Experian Automotive Quarterly Briefing First quarter 2016 automotive market share trends and registrations Brad Smith Director, Automotive Market Statistics Marty Miller Senior Product Manager, VIO Experian Automotive Experian and the marks used herein are service marks or registered trademarks of Experian Information Solutions, Inc. Other product and company names mentioned herein are the trademarks of their respective owners. No part of this copyrighted work may be reproduced, modified, or distributed in any form or manner without the prior written permission of Experian.
Today s presentation Part one Marty Miller Senior Product Manager, VIO What s on the Road VIO by model year, segment, age and market share U.S. light duty vehicles through March 31, 2016 U.S. medium and heavy duty vehicles through March 31, 2016 Presentation will be available 24-48 hours after Webinar Email with a link will be sent to all registrants to download Questions? Contact us at Auto@experian.com 2
Session overview Part two Q1 2016 Registrations Market trends Geographic performance Manufacturer, make and model share Loyalty conquest and defection Brad Smith Director, Automotive Market Statistics 3
U.S. Total Vehicles in Operation = 276.6M Light Duty Passenger Cars, Light Trucks, Vans Cars and GVW Class 1-3 Medium & Heavy Duty Large Vans, Delivery Trucks, Buses, RVs, Cement Trucks, Semi-Tractors GVW Class 4-8 Power Sports Motorcycles, All-Terrain, Utility Task, Snowmobiles 4
Vehicles in Operation What s on the road today? Light duty vehicles 5
What s on the road today? VIO Light duty vehicles VIO additions/deletions: 28.5 million (11%) (new sales + out of operation) VIO total changes: 69.1 million (26.6%) (used sales + new sales + out of operation) Vehicles in operation Q1 2015 253 million Net out of operation 11.1 million (4.3%) Carryover Used vehicle sales 40.6 million Vehicles in operation Q1 2016 259.3 million (2.5%) New vehicle sales 17.4 million Source: Experian Automotive as of March 31, 2016 (U.S. light duty vehicles only) 6
VIO change by model year (in millions) Q1 2015 to Q1 2016 New Sales 17.4M Out of Operation 11.1M Source: Experian Automotive as of March 31, 2016 (U.S. light duty vehicles only) 7
VIO change by model year (in millions) Q1 2012 to Q1 2016 Out of Operation 50.1M New Sales 64.3M Source: Experian Automotive as of March 31, 2016 (U.S. light duty vehicles only) 8
Aftermarket Sweet Spot overview Post and Pre Sweet Spot defined The aftermarket Sweet Spot is defined as 6 to 12 model year old vehicles, and because of their age, are out of the general OEM manufacturer warranty for any repairs. These vehicles are within a time period when more part replacement or services are needed (e.g. shocks, timing belt service, engine repairs) that may be performed by aftermarket service shops which are supplied by aftermarket part manufacturers and retailers. Defining the Sweet Spot size helps identify the overall market potential, and changes to the Sweet Spot can have implications to those that service it. Post Sweet Spot vehicles are defined as 13 model years old or older, and identify the models where less costs may be spent to service them due to their age and vehicle value. Pre Sweet Spot vehicles are defined as 5 model years old or newer, and identify the incoming models into the Sweet Spot. 9
VIO by model year (in millions) 86M vehicles within Sweet Spot (MY2005 2011) Pre-Sweet Spot Post-Sweet Spot Source: Experian Automotive as of March 31, 2016 (U.S. light duty vehicles only) 10
