Used Truck Update. Steve Tam ACT RESEARCH Co., LLC

Used Truck Update Steve Tam ACT RESEARCH Co., LLC September 30, 2016

Presentation Overview Used Truck Market Performance Used Truck Database Overview Market Performance Charts Market Summary Sample in-depth analysis Export Market Outlook Q&A 2

Used Truck Database Overview Collecting data from >650 unique sellers Average sales of 4,000+ units/month Coverage US only LD (GVW 3-5), MD (GVW 6-7), HD (GVW 8) Retail, wholesale, auction channels Units sold, total sales $, average sale price, miles, and age Industry estimates for sales and inventory Continue to expand participation 3

Why It Matters Used truck activity impact on new truck demand Relationship to new truck sales Empirical data on how trucks are being utilized Used truck activity as a stand-alone market Used Truck Dealers/Sellers Identify equipment and industry trends Optimize inventory/reduce inventory carrying costs Benchmarking Aftermarket parts and service Market sizing Finance and insurance 4

Market Performance

CLASS 8: U.S. USED TRUCK SALES January '09 - August '16 (Not Seasonally Adjusted) 4000 3500 Total Reported (Units) Monthly & 6 Mo. Avg. 3000 2500 2000 1500 1000 500 0 09 10 11 12 13 14 15 16 ACT Research Co., LLC: Copyright 2016 6

CLASS 8: U.S. USED TRUCK AVERAGE SALE PRICE January '09 - August '16 60 50 Total Reported Price ($000) Monthly & 6 Mo. Avg. Y/Y % Change 300 250 40 200 30 150 20 100 10 50 0-10 Y/Y% Chg. (right axis) 09 10 11 12 13 14 15 16 0-50 ACT Research Co., LLC: Copyright 2016 7

90 80 70 60 50 40 30 20 10 0-10 CLASS 8: U.S. USED TRUCK AVERAGE SALE PRICE 4 to 5 years old, 400-500,000 miles Total Reported Price ($000) January '09 - August '16 Monthly & 6 Mo. Avg. Y/Y% Chg. (right axis) Y/Y % Change 09 10 11 12 13 14 15 16 450 400 350 300 250 200 150 100 50 0-50 ACT Research Co., LLC: Copyright 2016 8

CLASS 8: U.S. USED TRUCK AVERAGE MILES January '09 - August '16 700 Total Reported Miles (000s) Monthly & 6 Mo. Avg. Y/Y % Change 100 600 75 500 50 400 25 300 0 Y/Y% Chg. (right axis) 200 09 10 11 12 13 14 15 16-25 ACT Research Co., LLC: Copyright 2016 9

CLASS 8: U.S. USED TRUCK AVERAGE AGE January '09 - August '16 Total Reported (Months) 96 90 84 78 72 66 60 09 10 11 12 13 14 15 16 ACT Research Co., LLC: Copyright 2016 10

Used Class 8: Average Retail Selling Price January '10 - August '16 60 $(000s) per Unit Y/Y % Chg. 70 55 50 Monthly & 3MMA 60 50 45 40 40 30 35 20 30 10 25 0 20 15 Y/Y % Chg. 10 11 12 13 14 15 16-10 -20 ACT Research Co., LLC: Copyright 2016 11

Used Truck Inventory Pain Index 10 9 8 7 6 5 4 3 2 1 0 2000-2002 2008-2010 2015-2016 12

Used Truck Market Summary Full year 2015 prices contracted 0.4% in 2015 Downward path through most of the year Weakness driven by late model aero sleepers Seeing lower mileage used trucks Younger trucks a little more common Roughly 38% of used Class 8 trucks sold in 2015 were old (8+ years), compared to 44% in 2014 2015 was still a pretty good year for the used truck market, with an estimated 265,000 units sold 13

Used Truck Market Summary ACT s USED CLASS 8 SUMMARY AUGUST (F) 2016 TOTAL CLASS 8 MONTH/ MONTH YEAR/ YEAR UNITS (Same Dealer Sales) 19% 19% AVERAGE PRICE AVERAGE MILES AVERAGE AGE -1% -4% -3% -12% -7% -7% YTD/ YTD -2% -11% -5% -2% 14

