president, data & j.d. power auto analytics and chief

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COVID-19:

J.D. Power Auto Industry Impact ReportJUNE 4, 2020

Webinar Dial-in: (562) 247-8422

Passcode: 289-175-474

https://register.gotowebinar.com/register/4653144609487918348

Thomas King

President, Data &

Analytics and Chief

Product Officer

Larry Dixon

Senior Director,

Valuation Services

Tyson Jominy

Vice President,

Data & Analytics

https://register.gotowebinar.com/register/4653144609487918348


Agenda

1. Retail Sales Impact Through June 1

2. Used Market

3. Sales Outlook

4. Q&A

Appendix


1.

Retail Sales

Impact Through June 1

444©2020 J.D. Power. All Rights Reserved. CONFIDENTIAL & PROPRIETARY—For Internal Use. External publication is prohibited without J.D. Power consent.

Week Ending 3/8 3/15 3/22 3/29 4/5 4/12 4/19 4/26 5/3 5/10 5/17 5/24 6/1

Retail Sales -1% -14% -36% -59% -55% -50% -43% -38% -30% -23% -24% -24% -12%

-100%

-80%

-60%

-40%

-20%

0%

20%

4

IMPACT: Retail Sales Accelerated at Month End INSIGHT

MayMay retail sales were 1,036,000 units, a decline

vs. pre-virus forecast of 20% or 266,000 units.

Weekly Change vs. Forecast• March 08: -1% or 1,000 units

• March 15: -14% or 35,000 units

• March 22: -36% or 95,000 units

• March 29: -59% or 189,000 units

• April 05: -55% or 141,000 units

• April 12: -50% or 106,000 units

• April 19: -43% or 108,000 units

• April 26: -38% or 101,000 units

• May 03: -30% or 94,000 units

• May 10: -23% or 53,000 units

• May 17: -24% or 62,000 units

• May 24: -24% or 76,000 units

• June 01: -12% or 50,000 units

Retail Sales: Actual over/(under) Pre-Virus Forecast

KEY TAKEAWAY

The industry exited May with its strongest

performance since the COVID crisis began.


Week Ending 3/8 3/15 3/22 3/29 4/5 4/12 4/19 4/26 5/3 5/10 5/17 5/24 6/1

Tampa 2% -16% -29% -24% -22% -24% -19% -20% 1% -25% -16% -17% 0%

Dallas 2% -13% -26% -38% -28% -28% -18% -10% -1% -11% -16% -11% -4%

San Francisco -1% -21% -71% -74% -67% -69% -67% -59% -46% -35% -36% -41% -12%

Detroit 10% 1% -19% -86% -99% -98% -83% -73% -59% -29% -30% -20% -14%

New York 0% -5% -30% -96% -88% -79% -74% -70% -63% -48% -39% -32% -20%

-100%

-80%

-60%

-40%

-20%

0%

20%

40%

60%

Week Ending 3/8 3/15 3/22 3/29 4/5 4/12 4/19 4/26 5/3 5/10 5/17 5/24 6/1

Tampa 2% -16% -29% -24% -22% -24% -19% -20% 1% -25% -16% -17% 0%

Dallas 2% -13% -26% -38% -28% -28% -18% -10% -1% -11% -16% -11% -4%

San Francisco -1% -21% -71% -74% -67% -69% -67% -59% -46% -35% -36% -41% -12%

Detroit 10% 1% -19% -86% -99% -98% -83% -73% -59% -29% -30% -20% -14%

New York 0% -5% -30% -96% -88% -79% -74% -70% -63% -48% -39% -32% -20%

Minneapolis 7% -6% -39% -47% -49% -30% -35% -27% -25% -22% -28% -25% -29%

-100%

-80%

-60%

-40%

-20%

0%

20%

40%

60%

Week Ending 3/8 3/15 3/22 3/29 4/5 4/12 4/19 4/26 5/3 5/10 5/17 5/24 6/1

Tampa 2% -16% -29% -24% -22% -24% -19% -20% 1% -25% -16% -17% 0%

Dallas 2% -13% -26% -38% -28% -28% -18% -10% -1% -11% -16% -11% -4%

San Francisco -1% -21% -71% -74% -67% -69% -67% -59% -46% -35% -36% -41% -12%

Detroit 10% 1% -19% -86% -99% -98% -83% -73% -59% -29% -30% -20% -14%

-100%

-80%

-60%

-40%

-20%

0%

20%

40%

60%

Week Ending 3/8 3/15 3/22 3/29 4/5 4/12 4/19 4/26 5/3 5/10 5/17 5/24 6/1

Tampa 2% -16% -29% -24% -22% -24% -19% -20% 1% -25% -16% -17% 0%

Dallas 2% -13% -26% -38% -28% -28% -18% -10% -1% -11% -16% -11% -4%

-100%

-80%

-60%

-40%

-20%

0%

20%

40%

60%

Week Ending 3/8 3/15 3/22 3/29 4/5 4/12 4/19 4/26 5/3 5/10 5/17 5/24 6/1

Tampa 2% -16% -29% -24% -22% -24% -19% -20% 1% -25% -16% -17% 0%

Dallas 2% -13% -26% -38% -28% -28% -18% -10% -1% -11% -16% -11% -4%

San Francisco -1% -21% -71% -74% -67% -69% -67% -59% -46% -35% -36% -41% -12%

-100%

-80%

-60%

-40%

-20%

0%

20%

40%

60%

Week Ending 3/8 3/15 3/22 3/29 4/5 4/12 4/19 4/26 5/3 5/10 5/17 5/24 6/1

Tampa 2% -16% -29% -24% -22% -24% -19% -20% 1% -25% -16% -17% 0%

-100%

-80%

-60%

-40%

-20%

0%

20%

40%

60%

Week Ending 3/8 3/15 3/22 3/29 4/5 4/12 4/19 4/26 5/3 5/10 5/17 5/24 6/1

-100%

-80%

-60%

-40%

-20%

0%

20%

40%

60%


5

IMPACT: Sales Recovery Advanced Across Major Markets

KEY TAKEAWAY

173 out of 210 markets advanced last week.

Week Ending 3/8 3/15 3/22 3/29 4/5 4/12 4/19 4/26 5/3 5/10 5/17 5/24 6/1

Tampa 2% -16% -29% -24% -22% -24% -19% -20% 1% -25% -16% -17% 0%

Dallas 2% -13% -26% -38% -28% -28% -18% -10% -1% -11% -16% -11% -4%

San Francisco -1% -21% -71% -74% -67% -69% -67% -59% -46% -35% -36% -41% -12%

Detroit 10% 1% -19% -86% -99% -98% -83% -73% -59% -29% -30% -20% -14%

New York 0% -5% -30% -96% -88% -79% -74% -70% -63% -48% -39% -32% -20%

Minneapolis 7% -6% -39% -47% -49% -30% -35% -27% -25% -22% -28% -25% -29%

-100%

-80%

-60%

-40%

-20%

0%

20%

40%

60%

New York

Tampa

Dallas

Minneapolis

DetroitSan

Francisco

INSIGHT

TampaStrong SUV sales made the market one of five

that beat pre-virus forecast (along with Houston,

Denver, Pittsburgh, West Palm).

Dallas / San FranciscoStrong sales close powered markets.

DetroitMidsize pickup sales (+18ppts to forecast) offset

relative weakness in light duty pickups.

New YorkNon-premium cars and SUVs contributed the

most to the 12ppt improvement in New York.

MinneapolisSales fell back modestly.


