Big Movers: Luxury and Compact Cars Capture Big Increases in Consumer Interest in October

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1 The New Car Insights Report, brought to you by the AutoTrader.com Trend Engine, provides analysis of new car shopping activity on AutoTrader.com each month. The report takes an in-depth look at which new car models are making big moves, what s driving segment level changes, which new car models are the most viewed, and what s happening with asking prices. As a top site for car shoppers with millions of unique visitors each month, AutoTrader.com and its site activity offer a unique, nationwide snapshot of the vehicles shoppers are considering. In this Issue: Big Movers Pent Up Demand for Luxury New Compact Model Entries Excite Segment Tracker Midsize Cars Poised for Comeback Chrysler Group Models: Segment Movement Most-Viewed Vehicles Eight Models Enter the Top 20 Kia Optima: A Standout Performer Price Tracker Interest Increases for Redesigns Korean Cars Show Big Price Increases Big Movers: Luxury and Compact Cars Capture Big Increases in Consumer Interest in October Each month, the AutoTrader.com New Car Insights Report offers a look at the Big Movers on the site, which are vehicles that have gained significant increases in consumer interest month-over-month. Although the vehicles on the list may not be among the most viewed, big movers highlight interesting early trends in the industry. In October, the list of big movers was dominated by luxury vehicles, but many new compact car models also made the list. Many of these models that made big moves are driving their corresponding segments forward. 1

2 Figure 1: Top 20 Big Movers by New Vehicle Interest Oct 2011 Sept 2011 MOM Change Make Model Land Rover Range Rover Evoque Hyundai Veloster MINI Cooper Countryman Land Rover Range Rover/Sport Honda Crosstour Hyundai Genesis MINI Cooper Kia Rio Volkswagen Beetle Cadillac Escalade Honda Pilot Chevrolet Sonic Mercedes-Benz E Class Toyota Camry Lexus IS Models Lincoln Navigator BMW 6 Series Toyota Sienna BMW 7 Series Land Rover LR Pent Up Demand for Luxury Vehicles Shows in List of Big Movers in October Luxury vehicles dominated the list of the top 20 big movers on the site in October, with 10 out of 20 vehicles being classified as luxury (see Figure 1 above). Five of the luxury vehicles were SUVs, with three of those being Land Rover vehicles. The Range Rover Evoque, recently named Motor Trend s 2012 SUV of the Year, was the biggest mover on the site, leaping an impressive 273 spots to land at No. 36. Two other Land Rover SUVs, the Range Rover Sport and LR4 also made big moves, increasing 99 and 25 spots, respectively. No other luxury automaker claimed as many spots in the big movers list as Land Rover. On the luxury car front, the Hyundai Genesis was an impressive addition to the list, moving up 67 spots monthover-month to No. 31. Interest in the Genesis was likely fueled by a $1500 incentive Hyundai placed on the model beginning October 1. This incentive may signal Hyundai s attempt to capitalize on the pent up demand in the luxury segment, according to AutoTrader.com analysts. 2

3 In-Depth Look at Models Leading Luxury Segment The luxury car segment increased 0.8 points in share of interest month-over-month, and the luxury SUV segment increased 0.6 points month-over-month (see Figure 5 below), supporting the trend seen in the list of top 20 big movers that interest in luxury vehicles is on the rise. In addition to the Hyundai Genesis, which was the biggest mover of the luxury cars in October, the Mercedes Benz C-Class also showed a significant increase of share of consumer interest in October, continuing on the upward trajectory that began in September Based on its gains from August to September, the C Class landed among the biggest movers in the September New Car Insights Report. Although its move from September to October wasn t big enough to land it on the big movers list again this month, its increase in share is notable nonetheless. Other luxury cars on an upward trend in October were the Cadillac CTS, the BMW 3 Series and the BMW 5 Series. Figure 2: Luxury Car Segment - Share of Interest for 10 Most Viewed Models In the luxury SUV segment (see Figure 3), the Land Rover Range Rover Sport and Cadillac Escalade, which were both among October s biggest movers, made positive jumps that contributed to the segment s overall rise in interest. Another luxury SUV, the Mercedes-Benz M Class, also showed positive movement during the month. 3

