1

February 3, 2020

“The overall market remains steady. Values of mainstream Mid-Size Cars experienced a slight increase last week.”

Anil Goyal, Executive Vice President, Operations

Model Years: 2011-2017, Volume Weighted Wholesale Average Values, Weekly Change from 1/24/20 to 1/31/20

Steady Depreciation Trend • Volume-weighted, overall car segment values decreased by 0.21% last week. In comparison,

market values decreased an average of 0.21% over the recent 4-week period.

• In cars, Sporty Car values decreased the most.

• Volume-weighted, overall truck segment (including pickups, SUVs, and vans) values decreased by 0.18% last week. In comparison, market values decreased an average of 0.36% over the recent 4-week period.

• In trucks, Sub-Compact Luxury Crossover segments decreased the most.

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2

February 3, 2020

Sentiment from the Industry Key comments from auction lanes and industry observers:

“The consignment was lower today which resulted in dealers complaining about higher prices.” Richard in TX

“Both wholesale and retail are soft here. A good amount of the buying at the auctions are from out of state buyers.” Mark in MI

“Prices were strong early regardless of condition but as the sale continued bidders were dealing with higher floors. SUVs and full-size trucks dominated the sale.” Israel from MO

Depreciation by Quarter in 2019 Weighted Average Wholesale for MY 2014-2018

source: Black Book Visual Analytics

The full-year depreciation in 2019 registered at 16.8%, driven higher by the steep decline in values in the fourth quarter.

Vehicle Highlight All New 2020 Subaru Outback is equipped with a 2.5-liter Boxer 4-cylinder engine producing 182 hp and 176 lb-ft of torque, powering all 4 wheels through a Lineartronic CVT. New to the Outback include upgrades to safety, technology, and a new Onyx Edition trim. MSRP with destination starts at $27,655 and the key competitors include the Toyota RAV4, Ford Escape, Honda CR-V, and Mazda CX-5.

This week’s report includes our Monthly Edition Supplement on Specialty Markets.

$14,493[-9.85%]

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3

February 3, 2020

Arizona Auction Sales Once Again Top $250,000,000 “The unofficial sales numbers are in, and as of now they are a little less than $253,000,000. This year’s totals are slightly ahead of last year’s $251,000,000, although many returning auctions saw their numbers decline anywhere from twenty to thirty percent, primarily due a lack of entrants and sales in the “seven figure” range.”

Eric Lawrence, Principal Analyst - Specialty Markets

• Barrett-Jackson’s Scottsdale auction was both its largest and most successful event ever. Over 1,900

vehicles were sold at no reserve for a total of $129,700,000, with automobilia contributing an additional $3,700,000 and vehicles sold for charity adding $7,625,000, for a grand total of more than $141,000,000.

• Gooding’s Scottsdale auction had the final numbers come in at $35,867,560 on the sale of 123 of 138 vehicles, with a sell through of just under 89%. Even with several million dollar plus sales, including the highest of the week at $3,222,500, total sales lagged last year by roughly $12,000,000.

• RM Sotheby’s Scottsdale auction saw its sales totals reach $30,400,000 with a ninety percent sell through rate. Although sales were down roughly $5,000,000 from last year, modern supercars led the way with some impressive sales numbers. Vintage exotics also did well, with several million dollar plus results.

Notable Recent Auction Sales Include: 2020 Chevrolet C8 Coupe #001 $3,000,000 (Barrett-Jackson) 2017 Ford GT Coupe $1,485,000 (Barrett-Jackson) 1969 Chevrolet Camaro ZL1 Coupe $1,094,500 (Barrett-Jackson) 2019 McLaren Senna $946,000 (Barrett-Jackson) 1967 Ferrari 330 GTS $1,710,000 (RM Sotheby’s) 1971 Lamborghini Miura P400 SV $1,391,000 (RM Sotheby’s) 1955 Mercedes-Benz 300 SL Gullwing $1,270.000 (RM Sotheby’s) 1995 Ferrari F50 $3,222,500 (Gooding) 1948 Tucker 48 Sedan $2,040,000 (Gooding) 1972 Ferrari 365 GTS/4 Daytona Spider $1,930,000 (Gooding)

2020 Corvette C8 Coupe. Courtesy of Chevrolet.

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Post WWII American Classics

SPECIALTY MARKETS: Collectible Cars

4

February 3, 2020

RV Values Mixed As Dealers Look To Spring

“It’s always nice when all segments of the RV industry move in the same direction, but this month featured motorized units falling for the fourth consecutive month, while towables rebounded a bit. With the prime spring selling season right around the corner, some dealers may be getting a jump on stocking up their higher volume units for when their first customers begin to arrive in their showrooms.”

Eric Lawrence, Principal Analyst - Specialty Markets

For Motor Homes (including Class A, B, and C) • Average selling price was $42,633, down $2,751 (6.1%) from the previous month. • One year ago, the average selling price was $43,435. • Auction volume was up 5.8% from the previous month. The average model year was 2013.

For Towables (including Travel Trailers and Fifth Wheels)

• Average selling price was $15,253, up $1,132 (7.9%) from the previous month. • One year ago, the average selling price was $12,872. • Auction volume was down 7.3% from the previous month. The average model year was 2012.

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SPECIALTY MARKETS: Recreational Vehicles

5

February 3, 2020

Powersports Values Mixed As Spring Approaches

“Now that we are firmly in the New Year, Powersports pricing has started to tick up in several markets, but remains a bit sluggish for others. The primary gainers are the road-going segments, while the off-road vehicles, including ATVs and Utility Vehicles, are mostly down.”

