Minnesota New Vehicle Market Posts Big Gain So Far in 2012

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1 FORECAST Minnesota New Vehicle Market Posts Big Gain So Far in 2012 Delayed title processing by the state in the summer of 2011 contributed to the big percentage gain The Minnesota new retail light vehicle market has had a very good year so far in 2012, with registrations increasing a reported 43.5% versus a year earlier. Part of the substantial increase is due to the slowdown in title processing by the state that occurred in the summer of This gave a boost to the year-over-year percentage gain this year. There is very little chance that the market will sustain this rate of growth in the Fourth Quarter. But even after accounting for this impact, the market is clearly recovering from the 2009 sales trough (see graph below). What s lies ahead for 2013? Another increase is likely, but at this point, it looks like the rate of increase is likely to ease. Auto Outlook is currently projecting an 8% improvement for 2013, below the 21% increase expected for this year. Why do we think the pace of the recovery will ease next year? Here are the three primary reasons. First, economic growth is expected to remain sluggish, as likely fiscal tightening by the Federal government will limit growth, and the European financial crisis is likely to put a damper on the global economy. Second, the unemployment rate is expected to remain relatively high, with slim gains in employment. And third, although households have made headway in reducing debt, there is still a lot of work to do in curing ailing balance sheets, which are still on the mend following the financial crisis. At this point, it seems highly unlikely that these events will derail the new vehicle market recovery. Indeed, our basic outlook has remained intact since the recession hit in 2008 and 2009: the market will remain on its long term improvement path, with sales having a good chance to hit record levels before the end of the decade. Annual Trend in Minnesota New Vehicle Market Market Review New light vehicle registrations 250, , , ,000 50, , , , , , , ,000 YTD '11 YTD '12 % ch. thru July thru July '11 to '12 TOTAL 86, , % Car 37,359 52, % Light Truck 49,376 71, % Detroit Three 45,352 66, % European 5,537 9, % Japanese 28,946 38, % Korean 6,900 10, % Forecast Forecast Years

2 Brand Registrations Report Minnesota New Retail Car and Light Truck Registrations Most recent three months (May thru July) Year To Date thru July Registrations Market Share (%) Registrations Market Share (%) % change Change YTD 2011 YTD 2012 % change YTD 2011 YTD 2012 Change TOTAL 30,832 63, , , Cars 14,618 28, ,359 52, Light Trucks 16,214 34, ,376 71, Domestic Brands 15,567 32, ,352 66, European Brands 2,073 4, ,537 9, Japanese Brands 10,387 20, ,946 38, Korean Brands 2,805 6, ,900 10, Acura Audi BMW ,114 1, Buick 698 1, ,001 2, Cadillac Chevrolet 5,220 10, ,842 20, Chrysler 624 1, ,841 3, Dodge 738 1, ,150 3, Fiat Ford 5,481 10, ,505 22, GMC 1,013 2, ,662 4, Honda 3,053 4, ,077 9, Hyundai 1,321 2, ,411 5, Infiniti Jaguar Jeep 734 2, ,857 4, Kia 1,484 3, ,489 5, Land Rover Lexus ,114 1, Lincoln Mazda 611 1, ,586 2, Mercedes , MINI Mitsubishi Nissan 1,514 2, ,304 5, Porsche Ram 614 1, ,875 2, smart Subaru 943 2, ,781 4, Suzuki Toyota/Scion 3,427 7, ,584 13, Volkswagen 836 1, ,128 3, Volvo Other Source: AutoCount data from Experian Automotive

3 MARKET TRACKER: BRAND MARKET SHARE Japanese Brands Lose Share in First Half of 12; Rebound Likely in Second Half Change in State Market Share: YTD 2012 thru July vs. YTD 2011 European Detroit Three European brand share has increased 0.9 points so far this year Korean 0.8 Japanese Change in market share MARKET TRACKER: HYBRID AND ELECTRIC VEHICLES Hybrid & Electric Share Increases Quarterly Alternative Powertrain Market Share (includes hybrid and electric vehicles) Trendline Alternative powertrain market share has trended lower during the past three years, but is up so far this year. 0.0 Q4 '09 Q1 '10 Q2 '10 Q3 '10 Q4 '10 Q1 '11 Q2 '11 Q3 '11 Q4 '11 Q1 '12 Q2 '12 Q3 '12 Note: Third Quarter 2012 includes July figures only.