Sweet Spot changing Vehicle segment type Source: Experian Automotive as of March 31, 2016 (U.S. light duty vehicles only) 11
VIO Top 20 segments on the road market share Change from Q1 2016 Source: Experian Automotive as of March 31, 2016 (U.S. light duty vehicles only) 12
Trend by Select Segment Changes Trend Hybrid/Electric Vehicles Source: Experian Automotive as of March 31, 2016 (U.S. light duty vehicles only) 13
Average vehicle age (1967 to current MYs of period) Rolling average vehicle age (first 20 MYs of period) Source: Experian Automotive as of March 31, 2016 (U.S. light duty vehicles only) 14
Percentage of VIO by manufacturer market share Trend from Q1 2013 to Q1 2016 Source: Experian Automotive as of March 31, 2016 (U.S. light duty vehicles only) 15
VIO Vocation How light duty commercial vehicles are used Source: Experian Automotive as of March 31, 2016 (U.S. light duty vehicles only) 16
VIO Vocation Top 10 makes and 25 models Light duty vehicles as of Q1 2016 (excludes passenger car rental / leasing) Source: Experian Automotive as of March 31, 2016 (U.S. light duty vehicles only) 17
VIO Vocation Top 5 vocations within age group Light duty vehicles as of Q1 2016 (excludes passenger car rental / leasing) 2017-2012 2011-2005 2004 & Older Offices of Other Holding Companies New Car Dealers Other Commercial and Industrial Machinery and Equipment Rental and Leasing Commercial and Institutional Building Construction Legislative Bodies Plumbing Heating and Air-Conditioning Contractors Electrical Contractors and Other Wiring Installation Contractors Legislative Bodies Commercial and Institutional Building Construction Site Preparation Contractors Religious Organizations Plumbing Heating and Air-Conditioning Contractors Electrical Contractors and Other Wiring Installation Contractors Landscaping Services New Single-Family Housing Construction (except For-Sale Builders) Source: Experian Automotive as of March 31, 2016 (U.S. light duty vehicles only) 18
Vehicles in Operation What s on the road today? Medium and heavy duty vehicles 19
What s on the road today? VIO by model year Medium and heavy duty vehicles Vehicles in operation Q1 2016 6.9 million 67.1% of VIO MY2001+ 30% of VIO MY2010+ 83.3% of VIO MY1996+ Source: Experian Automotive as of March 31, 2016 (U.S. light duty vehicles only) 20
VIO by GVW class & engine manufacturer share Medium and heavy duty vehicles Source: Experian Automotive as of March 31, 2016 (U.S. light duty vehicles only) 21
Top VIO Market share of Vocation High level Medium and heavy duty vehicles Source: Experian Automotive as of March 31, 2016 (U.S. light duty vehicles only) 22
U.S. Market Overview What products are selling? Who s buying? Where is it happening? 23
New Registration Volume (Millions) Growth continues: New vehicle registrations are up 7.5% in the first quarter of 2016 5.0 New passenger car / light truck registrations through March 2016 4.5 4.3 4.0 3.5 3.9 3.8 3.7 3.2 3.5 3.8 3.9 4.0 3.0 2.7 2.5 2.3 2.0 1.5 1.0 0.5 0.0 24
Growth in fleet based sales categories is out pacing retail Q1 15 vs. Q1 16 Total new vehicle registrations through March 2016 Retail 3.5% Rental/Lease 10.9% Other 22.8% Government 36.9% Dealer Manufacturer 31.0% Commercial/Taxi 15.9% 0% 10% 20% 30% 40% 50% % Change from Q1 2015 25
10 states accounted for nearly 60% of retail registrations in the first quarter of 2016 New vehicle registrations Individual buyers Q1 2016 Source: Experian Automotive registrations through Q1 2016 26