Week Ending 3/8 3/15 3/22 3/29 4/5 4/12 4/19 4/26 5/3 5/10 5/17 5/24 6/1

Large Pickup -2% -9% -10% -25% -9% -12% -10% -9% -1% -1% -2% -3% 5%

Midsize Pickup 5% 1% -30% -48% -42% -32% -20% -12% -1% 7% -5% -4% 5%

Midsize SUV 5% -11% -35% -58% -51% -45% -38% -35% -26% -28% -25% -23% -8%

Compact SUV 0% -17% -43% -65% -64% -60% -55% -48% -38% -30% -27% -27% -11%

Compact Car -11% -25% -48% -68% -68% -63% -58% -53% -48% -44% -41% -45% -33%

-100%

-80%

-60%

-40%

-20%

0%

20%

40%

60%

Week Ending 3/8 3/15 3/22 3/29 4/5 4/12 4/19 4/26 5/3 5/10 5/17 5/24 6/1

Large Pickup -2% -9% -10% -25% -9% -12% -10% -9% -1% -1% -2% -3% 5%

Midsize Pickup 5% 1% -30% -48% -42% -32% -20% -12% -1% 7% -5% -4% 5%

Midsize SUV 5% -11% -35% -58% -51% -45% -38% -35% -26% -28% -25% -23% -8%

Compact SUV 0% -17% -43% -65% -64% -60% -55% -48% -38% -30% -27% -27% -11%

-100%

-80%

-60%

-40%

-20%

0%

20%

40%

60%

Week Ending 3/8 3/15 3/22 3/29 4/5 4/12 4/19 4/26 5/3 5/10 5/17 5/24 6/1

Large Pickup -2% -9% -10% -25% -9% -12% -10% -9% -1% -1% -2% -3% 5%

Midsize Pickup 5% 1% -30% -48% -42% -32% -20% -12% -1% 7% -5% -4% 5%

Midsize SUV 5% -11% -35% -58% -51% -45% -38% -35% -26% -28% -25% -23% -8%

-100%

-80%

-60%

-40%

-20%

0%

20%

40%

60%

Week Ending 3/8 3/15 3/22 3/29 4/5 4/12 4/19 4/26 5/3 5/10 5/17 5/24 6/1

Large Pickup -2% -9% -10% -25% -9% -12% -10% -9% -1% -1% -2% -3% 5%

Midsize Pickup 5% 1% -30% -48% -42% -32% -20% -12% -1% 7% -5% -4% 5%

-100%

-80%

-60%

-40%

-20%

0%

20%

40%

60%

Week Ending 3/8 3/15 3/22 3/29 4/5 4/12 4/19 4/26 5/3 5/10 5/17 5/24 6/1

Large Pickup -2% -9% -10% -25% -9% -12% -10% -9% -1% -1% -2% -3% 5%

-100%

-80%

-60%

-40%

-20%

0%

20%

40%

60%

Week Ending 3/8 3/15 3/22 3/29 4/5 4/12 4/19 4/26 5/3 5/10 5/17 5/24 6/1

-100%

-80%

-60%

-40%

-20%

0%

20%

40%

60%

6

IMPACT: Sales Recovery Across Every Segment

KEY TAKEAWAY

Mainstream segment performance accelerated

into sales close.

INSIGHT

All SegmentsEvery segment improved against pre-virus

forecast in the last week of June and four

segments beat the pre-virus forecast.

PickupsConsumers taking advantage of strong incentive

offers drove up sales of both light duty and

midsize trucks.

SUVStrength in SUVs came from the small and large

segments, both climbing above pre-virus levels.

CarMainstream car sales improved 10ppts from

prior week, but lagged pre-virus forecasts by

35%. Compact Car was 33% below pre-virus

forecast.


Week Ending 3/8 3/15 3/22 3/29 4/5 4/12 4/19 4/26 5/3 5/10 5/17 5/24 6/1

Large Pickup -2% -9% -10% -25% -9% -12% -10% -9% -1% -1% -2% -3% 5%

Midsize Pickup 5% 1% -30% -48% -42% -32% -20% -12% -1% 7% -5% -4% 5%

Midsize SUV 5% -11% -35% -58% -51% -45% -38% -35% -26% -28% -25% -23% -8%

Compact SUV 0% -17% -43% -65% -64% -60% -55% -48% -38% -30% -27% -27% -11%

Compact Car -11% -25% -48% -68% -68% -63% -58% -53% -48% -44% -41% -45% -33%

-100%

-80%

-60%

-40%

-20%

0%

20%

40%

60%

Midsize SUV

Compact SUV

Large Pickup

Light Duty

Compact Car

Midsize Pickup


Week Ending 3/8 3/15 3/22 3/29 4/5 4/12 4/19 4/26 5/3 5/10 5/17 5/24 5/31

Small SUV -1% -15% -37% -70% -62% -59% -49% -45% -34% -9% -11% -3% 16%

Compact SUV 12% -1% -35% -71% -57% -53% -48% -45% -39% -33% -22% -19% -3%

Midsize SUV 11% -8% -33% -70% -59% -56% -50% -49% -39% -25% -23% -16% -8%

Compact Car 4% -18% -38% -69% -63% -61% -58% -56% -51% -38% -33% -36% -30%

-100%

-80%

-60%

-40%

-20%

0%

20%

40%

60%

Week Ending 3/8 3/15 3/22 3/29 4/5 4/12 4/19 4/26 5/3 5/10 5/17 5/24 5/31

Small SUV -1% -15% -37% -70% -62% -59% -49% -45% -34% -9% -11% -3% 16%

Compact SUV 12% -1% -35% -71% -57% -53% -48% -45% -39% -33% -22% -19% -3%

Midsize SUV 11% -8% -33% -70% -59% -56% -50% -49% -39% -25% -23% -16% -8%

-100%

-80%

-60%

-40%

-20%

0%

20%

40%

60%

Week Ending 3/8 3/15 3/22 3/29 4/5 4/12 4/19 4/26 5/3 5/10 5/17 5/24 5/31

Small SUV -1% -15% -37% -70% -62% -59% -49% -45% -34% -9% -11% -3% 16%

Compact SUV 12% -1% -35% -71% -57% -53% -48% -45% -39% -33% -22% -19% -3%

-100%

-80%

-60%

-40%

-20%

0%

20%

40%

60%

Week Ending 3/8 3/15 3/22 3/29 4/5 4/12 4/19 4/26 5/3 5/10 5/17 5/24 5/31

Small SUV -1% -15% -37% -70% -62% -59% -49% -45% -34% -9% -11% -3% 16%

-100%

-80%

-60%

-40%

-20%

0%

20%

40%

60%

Week Ending 3/8 3/15 3/22 3/29 4/5 4/12 4/19 4/26 5/3 5/10 5/17 5/24 5/31

-100%

-80%

-60%

-40%

-20%

0%

20%

40%

60%


7

IMPACT: Premium Sales Show Widespread Improvement

KEY TAKEAWAY

Premium segments outperformed mainstream for third week in a row.

INSIGHT

Premium SegmentsPremium segments improved 9ppts to -11% vs.

forecast in the final week of June.

While every premium segment improved against

forecast, SUVs improved significantly more than

cars.

Week Ending 3/8 3/15 3/22 3/29 4/5 4/12 4/19 4/26 5/3 5/10 5/17 5/24 5/31

Small SUV -1% -15% -37% -70% -62% -59% -49% -45% -34% -9% -11% -3% 16%

Compact SUV 12% -1% -35% -71% -57% -53% -48% -45% -39% -33% -22% -19% -3%

Midsize SUV 11% -8% -33% -70% -59% -56% -50% -49% -39% -25% -23% -16% -8%

Compact Car 4% -18% -38% -69% -63% -61% -58% -56% -51% -38% -33% -36% -30%

-100%

-80%

-60%

-40%

-20%

0%

20%

40%

60%

Midsize Premium

SUV

Compact

Premium SUV

Compact

Premium Car

Small Premium

SUV


Week Ending 3/8 3/15 3/22 3/29 4/5 4/12 4/19 4/26 5/3 5/10 5/17 5/24 6/1

Car 27% 27% 25% 23% 23% 24% 23% 22% 22% 23% 23% 23% 22%

SUV 52% 51% 49% 45% 45% 46% 48% 49% 50% 51% 52% 53% 55%

Truck 21% 22% 25% 32% 32% 31% 29% 28% 28% 26% 25% 24% 22%

0%

10%

20%

30%

40%

50%

60%

% of Sales by Vehicle Type

8

IMPACT: SUV Sales Mix Reached Record-Level INSIGHT

SUV Share of Retail Sales Highest on

RecordSUV sales mix at 55.3% topped the previous

record of 54.3% in the week ending Dec 29,

2019.