4 Figure 3: Luxury SUV Segment - Share of Interest for 10 Most Viewed Models Compact New Model Entries also Provide Excitement but without the Luxury Price Tag On the flip side, several new compact cars caught the attention of consumers looking for some excitement without the luxury price tag, with six compacts ultimately making the list of big movers. The Hyundai Veloster, which was the biggest mover based on rank in September 2011, made another large month-over-month move in October, moving up 114 spots to No. 27. If the Veloster continues to generate this much excitement and interest among consumers, it could very well land among the top 20 most-viewed new vehicles next month. A few other compact new model entries captured significantly more consumer interest month-over-month: the new Mini Cooper Countryman leapt 114 spots to No. 102; the Kia Rio improved 60 spots to No. 152; the new Volkswagen Beetle moved up 55 spots to No. 83; and the Chevrolet Sonic jumped 42 spots to No. 67. Roller Coaster Year for Compact Segment: Exciting Entries Lead Recent Segment Uptick The compact car segment also showed an uptick of 0.2 points in share of interest month-over-month, although it is down 2.9 points year-over-year (see Figure 5). As the trend of share lines indicate in Figure 4 below, consumer interest in compacts has been on quite the roller coaster over the last 13 months, with high interest this time last year, a drop at the beginning of 2011 (led by Honda Civic), another shift upward during the precipitous rise in gas prices, and finally another notable dive as gas prices declined over the summer. The most recent trends, however, pointed to yet another positive shift. The latest uptick was led by exciting new entries, most notably the new Chevrolet Sonic and Hyundai Veloster, which were both included in the list of big movers in October. 4

5 Figure 4: Compact Car Segment Share of Interest for 10 Most Viewed Models Segment Tracker This month, the Segment Tracker section of the New Car Insights Report offers a close look at some other interesting developments emerging at the segment level: evidence that midsize cars may be poised for a comeback and some positive indicators for the Chrysler Group across three other segments. Figure 5: Segment Tracker - All Segments by Share of New Vehicle Interest Oct 2011 Segment Share Point Change from Sept '11 Share Point Change from Oct '10 Share Point Change from Oct '09 1 Full-size Truck Midsize SUV Compact Car Luxury Car Sports Car Midsize Car Luxury SUV Compact SUV Full-size SUV Compact Truck Full-size Car Van Exotic Trend of Share (prev 13 mo) 5

6 Midsize Car Segment May be Poised for Comeback Beginning in January and February 2011, the midsize car segment began a downward trend in interest on the new-car front. Driving this decline were the Toyota Camry and Honda Accord, both top selling vehicles in this segment that were dramatically impacted by production disruptions in Japan. Overall, the segment is down 2.8 points from October 2010; however, it did show a slight uptick from September to October 2011 of 0.4 points. This uptick could indicate that the trend is beginning to reverse, and AutoTrader.com analysts noted that it is likely driven by renewed interest in the Toyota Camry, with its redesign for 2012 and production normalizing. In fact, the Camry garnered a significant enough jump in interest month-over-month to land on the list of the top 20 biggest movers for October. Currently positioned at No. 28, the Toyota Camry could break back into the top 20 most-viewed list if it continues its current trajectory. Other midsize cars driving the uptick are the redesigned Volkswagen Passat and a newly strong contender in the Kia Optima. Analysts at AutoTrader.com will be watching these models and this segment closely. This segment, which previously was dominated by the Camry and Accord, has become much more crowded and competitive in shopper behavior in recent months. Figure 6: Midsize Car Segment - Share of Interest for 10 Most Viewed Models Positive Chrysler Story Shines through in Segment Tracker Chrysler, which has been having a stellar year in sales and has gotten positive press for improvements in its products, also has a positive story to tell on the segment level. A cross-segment analysis shows that numerous popular models from the Chrysler Group landed at or near the top of numerous segments through October. 6

7 While the full-size car segment has been flat most of the year, the Dodge Charger and Chrysler 300 stand out amongst the pack, taking the top two positions in the segment. They have garnered more share than any other in-segment vehicle for much of the year and have pulled ahead even farther over the past two months. Figure 7: Full-Size Car Segment - Share of Interest for 10 Most Viewed Models In the full-size SUV segment, the Dodge Durango has a particularly strong showing. It ended its temporary hiatus last year, spiked at No. 1 in March and has held on to a strong position since, currently sitting at No. 2. Figure 8: Full-Size SUV Segment - Share of Interest for 10 Most Viewed Models 7