4 BRAND SCOREBOARD - PART ONE Jeep Posts Largest Gain So Far This Year vs Toyota new retail registrations improve 78.9% from First to Second Quarter of this year The graph below provides a quick snapshot of brand sales performance in the state market. For the top 20 selling brands, it shows the percent change in new retail light vehicle registrations during the first seven months of this year versus the same period a year earlier, and the change from the First Quarter of 2012 to the Second Quarter. Brands are shown from top to bottom based on the year-to-date percent change. Percent Change in State New Retail Light Vehicle Registrations (Top 20 Selling Brands) YTD 2012 thru July vs. YTD 2011 and Second Quarter 2012 vs. First Quarter 2012 Jeep 42.6% 117.8% Mercedes Chrysler 12.0% 82.9% 80.3% 74.1% Volkswagen 36.6% 75.8% Kia 68.3% 87.4% Dodge Ford Subaru 36.5% 65.2% 63.8% 56.9% 56.0% Jeep had the largest gain during the first seven months of Improving supplies helped Mazda post an 88.7% gain from the First to the Second Quarter of this year. 76.8% Ram 40.7% 54.2% Hyundai BMW 41.8% 48.5% 69.7% 72.0% Audi 11.0% 40.4% Toyota/Scion 40.2% 78.9% Mazda 38.4% 88.7% Nissan GMC Chevrolet 37.1% 39.6% 31.3% 31.0% 53.1% 58.1% YTD '12 vs. YTD '11 2Q '12 vs. 1Q '12 Buick 19.7% 69.1% Honda 16.7% 39.2% Lexus -2.5% 39.6% -20.0% 0.0% 20.0% 40.0% 60.0% 80.0% 100.0% 120.0% 140.0%

5 BRAND SCOREBOARD - PART TWO Ford is State Car Market Share Leader Ford also leads for light trucks; Jeep market share moves higher The two graphs below show market share for the top ten car and light truck brands for the first seven months of 2011 and Brands are shown from left to right on each graph based on first half 2012 market share. Source: AutoCount data from Experian Automotive. Brand Market Share in State Car Market - YTD 2011 and YTD 2012, thru July Top Ten Brands only 16.0% 14.0% 12.0% 10.0% Ford is the best selling brand in the Minnesota car market. Chrysler, Kia, and VW have posted big gains this year. YTD '11 YTD '12 8.0% 6.0% 4.0% 2.0% 0.0% Ford Toyota/Scion Chevrolet Honda Hyundai Kia Subaru Volkswagen Nissan Chrysler YTD ' % 13.1% 14.1% 11.4% 6.9% 4.9% 5.2% 4.8% 6.0% 1.1% YTD ' % 13.2% 13.0% 8.3% 7.4% 6.5% 6.3% 6.2% 5.6% 2.9% 25.0% Brand Market Share in State Light Truck Market - YTD 2011 and YTD 2012, thru July Top Ten Brands only 20.0% 15.0% Ford is the Minnesota light truck leader, while Ford, Jeep, and Dodge market shares have moved higher in YTD '11 YTD ' % 5.0% 0.0% Ford Chevrolet Toyota/Scion Honda GMC Jeep Nissan Ram Kia Dodge YTD ' % 21.5% 9.6% 7.8% 7.4% 3.8% 4.2% 3.8% 3.4% 2.9% YTD ' % 19.4% 9.1% 7.0% 6.7% 5.7% 4.1% 4.0% 3.4% 3.4%