Truck Share of Retail Sales Now On Par

With CarsThe truck category outsold the car category at

retail for the first time on record at the end of

March, but truck mix has since fallen to more

normal levels and is now on par with car mix.

Truck sales volume was supported by heavy

incentive escalation beginning in week ending

March 22.

KEY TAKEAWAY

SUV share of retail sales reached an all-time

high.

Truck

Car

SUV


37%38%

44%

50% 50%

47%

46%45%

43%

42%41%

40%39%

50%48%

44%

40% 40%

43%

44% 44%

45%47% 47% 48% 48%

13% 13% 12%

10% 10% 10% 11% 11% 12% 12%13% 13%

14%

3/8 3/15 3/22 3/29 4/5 4/12 4/19 4/26 5/3 5/10 5/17 5/24 6/1

Share of Industry Retail Sales

9

IMPACT: Premium Regaining Market Share INSIGHT

GM, Ford, and FCA combined retail market

share declined in week ending June 1 and is

approaching pre-virus levels.

Premium market share is now at pre-virus levels.

KEY TAKEAWAY

Market share is returning to pre-virus levels.

Detroit 3

Non-Premium

Non-Detroit 3

Non-Premium

Premium


12%

23%22%

26%

23%

16%

15%15%

16%

15%

13%13%

23%23%

28%

23%

17%18%

15%

17% 17%

13%

National NY LA Miami SF Chicago Dallas Philly Houston DC Boston

INSIGHT

Premium share of industry retail sales is now on

par with prior year levels in May. However,

continued industry sales weakness in New York,

Los Angeles, and San Francisco is inhibiting

premium sales from making a substantial

comeback.

Additionally, while the premium recovery is not

consistent across markets, every major premium

market is now showing growth vs. prior year.

10

IMPACT: Premium Gaining Across All Major Markets

KEY TAKEAWAY

The premium industry rebounded in every top

market in May.

May Premium Share of Industry Retail Sales

2019 2020


Week Ending 3/8 3/15 3/22 3/29 4/5 4/12 4/19 4/26 5/3 5/10 5/17 5/24 6/1

Incentives % 10.0% 10.1% 11.2% 11.4% 11.4% 11.5% 11.7% 11.8% 11.8% 11.5% 11.6% 11.8% 11.8%

MSRP

$4.0$4.1

$4.6

$4.9 $4.9 $4.9 $4.9 $5.0 $5.0

$4.8 $4.8 $4.8 $4.9

$34.0

$34.3

$34.7

$35.4

$35.7

$35.5

$34.9$34.9

$35.1

$34.7$34.6

$34.3 $34.4

11

IMPACT: Transaction Prices & Incentive Spend

KEY TAKEAWAY

Prices are normalizing as pickup mix falls back

and smaller SUVs gain share.

Net Transaction

Prices

Incentives per

Unit

Net Transaction Prices and Incentive Spending (000s)

INSIGHT

Net Transaction PricesTransaction prices reached their highest-level on

record at $35,700 during the week ending April

05, but have since declined.

Average transaction prices rose slightly in the

final week of May, with higher premium

nameplate mix overcoming downward pricing

pressure from the normalization of pickup

segment share.

Incentive SpendingIncentives hit record levels at over $5,000 per

unit during the week ending May 03. Week-over-

week decreases in the week ending May 10

were driven by vehicle mix and lower supported

finance incentive mix. Spending remained

roughly flat through the end of May.


8% 7%

13%

22% 21%

20%19%

18%17%

15%13% 13%

12%

32%

34% 33%

21%20%

20% 20% 21% 21%

23%

25% 25% 25%

3/8 3/15 3/22 3/29 4/5 4/12 4/19 4/26 5/3 5/10 5/17 5/24 6/1

12

IMPACT: How People Are Buying Vehicles

KEY TAKEAWAY

While 84-month loans are continuing to fall back

toward pre-virus levels, lease mix remains

depressed.

% of Sales That

Are Leased

% of Sales That

Are Financed

with an 84-month

or Longer Loan

Share of New Vehicle Sales by Purchase Type

INSIGHT

Buyers Taking 84-Month LoansWhile still elevated, 84-month loans are now

more than halfway back to pre-virus levels at

12% for the week ending Jun 1.

Buyers Leasing Their Vehicles25% of buyers during the week ending Jun

1 took a lease, but lease mix remains well below

pre-virus levels. Many lessees who extended

their leases have not yet returned to market, due

to the monthly cadence of lease extensions.


INSIGHT

Most OEMs have pulled back incentive offers

from May to June in the Large Light Duty Pickup

segment with 0% for 84 month offers no longer

in market.

13

IMPACT: Deals Reduced On Light-Duty Pickups From May to June

KEY TAKEAWAY

Reduced incentives are being driven by lower

inventories but pose a threat to the sales

recovery.

Note: Offers listed are the best available offers; Offers may be limited to specific regions, variants

MY19 MY20

May 0% for 84 w/ 90 day deferral 0% for 72

June 0% for 84 0% for 72

May 0% for 84 0% for 84


May 0% for 72 w/ 120 day deferral 0%/0.9% for 72/84 w/ 120 day deferral

June 0% for 72 w/ 90 day deferral3.9%/5.9% for 60/72 w/ 90 day deferral +

$3,500 cust. cash

May 0% for 84 0% for 84


May1.9% for 72 w/120 day deferral +

$4,750 cust. cash

1.9%/3.9% for 60/72 w/ 120 day deferral +

$1,000 cust. cash

June1.9% for 72 w/ 90 day deferral +

$4,750 cust. cash


$1,000 cust. cash

May n/a0% for 72 +

$2,000 cust. cash

June n/a0%/2.9% for 60/72 +

$1,500 cust. cash

May0% for 84 w/ 90 day deferral +

$1,000 cust. cash


$2,000 cust. cash

June0% for 84 w/ 90 day deferral +

$1,000 cust. cash


$2,000 cust. cash

Titan

F-150

Silverado

1500

RAM 1500

Sierra

1500

RAM 1500

Classic

Tundra


INSIGHT

Several nameplates pulled back offers from May

to June in the Compact SUV segment for model

year 2019 and 2020 vehicles.

As production restarts across the industry and

retail sales are stabilizing, OEMs are scaling

back incentive spending.

14

IMPACT: Deals Reduced On Compact SUVs From May To June

KEY TAKEAWAY

Compact SUV is the largest segment in the

industry. Lower incentives will reduce demand

and create market share volatility.

Note: Offers listed are the best available offers; Offers may be limited to specific regions, variants

MY19 MY20

May 0%/1.9% for 60/72 0%/1.9% for 60/72

June n/a 0.9%/2.9% for 60/72

May0.9%/1.9% for 60/72 +

$1,000 loyalty + $2,000 dealer cash

0.9%/1.9% for 60/72 +

$1,000 loyalty

June0.9%/1.9% for 60/72 +

$2,000 dealer cash

0.9%/1.9% for 60/72 +

$500 dealer cash

May 0% for 84 0% for 84


May 0% for 72 0% for 72


May n/a0%/1.9% for 60/72 +

$1,000 cust. cash

June n/a0%/1.9% for 60/72 +

$1,000 cust. cash

May n/a 0%/0.9% for 72/84 w/120 day deferral

June n/a2.9%/3.9% w/90 day deferral +

$2,500 cust. cash

May 0% for 63 w/ 90 day deferral 0% for 63 w/ 90 day deferral

June n/a 0% for 63 w/ 90 day deferral

Cherokee

Forester

RAV4

CR-V

Equinox

Escape

Rogue


Compact SUV

INSIGHT

Deterioration of incentives in June will reduce

purchasing power and/or increase monthly

payments.

This will likely result in fewer vehicle sales, lower

transaction prices and more migration to the

used vehicle market.

15

IMPACT: Incentive Impact on Monthly Payments

KEY TAKEAWAY

Lower incentives in two key segments degrades

purchasing power for consumers and will likely

slow the recovery.