8 Rounding out the Chrysler story are the Jeep Wrangler and Jeep Grand Cherokee in the midsize SUV segment. The Wrangler has held on to the No. 1 position in the segment throughout 2011, only recently taking a dip in consumer interest. Nevertheless, it remains far above other midsize SUVs in terms of shopper interest. The Grand Cherokee recently emerged in the No. 2 spot in its segment, following the overall upward trajectory it has been on since July Figure 9: Midsize SUV Segment - Share of Interest for 10 Most Viewed Models Most-Viewed New Vehicles in October In looking at the most-viewed models on the site, it appears that rather steady gas prices have allowed Americans to continue their love affair with big trucks and SUVs. Out of the 20 vehicles on the list, there were eight full-size trucks, one full-size SUV, three midsize SUVs and one compact truck. However, it was eight models on the list that were not among the most-viewed vehicles during the same time in 2010 that caught the attention of AutoTrader.com analysts. Eight Models Make Year-Over-Year Improvements to Land on List of Top 20 Most-Viewed Models While the Ford F-150 held onto its No. 1 spot for yet another month, there were eight new entries into the top 20 that were not there a year ago: 8 Dodge Challenger moved up 16 spots to No. 8 Chevrolet Silverado 2500 moved up 17 spots to No. 12 Ford Explorer moved up 92 spots to No. 13 Dodge Ram 2500 moved up 14 spots to No. 14 Dodge Charger moved up 71 spots to No. 15 Ford F-350 moved up 22 spots to No. 16 Kia Optima moved up 178 spots to No. 19 Chevrolet Tahoe moved up three spots to No. 20

9 Of those eight, five were either trucks or SUVs and seven were made by domestic automakers. These points are notable because six of the eight that were replaced on the list compared to October 2010 were either compact or midsize sedans, and seven out of the eight were made by foreign automakers, two of which were made by Toyota and two of which were made by Honda. Analysts noted that the dual natural disasters that put a damper on those popular automakers not only made way for other foreign competitors, such as Hyundai, to take greater market share, but they also opened up American consumers to the resurgence of Chrysler, as three of the new entrants to the top 20 are from the Chrysler Group. Kia Optima: A Standout Performer in October Additionally, there was a Korean car that stood out from the pack in the most-viewed list: the recently redesigned Kia Optima moved up 16 spots month-over-month to No. 19. This is up 178 spots from October 2010 and up 151 spots from October In October, the Optima was supported by a new round of advertising, the start of U.S. production at Kia Motors Manufacturing Georgia, and Esquire naming the midsize sedan the most gorgeous car under $20,000. Being the only midsize car to crack the top 20 in October, the Kia Optima will certainly be a car to watch in the coming months. Figure 10: Top 20 Most-Viewed Models by New Vehicle Interest 9 Oct 2011 Make Model Change from Sept '11 Change from Oct '10 Change from Oct '09 1 Ford F Ford Mustang Chevrolet Camaro Jeep Wrangler Chevrolet Silverado Dodge Ram Ford F Dodge Challenger Jeep Grand Cherokee Chevrolet Corvette Toyota Tacoma Chevrolet Silverado Ford Explorer Dodge Ram Dodge Charger Ford F GMC Sierra C/K Volkswagen Jetta Kia Optima Chevrolet Tahoe * N/A - Vehicle was not available in reported month Trend of Share (prev 13 mo)

10 Price Tracker: Redesigned Models and Korean Vehicles Command Price Premiums Consumer Interest Increases for Redesigned Models Despite Higher Asking Prices An examination of the asking prices for the top 20 most-viewed vehicles on the site in October showed that consumer interest can be greatly influenced by exciting redesigns, even in the face of hefty price increases that often follow. In this regard, redesigns for three of the most-viewed models on AutoTrader.com in October turned out to be excellent investments for their respective automakers, as they boosted not only the asking price year-overyear but also the level of consumer interest. The new Ford Explorer showed an 8.9% ($3,160) increase in its median asking price year-over-year, but it still managed to jump 92 spots in that time to become the 13th most-viewed vehicle on AutoTrader.com in October. The second biggest price increase came for the new Dodge Charger, which moved up 71 spots yearover-year to the No. 15 position, despite the fact that its asking price increased 15.5% ($4,328) during that time. Topping the list was the Kia Optima, which moved up 178 spots year-over-year to No. 19, even though it comes with a 28.2% ($5,725) asking price premium the biggest price jump of any of the most-viewed vehicles in October. Figure 11: Price Tracker Top 20 Most-Viewed Models by New Vehicle Interest 10 Oct 2011 Make Model Median Inventory Listing Price Price Change from Sept '11 Price Change from Oct '10 Price Change from Oct '09 1 Ford F-150 $37, % 2.4% 5.5% 2 Ford Mustang $32, % -2.4% 1.3% 3 Chevrolet Camaro $35, % 6.8% -1.0% 4 Jeep Wrangler $31, % 7.1% 9.7% 5 Chevrolet Silverado 1500 $34, % 1.5% 0.8% 6 Dodge Ram 1500 $35, % -1.6% -0.4% 7 Ford F-250 $48, % 3.2% 4.8% 8 Dodge Challenger $31, % -6.8% -19.1% 9 Jeep Grand Cherokee $38, % 6.1% 10.4% 10 Chevrolet Corvette $63, % -0.5% 3.5% 11 Toyota Tacoma $29, % 3.9% 5.6% 12 Chevrolet Silverado 2500 $42, % 0.6% 5.0% 13 Ford Explorer $38, % 8.9% 10.6% 14 Dodge Ram 2500 $47, % 0.7% 5.9% 15 Dodge Charger $32, % 15.5% 14.0% 16 Ford F-350 $51, % -1.2% 3.2% 17 GMC Sierra C/K1500 $36, % 1.9% 2.8% 18 Volkswagen Jetta $23, % -0.9% 3.9% 19 Kia Optima $26, % 28.2% 31.6% 20 Chevrolet Tahoe $49, % 0.4% 1.2% * N/A - Vehicle was not available in reported month

