Drive Market Share Gains - Automotive Industry Insights: Q2, 2010

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Drive Market Share Gains - Automotive Industry Insights: Q2, 2010 Jeffrey Anderson, Director of Consulting & Analytics 2010 Experian Information Solutions, Inc. All rights reserved.

1 Drive Market Share Gains - Automotive Industry Insights: Q2, 2010 Jeffrey Anderson, Director of Consulting & Analytics 2010 Experian Information Solutions, Inc. All rights reserved. Experian and the marks used herein are service marks or registered trademarks of Experian Information Solutions, Inc. Other product and company names mentioned herein may be 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 Information Solutions, Inc.

2 Presentation Overview Second Quarter 2010 Automotive Market Overview Vehicles in Operation (VIO) Vehicle Registrations New and Used New Vehicle Market Share Purchase Loyalty Corporate and Brand Other Market Impacts Hybrid Migration New to Used Vehicle Migration Repurchase Frequency Length of Ownership 2010 Experian Information Solutions, Inc. All rights reserved. 2

Understanding the Automotive Customer Leveraging Experian s best in class data assets Integrated Information Assets Consumer Marketing Databases Credit Databases National

record Attitudinal segments and touch-points 3,200 public and proprietary sources 110 million catalog buyers 148 million magazine subscribers Consumer 2 million credit

3 second response rate 220 million credit active consumers 50 million public records Business 22 million businesses 625 million+ vehicles in U.S. (all 50 states & Wash. D.C.

million Internet users interacting with one million Websites across 160+ industries Average of 60 billion emails sent on behalf of clients per year 50,000 + adults surveyed

psychographic measures Easily extrapolated to any target file Approximately 600,000 known fraud records 186+ million cross-industry credit applications 215+ million consumer

3 Understanding the Automotive Customer Leveraging Experian s best in class data assets Integrated Information Assets Consumer Marketing Databases Credit Databases National Vehicle Database Online Activity Databases Simmons National Consumer Study National Fraud Database 235 million consumers, 113 million households 1,500+ data attributes per record Attitudinal segments and touch-points 3,200 public and proprietary sources 110 million catalog buyers 148 million magazine subscribers Consumer 2 million credit inquiries daily 1.3 billion transaction updates/month 99.9% system availability 1.3 second response rate 220 million credit active consumers 50 million public records Business 22 million businesses 625 million+ vehicles in U.S. (all 50 states & Wash. D.C.) and Canada Includes title, registration, mileage readings, key vehicle events 6B+ vehicle history records, including 270M title brands and 92M accident related events 25 million Internet users interacting with one million Websites across 160+ industries Average of 60 billion s sent on behalf of clients per year 50,000 + adults surveyed annually 8,000+ brands in 450+ product categories Measures television viewing, newspaper and magazine readership, internet usage, radio listening plus mobile 700+ psychographic measures Easily extrapolated to any target file Approximately 600,000 known fraud records 186+ million cross-industry credit applications 215+ million consumer 200 +demographic and credit records 2010 Experian Information Solutions, Inc. All rights reserved. 3 Experian has the most well-regarded compiled consumer file on the market today The Forrester Wave : Database Marketing Service Providers, Q1 2006, Forrester Research Inc. January 10, 2006

5 AutoCount Vehicles in Operation (VIO) Experian Automotive s AutoCount VIO is a compilation of all new and used vehicles registered on the road in the U.S. Quick Facts There are 239,800,726 light duty vehicles on the road Up over 450,000 units from last quarter (+0.19%) But down when compared to Q (240,264,795) Ford is the most prevalent make, followed by Chevrolet and Toyota Trucks continue to retain top place versus cars (50.1% vs. 49.9%) Average age of all cars and light trucks in operation is 10.3 years Up from 10.0 years in Q Experian Information Solutions, Inc. All rights reserved. 5

6 Current VIO U.S. Summary by Model Year as of June 30, 2010 (U.S. light duty vehicles only) 81 percent of vehicles are 15 years old or less 81% 90 million : aftermarket sweet spot 2010 Experian Information Solutions, Inc. All rights reserved. 6

Vehicle Scrappage Annual scrappage rate is 5.

2 million vehicles have been taken off the road in the last 12

registrations in that time period. as of June 30, 2010 (U.S.

7 Vehicle Scrappage Annual scrappage rate is 5.2 percent for cars, 4.2 percent for light trucks More than 11.2 million vehicles have been taken off the road in the last 12 months More than 4 percent higher than new light-vehicle registrations in that time period. as of June 30, 2010 (U.S. light duty vehicles only) 2010 Experian Information Solutions, Inc. All rights reserved. 7

Full-Size Pickup Share by State Percentage of Vehicles in Operation 2.3% 33.1% The plain states have highest percent of pickups: One in three in Wyoming Lowest share is on east coast: just 2.