Large Pickup - LD

May Offers June Offers

0% / 84 months 0% / 72 months

0% / 84 months 0% / 72 months

$28,500 Financed= $339 Monthly Payment



17% Payment Increase

Or

$36,857 Financed= $512 Monthly Payment14% Less Buying Power


17% Payment Increase

Or

$24,429 Financed= $339 Monthly Payment14% Less Buying Power


Monthly Payment Loyalty Cash Conquest Cash

May $409 $1,000 $0

June $459 $1,000 $0

Change $50 $0 $0

May $672 $1,000 $1,000

June $715 $500 $500

Change $43 -$500 -$500

May $755 $1,000 $0

June $770 $1,000 $0

Change $14 $0 $0

May $620 $1,000 $0

June $637 $1,000 $0

Change $17 $0 $0

RX

X5

GLE

Q7

16

IMPACT: Many Premium Lease Payments Deteriorated for June INSIGHT

While aggressive finance offers continue, lease

payments rose in June in key premium SUV

segments. This strategy presents a challenging

decision to a customer that prefers to lease.

Premium OEMs may be trying to conserve

incentive budgets with light inventory, but this

may result in increased defection just at the time

when lessees are deciding whether to continue

to sit on the sidelines or return their vehicles.

Loyalty offers are prevalent among nameplates

but may not be enough to retain customers

within the brand.

KEY TAKEAWAY

June lease offers worsened in a market full of pent up lease demand.

Note: Monthly payments normalized to $3,000 down payment

Monthly Payment Loyalty Cash Conquest Cash

May $307 $1,500 $0

June $307 $1,500 $0

Change $0 $0 $0

May $375 $1,500 $1,500

June $447 $750 $750

Change $72 -$750 -$750

May $440 $1,000 $0

June $454 $1,000 $0

Change $14 $0 $0

May $391 $1,000 $0

June $412 $1,000 $0

Change $21 $0 $0

NX

X3

GLC

Q5

Select Midsize Premium SUVs Select Compact Premium SUVs


-12%-8%

-33%

-73%-70%

-57%

-51% -50%

-41%

-19%-18% -20% -20%

3/8 3/15 3/22 3/29 4/5 4/12 4/19 4/26 5/3 5/10 5/17 5/24 6/1

17

IMPACT: Many Lessees Remain Out of Market

% of Lessees Returning to Market over/(under) Pre-Virus Forecast

INSIGHT

Returning lessees have stabilized at 20% below

pre-virus forecast for the past four weeks.

Among the top 10 lease states, only Michigan

had a greater number of returns in May relative

to pre-virus levels at +9%. The over

achievement mainly occurred in the final week.

KEY TAKEAWAY

A large number of lessees remain out of market

due to lease extensions.


Week Ending 3/8 3/15 3/22 3/29 4/5 4/12 4/19 4/26 5/3 5/10 5/17 5/24 6/1

18-35 -2% -16% -33% -52% -49% -44% -37% -32% -22% -18% -17% -19% -6%

36-55 -2% -16% -37% -57% -52% -45% -42% -36% -27% -22% -24% -24% -13%

56-65 -2% -14% -38% -63% -57% -52% -44% -40% -30% -20% -25% -25% -10%

66-75 7% -12% -38% -67% -65% -63% -54% -47% -39% -33% -31% -29% -17%

76+ 13% -7% -40% -71% -71% -68% -63% -57% -49% -39% -38% -36% -26%

-100%

-80%

-60%

-40%

-20%

0%

20%


18

IMPACT: Mature Buyers Are Staying Away INSIGHT

Sales to mature customers continued to lag the

industry as a whole.

KEY TAKEAWAY

The lower participation of the 56+ group relative

to the rest of industry accounted for 7,000 of the

50,000 decline this past week. Excluding this group, sales decline was only 10.4%.

56-65

76+

66-7536-55

18-35


Week Ending 3/8 3/15 3/22 3/29 4/5 4/12 4/19 4/26 5/3 5/10 5/17 5/24 6/1

740+ 54% 54% 52% 51% 52% 52% 54% 57% 59% 57% 58% 60% 62%

660-739 25% 25% 26% 29% 29% 29% 28% 26% 26% 27% 26% 26% 24%

620-659 9% 9% 10% 10% 10% 9% 9% 8% 7% 8% 8% 7% 7%

0-619 12% 12% 12% 10% 10% 10% 10% 8% 8% 8% 8% 7% 6%

Average FICO 739 739 736 736 738 738 741 749 752 749 750 754 759

0%

10%

20%

30%

40%

50%

60%

70%

New Vehicle Loans: FICO Mix

19

IMPACT: New Vehicle Sales To Sub-Prime Buyers Lagging INSIGHT

The average credit quality of new vehicle

buyers, as measured by consumer credit scores,

is higher in recent weeks.

Average FICO score of buyers has risen from

739 pre-virus to 759 during the May close.

Sub-prime share of new vehicle loans has fallen

by half from 12% to 6%.

Sub-prime mix decline reflects a higher

proportion of households in this category facing

financial hardship, coupled with reduced benefit

from 0% APR offers for which sub-prime buyers

do not typically qualify.

KEY TAKEAWAY

Average credit quality on new car loans is higher

in recent weeks due to fewer loans to sub-prime

customers.

740+

660-739

620-659

0-619


2.

Used Market

212121©2020 J.D. Power. All Rights Reserved. CONFIDENTIAL & PROPRIETARY—For Internal Use. External publication is prohibited without J.D. Power consent. 21

IMPACT: Used Vehicle Sales At Franchised Dealers

KEY TAKEAWAY

Used vehicle sales in May were only 5% below

pre-virus forecast. This is a stark improvement

from April and evidence that the used vehicle market is in recovery.

May Retail Sales: Actual over/(under) Pre-Virus Forecast

INSIGHT

May SalesUsed vehicle sales fell significantly less than

new vehicle sales in May.

The overall impact for May is 15ppts better for

used vehicle sales than for new vehicle sales.


IMPACT: Wholesale Auction Sales Close in on Pre-Virus Forecast INSIGHT

Wholesale Auction Sales ResultsWholesale auction sales reached 90,000 units

the week ending May 31, just 6% below the pre-

virus forecast for the week. On a full month

basis, auction sales reached 341,000 units in

May 2020, double April 2020’s 170,000 units, but

down 32% from May 2019’s 502,000 units.

Impact-to-DateWholesale auction sales have totaled 610,000

units since mid-March, a decline of 628,000

units versus the same period in 2019 and a loss

of 528,000 units versus our pre-virus forecast.

KEY TAKEAWAY

Wholesale auction sales will return to and then

surpass pre-virus expectations over the coming

weeks as deferred off-lease and higher off-rental

supply enter the market.Notes: Simulcast and physical auction sales for vehicles up to 8 years in age; Actual figures through March 1, 2020; Lagging reported sales will impact

previously reported results.

Weekly Wholesale Auction Sales (000s)


IMPACT: Wholesale Auction Prices Exceed Pre-Virus Expectations

KEY TAKEAWAY

Prices are expected to level off and retreat

modestly over the coming weeks as dealer

inventory needs are met and larger quantities of

off-lease and off-rental vehicles enter the

market. Notes: Simulcast and physical auction sales for vehicles up to 8 years in age; Actual figures through March 1, 2020; Lagging reported sales will impact

previously reported results

INSIGHT

Wholesale Auction PricesWholesale auction prices rose 2.3ppts on a

weekly basis the week ending May 31, placing

prices slightly above pre-virus expectations.

May closed with wholesale prices fully recovered

from the 16% trough recorded in mid-April when

auction activity was severely curtailed by

nationwide stay at home orders.

On a year over year basis, last week’s result was

essentially equal to May 2019’s month-end

result.

Weekly Wholesale Auction Price IndexMarch 1 = 100


IMPACT: Used Retail Prices vs. Wholesale Prices INSIGHT

Used Retail PricesUsed retail prices continue to exhibit stability.