6 BRAND SCOREBOARD - PART THREE Chevrolet and Ford Are Relatively Strong Performers in State GMC, Chrysler, and Subaru also rank high The graph below provides an indicator of brands that are popular in Minnesota (relative to the National standard), and those that are not. Here s how it works: For the top 30 selling brands in the state, each brand s share of the U.S. market is multiplied by retail registrations in the state during the first seven months of This yields a target for the state market. Target registrations are subtracted from actual registrations to derive the measurement of sales performance. Brands at the top of the graph (i.e., Chevrolet, Ford, GMC, Chrysler, and Subaru) are relatively strong sellers in the state, with actual registrations exceeding the calculated target by a large margin. For instance, Chevrolet registrations exceeded the target by 6,902 units. Source for registration data: AutoCount data from Experian Automotive. Minnesota Retail Market Performance based on registrations for YTD 2012 thru July Actual registrations minus target (state industry registrations times U.S. market share) Chevrolet Ford GMC Chrysler Subaru Buick Ram Kia Dodge Volkswagen Volvo Lincoln Suzuki Mazda Mitsubishi Land Rover Fiat MINI Jeep Audi Infiniti Cadillac Acura BMW Lexus Mercedes Hyundai Nissan Toyota/Scion Honda ,000-4,000-2, ,000 4,000 6,000 8,000 Actual registrations minus target (Minnesota industry registrations times U.S. market share)

7 MODEL SCOREBOARD Ford Fusion is on Top of Standard Mid Size Car Segment Grand Cherokee is best-selling Mid Size SUV The table below shows the top five selling models during the first seven months of this year in 16 primary market segments. In addition to unit registrations, it also shows each model s market share in its respective segment. Ford Fusion retained the top spot as the best-selling Standard Mid Size Car, with a 15.5% share. Chevrolet Cruze was first among Sub Compact Cars, followed by Ford Focus and Honda Civic. BMW 3-Series remained at the top, as the perennial best seller among Near Luxury Cars. Chrysler Town and Country and Chevrolet Equinox were the best selling Mini Van and Compact SUV, respectively. Ford Explorer was first among Full Size SUVs (including Crossovers). Lexus RX was the best-selling Luxury SUV. Top Selling Models in Each Segment - Minnesota New Retail Registrations, YTD 2012 thru July and Market Share of Segment Cars Entry Sub Compact Sporty Compact Standard Mid Size Model Regs. Share Model Regs. Share Model Regs. Share Model Regs. Share Kia Soul Chevrolet Cruze Chevrolet Camaro Ford Fusion Chevrolet Sonic Ford Focus Ford Mustang Toyota Camry Ford Fiesta Honda Civic Hyundai Veloster Subaru Legacy Honda Fit Toyota Prius Dodge Challenger Chevrolet Malibu Kia Rio Toyota Corolla/Matrix Scion tc Honda Accord Large Mid Size Near Luxury Luxury Sports Car Model Regs. Share Model Regs. Share Model Regs. Share Model Regs. Share Chevrolet Impala BMW 3-Series BMW 5-Series Chevrolet Corvette Buick LaCrosse Infiniti G Mercedes E-Class Porsche Ford Taurus Mercedes C-Class Audi A Mazda MX Chrysler Audi A Audi A Audi TT Nissan Maxima Lincoln MKZ Lexus GS Nissan 370Z Light Trucks Compact Pickup Full Size Pick Up Mini Van Full Size Van Model Regs. Share Model Regs. Share Model Regs. Share Model Regs. Share Ford Ranger Ford F-Series Chrysler T & C Ford Transit Connect Toyota Tacoma Chevrolet Silverado Dodge Caravan Ford E-Series Chevrolet Colorado Dodge Ram Toyota Sienna Chevrolet Express Nissan Frontier GMC Sierra Honda Odyssey Nissan NV Honda Ridgeline Toyota Tundra Kia Sedona Dodge Sprinter % Compact SUV Mid Size SUV/Crossover SUV Full Size SUV Mid Size & Full Size Luxury SUV Model Regs. Share Model Regs. Share Model Regs. Share Model Regs. Share Chevrolet Equinox Jeep Grand Cherokee Ford Explorer Lexus RX Ford Escape Ford Edge Chevrolet Traverse Cadillac SRX Honda CRV Kia Sorento GMC Acadia Acura MDX Toyota RAV Toyota Highlander Buick Enclave Lincoln MKX Nissan Rogue Honda Pilot Chevrolet Suburban BMW X