Scott Yarbrough, Senior Analyst - Motorcycle & Powersports

• We are beginning to see the first signs of dealers stocking up on inventory for the coming spring selling season, reflected in gains for the Cruisers and Street Bikes. This time of year generally marks the transition at the wholesale level from the slow winter market to the much more active spring selling season. Keep an eye out for more and larger gains for most units over the next few months.

• Our biggest increase this month is the Snowmobile segment, up 2.5%, which should not be surprising considering the time of year. After that comes the Cruisers, up 1.1%. The Street Bike segment follows closely at 1%, along with the Scooters, up 0.4%.

• The Domestic V-Twins are lagging a little behind their Metric counterparts this month, with an average increase of 0.6% versus 1.5%. Within that segment, the larger Touring bikes have performed a bit better than their smaller stablemates, something we have not seen in quite a while. The overall amounts were not huge, but it is still interesting and worth keeping an eye on in the future.

• The off-road segments have not fared as well overall. The ATVs are the biggest decliners, dropping 2%. The Utility Vehicles are down a bit less with a drop of 1%, while the Off-Road motorcycles are actually up about a half a percent.

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3.0%Motorcycle & Powersports Percent Change Jan to Feb 2020

SPECIALTY MARKETS: Powersports

6

February 3, 2020

Auction Values Show a Steady Depreciation Trend Through December “Auction activity is picking up after taking a couple of weeks off around the first of the year; however, buyers continue to be very selective as used supply remains strong.” Andrew Floto – Automotive Analyst

• Overall, both the Over-The-Road and Regional segments continued a steady depreciation trend

over December. • While these units are starting to get more attention, the wholesale market is still inundated with

inventory. • The Construction/Vocational segment showed a slight improvement as these units have a bit more

demand at this time of year.

DATE Construction/Vocational Over the Road Trucks & Tractors Regional Tractors MODEL

YEARS Value $ Change % Change Value $ Change % Change Value $ Change % Change 02/01/20 97,158 -983 -1.0% 75,000 -1,208 -1.6% 66,832 -1,205 -1.8% 2017-2018 01/01/20 98,141 -2,752 -2.7% 76,209 -1,443 -1.9% 68,037 -1,748 -2.5% 2017-2018

• 2017-2018 HD Construction/Vocational segment decreased an average of $983 (1.0%) in January, compared to the average drop of $2,752 (2.7%) in December.

• 2017-2018 HD Over the Road Tractor segment dropped an average of $1,208 (1.6%) in January, compared to the average drop of $1,443 (1.9%) in December.

• 2017-2018 HD Regional Tractor segment dropped an average of $1,205 (1.8%) in January, compared to the average depreciation of $1,748 (2.5%) in December.

DATE Construction/Vocational Over the Road Trucks & Tractors Regional Tractors MODEL

YEARS Value $ Change % Change Value $ Change % Change Value $ Change % Change 02/01/20 52,908 -510 -1.0% 32,825 -641 -1.9% 26,694 -673 -2.5% 2009-2016 01/01/20 53,418 -969 -1.8% 33,692 -537 -1.6% 27,367 -689 -2.5% 2009-2016

• 2009-2016 HD Construction/Vocational segment dropped an average of $510 (1.0%) in January, compared to the $969 (1.8%) average depreciation in December.

• 2009-2016 HD Over the Road Tractor segment dropped an average of $641 (1.9%) in January, compared to $537 (1.6%) average depreciation in December.

• 2009-2016 HD Regional Tractor segment dropped an average of $673 (2.5%) in January, compared to the average drop of $689 (2.5%) in December.

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Construction/Vocational Over the Road Trucks & Tractors Regional Tractors

SPECIALTY MARKETS: Heavy Duty

7

February 3, 2020

New and Used Supply Continues to Out Pace Demand “Medium Duty depreciation improves in January following increasing value drops during the second half of 2019.” Josh Giles - Principal Automotive Analyst

DATE Medium Duty MODEL

YEARS

DATE Medium Duty MODEL

YEARS Value $ Change % Change Value $ Change % Change 02/01/20 45,286 -516 -1.1% 2017-2018 02/01/20 21,148 -223 -1.0% 2009-2016 01/01/20 45,985 -1,721 -3.6% 2017-2018 01/01/20 21,337 -499 2.3% 2009-2016

• Late model units (2017 – 2018) dropped an overall weighted average of $516 (1.1%) in January, compared to the

$1,721 (3.6%) depreciation witnessed in December. • Older model year units (2009 – 2016) dropped an overall weighted average of $223 (1.0%) in January, compared

to the $499 (2.3%) drop in December.

• Due to a lack of auction activity prices in January were a bit more stable than what we witnessed in December. • Overall, the market continues to depreciate, and reports are indicating that the first quarter of 2020 will be tough

for used prices as over supply continues to put downward pressure on the used inventory. • New truck orders, for classes 3 - 7 were up in December compared to November numbers. This is not unusual for

the end of the year; however, as inventory in some segments continue to pile up, this could be an indication of an even weaker market for the first half of 2020.

• Overall, medium duty units continue to get more and more expensive as OEMs introduce newer models each year with increasing and improved technology and safety features. The graph above illustrates the average value of used 4 – 10-year-old units since 2010. This group of trucks have increase 157% in 10 years.

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CHANGES IN WHOLESALE VALUEMODEL YEARS 2015 TO 2017

CLASS 4 CAB/CHASSIS CLASS 5 CAB/CHASSIS CLASS 6 CAB/CHASSIS

CLASS 7 CAB/CHASSIS LIGHT-DUTY PICKUP TRUCKS

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Average Wholesale Values (Medium Duty Market)Decade In Review

SPECIALTY MARKETS: Medium Duty