Prices were essentially unchanged the week of

May 31 and they finished the week down just

2.3ppts from the first week of March.

Used retail prices have held up very well and

have deviated just modestly from seasonal

expectations despite substantial headwinds.

Direct to Dealer Wholesale PricesDirect to dealer wholesale prices also remained

stable last week, growing by 0.4ppt versus the

week prior.

KEY TAKEAWAY

May ‘20 closed with the relationship between

used retail and wholesale auction prices back to

pre-virus levels.

Notes: Wholesale auction sales include simulcast and physical auction sales. Direct to dealer wholesale sales occur “upstream” or outside of a physical

auction sale. Data covers vehicles up to 8 years in age. Figures are mix-adjusted.

Weekly Used Retail, Direct to Dealer Wholesale, and Wholesale Auction Price IndicesMarch 1 = 100


3.

Sales Outlook


SALES PERFORMANCE: May 2020 vs. May 2019 INSIGHT

Total SalesTotal sales finished with 1,128,887 units sold, a

decline 28.8% (-456k units) from May 2019.

Retail SalesRetail sales finished with 1,036,112 units sold, a

decline of 17.4% (-219k units) from May 2019.

Fleet SalesFleet sales of 92,775 represents a decline of

72% (-237k units) from May 2019. This

represents a mix of only 8.2% of total sales.

KEY TAKEAWAY

May total sales finished with a decline of just

over 28%, as retail sales (-17%) out-performed

fleet sales (-72%).

TOTAL SALES

1,128,887-28.8%

-456k unitsversus May 2019

Jan Feb Mar Apr May

RETAIL SALES

1,036,112-17.4%


Jan Feb Mar Apr May

FLEET SALES

92,775-71.9%


Jan Feb Mar Apr May

TOTAL SAAR

12.3M-29.3%

-5.1M unitsversus May 2019

RETAIL SAAR

11.4M-18.0%

-2.5M unitsversus May 2019

Jan Feb Mar Apr May

Jan Feb Mar Apr May

2020

2019

2020

2019

2020

2019

2020

2019

2020

2019


42%

27

OUTLOOK: March–July Retail Sales Scenarios

KEY TAKEAWAY

Potential for lost sales through July ranges from

1.2M – 1.6M units.

LOW

MODERATE

SEVERE

16% 1.2M

18% 1.4M

21% 1.6M

TOTAL RISK(through July)

% UNITS

2020 J.D. Power

Pre-Virus

Retail Forecast

RAMP UP PLATEAU/

RECOVER

NORMAL

Sales

Decline

vs.

Baseline 35% 20%

7%

14%

21%

1%

10%

20%

SALES

RISK

INSIGHT

Sales Impact March through JulyThe virus is projected to remove 1.2-1.6 million

sales over the five months of March - July.

Full-Year OutlookRecovery/full-year sales will be determined by:

• Economic conditions and/or mitigation of

economic conditions through government

stimulus actions

• Inventory constraints

• OEM incentives

• Recovery of sales postponed during March-

July

• 2020CY retail sales: 11.3-12.3 million retail

sales vs. baseline of 13.4 million

• 2020CY total sales: 12.9-14.2 million total

sales vs. baseline of 16.8 million

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Baseline 1.12 1.08 1.30 1.06 1.18

LOW 0.99 1.17

MODERATE 0.92 1.06

SEVERE 0.73 0.63 1.04 0.84 0.95

Delta vs. Baseline

LOW (0.08) (0.01)

MODERATE (0.15) (0.12)

SEVERE (0.39) (0.46) (0.27) (0.23) (0.24)


OUTLOOK: New Vehicle Inventory

KEY TAKEAWAY

There will be inventory constraints on certain

vehicles and in certain geographic locations.

LOW

MODERATE

SEVERE

MODERATE2020 J.D. Power

Pre-Virus

Retail Forecast

RAMP UP PLATEAU/

RECOVER

NORMAL

LOW

Inventory

vs.

Baseline 2%

SEVERE

-9% -25%

-29%

-27%

-24%

-22%

-16%

-9%

SALES

RISK

INSIGHT

Scenario AssumptionsProduction outlook is uncertain but expectation

is that it will continue to ramp up thru June as

supply chain issues are resolved.

OutcomeInventory levels may fall by 1.1 million units to

2.5 million in June. This remains a sufficient level

for the overall industry since it is equivalent to a

64 days supply. There will, however, likely be

constraints for select vehicles and markets.


Baseline 3.73 3.66 3.47 3.60 3.42

LOW 2.54 2.65

MODERATE 2.64 2.87

SEVERE 3.79 3.31 2.62 2.74 3.13

Delta vs. Baseline

LOW (1.05) (0.77)

MODERATE (0.96) (0.54)

SEVERE 0.06 (0.35) (0.85) (0.85) (0.29)

3.49 3.61 3.73 3.66 3.47 3.60

3.42 3.49 3.47 3.43 3.61

3.32


4.

Q&A


Appendix


847

1,023

1,1151,085

1,302

1,064

1,1801,220

1,118 1,137

1,001

1,354


31

IMPACT: J.D. Power 2020 Pre-Virus Retail Forecast INSIGHT

2020 Pre-Virus Full Year ForecastPrior to the escalation of COVID-19 in the U.S.,

J.D. Power expected annual total sales of 16.8

million and retail sales of 13.4 million, declines of

1.9% and 2.6% respectively from 2019.

Pre-Virus May ForecastThe pre-virus forecast for May 2020 was 1.302

million retail sales, an increase of 3.8% from

May 2019.

KEY TAKEAWAY

Prior to the virus, May was projected to be one

of the strongest months of the year with new-

vehicle retail sales forecasted to grow 3.8%.

Retail Sales Forecast (000s)


2.4%

0.5%0.8

3.3%

0.5%1.2%

0.5%

0.2%

No constraints on showroom sales

0.4%

Online, remote, or appointment sales only

32

IMPACT: Dealership Sales Operations by State INSIGHT

Dealership Sales Operations• 29 states (59% of 2019 sales) allow

dealership sales operations to remain open.

• 21 states (41%) still have limitations on

dealership sales operations from state

orders.

• Of those with limitations, 18 allow for

showroom sales by appointment or with

specified social distancing actions.

• States that allow online or remote sales only

are Pennsylvania, Illinois and New Mexico.

Changes This Week:• None

KEY TAKEAWAY

No changes to dealership operations this week.


INSIGHT

MayAreas in the northeast and west coast remain

the hardest hit, with New York and Philadelphia

showing some of the largest sales declines.

Sunbelt states, especially Texas and Florida,

continue to perform better than the national

average.

Week Ending May 3122 of the top 25 markets outperformed

expectations for the week ending May 31.

Underperforming markets are centered in

California.