8 MINNESOTA MARKET VERSUS U.S. Increase in State Market Easily Surpasses U.S. Light Truck market share in state nine points higher than in Nation The accompanying table provides a comparison of results in both the Minnesota and U.S. markets. New vehicle registrations in the state improved a reported 43.5% during the first seven months of 2012 versus a year earlier, while the U.S. market increased 11.2%. (Note: delayed title processing in the summer of 2011 contributed to the big percentage gain in Minnesota.) Car market share in Minnesota was nine share points lower than in the Nation. Detroit Three market share in Minnesota was 53.1%, up from 2011, and well above the 40.2% share in the Nation. Source: AutoCount data from Experian Automotive. Market Growth % change in registrations YTD 2012 thru July vs. YTD 2011 Car Market Share Car share of industry retail light vehicle registrations - YTD 2012 thru July Detroit Three Brand Market Share Domestic brand share of industry retail light vehicle registrations - YTD 2012 thru July Minnesota Market U.S. Market 43.5% 11.2% 42.4% 51.4% 53.1% 40.2% Top Selling Retail Brands Top selling light vehicle brands and market share - YTD 2012 thru July First Ford 18.3% Toyota/Scion 13.4% Second Chevrolet 16.7% Ford 13.3% Third Toyota/Scion 10.8% Chevrolet 11.1% Fourth Honda 7.6% Honda 10.5% Fifth Kia 4.7% Nissan 7.0% Sixth Nissan 4.7% Hyundai 5.4% Seventh Hyundai 4.1% Kia 4.4% Eighth GMC 3.9% Jeep 3.5% Ninth Subaru 3.5% Volkswagen 3.0% Tenth Jeep 3.2% GMC 2.9%

9 RECENT RESULTS IN MINNESOTA USED VEHICLE MARKET Minnesota Used Vehicle Market Falls 13.6% So Far This Year Tight supplies continue to put a damper on sales Below is a list of key trends in the state used vehicle market: Retail used registrations declined 13.6% during the first seven months of this year versus 2011, much weaker than the 43.5% increase for new vehicles. As shown on the graph below, the Minnesota new vehicle market has posted larger percentage gains during the past couple of years. There are two primary reasons for this: First, the new vehicle market fell precipitously in 2008 and 2009, and consequently the bounceback has been sharper. And second, tighter supplies of late model vehicles have restricted used vehicle sales. MINNESOTA RETAIL USED LIGHT VEHICLE REGISTRATIONS YTD THRU JULY Registrations % Change Market Share '11 TO ' TOTAL 156, , % Cars 84,861 69, % 54.1% 51.1% Light Trucks 72,075 66, % 45.9% 48.9% Big Three 114,364 97, % 72.9% 72.2% Japanese 30,898 27, % 19.7% 20.0% European 8,417 7, % 5.4% 5.5% Korean 3,257 3, % 2.1% 2.3% Soft new vehicle sales in 2009 were responsible for the big market share decline for three year old used vehicle registrations so far this year. Used light truck registrations fell 8%, while cars were off 18.2%. Korean brand registrations declined a relatively slim 5.3%. Chevrolet Silverado was the best-selling model in the state for three and four year old vehicles. 50.0% 40.0% 30.0% 20.0% 10.0% 0.0% -10.0% -20.0% -30.0% % Change in Retail New and Used Vehicle Markets Used New -13.6% 43.5% Jan thru July '12 vs. Jan thru July '11-1.0% 2011 vs % MINNESOTA RETAIL USED VEHICLE REGISTRATIONS-THREE MONTH MOVING AVERAGE (AUGUST 10 THRU JULY 12) Trendline