An increasing number of states are experiencing declines in new vehicle registration as compared to Q1 2015 New vehicle registrations Individual buyers Q1 2015 vs. Q1 2016 Source: Experian Automotive registrations through Q1 2016 27
New York and Los Angeles lead all markets for new vehicle registrations DALLAS-FT. WORTH SAN FRANCISCO-OAK-SAN JOSE MIAMI-FT. LAUDERDALE BOSTON (MANCHESTER) WASHINGTON, DC (HAGRSTWN) TAMPA-ST. PETE (SARASOTA) PHOENIX (PRESCOTT) ORLANDO-DAYTONA BCH-MELBRN Market Share by Nielsen DMA NEW YORK LOS ANGELES CHICAGO DETROIT PHILADELPHIA HOUSTON ATLANTA 1.80% 1.74% 1.53% 2.15% 1.90% 2.50% 2.41% 2.35% 2.34% 2.84% 2.82% 2.76% 2.68% New vehicle registrations Individual buyers Q1 2016 7.16% 7.00% DMA is a registered service mark of The Nielsen Company. Used under license. 0% 1% 2% 3% 4% 5% 6% 7% 8% Source: Experian Automotive registrations through Q1 2016 28
Led by Entry CUV, 10 vehicle segments accounted for approximately 80% of new individual registrations in Q1 2016 Top 15 Vehicle Segments Individual new vehicle registrations through March 2016 CUV - Entry Level Pickup - Full Sized Small Car - Economy Mid Range Car - Standard Mid Range Car - Lower CUV - Mid Range SUV - Lower Mid Range CUV - Premium Upscale - Near Luxury SUV - Entry Level Van - Mini Sport Car - Touring Pickup - Small Mid Range Car - Premium Small Car - Budget 3.31% 2.88% 2.76% 2.45% 2.40% 2.33% 2.15% 5.66% 5.50% 6.44% 8.48% 9.86% 9.48% 11.35% 15.09% 29
CUVs and SUV led in year over year growth, while luxury, premium and hybrid segments declined from compared to Q1 2015 Q1 2016 % Change from Q1 2015 Individual new vehicle registrations through March 2016 Minimum 5,000 registrations CUV - Premium 24.7% CUV - Entry Level 15.6% SUV - Large Van - Full Sized SUV - Lower Mid Range 7.5% 10.3% 9.8% Upscale - Ultra Upscale - Near Luxury Sport Car - Premium Alt Power - Hybrid Car -10.9% -11.4% -11.4% -11.5% Upscale - Luxury -25.2% 30
General Motors outsold Toyota by 25k units to lead Q1 2016 market share Top 15 Manufacturers (Q1 2016) Individual new vehicle registrations through March 2016 GM Toyota Ford FCA US LLC Honda Nissan Subaru Kia Hyundai VW BMW Daimler Mazda Mitsubishi Tata 4.06% 3.95% 3.90% 3.15% 2.40% 2.04% 1.90% 0.71% 0.65% 8.77% 11.27% 12.19% 11.91% 15.63% 16.44% 0% 5% 10% 15% 20% Share of Individual Registrations 31
Toyota outsold Ford by over 38k units to lead Q1 2016 brand market share Top 15 Makes (Q1 2016) Individual new vehicle registrations through March 2016 Toyota Ford Chevrolet Honda Nissan Jeep Subaru Kia Hyundai GMC Ram Dodge Lexus BMW Mercedes-Benz 4.06% 3.95% 3.90% 3.17% 2.66% 2.45% 2.34% 2.07% 2.00% 5.34% 7.90% 10.15% 10.99% 11.54% 12.74% Share of Individual Registrations 32
9 of the top 15 models are produced by Asian based manufacturers Top 15 Models Individual new vehicle registrations through March 2016 Ford F150 Honda Civic Chevrolet Silverado 1500 Honda Accord Honda CR-V Toyota Corolla Toyota RAV4 Toyota Camry Ford Escape Ram 1500 Nissan Rogue Nissan Altima Nissan Sentra Ford Fusion Chevrolet Malibu 1.83% 1.83% 1.68% 1.63% 1.49% 1.48% 1.36% 2.26% 2.19% 2.17% 2.17% 2.86% 2.74% 2.60% 2.47% Share of New Individual Registrations 33
Loyalty, Conquest & Defection Experian and the marks used herein are service marks or registered trademarks of Experian Information Solutions, Inc. Other product and company names mentioned herein are the trademarks of their respective owners. No part of this copyrighted work may be reproduced, modified, or distributed in any form or manner without the prior written permission of Experian.