33

IMPACT: Regional Retail Sales

KEY TAKEAWAY

Most top markets continued to outperform for the

week ending May 31, and all top 25 showed

gains week-over-week

May-19 Apr-20 May-20 Δ Y/Y 2019-06-02 2020-05-24 2020-05-31 Δ W/W

National 1,255.0 629.3 1,036.1 363.7 236.1 315.5

Pre-Virus Forecast 1,255.0 1,084.9 1,302.4 363.7 312.2 366.8

New York 97.2 23.7 68.0 31.4 16.5 22.9

Los Angeles 83.4 33.0 65.0 22.5 16.1 18.2

Chicago 36.2 19.0 28.5 10.9 6.2 9.1

Dallas 34.1 24.2 30.0 9.9 6.6 9.4

Philadelphia 34.8 6.6 25.4 10.5 6.1 7.7

Detroit 31.6 6.2 25.2 9.4 6.0 7.6

Boston 29.6 12.4 23.0 8.8 4.8 7.8

San Francisco 30.5 9.4 21.2 8.8 5.0 6.4

Houston 27.7 20.6 26.0 8.1 5.7 8.1

Miami 27.6 15.2 24.9 7.3 5.5 7.6

Washington, DC 28.3 13.4 20.7 8.5 4.8 6.4

Atlanta 24.3 13.6 17.9 7.1 3.7 5.1

Tampa 22.3 16.0 21.1 6.2 4.6 6.9

Phoenix 21.9 15.6 20.2 5.7 4.8 6.1

Orlando 20.1 12.6 18.0 5.4 3.9 5.6

Cleveland 17.9 12.1 16.6 5.1 3.7 4.9

Seattle 17.7 4.5 14.9 4.8 3.5 4.5

Minneapolis 17.4 10.2 13.6 5.2 3.2 4.0

Denver 15.3 9.3 14.1 4.2 3.2 4.6

Pittsburgh 14.0 2.6 13.7 4.4 3.5 4.5

Sacramento 13.7 7.0 11.4 3.6 2.9 3.2

San Diego 13.9 5.6 10.9 3.9 2.9 3.0

West Palm Beach 11.9 7.2 10.8 3.3 2.4 3.4

Raleigh 12.5 7.7 10.1 3.6 2.3 2.9

Charlotte 12.1 7.3 9.7 3.5 1.9 3.0

Week Ending

-30%

-22%

-21%

-12%

-27%

-20%

-22%

-30%

-6%

-10%

-27%

-26%

-5%

-8%

-11%

-7%

-16%

-21%

-8%

-2%

-17%

-22%

-9%

-19%

-20%

+66%

+35%

+76%

+70%

+52%

+53%

+95%

+54%

+69%

+67%

+60%

+62%

+83%

+54%

+73%

+57%

+54%

+48%

+74%

+52%

+32%

+23%

+73%

+53%

+88%

-17%

+4%

+60%

+41%


INSIGHT

MayPremium declines are now smaller than the

industry overall on a percentage basis, with

some southern markets flat or even growing

year-over-year.

Week Ending May 31Premium continued it bounce back faster than

industry overall led by strong week-over-week

growth from all major markets.

34

IMPACT: Regional Premium Retail Sales

KEY TAKEAWAY

Premium continued to bounce back in the week

ending May 31 led by strong growth from all

major premium markets.


National 154.9 68.3 130.6 46.8 29.9 43.5

Pre-Virus Forecast 154.9 140.3 157.5 46.8 35.6 46.8

New York 21.8 5.0 15.7 7.2 3.8 5.3

Los Angeles 17.6 6.5 14.4 4.7 3.4 4.3

Chicago 5.8 2.8 4.8 1.8 1.1 1.6

Dallas 5.1 3.9 5.2 1.5 1.2 1.9

Philadelphia 5.1 0.9 3.9 1.6 0.9 1.4

Detroit 2.8 0.6 2.2 0.9 0.5 0.7

Boston 3.8 1.5 3.0 1.1 0.6 1.2

San Francisco 6.3 1.7 4.6 1.9 1.0 1.5

Houston 4.5 3.6 4.4 1.5 1.0 1.3

Miami 7.1 3.8 6.9 2.0 1.6 2.1

Washington, DC 4.2 2.1 3.5 1.3 0.8 1.2

Atlanta 3.2 2.0 2.9 1.0 0.6 0.8

Tampa 2.8 2.1 3.1 0.8 0.7 1.1

Phoenix 2.2 1.6 2.4 0.6 0.5 0.8

Orlando 2.2 1.3 2.0 0.7 0.5 0.7

Cleveland 1.5 1.2 1.6 0.5 0.3 0.6

Seattle 2.0 0.6 1.7 0.6 0.4 0.6

Minneapolis 1.4 0.6 1.0 0.4 0.2 0.4

Denver 1.7 0.9 1.7 0.5 0.4 0.6

Pittsburgh 1.1 0.2 1.0 0.3 0.3 0.3

Sacramento 1.4 0.7 1.1 0.4 0.3 0.4

San Diego 2.2 0.8 1.6 0.6 0.4 0.5

West Palm Beach 3.0 1.8 2.9 0.9 0.6 1.0

Raleigh 1.1 0.6 1.2 0.4 0.3 0.4

Charlotte 1.3 0.8 1.3 0.5 0.2 0.5

Week Ending

-28%

-18%

-18%

+2%

-23%

-20%

-19%

-27%

-3%

-3%

-15%

-10%

+10%

+8%

-8%

+5%

-14%

-27%

+3%

-12%

-18%

-28%

-3%

+9%

+0%

+68%

+54%

+64%

+96%

+75%

+74%

+150%

+81%

+64%

+55%

+91%

+77%

+100%

+82%

+86%

+120%

+66%

+115%

+84%

+43%

+58%

+54%

+87%

+63%

+134%

-16%

+2%

+75%

+58%


Week Ending 3/8 3/15 3/22 3/29 4/5 4/12 4/19 4/26 5/3 5/10 5/17 5/24 6/1

Compact SUV 16% 16% 16% 14% 14% 13% 14% 15% 16% 17% 17% 17% 18%

Midsize SUV 16% 15% 16% 15% 16% 16% 16% 16% 16% 15% 16% 16% 16%

LD Pickup 11% 11% 15% 20% 20% 18% 16% 15% 15% 13% 13% 12% 12%

Compact Car 10% 10% 9% 8% 8% 8% 8% 8% 7% 8% 8% 8% 8%

Small SUV 9% 9% 9% 7% 7% 8% 8% 9% 8% 9% 9% 10% 10%

Midsize Car 8% 7% 7% 6% 6% 7% 6% 6% 6% 7% 6% 6% 6%

Midsize Pickup 4% 4% 4% 5% 5% 5% 5% 6% 6% 6% 6% 5% 5%

0%

5%

10%

15%

20%

25%

Midsize Pickup

35

IMPACT: Industry Segment Mix Normalizing

KEY TAKEAWAY

Industry segment mix is normalizing, leading to

normalization of other metrics, such as

manufacturer market share.

INSIGHT

Resilience of Large Pickup caused share to

nearly double in late March/early April.

Large Pickup sales remain strong, but sales of

other segments are recovering, causing industry

segment mix to approach normal levels.

Mix of Industry Retail Sales by Segment

Midsize SUV

Compact SUV

Large Pickup

Light Duty

Compact Car

Small SUV

Midsize Car


Week Ending 3/8 3/15 3/22 3/29 4/5 4/12 4/19 4/26 5/3 5/10 5/17 5/24 6/1

18-35 -2% -16% -33% -52% -49% -44% -37% -32% -22% -18% -17% -19% -6%

36-55 -2% -16% -37% -57% -52% -45% -42% -36% -27% -22% -24% -24% -13%

56+ 3% -12% -38% -66% -62% -58% -50% -45% -36% -28% -29% -28% -15%

-100%

-80%

-60%

-40%

-20%

0%

20%

36

IMPACT: Declines Most Severe For Buyers Over 55

KEY TAKEAWAY

Retail sales to buyers over 55 underperformed

the rest of the industry by 3ppts the week ending

June 1.

INSIGHT

Sales Decline by Buyer Age56+ accounted for 37% of new-vehicle sales in

2019 and was the only group that grew.

May• 18-35 years: -14% or 43,000 units

• 36-55 years: -20% or 107,000 units

• 56+ years: -24% or 117,000 units

Week Ending June 1• 18-35 years: -6% or 6,000 units

• 36-55 years: -13% or 21,000 units

• 56+ years: -15% or 23,000 units


18-35

36-55

56+


Week Ending 3/8 3/15 3/22 3/29 4/5 4/12 4/19 4/26 5/3 5/10 5/17 5/24 6/1

Over 720 FICO 0% -15% -39% -63% -58% -51% -45% -37% -27% -21% -23% -22% -8%

Under 720 FICO -1% -14% -32% -51% -49% -47% -41% -39% -32% -26% -26% -29% -20%

-100%

-80%

-60%

-40%

-20%

0%

20%

37

IMPACT: Retail Sales by Credit Score

KEY TAKEAWAY

For the week ending June 1, retail sales to

buyers with credit scores over 720

overperformed the rest of the industry by 4ppts.

Over 720 FICO

Under 720 FICO

INSIGHT

Credit Tier VariationBuyers with better credit began to outperform

buyers with worse credit in late April. 720+ FICO

buyers account for about 65% of new vehicle

sales.

