June 30, 2020

COVID-19 AUTOMARKET UPDATE

Jonathan SmokeChief Economist, Cox Automotive

COVID-19 LOCAL IMPACT ASSESSMENT

Source: Cox Automotive

CONTINUING CLAIMS AT 19.5 MILLION NATIONALLY

Source: Department of Labor

CONSUMER SENTIMENT DOWN AGAIN LAST WEEKMorning Consult’s Index of Consumer Sentiment on Monday was down 22.8% since February 29

Source: Morning Consult

114.23

113.8

81.23

87.52

60

70

80

90

100

110

120

1/1/20 1/8/20 1/15/20 1/22/20 1/29/20 2/5/20 2/12/20 2/19/20 2/26/20 3/4/20 3/11/20 3/18/20 3/25/20 4/1/20 4/8/20 4/15/20 4/22/20 4/29/20 5/6/20 5/13/20 5/20/20 5/27/20 6/3/20 6/10/20 6/17/20 6/24/20

ICS Value (7-Day Average)

CONSUMER SENTIMENT VARIES ACROSS MAJOR MARKETS

Since February 29th Since June 22nd

Source: Morning Consult

The growth in cases is generating additional concern, especially in impacted states

Source: 2020 Cox Automotive COVID-19 Consumer Impact Study

Q27b. How concerned are you about a possible second wave of the coronavirus?Q9a. You may have heard that some states have seen an increase in the number of new coronavirus cases as of June. How concerned are you about the increase in new coronavirus cases?

Level of Concern for a Second Wave

6

13% 11% 10% 12% 16% 15% 15% 12%

26% 23% 22% 24% 21% 24% 23% 21%

61% 66% 68% 64% 64% 61% 63% 67%

Apr10-11

Apr17-18

Apr24-25

May1-3

May15-16

May29-30

June12-13

June26-27

Not very/Not at all Somewhat Extremely/Very

↑ ↑

↑

↑

Level of Concern with Recent Increase in Cases

11% 14%15% 19%

74% 67%

Sun Belt states Other states

Not very/Not at all Somewhat Extremely/Very

Indicates significant difference between state groups

Source: 2020 Cox Automotive COVID-19 Consumer Impact Study 7

The decision to delay purchase changes by the week

Delaying Vehicle Purchase/Lease*

↑↑

7%17%

28%35% 34% 33% 34% 34% 31% 27%

37% 36%29%

Mar5-6

Mar13-14

Mar20-22

Mar27-28

Apr3-4

Apr10-11

Apr17-18

Apr24-25

May1-3

May15-16

May29-30

June12-13

June26-27

Anticipated Delay in Vehicle Purchase**

(among those planning to delay purchase)

32%14% 18% 10% 8% 17% 24%

11% 5% 10% 6%

5%

11% 10%4% 5%

13% 2%4% 10% 7%

4%

32%43% 40%

36% 41%

39% 37%

29% 36%43%

38%

30% 31% 33%49% 46%

32% 37%56% 49% 41%

51%

Mar20-22

Mar27-28

Apr3-4

Apr10-11

Apr17-18

Apr24-25

May1-3

May15-16

May29-30

June12-13

June26-27

Not sure 6+ months 3-6 months Up to 2 months

↑

*Among 6-month auto intenders

↑

Q10. Have you done, or do you think you will do any of the following because of the coronavirus? *Note: Added “have done” in Wave 4 Q17a1. How do you anticipate the coronavirus will change the timing of when you purchase or lease a vehicle, if at all? **Among 6-month auto intenders who will delay purchasing/leasing a vehicle

Factors At Work• Spike in COVID-19 cases• Civil unrest• Continued unemployment concerns• General uncertainty in the market

8Source: 2020 Cox Automotive COVID-19 Consumer Impact Study

But purchase intentions are down

% OF CONSUMERS IN-MARKET TO PURCHASE A VEHICLE WITHIN THE NEXT 6 MONTHS

Early Outbreak(March 20-22)

20%Shelter in Place

(April 24-25)

22%Reopening(May 29-30)

16%

16%Recovery to Date

(June 26-27)

Q4. Now as of today, when do you think you will be in the market to purchase or lease a vehicle?