11 Korean Vehicles Show Big Price Increases Year-Over-Year In addition to examining pricing trends for vehicles included in the top 20 most-viewed list, the New Car Insights Report offers a look at the vehicles with the biggest price increases overall. Figure 12 below looks at the top 20 largest median asking price increases on the site year-over-year. Analysts noted that some popular Korean vehicles took four of the top 10 spots on the list. Among those are the Kia Optima, as noted above, with a 28.2% ($5,725) increase in median asking price year-over-year; the Hyundai Accent with a 16.4% ($2,380) increase; the Hyundai Elantra with a 12.3% ($2,181) increase; and the Hyundai Sonata with a 12.2% ($2,790) increase. Figure 12: Price Tracker 20 Largest Increases by Percent Change Oct 2011 Make Model Median Inventory Listing Price Price Change from Sept '11 Price Change from Oct '10 Price Change from Oct '09 19 Kia Optima $26, % 28.2% 31.6% 74 BMW M Series $93, % 20.4% 14.4% 116 Hyundai Accent $16, % 16.4% 13.5% 15 Dodge Charger $32, % 15.5% 14.0% 86 Nissan GT-R $96, % 14.5% 14.5% 33 Dodge Durango $39, % 13.2% 8.2% 53 Hyundai Elantra $19, % 12.3% 12.1% 39 Hyundai Sonata $25, % 12.2% 21.6% 32 Ford Focus $21, % 10.9% 13.6% 21 Chrysler 300 $37, % 10.9% 10.1% 191 Porsche Cayman $69, % 10.5% 18.4% 114 Volkswagen Touareg $50, % 9.7% 12.9% 58 Ford Ranger $24, % 9.3% 11.9% 113 BMW 6 Series $99, % 9.0% 7.7% 105 Dodge Journey $27, % 9.0% 3.2% 81 Nissan Juke $24, % 8.9% N/A N/A 13 Ford Explorer $38, % 8.9% 10.6% 110 Audi A6 $57, % 8.2% 9.2% 98 Volkswagen Golf and Rabbit Models $23, % 8.0% 25.0% 4 Jeep Wrangler $31, % 7.1% 9.7% * N/A - Vehicle was not available in reported month 11

12 About AutoTrader.com Atlanta-based AutoTrader.com, created in 1997, is the Internet's ultimate automotive marketplace and consumer information website. AutoTrader.com aggregates in a single location millions of new cars, used cars and certified pre-owned cars from thousands of auto dealers and private sellers and is a leading online resource for auto dealers, individuals and manufacturers to advertise and market their vehicles to in-market shoppers. The company also provides a robust suite of software tools for dealers and manufacturers to help them manage and market their vehicle inventory and display advertising on the Internet. AutoTrader.com continues to grow key business metrics, including revenue, profitability and site traffic. Today, AutoTrader.com attracts more than 15 million unique monthly visitors who utilize the site to review descriptions, photos and videos of vehicles for sale; research and compare vehicles; review pricing and specials; and read auto-related content like buying and selling tips and editorial coverage of major auto shows and automotive trends. AutoTrader.com operates one other auto marketing brand, AutoTraderClassics.com. AutoTrader.com also owns used vehicle management software company vauto, Kelley Blue Book (Kbb.com), HomeNet Automotive, a leading provider of online inventory management and merchandising solutions for the automotive retail industry and VinSolutions, a leading provider of end-to-end solution platforms for dealers. AutoTrader.com is a majority-owned subsidiary of Cox Enterprises. Providence Equity Partners is a 25 percent owner of the company and Kleiner Perkins Caufield & Byers is also an investor. For more information, please visit 12

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