May Sales Change• Over 720 FICO: -18% or 155,000 units

• Under 720 FICO: -25% or 111,000 units

Week Ending June 1 Sales Change• Over 720 FICO: -8% or 23,000 units

• Under 720 FICO: -20% of 27,000 units



Average Trade-In Equity and Trade-In Vehicle Age

38

IMPACT: Trade Equity and Trade-In Age Continue to Rebound INSIGHT

Trade-In AgeThe average age of all vehicles traded in

dropped by nearly a full year to the lowest level

since the recession by the end of March. Since

then, vehicle age has been rebounding towards

pre-virus levels.

Trade-In EquityThe decline in equity reflects higher loan

balances carried on vehicles traded in and lower

trade values on used vehicles.

KEY TAKEAWAY

Incentive programs are helping keep monthly

payments affordable despite buyers having less

equity on their trade-in.

Age of Vehicle

traded (in Years)

Trade-In Equity

6.2 6.1

5.6

5.3 5.3 5.4

5.7

6.0 6.1

6.2 6.2

6.3

6.4

$3.7k $3.7k

$2.9k

$1.9k

$2.1k$1.9k $1.9k

$2.5k

$3.1k

$2.7k$2.8k $2.8k

$3.2k

5.0

5.5

6.0

6.5

7.0

7.5

8.0

3/8 3/15 3/22 3/29 4/5 4/12 4/19 4/26 5/3 5/10 5/17 5/24 6/1


Week Ending 3/8 3/15 3/22 3/29 4/5 4/12 4/19 4/26 5/3 5/10 5/17 5/24 6/1

Incentives % 12.1% 12.4% 12.8% 11.9% 12.4% 12.8% 12.8% 12.9% 13.0% 13.2% 13.4% 13.9% 13.5%

MSRP

$7.2$7.4

$7.7

$7.1

$7.4$7.6 $7.7 $7.7

$7.8$7.9

$8.1$8.2

$8.0

$49.9 $50.0 $49.7

$51.6

$50.4

$51.3

$50.7 $50.8 $51.0

$50.5

$49.9

$48.2$48.9

39

IMPACT: Premium Transaction Prices & Incentive Spend

KEY TAKEAWAY

Premium nameplates followed the lead of

mainstream in offering enhanced supported

finance offers and are seeing average prices

starting to decline.

Net Transaction

Prices

Incentives per

Unit

Net Transaction Prices and Incentive Spending (000s)

INSIGHT

Net Transaction PricesPremium transaction prices grew to $51,600

during the week ending March 29 driven by

lower lease mix and a higher sales mix of Large

SUVs.

Prices declined sharply in week ending May 24

driven by segment mix and model mix within

segments but rebounded in the final week of

May.

Incentive SpendingIncentives dropped to $7,100 in the week ending

March 29 due to lower lease spending and mix.

Spending has increased since then as premium

nameplates enhanced their supported finance

offers to keep up with mainstream nameplates.

Supported finance mix remained elevated at

25% in the final week of May.


$4.8 $4.9

$5.6$5.9 $5.8 $5.7

$5.8 $5.9 $5.8$5.5 $5.5 $5.5 $5.5

$2.6 $2.6 $2.8$3.0 $3.1

$3.3 $3.3 $3.4 $3.5 $3.3 $3.4 $3.4 $3.5

3/8 3/15 3/22 3/29 4/5 4/12 4/19 4/26 5/3 5/10 5/17 5/24 6/1

Non-Premium Incentive Spending (000s)

40

IMPACT: Incentives Remain Elevated Across Non-Premium Brands INSIGHT

Detroit 3 Non-Premium spending was stable for

the past three weeks with no significant

escalation towards the end of May.

Spending for other non-premium OEMs remains

elevated from pre-virus levels, with the

Japanese OEMs driving the increase in May.Detroit 3

Non-Premium

Non-Detroit 3

Non-Premium

KEY TAKEAWAY

Incentive spending remains elevated relative to

pre-virus levels. Spending at the Detroit 3 OEMs

remained flat despite the Memorial Day weekend, while non-Detroit 3 OEMs enhanced.


8%

2%

5% 5%6%

5%

2%

18%

9%

6%

15%

5%

10%

14%13%

11%

7%

22%

16%

13%

National New York Los Angeles Chicago Dallas Philadelphia Detroit Phoenix Orlando Houston

2019 2020

41

IMPACT: % of Buyers Taking 84-Month Loans

KEY TAKEAWAY

Consumer response to 84-month term loans

remains strong, even in markets that are

typically lease heavy.

May Month-to-Date

INSIGHT

May month-to-date percentage of buyers taking

84-month loans was 15%, nearly double the

level in the same period last year.

84-month loan term mix is exceeding prior year

levels in the top six markets by 2019 retail salesvolume.

In Chicago, 84-month loan term mix is 14%,

triple the level in the same period last year.

Even New York, a typically lease heavy market,

has doubled 84-month loan penetration.


INSIGHT

Captive %Captive lenders captured 76.0% of loans and

leases in week ending June 1, up from the

previous week.

Captive mix increases despite a continued

reduction in supported 84-month loans from the

Detroit 3 along with a continued rebound in

leasing across a number of segments.

42

IMPACT: Captive Lenders Benefit From Strong APR Offers

KEY TAKEAWAY

Strong finance offers are supporting sales and

enabling captives to maintain a high share of

loans.

Captives

Banks

Credit Unions

Share of New Vehicle Loans and Leases


Week Ending 3/8 3/15 3/22 3/29 4/5 4/12 4/19 4/26 5/3 5/10 5/17 5/24 6/1

0-99% 38% 39% 34% 30% 30% 30% 32% 35% 37% 37% 37% 39% 41%

100-109% 17% 17% 17% 17% 18% 19% 19% 20% 20% 20% 20% 20% 20%

110-119% 18% 17% 19% 20% 20% 21% 21% 20% 20% 20% 20% 19% 19%

120%+ 27% 27% 30% 32% 31% 30% 28% 25% 23% 23% 23% 22% 20%

Average LTV 103% 103% 105% 108% 107% 107% 106% 104% 103% 103% 103% 102% 101%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

New Vehicle Loan-to-Value Distribution

43

IMPACT: New Vehicle Loan-To-Values Have Largely Normalized INSIGHT

The sudden acceleration of high loan-to-value

loans continues to decline.

In particular, the 120%+ bucket has decreased

to well below Jan/Feb 2020 levels.

Captives and credit unions have dramatically

reduced their 120%+ LTVs since mid-April.

Specialty sub-prime lenders have reduced LTVs

across the board.

The 20% rise in the 100%-109% LTV category

may be correlated to worsening trade-in values.

KEY TAKEAWAY

High LTV new vehicle loans have decreased and

average LTV has aligned with historical levels.

0-99%

100-109%

110-119%

120%+


Week Ending 3/8 3/15 3/22 3/29 4/5 4/12 4/19 4/26 5/3 5/10 5/17 5/24 6/1

740+ 4.16% 4.09% 3.97% 3.99% 3.91% 3.95% 3.95% 3.95% 3.95% 3.94% 3.98% 3.95% 3.90%

660-739 5.99% 5.87% 6.00% 5.89% 6.21% 5.95% 6.12% 5.96% 6.05% 6.08% 6.12% 5.89% 5.89%

620-659 9.20% 9.11% 9.02% 9.13% 9.18% 9.11% 9.10% 8.89% 8.87% 8.72% 8.68% 8.58% 8.81%

0-619 14.12% 14.18% 13.98% 13.74% 13.79% 13.68% 13.62% 13.38% 13.07% 13.11% 13.10% 13.06% 13.34%

Average APR 7.35% 7.34% 7.48% 7.66% 7.57% 7.65% 7.67% 7.29% 7.14% 6.98% 6.97% 6.72% 6.72%

0%

2%

4%

6%

8%

10%

12%

14%

16%

740+

660-739

620-659

0-619

Non-Captive New Vehicle Loans: Average APR by Credit Score (64-75 Month Term Loans)

44

IMPACT: Attractive New Car Loan Pricing Continues INSIGHT

New vehicle standard rates (non-subvented) fell

in the past three weeks.