10 USED VEHICLE SALES BY AGE 3 Year Old Vehicle Sales Decline Sharply Two year old market share moves higher As highlighted on the graph below, the sweet spot in the Minnesota used vehicle market is shifting, due to changes in wholesale availability of pre-owned vehicles. Depressed new vehicle sales in 2009 have made three year old used vehicles a scarce commodity, with market share declining 8.7 points. Two year old market share increased 7.6 points during the first seven months of this year versus a year earlier. Change in Market Share by Vehicle Age (vehicles six years old or newer) YTD 2012 thru July vs. YTD Change in market share years old 5 years old 4 years old 3 years old 2 years old or newer

11 BRAND MARKET SHARE BY VEHICLE AGE Chevrolet is the Top Selling Brand in State Used Vehicle Market Honda share is higher for three and four year old vehicles The two graphs below show brand market share leaders for vehicles two years old or newer, and for 3 and 4 year old vehicles. Chevrolet, Ford, and Toyota/Scion were ranked first, second, and third in both age categories. Brand Market Share - Vehicle 2 years old or newer YTD 2012 thru July Brand Market Share - 3 and 4 Year Old Vehicles YTD 2012 thru July Chevrolet Ford Toyota/Scion Dodge Honda Chrysler Hyundai Nissan GMC Kia Buick Jeep Volkswagen Mazda Subaru 0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0% Chevrolet Ford Toyota/Scion Honda Dodge Nissan GMC Pontiac Volkswagen Chrysler Saturn Mazda Buick BMW Subaru 0.0% 5.0% 10.0% 15.0% 20.0%

12 TOP SELLING MODELS Impala & Malibu Rank First and Second in 2 Year Old or Newer Market Silverado was leader among two year old vehicles The graphs below show top selling models in two age categories: vehicles two years old or newer, and three and four year old vehicles. Source: AutoCount data from Experian Automotive. Top 25 Selling Models (Two years old or newer) Top 25 Selling Models (3 and 4 Year Old Vehicles) Used retail registrations, YTD 2012 thru July Used retail registrations, YTD 2012 thru July Chevrolet Impala 2834 Chevrolet Silverado 1717 Chevrolet Malibu 1354 Chevrolet Impala 1673 Ford Fusion 1136 Ford F-Series 1079 Toyota Camry 1097 Toyota Camry 985 Chrysler T & C 1035 Honda Accord 948 Chevrolet Traverse 1018 Ford Escape 798 Ford F-Series 959 Honda Civic 770 Chevrolet Silverado 864 Chevrolet Malibu 706 Dodge Caravan 829 Nissan Altima 699 Toyota Corolla 759 Ford Fusion 695 Ford Focus 749 Chrysler T & C 673 Ford Escape 748 Pontiac G6 637 Chevrolet Equinox 694 Ford Edge 597 Chevrolet Cruze 624 Toyota Corolla 587 Chevrolet HHR 595 Dodge Caravan 574 Ford Edge 533 GMC Sierra 545 Hyundai Elantra 483 Honda Crv 541 Hyundai Sonata 481 Volkswagen Jetta 527 Nissan Altima 453 Ford Focus 526 Jeep Grand Cherokee 425 Dodge Ram 437 Chevrolet Cobalt 404 GMC Acadia 436 Chevrolet Tahoe 394 Saturn VUE 428 Buick Enclave 384 Chevrolet Cobalt 413 Kia Sorento 383 Honda Odyssey 406 Dodge Avenger 375 Toyota Rav