8 Full-Size Pickup Share by State Percentage of Vehicles in Operation 2.3% 33.1% The plain states have highest percent of pickups: One in three in Wyoming Lowest share is on east coast: just 2.3 percent of D.C. vehicles, less than 7 percent in New Jersey States with highest volumes of vehicles: California = 11 percent Texas = 22 percent as of June 30, 2010 (U.S. light duty vehicles only) 2010 Experian Information Solutions, Inc. All rights reserved. 8

Current VIO Trends Estimated Vehicles In Warranty Q2 2010 Vehicles in Operation (VIO): An estimated 85.6% of all light vehicles do not have Manufacturer warranties.

9 Current VIO Trends Estimated Vehicles In Warranty Q Vehicles in Operation (VIO): An estimated 85.6% of all light vehicles do not have Manufacturer warranties. Percent Covered by OEM Warranty Vehicles in Operation as of June 30, 2010 (U.S. light duty vehicles only) 2010 Experian Information Solutions, Inc. All rights reserved. 9

2x in Q1 2009 New Vehicle Registrations 2008 2009 2010 Q2 2010 vs Q2 2009, new vehicle registrations increased by

11 U.S. Automotive Market Overview Total Vehicle Registrations by Quarter Used registrations are increasing in proportion to new registrations: 2.5x new in 2007, peaking at 4.2x in Q New Vehicle Registrations Q vs Q2 2009, new vehicle registrations increased by nearly 350,000 units (13.5 percent ) Very strong when compared to drops of more than 1 million units in 2009 qtrs 2010 Experian Information Solutions, Inc. All rights reserved

U.S. Market New Vehicle Registrations New Vehicle Registrations 2008

prior quarters, Q1 and Q2 2010 clearly turned the corner on market

12 U.S. Market New Vehicle Registrations New Vehicle Registrations Q3 and Q4 narrowing gap compared to prior quarters, Q1 and Q clearly turned the corner on market improvement 2010 Experian Information Solutions, Inc. All rights reserved. 12

U.S. Market Used Vehicle Registrations Used Vehicle Registrations 2008 2009 2008 2009 2009 2010 2009 2010 Used vehicle registrations have dropped

13 U.S. Market Used Vehicle Registrations Used Vehicle Registrations Used vehicle registrations have dropped slightly compared to Q2 2009, as last four quarters have been fairly consistent over prior year 2010 Experian Information Solutions, Inc. All rights reserved. 13

New Vehicle Market Overview New Vehicle Registrations Q2 2010 vs.

4 percent) Nissan had the highest percentage point gain, up 22.1 percent Chrysler and Hyundai were up 21.5 and 18.

14 New Vehicle Market Overview New Vehicle Registrations Q vs. Q Ford had highest unit gain versus Q2 2009, up more 70,000 units (17.4 percent) Nissan had the highest percentage point gain, up 22.1 percent Chrysler and Hyundai were up 21.5 and 18.5 percent respectively GM was up more than 60,000 units, netting a 11.8 percent increase Toyota and Honda were up 6.9 and 9.7 percent respectively Corporation 2010 Experian Information Solutions, Inc. All rights reserved. 14

15 Segment Registration Trends Q vs. Q Full Size Pickup segment had greatest unit increase in Q when compared to Q New Registrations Entry Level CUV, Small and Mid- Range cars also had strong increases Small Car Budget had largest segment drop, followed by Hybrid Car segment SUV Upper Mid- Range Alt Power Hybrid Truck Sport Car - Premium Alt Power Hybrid Car Small Car - Budget Full Size Pickup CUV Entry Level Small Car Economy Mid Range Car - Lower Mid Range Car - Standard 2010 Experian Information Solutions, Inc. All rights reserved. 15

Market Changers Ranked by Unit Change New

down a combined 8,200+ units 2010 Experian

16 Market Changers Ranked by Unit Change New Registrations Chevrolet Malibu and Equinox up a combined 39,000+ units Hyundai Accent down 12,540 units Honda Odyssey and Fit down a combined 8,200+ units 2010 Experian Information Solutions, Inc. All rights reserved. 16

more than 44,000 additional sales for 2 nd quarter New Vehicle

18 NVE (New Vehicle Entries) Q2 Performance While a CUV is at top of list, small sedans and coupes having impact New entries represent more than 44,000 additional sales for 2 nd quarter New Vehicle Registrations 2010 Experian Information Solutions, Inc. All rights reserved. 18

Manufacturer Market Share Analysis Q2 2010 YTD

Chrysler Other 2009 GM Toyota Nissan Who is up?