Rates to sub-prime buyers remained 80 bps

below pre-virus levels in week ending June 1.

However, there has been minimal disruption to

consumer pricing due to the crisis.

KEY TAKEAWAY

Lenders are offering attractive loan rates to new

vehicle buyers.


Week Ending 3/8 3/15 3/22 3/29 4/5 4/12 4/19 4/26 5/3 5/10 5/17 5/24 6/1

<60 7% 7% 6% 4% 4% 4% 4% 4% 4% 4% 4% 4% 5%

60-71 23% 23% 18% 15% 15% 16% 17% 20% 22% 22% 23% 24% 27%

72-83 55% 55% 51% 48% 49% 50% 51% 48% 47% 50% 51% 50% 49%

84+ 15% 15% 25% 33% 32% 30% 29% 27% 26% 23% 22% 21% 19%

Average Term 70 70 72 74 74 73 73 72 72 71 71 71 70

0%

10%

20%

30%

40%

50%

60%

New Vehicle Loans: % by Loan Term

45

IMPACT: New Car Loan Terms Normalized INSIGHT

After peaking in late March/early April due to the

provision of subvented 84 month financing

deals, average loan terms have receded to pre-

virus levels.

Term mix shifted downwards in recent weeks

due to the combination of many manufacturers

launching 60 and 72 month subvented APR

deals, coupled with pickup share of sales falling.

KEY TAKEAWAY

Average loan terms are back to pre-virus levels

as industry sales and incentive mix starts to

normalize.

<60

60-71

72-83

84+


Week Ending 3/8 3/15 3/22 3/29 4/5 4/12 4/19 4/26 5/3 5/10 5/17 5/24 6/1

740+ 33.6 33.8 36.5 38.7 39.2 38.9 38.1 37.4 37.0 36.9 36.5 35.9 35.8

660-739 36.7 37.4 39.2 41.1 41.6 41.4 40.4 39.9 39.4 39.3 39.2 38.8 38.2

620-659 35.0 35.8 37.6 39.3 39.0 39.0 38.4 37.6 37.1 37.2 37.2 36.9 36.4

0-619 30.0 30.2 31.9 33.2 33.8 33.7 32.6 32.5 32.8 32.6 32.9 32.5 32.3

Average 34.1 34.4 36.8 38.9 39.3 39.1 38.2 37.7 37.3 37.2 36.9 36.4 36.2

25

27

29

31

33

35

37

39

41

43

45

New Vehicle Loans: Amount Financed by FICO ($000s)

46

IMPACT: New Vehicle Loan Amounts Remain Elevated INSIGHT

Across the consumer credit spectrum, the

average loan amount on new vehicles remains

elevated, but has declined from the early April

peak.

The elevated loan amounts reflect the purchase

of higher MSRP vehicles and lower down

payments.

The declines reflect the industry shifting to a

more typical sales and incentive mix.

KEY TAKEAWAY

New Car Loan amounts are trending down to

more typical levels but remain elevated among

buyers with FICO ≥660.

740+

660-739

620-659

0-619


INSIGHT

MayWhile a majority of markets have declined less

than 10%, there remain a number of harder hit

markets in the Northeast and on the West Coast.

Week Ending May 31All markets posted gains week-over-week in line

with expectations, but only 5 out of the top 25

showed stronger than expected growth.

47

IMPACT: Regional Used Retail Sales

KEY TAKEAWAY

While used sales are nearly flat year-over-year,

significant declines persist in some of the largest

northeast and west coast markets.


National 981.3 583.3 1,015.8 235.8 242.2 250.8

Pre-Virus Forecast 981.3 942.4 1,065.3 235.8 243.2 257.6

New York 42.0 8.5 26.4 10.9 6.9 7.4

Los Angeles 39.0 18.6 37.0 8.9 9.1 8.9

Chicago 34.3 18.9 31.7 8.1 7.7 7.7

Dallas 35.0 25.1 38.7 8.9 8.8 9.8

Philadelphia 24.0 5.2 18.6 5.8 4.9 4.9

Detroit 11.9 2.6 10.1 2.6 2.5 2.6

Boston 20.4 8.5 16.6 4.8 4.2 4.3

San Francisco 19.3 6.3 13.1 4.7 3.3 3.2

Houston 21.6 14.7 22.5 5.7 5.1 5.8

Miami 14.3 7.6 14.2 3.5 3.3 3.6

Washington, DC 25.4 14.5 24.2 6.4 5.6 5.7

Atlanta 22.7 14.3 22.0 5.6 4.9 5.1

Tampa 16.5 11.6 18.2 4.0 4.3 4.5

Phoenix 23.1 18.8 28.2 5.5 6.9 7.0

Orlando 14.5 9.9 16.3 3.5 3.7 3.9

Cleveland 21.3 13.9 23.0 5.2 5.4 5.6

Seattle 11.6 3.1 10.5 2.7 2.6 2.6

Minneapolis 26.4 17.8 28.3 6.2 6.7 6.6

Denver 15.1 7.8 17.5 3.8 4.3 4.3

Pittsburgh 10.4 1.8 11.9 2.6 3.4 3.2

Sacramento 6.7 4.3 7.7 1.5 1.9 1.8

San Diego 5.5 3.2 6.1 1.2 1.6 1.5

West Palm Beach 8.9 5.4 9.2 2.1 2.2 2.2

Raleigh 10.0 7.6 11.4 2.5 2.7 2.6

Charlotte 14.6 8.4 12.7 3.5 2.9 3.2

Week Ending

-37%

-5%

-8%

+11%

-22%

-15%

-19%

-32%

+4%

-1%

-5%

-3%

+10%

+22%

+12%

+8%

-10%

+7%

+16%

+15%

+14%

+13%

+4%

+14%

-13%

+29%

+16%

+20%

+34%

+19%

+25%

+24%

+14%

+36%

+31%

+23%

+24%

+25%

+22%

+25%

+24%

+20%

+17%

+22%

+13%

+15%

+13%

+23%

+16%

+34%

+4%

+9%

+24%

+27%


IMPACT: Industry Health Metrics Near Prior Year Levels INSIGHT

Even with new vehicle retail sales posting a 23%

drop year-over-year for the last week of May

2020, industry health metrics are not far off from

the same period in 2019.

With manufacturers rolling back aggressive APR

offers from May to June type of sale mix and

loan terms are expected to continue to trend

toward historical levels in June.

KEY TAKEAWAY

With industry health metrics normalizing,

manufacturers will need to revert back to tactical

incentives, balancing consumer demand with

current inventory and productions levels.

New Vehicle Health Metrics

Last Week

May'19

Last Week

May'20

% of Sales - Lease 31% 25% ↓ -6ppts

% of Sales - Cash 14% 10% ↓ -4ppts

% of Sales - APR 55% 65% ↑ +10ppts

% of Sales <60 mo 4% 3% ↓ -1ppt

% of Sales 60-71 mo 13% 17% ↑ +4ppts

% of Sales 72-83 mo 30% 32% ↑ +2ppts

% of Sales 84+ mo 7% 12% ↑ +5ppts

Average Loan Term 57 61 ↑ +4mo

Loan to Value 101% 101% – –

Average Credit Score 756 761 ↑ +5

% of Sales 0-619 7% 6% ↓ -1ppt

% of Sales 620-659 7% 7% – –

% of Sales 660-739 24% 24% – –

% of Sales 740+ 61% 63% ↑ +2ppts

Average Buyer Age 49 49 – –

% of Sales 18-35 23% 24% ↑ +1ppt

% of Sales 36-55 41% 40% ↓ -1ppt

% of Sales 56+ 37% 36% ↓ -1ppt

Trade-In Equity $4.0k $3.2k ↓ -$0.8k

% Negative Equity 34% 35% ↑ +1ppt

May'20 o/u

May'19

president, data & j.d. power auto analytics and chief

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