Source: 2020 Cox Automotive COVID-19 Consumer Impact Study 9

Lower miles traveled is contributing to vehicle service delays

Delaying Vehicle Service/Repair*(% consumers that said “Yes”)

↑↑

5%13%

29%37% 40% 37% 32% 32% 32% 28% 25% 25% 26%

Mar5-6

Mar13-14

Mar20-22

Mar27-28

Apr3-4

Apr10-11

Apr17-18

Apr24-25

May1-3

May15-16

May29-30

June12-13

June26-27

↑ ↑

Q10. Have you done, or do you think you will do any of the following because of the coronavirus? *Note: Added “have done” in Wave 4Q18a. You said you have delayed or may delay taking your vehicle in for service/maintenance. What makes you say that?

*Among vehicle owners** Among vehicle owners who are delaying service

39%of those delaying service are doing so because they aren’t driving as much as they did before COVID-19**

↑

ZERO PERCENT FINANCING CONTINUES DECLINE

Source: Cox Automotive

0.00%

5.00%

10.00%

15.00%

20.00%

25.00%

Jan-

17

Feb-

17

Mar

-17

Apr-

17

May

-17

Jun-

17

Jul-1

7

Aug-

17

Sep-

17

Oct

-17

Nov

-17

Dec

-17

Jan-

18

Feb-

18

Mar

-18

Apr-

18

May

-18

Jun-

18

Jul-1

8

Aug-

18

Sep-

18

Oct

-18

Nov

-18

Dec

-18

Jan-

19

Feb-

19

Mar

-19

Apr-

19

May

-19

Jun-

19

Jul-1

9

Aug-

19

Sep-

19

Oct

-19

Nov

-19

Dec

-19

Jan-

20

Feb-

20

Mar

-20

Apr-

20

May

-20

Jun-

20

0% APR Finance Share

NEW SALES NOW HAMPERED BY SUPPLY

Source: Cox Automotive

2,000,000

2,200,000

2,400,000

2,600,000

2,800,000

3,000,000

3,200,000

3,400,000

3,600,000

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52

Active New Vehicle Inventory by Week

2019 Active Inventory 2020 Active Inventory

USED INVENTORY DOWN

Source: Cox Automotive

0.0 Days

20.0 Days

40.0 Days

60.0 Days

80.0 Days

100.0 Days

120.0 Days

140.0 Days

160.0 Days

01/0

8/20

01/1

2/20

01/1

6/20

01/2

0/20

01/2

4/20

01/2

8/20

02/0

1/20

02/0

5/20

02/0

9/20

02/1

3/20

02/1

7/20

02/2

1/20

02/2

5/20

02/2

9/20

03/0

4/20

03/0

8/20

03/1

2/20

03/1

6/20

03/2

0/20

03/2

4/20

03/2

8/20

04/0

1/20

04/0

5/20

04/0

9/20

04/1

3/20

04/1

7/20

04/2

1/20

04/2

5/20

04/2

9/20

05/0

3/20

05/0

7/20

05/1

1/20

05/1

5/20

05/1

9/20

05/2

3/20

05/2

7/20

05/3

1/20

06/0

4/20

06/0

8/20

06/1

2/20

06/1

6/20

06/2

0/20

06/2

4/20

06/2

8/20

Inve

ntor

y Da

ys' S

uppl

y

Days Supply Wholesale Inventory and Retail Inventory

Rolling 7 Day Supply Retail Rolling 7 day Supply Wholesale

WHOLESALE PRICES ARE NOW AT HIGHEST POINT

Source: Cox Automotive

85%

90%

95%

100%

105%

110%

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51

MY 2017 Retail and Wholesale Price Indices (wk1=100)

2019 Retail Index 2020 Retail Index 2019 Wholesale Index 2020 Wholesale Index

SALES IMPACT VARIES BY DMA AS EVIDENCED BY UNIQUE CREDIT APPS

April 5th June 28th

Source: Cox Automotive

COX AUTOMOTIVE LEADING INDICATORS

• Leads on Autotrader were up 52% y/y in June through Saturday and on Kelley Blue Book up 45%

• Dealer.com continues to see both New and Used Vehicle Form Submissions outperform, but used lost momentum over the weekend

• Dealertrack unique credit applications on same-store basis were down 11% y/y last week, which was a declining trend and weakest y/y performance since early May

• Xtime saw a 15% decrease y/y last week in consumers having their cars serviced, which was a decline from the prior week