4% share Other GM Honda Ford Who is down?

3% share Hyundai Chrysler Honda 2010 Toyota Ford

20 Manufacturer Market Share Analysis Q YTD vs Q YTD Market Share Nissan Hyundai Chrysler Other 2009 GM Toyota Nissan Who is up? Ford 1.3% share Nissan 0.6% share Hyundai 0.4% share Other GM Honda Ford Who is down? Toyota -0.8% share Chrysler -0.5% share Honda -0.3% share Hyundai Chrysler Honda 2010 Toyota Ford 2010 Experian Information Solutions, Inc. All rights reserved. 20

Market Share Analysis: Model Level Q2 2010 vs Q2 2009 Market Share Cars and CUVs helping to drive share gains for Ford, Hyundai, Subaru and

23 Market Share Analysis: Model Level Q vs Q Market Share Cars and CUVs helping to drive share gains for Ford, Hyundai, Subaru and Nissan Wide variety of segments impacting share for Chrysler, Toyota, VW and Honda 2010 Experian Information Solutions, Inc. All rights reserved

Market Share Analysis: Segment Level Q2 2010 vs Q2 2009 Market Share Full Size Pickup

Change Entry Level SUV, Premium Mid-Range Car and CUV also had strong increases Small Car

Standard Upscale Near Luxury Small Car - Budget Full Size Pickup SUV Entry Level Mid Range

24 Market Share Analysis: Segment Level Q vs Q Market Share Full Size Pickup segment had greatest market share increase in Q when compared to Q Market Share Change Entry Level SUV, Premium Mid-Range Car and CUV also had strong increases Small Car Budget had largest market share drop Pickup - Small Alt Power Hybrid Car Mid Range Car - Standard Upscale Near Luxury Small Car - Budget Full Size Pickup SUV Entry Level Mid Range Car - Premium CUV Premium CUV Mid Range 2010 Experian Information Solutions, Inc. All rights reserved. 24

25 Market Share Analysis: Economy Cars Chevrolet Aveo only Budget car to gain share Consumers placing less emphasis on fuel efficiency when purchasing new vehicles 2010 Experian Information Solutions, Inc. All rights reserved. 25

27 Loyalty Methodology Garage loyalty measures whether a new vehicle purchase matches a prior new vehicle owned, including vehicles currently in the garage or disposed up to 90 days prior to the new vehicle purchase. Purchase Loyalty Owned Vehicle: Honda Honda Provides complete view of repurchase activity Honda Acura Migration Measurement Disposal loyalty measure whether a new vehicle purchase matches a Multiple vehicle disposed of +/- 90 days of the new Levels vehicle purchase. Essentially tracking vehicle replacement 2010 Experian Information Solutions, Inc. All rights reserved. 27

28 Market Overview - Loyalty Q Corporate Loyalty Corporate Loyalty by Month Ford remains on top versus GM and Toyota in corporate loyalty Hyundai has surpassed Honda Chrysler continues to increase GM ended quarter with rising loyalty Toyota dropped in April and June Hyundai has strong increase in Experian Information Solutions, Inc. All rights reserved

29 Brand Loyalty Top Gainers for Q Q vs Q Brand Loyalty: ranked by % change Luxury brands represent eight out of the top ten spots in terms of proportional gain in loyalty Kia and Mazda only non-luxury in top ten Land Rover had greatest percentage gain Kia had highest point gain, nearly nine percentage points 2010 Experian Information Solutions, Inc. All rights reserved. 29

30 Brand Loyalty by Model: Top 10 70% 60% 50% 40% 30% Q Brand Loyalty Kia Forte owners were most loyal, with nearly two out of three returning to the Kia brand Ford vehicles made up six of the top ten in brand loyalty 20% 10% 0% Kia Forte Ford Fusion Ford Edge Ford Five Hundred Ford Flex Chevrolet Traverse Model Owned Ford Escape Chevrolet Impala Ford Focus Kia Soul Chevrolet Traverse and Impala owners were ranked sixth and eighth respectively 2010 Experian Information Solutions, Inc. All rights reserved

31 2007 Who took from Whom? Net Units Ford (471,254) GM (330,313) Chrysler (225,213) Honda 325,555 Toyota 701,225 GM 64,000 Ford Honda Toyota Chrysler 2010 Experian Information Solutions, Inc. All rights reserved. 31 Net Owner Migration

