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
October 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. 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
WLTP continued to impact the supply of new cars to dealers, and while the demand for hybrid and plug-in vehicles looks strong, the
figures are behind Government ambitions
45%
36%
44% 35%
43%
32%
45%
31%
44%
32%
43%
32% 43%
32%
40% 30%
40%
29%
39% 32%
51%
59%
52% 61%
53%
63%
51% 64%
52%
62%
53%
62%
52%
62%
55% 62%
55%
64%
56%
61%
4%
6%
4% 4%
4%
5%
4%
6%
4% 6%
4%
7%
6% 7%
5%
8%
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
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
January February March April May June July August September October
Registrationvolumes
New Registrations - fuel type
Diesel Petrol AFV

6. The retail market held steady across the board, with average sold prices of vehicles increasing 0.3% from September to £14,644
(up 2.1% YoY)
October
‘16
£12,307
October
‘17
£14,347
October
‘18
£14,644
£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
Retail

7. Fastest selling market sectors in October were 4X4s and lower-medium cars - both averaging 35 days, while coupes were the
slowest at 40 days
37 37
42 41 40
43
34
36
38 37
35 3536 35
39 40
37
39
35 36
38 37 37 37
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 October ‘17 vs. ‘18
(as listed on Motors.co.uk)
Oct '17 Oct '18
Retail

8. Retail
Volumes and views decreased for diesel models while days in stock shortened by 1 day. Petrol vehicles days in stock increased by
3 days
Vehicle Views
Oct '18 - 51% of total
Oct '17– 50% of total
Stock Volume
Oct '18 - 47% of total
Oct ‘17– 56% of total
Days in stock
Oct '18 – 38 days
Oct '17 – 39 days
Diesel Petrol Hybrid ElectricHybrid
Stock Volume
Oct '18 - 51% of total
Oct '17– 43% of total
Stock Volume
Oct '18 – 1.24% of total
Oct '17– 1.16% of total
Stock Volume
Oct '18 – 0.15% of total
Oct '17– 0.26% of total
Vehicle Views
Oct '18 – 1.23% of total
Oct '17– 1.48% of total
Vehicle Views
Oct '18 - 47% of total
Oct '17– 49% of total
Vehicle Views
Oct '18 – 0.47% of total
Oct '17– 0.45% of total
Days in stock
Oct '18 – 37 days
Oct '17 – 34 days
Days in stock
Oct '18 – 46 days
Oct '17– 36 days
Days in stock
Oct '18 – 36 days
Oct '17– 34 days

9. Retail
Retail
• Consumer demand for used cars remained steady throughout October, with average days in stock down
-3% month-on-month, and level year-on-year, at 37 days
• Franchise dealers saw average days in stock increase in October by 1 day year-on-year, up from 37 days
to 38 days. Car Supermarkets saw average days in stock increased by 8 days year-on-year, up from 20
days to 28 days
• Independents averaged 45 cars in stock in October, compared with 44 in both September 2018 and
October 2017
• Year on Year, Estates and Large vehicles saw the sharpest increase in consumer demand, selling on
average 3 and 4 days quicker in October vs. October 2017

11. Wholesale
The wholesale average selling price of vehicles eased by 2% from September to £6,242, reflecting a change in the mix
of stock going through the lanes
October
‘16
£6,275
October
‘17
£6,501
October
‘18
£6,242
£-
£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

12. Diesel wholesale prices declined marginally by -2.1% from September while petrol eased by -0.8% in October; an
average of -£101 overall
Wholesale Used Prices by Fuel Type
£4,543 £4,483 £4,445
Aug '18 Sept '18 Oct '18
Petrol
£8,258
£7,867 £7,704
Aug '18 Sept '18 Oct '18
Diesel
Wholesale

13. Dealers are gearing up to invest in their used car business in 2019 to counter falling new car sales, with four in five
dealers reported having investment plans to support their used car business in 2019
*State of the market dealer September ‘18
52%
21%
0%
7%
3%
17%
0% 10% 20% 30% 40% 50% 60%
Investing in additional used car stock
Investing in preparation facilities (including
reconditioning and retail ready capabilities)
Investing in transport solutions
Investing in additional locations
Arranging funding to enable used car stock growth
No current plan for investment 2019
Looking forward into 2019, what will you be investing in to support your used car business?
Wholesale

14. Wholesale
Wholesale
The data – Summary
• Dealer Auction reported increased volumes, up 16% year on year, with a 7.9% year-on-year
increase in average selling price (£4,829)
• Attendance at all Manheim auctions nationwide was high, and we saw a greater willingness by
dealers to travel further to obtain good stock
• Strong demand was also reported for high specification vehicles, with valued extras such as
panoramic roofs, privacy, larger alloys and reversing cameras achieving in excess of cap clean
• Retail part-exchanges performed well, and the corporate and fleet market also achieved strong
prices in the direct supply market
• Hybrids remain interesting, there is little appetite to purchase plug-in electric vehicles while
logistical infrastructure remains low

16. Funding
Wholesale stock funding remained steady across the board, with the average cost per unit decreasing just 0.07% to £7,697
from September
October
‘16
£7,075
October
‘17
£7,077
October
‘18
£7,697
£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 remained level with September at 59 days – two days more than experienced in October 2017
October
‘17
57
October
‘18
59
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 decreased to 5.8 years from 5.9 years in the same period last year whereas mileage increased
from 59,496 to 60,769
October 2017
5.9 years
Ave. Age Funded
59,496
Ave. Mileage
October 2018
5.8 years
Ave. Age Funded
60,769
Ave. Mileage

20. Dealers
The Market Overview Survey cited 37% of dealers* report margin pressures and77% cited the current demand for used vehicle stock either the same or
worsening compared to 2017
32%
40%
27%
35%
29%
23%
40%
30%
37%
20%
38%
32%
28%
30%
36%
45%
33%
45%
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 October ‘18

21. Dealers
The Market Overview Survey indicated dealers* support the data indicating the strength of the used vehicle market, with half reporting decrease in overage
stock
30%
28%
25%
30%
45%
44%
43%
50%
25%
28%
32%
20%
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 October ‘18

22. Dealers
29% of dealers* responding to the Market Overview Survey indicated sourcing stock will toughen whereas 60% cite no change and 29% are positive about the
economy in the final months of 2018
29%
40%
31%
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 October ‘18
29%
11%
60%
What are your expectations for sourcing used
vehicles over the coming months?
(as a proxy for supply)
Improving Declining About the same

24. 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

25. 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

26. 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

27. 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

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