Overview of Loyalty Methodologies Household Consistent view of activity across all buyers Captures additions to household fleets Looks for loyalty first and foremost Census coverage, findings applicable to dealers of all sizes Most timely loyalty metric available Requires an owned vehicle to be registered to another owner Creates additional lag in reporting Registration must occur within 90 days of new vehicle purchase Disposal Some off lease used vehicles missed due to turn time Does not capture additions to household fleet Smaller population, finding not applicable to small dealers 35
Loyalty Rate Household Loyalty Rates Continue Climbing 80% 70% Household Loyalty Trends Manufacturer Make Model Lender Household Methodology New to New Through January 2016 69.6% 60% 50% 62.4% 40% 30% 29.7% 20% 24.3% 10% 0% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 2010 2011 2012 2013 2014 2015 2016 36
New buyers are the most loyal to their brands, followed buy Certified Used and Non-Certified Used 70% New Certified Used Non-Certified Used Household Methodology February 2015 January 2016 60% 50% 65.6% 62.0% 56.5% 58.3% 53.9% 40% 44.6% 30% 20% 26.6% 21.0% 22.0% 10% 14.1% 14.6% 0% Manufacturer Make Model Lender 4.2% 37
Ford led all manufacturers with 70.3% returning households remaining loyal to the manufacturer Minimum 1,000 RTM Ford GM Tesla Subaru Toyota FCA US LLC Daimler Kia Honda Nissan Hyundai BMW VW Porsche Tata Manufacturer Loyalty Rates 70.3% 69.6% 69.0% 68.5% 67.9% 67.1% 65.4% 63.5% 63.3% 62.2% 61.2% 58.9% 56.3% 56.1% 53.7% Household Methodology New to New February 2015 January 2016 0% 10% 20% 30% 40% 50% 60% 70% 80% Manufacturer Loyalty Rate (Household) 38
Ford led all brands with 69.4% of returning owners buying another Ford vehicle Minimum 1,000 RTM Ford Tesla Subaru Mercedes-Benz Toyota Kia Chevrolet Nissan Honda Hyundai Lexus Lincoln BMW Ram Porsche Make Loyalty Rates (Top 15) Household Methodology New to New February 2015 January 2016 69.4% 69.0% 68.5% 65.6% 64.2% 63.5% 63.4% 61.7% 61.4% 61.2% 60.4% 59.7% 59.0% 58.9% 56.1% 0% 10% 20% 30% 40% 50% 60% 70% 80% Make Loyalty Rate (Household) 39
Tesla Model S leads all models with 69.1% model loyalty rate Minimum 2,000 RTM Tesla Model S Land Rover Range Rover Lincoln MKZ Ram 1500 Ford F150 Cadillac Escalade ESV Kia Soul Cadillac SRX Subaru Outback Lexus RX350 Subaru Forester Chevrolet Silverado 1500 Mercedes-Benz C Class Mercedes-Benz S Class Hyundai Genesis Model Loyalty Rates (Top 15) 48.3% 46.8% 46.8% 43.9% 42.7% 42.2% 42.0% 42.0% 42.0% 41.7% 41.2% 40.5% 40.3% 40.2% Household Methodology New to New February 2015 January 2016 69.1% 0% 10% 20% 30% 40% 50% 60% 70% 80% Model Loyalty Rates (Household) 40
Conquest / Defection Metrics When loyalty does not exist a conquest / defection relationship is present Conquest is assessed against the purchased vehicle / vehicle attribute Defection is assessed against the owned vehicle / vehicle attribute Conquest / defection ratio is the number of conquests divided by the number of defections Conquest / defection net is the number of conquests less the number of defections 41