32 Q2 2010: Who s taking from Whom? Net Units GM (100,408) Chrysler (100,092) Ford 35,519 Toyota 62,947 Honda 102,034 GM 38,973 Ford Honda Toyota Chrysler 2010 Experian Information Solutions, Inc. All rights reserved. 32 Net Owner Migration

ADDITIONAL INDUSTRY INSIGHTS 2010 Experian

Hybrid Migration Percent of Hybrid Car Disposers that Purchase another Hybrid Vehicle Nearly one-third drop since peak of nearly 60 percent in Q3

36 Hybrid Migration Percent of Hybrid Car Disposers that Purchase another Hybrid Vehicle Nearly one-third drop since peak of nearly 60 percent in Q Q1 is below 2008 levels, when there were fewer hybrid options Experian Information Solutions, Inc. All rights reserved. 36

37 Hybrid Migration Hybrid Car Disposers: Most Frequent Non-Hybrid Purchases Hybrid owners seem to be staying with fuel efficient segments when replacing their vehicle Mix of small and medium size sedans, and CUVs 2010 Experian Information Solutions, Inc. All rights reserved. 37

(up 4 percentage points) In early 2010, trend seems to be returning to established level at just

39 New to Used Vehicle Migration Percent of New Vehicle Disposers Purchasing Used During 2009, new vehicle disposers were nearly 15 percent more likely to purchase a used vehicle than in prior years (up 4 percentage points) In early 2010, trend seems to be returning to established level at just over one-in-four moving to a used vehicle 2010 Experian Information Solutions, Inc. All rights reserved. 39

move to used Large increases in used migration for Dodge and Hyundai in early 2010

40 New to Used Vehicle Migration Percent of New Vehicle Disposers Purchasing Used Dodge new vehicle owners have highest rate of moving to used vehicles Honda owners least likely to move to used Large increases in used migration for Dodge and Hyundai in early 2010 Decreases for remaining highvolume brands 2010 Experian Information Solutions, Inc. All rights reserved. 40

purchases has increased dramatically 2010 seems to indicate a return to

42 New Vehicle Repurchase Frequency Number of Months Between New Vehicle Purchases Over the past 11 years, the number of months between new vehicle purchases has increased dramatically 2010 seems to indicate a return to pre-2009 trend 2010 Experian Information Solutions, Inc. All rights reserved. 42

owners returned to market most frequently Hyundai owners return to market much less

43 New Vehicle Repurchase Frequency Number of Months Between New Vehicle Purchases Dodge and Ford owners are in market least frequently During early/mid 2000 s, Chevrolet owners returned to market most frequently Hyundai owners return to market much less frequently in the early 2000 s 2010 Experian Information Solutions, Inc. All rights reserved. 43

44 New Vehicle Repurchase Frequency Number of Months Between New Vehicle Purchases Luxury brand owners are generally in market much more frequently BMW and Mercedes-Benz owners purchasing new vehicles on average every 30 months 2010 Experian Information Solutions, Inc. All rights reserved. 44

buyers Similar trend as new buyers (a bit less drastic), but still showing

45 New vs Used Vehicle Repurchase Frequency Number of Months Between Vehicle Purchases Used owners return to market on average twice as often as new vehicle buyers Similar trend as new buyers (a bit less drastic), but still showing slight increase for Experian Information Solutions, Inc. All rights reserved. 45

Used Vehicle Repurchase Frequency Number of Months Between Used Vehicle Purchases Used owners showing similar trends across high-volume brands Toyota

46 Used Vehicle Repurchase Frequency Number of Months Between Used Vehicle Purchases Used owners showing similar trends across high-volume brands Toyota and Honda have longest time between used vehicle purchases Chevrolet least amount of time 2010 Experian Information Solutions, Inc. All rights reserved. 46

How Long are Vehicles Owned? Trend 2008-2010 Vehicles Purchased New Avg.

How Long are Vehicles Owned? Trend 2008-2010 Vehicles Purchased Used Avg.

51 Conclusions For the third straight quarter new vehicle registrations are higher when compared to same quarter of prior year Used vehicle registrations for last four quarters are flat or lagging behind same quarters from prior year Ford gained market share for second straight quarter, up 1.3 percentage points. GM seems to have stabilized share with remaining four brands, Hyundai continues upward trend in share Toyota and Honda lost more than a percentage point in share combined, and Chrysler lost share but is showing increases compared to mid-2009 Hybrid and small-budget share of market decreased, even with more choices of vehicles available Customers continue to hold on for vehicles longer, and return to market less frequently 2010 Experian Information Solutions, Inc. All rights reserved. 51