SENTIMENT INDEX Fourth Quarter 2017 0 BACKGROUND Data for the - PowerPoint PPT Presentation

DEALER SENTIMENT INDEX Fourth Quarter 2017 0

BACKGROUND • Data for the Cox Automotive Dealer Sentiment Index (CADSI) is gathered via an online survey. • The Q4 results were based on 919 dealer respondents. The survey was conducted from October 25 to November 2, 2017. • Dealer responses were weighted by dealership type and volume of sales to be representative of the national dealer population. Dealer Sentiment • The Cox Automotive Dealer Sentiment Index is a Index: Q4 2017 new product from Cox Automotive. This is the second published report. The next quarterly report will be released in March 2018. . 1

KEY TAKEAWAYS • Dealers are positive about the future, but perceptions of the strength of the current market and factors holding it back vary by region and by type of dealer. • Despite a healthy new-vehicle sales environment, dealers continue to feel pressure to lower prices and report weak customer traffic. • Dealers indicate that new-vehicle inventory levels are no longer growing as substantially as they Dealer Sentiment were in the last quarter. Index: Q4 2017 • Both franchise and independent dealers expect a stronger market in the first quarter of 2018. Source: Q4 Dealer Sentiment Research, December 2017 2

Q1: How would you describe the current market for vehicles in the areas where you operate? Overall Score Q 3 2 0 1 7 : 4 5 46 0 0 50 50 100 100 Average Average Weak Strong Fr anc his e D ealer s Independent D ealer s 54 43 Q 3 2 0 1 7 : 5 5 Q 3 2 0 1 7 : 4 2 Source: Q4 Dealer Sentiment Research, December 2017 3

Q2: What do you expect the market for vehicles in your area to look like 3 months from now? Overall Score Q 3 2 0 1 7 : 5 2 53 50 0 0 50 100 100 Average Average Weak Strong Fr anc his e D ealer s Independent D ealer s 57 52 Q 3 2 0 1 7 : 5 7 Q 3 2 0 1 7 : 5 1 Source: Q4 Dealer Sentiment Research, December 2017 4

Q3: How do you rate the customer traffic to your dealership over the past 3 months? Overall Score Q 3 2 0 1 7 : 3 7 34 50 0 0 50 100 100 Average Average Weak Strong Fr anc his e D ealer s Independent D ealer s 45 31 Q 3 2 0 1 7 : 4 2 Q 3 2 0 1 7 : 3 6 Source: Q4 Dealer Sentiment Research, December 2017 5

Q4: How would you describe your profits over the past 3 months? Overall Score Q 3 2 0 1 7 : 4 1 41 50 0 0 50 100 100 Average Average Weak Strong Fr anc his e D ealer s Independent D ealer s 49 38 Q 3 2 0 1 7 : 5 0 Q 3 2 0 1 7 : 3 8 Source: Q4 Dealer Sentiment Research, December 2017 6

Q5: How would you describe your ability to get credit to operate your business over the past 3 months? Overall Score Q 3 2 0 1 7 : 5 5 57 0 0 50 100 Average Difficult Easy Fr anc his e D ealer s Independent D ealer s 68 54 Q 3 2 0 1 7 : 6 6 Q 3 2 0 1 7 : 5 2 Source: Q4 Dealer Sentiment Research, December 2017 7

Q6: How would you describe the cost of running your dealership over the past 3 months? Overall Score Q 3 2 0 1 7 : 6 8 67 0 0 50 100 Average Growing Declining Fr anc his e D ealer s Independent D ealer s 69 66 Q 3 2 0 1 7 : 6 9 Q 3 2 0 1 7 : 6 7 Source: Q4 Dealer Sentiment Research, December 2017 8

Q7: How would you describe your dealership’s current fixed capital investment levels? Overall Score Q 3 2 0 1 7 : 5 3 54 0 0 50 100 Average Growing Declining Fr anc his e D ealer s Independent D ealer s 64 51 Q 3 2 0 1 7 : 6 3 Q 3 2 0 1 7 : 4 9 Source: Q4 Dealer Sentiment Research, December 2017 9

