*State of the market dealer survey July ‘18

26. 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

27. 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

28. 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

29. 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

30. THANK YOU