For every customer lost, Subaru gains nearly four new customers from other brands Minimum 5,000 RTM Subaru Porsche Tata Kia Daimler Mazda BMW VW FCA US LLC Hyundai Nissan Honda Volvo Toyota Ford Mitsubishi GM Manufacturer Conquest / Defection Ratio 1.90 1.82 1.79 1.55 1.51 1.40 1.27 1.17 1.17 1.05 0.83 0.82 0.78 0.76 0.72 0.58 Household Methodology New to New February 2015 January 2016 3.72 0.00 0.50 1.00 1.50 2.00 2.50 3.00 3.50 4.00 42
Small and mid-size brands are gaining owners while the larger, more established brands struggle to maintain their owner base Minimum 5,000 RTM Top brands based on RTM Subaru Jeep Kia Mercedes-Benz Mazda BMW Lexus Hyundai GMC Nissan Volkswagen Honda Ford Toyota Chrysler Chevrolet Dodge 0.40 Make Conquest / Defection Ratio 1.82 1.79 1.57 1.51 1.42 1.27 1.17 1.16 1.03 0.94 0.82 0.78 0.73 0.66 0.61 Household Methodology New to New February 2015 January 2016 3.72 0.00 0.50 1.00 1.50 2.00 2.50 3.00 3.50 4.00 43
Small and mid-size utility vehicles are gaining owners while trucks and sedan lose Minimum 5,000 RTM Top models based on RTM Toyota RAV4 Honda CR-V Ford Escape Chevrolet Equinox Ford Fusion Toyota Highlander Toyota Tacoma Hyundai Sonata Chevrolet Silverado 1500 Ford F150 Nissan Altima Toyota Corolla Honda Civic Honda Accord Honda Odyssey Toyota Camry Ford Focus Model Conquest / Defection Ratio 0.62 0.60 0.67 0.73 0.73 0.71 0.78 0.90 0.90 0.99 1.06 1.15 1.25 1.38 1.34 Household Methodology New to New February 2015 January 2016 1.78 1.50 0.00 0.20 0.40 0.60 0.80 1.00 1.20 1.40 1.60 1.80 2.00 44
Luxury Vehicle Market Analysis Experian and the marks used herein are service marks or registered trademarks of Experian Information Solutions, Inc. Other product and company names mentioned herein are the trademarks of their respective owners. No part of this copyrighted work may be reproduced, modified, or distributed in any form or manner without the prior written permission of Experian.
Market Share New Individual Registrations Import Luxury Market Share Luxury Market Share 3.5% Audi BMW Lexus Mercedes-Benz 3.0% 2.5% 2.0% 2.34% 2.07% 2.00% 1.5% 1.0% 1.19% 0.5% 0.0% 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 46
Make Loyalty Rate Import Luxury Loyalty Make Loyalty Trend 80% Audi BMW Lexus Mercedes-Benz 70% 60% 50% 66.7% 64.9% 62.4% 56.0% 40% 30% 20% 10% 0% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 2010 2011 2012 2013 2014 2015 2016 47
Import Luxury Conquest and Defection Metrics Household Methodology New to New Conquest / Defection Net February 2015 January 2016 Conquest / Defection Ratio 35,000 32,560 32,019 2.50 30,000 25,866 2.00 2.01 25,000 20,000 21,851 1.50 1.42 1.27 1.57 15,000 1.00 10,000 5,000 0.50 0 0.00 48
Summary of Today s Presentation Light duty vehicles in operation increased to over 259 million units. The aftermarket Sweet Spot will continue to decline for another year, when an increase will be met with change in vehicle segments. Ford dominates the commercial light duty vehicle market. Rental and Leasing is the top vocation in the United States. Q1 new vehicle registrations are up for the 7 th consecutive year and up 7.5% over 2015. Entry level CUV segment was up 15.6% over 2015 to capture 15.09% of the market. General Motors outsold Toyota by 25k units to lead Q1 2016 market share among individual buyers. Ford led all manufacturers with a loyalty rate of 70.3%. Subaru led all brands and manufacturers with a conquest to defection ratio of 3.72. 49
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