Q8: How would you describe the current new- vehicle sales environment? Overall Score Q 3 2 0 1 7 : 5 7 61 0 0 50 100 Average Good Poor Fr anc his e D ealer s Independent D ealer s 61 na Q 3 2 0 1 7 : 5 7 Q 3 2 0 1 7 : n a Source: Q4 Dealer Sentiment Research, December 2017 10

Q9: How would you describe your dealership's current new-vehicle inventory levels? Overall Score Q 3 2 0 1 7 : 6 7 62 0 0 50 100 Average Growing Declining Fr anc his e D ealer s Independent D ealer s 62 na Q 3 2 0 1 7 : 6 7 Q 3 2 0 1 7 : n a Source: Q4 Dealer Sentiment Research, December 2017 11

Q10: How would you describe the current used- vehicle sales environment? Overall Score Q 3 2 0 1 7 : 5 7 55 0 0 50 100 Average Good Poor Fr anc his e D ealer s Independent D ealer s 67 51 Q 3 2 0 1 7 : 6 8 Q 3 2 0 1 7 : 5 3 Source: Q4 Dealer Sentiment Research, December 2017 12

Q11: How would you describe your dealership's current used-vehicle inventory levels? Overall Score Q 3 2 0 1 7 : 5 1 53 0 0 50 100 Average Growing Declining Fr anc his e D ealer s Independent D ealer s 55 53 Q 3 2 0 1 7 : 5 5 Q 3 2 0 1 7 : 5 0 Source: Q4 Dealer Sentiment Research, December 2017 13

Q12: How much pressure do you feel to lower your prices? Overall Score Q 3 2 0 1 7 : 6 3 67 0 0 50 100 Average More Less Fr anc his e D ealer s Independent D ealer s 67 67 Q 3 2 0 1 7 : 6 7 Q 3 2 0 1 7 : 6 2 Source: Q4 Dealer Sentiment Research, December 2017 14

Q13: How would you describe your dealership's current staffing levels? Overall Score Q 3 2 0 1 7 : 5 2 52 0 0 50 100 Average Growing Declining Fr anc his e D ealer s Independent D ealer s 55 51 Q 3 2 0 1 7 : 5 5 Q 3 2 0 1 7 : 5 1 Source: Q4 Dealer Sentiment Research, December 2017 15

Overall Rank Market Conditions 1 44% Competition 2 36% Credit Availability for Consumers 3 33% Expenses 4 29% Limited Inventory 5 27% Consumer Confidence 6 19% Consumer Transparency in Pricing 7 15% What are the top Staff Turnover 8 11% factors holding Regulations 8 11% 10 Too Much Retail Inventory 9% your business 11 Credit Availability for Business 8% back? 12 Interest Rates 6% 13 OEM Mandates/Restrictions 5% 13 Dealership Systems / Tools 5% Source: Q4 Dealer Sentiment Research, December 2017 16

Franchise Dealer Rank 1 Market Conditions 40% 2 Competition 32% 3 Staff Turnover 21% 4 Expenses 20% 5 Consumer Confidence 19% 5 OEM Mandates/Restrictions 19% 7 Limited Inventory 17% What are the top 8 Credit Availability for Consumers 15% factors holding 9 Consumer transparency in pricing 14% 10 Regulations 6% your business 10 Dealership systems/tools 6% back? 12 Too much retail inventory 5% 12 Interest rates 5% 14 Credit availability for business 1% Source: Q4 Dealer Sentiment Research, December 2017 17

Independent Dealer Rank 1 Market Conditions 45% 2 Credit Availability for Consumers 39% 3 Competition 37% 4 Expenses 33% 5 Limited Inventory 31% 6 Consumer Confidence 18% 7 Consumer transparency in pricing 15% What are the top 8 Regulations 12% factors holding 9 Credit availability for business 11% 10 Too much retail inventory 10% your business 11 Staff Turnover 7% back? 12 Interest rates 6% 13 Dealership systems/tools 5% Source: Q4 Dealer Sentiment Research, December 2017 18

Contact Information: Dara Hailes Manager, Public Relations Cox Automotive dara.hailes@coxautoinc.com Mark Schirmer Senior Manager, Public Relations Cox Automotive mark.schirmer@coxautoinc.com 19