In-Depth Analysis

UNITS Class 8: Used Truck Sales by Selling Price 2016 5,000 4,500 $42,300 4,000 3,500 3,000 2,500 2,000 1,500 1,000 500 - Under $10,000 $10,000 - $19,999 $20,000 - $12,999 $30,000 - $39,999 $40,000 - $49,999 $50,000 - $59,999 $60,000 - $69,999 $70,000 - $79,999 $80,000 - $89,999 $90,000 - $99,999 $100,000 or more 16

UNITS Class 8: Used Truck Sales by Mileage 2016 6,000 474,000 5,000 4,000 3,000 2,000 1,000 - Under 100,000 100,000 200,000 300,000 400,000 500,000 600,000 700,000 800,000 900,000 1,000,000 or more 17

UNITS Class 8: Used Truck Sales by Age 2016 6,000 87 months 5,000 4,000 3,000 2,000 1,000 - Under 1 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 or more Years 18

How Many Miles Does a Class 8 Truck Drive in a Year? 100% CLASS 8: U.S. USED TRUCK SALES % SOLD BY ANNUAL MILEAGE BUCKET 90% 80% 70% 60% 56% <80k 50% 40% 33% <80k 30% 20% 10% 0% 2010 2011 2012 2013 2014 2015 2016 under 60,000 60,000 70,000 80,000 90,000 100,000 110,000 120,000+ 19

How Used Trucks Impact New Trucks A used truck is equity toward new truck purchase As used truck prices decrease, new truck buyers have less equity available, which act either as: A disincentive to buy, or A incentive to buy fewer And a constant refreshing of used truck inventory Exports of used trucks also affect capacity The greater the number, the greater the need to replace with new, which may or may not lead to more used truck inventory 20

130 120 110 100 90 80 70 60 50 40 30 20 10 0 Used Class 8 Sales Gap: Average Selling Price vs. Estimated New Class 8 Price 140 $(000s)/Unit New Price Estimate (Tractor Sleeper) $95K $100K January '03 - August '16 $108K $117K $ GAP: New - Used Average Used Class 8 Price Used % of New Used % of New Price $130K 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 1.6 1.5 1.4 1.3 1.2 1.1 1 0.9 0.8 0.7 0.6 0.5 0.4 0.3 0.2 ACT Research Co., LLC: Copyright 2016 21

Export Market

25.0 20.0 Units (Thousands) Actual Estimated Used Class 8 Tractor Exports 1996-2016 (Actual through July 2016) 22.1 20.9 22.1 15.0 16.0 14.4 15.0 13.4 15.4 11.8 11.5 10.0 9.6 5.8 6.2 5.0 2.4 2.1 2.3 1.6 1.5 2.7 3.3 4.0 0.0 '96 '97 '98 '99 '00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16e International Trade Commission, ACT Research Co., LLC: Copyright 2016 23

Used Class 8 Exports Geographic Distribution of Road Tractor Exports 2015 2016 YTD July Asia 32% S. Am. 1% Vietnam Vietnam Panama Mid East 1% Europe 0% Nigeria Nigeria Africa 18% Asia 28% S. Am. 0% Vietnam Mid East 2% Europe 1% Nigeria Africa 12% Panama Mexico Mexico Canada Guatemala Mexico C. Am. 10% 11,800 Units N. Am. 38% C. Am. 15% 6,700 Units N. Am. 42% Source: International Trade Commission 24

Used Truck Outlook

A Matter of History & Timing How many used trucks were manufactured when? When will those trucks escape the new truck market? We have laid the groundwork for a used truck forecasting model 26

U.S. Class 8 New Retail Sales CY 2013 CY 2014 CY 2015 CY 2016 Freightliner 67,600 78,400 95,400 82,100 International 26,600 31,100 28,800 24,800 Kenworth 25,900 31,100 37,200 32,000 Mack 16,300 19,700 19,800 17,000 Peterbilt 24,700 29,700 31,700 27,300 Volvo 20,700 26,600 30,900 26,600 Western Star 3,000 3,600 4,900 4,200 Others 2,700 3,800 4,100 3,500 Total 187,600 224,000 252,900 217,600 27

CY Used Class Sales by MY Mix Model Year CY 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2009 27% 17% 7% 2% 1% 0% 2010 20% 26% 15% 5% 2% 0% 0% 2011 14% 17% 34% 9% 4% 1% 1% 1% 2012 11% 20% 27% 13% 10% 3% 2% 1% 1% 2013 7% 16% 26% 9% 15% 8% 6% 2% 1% 1% 2014 5% 10% 20% 6% 12% 12% 11% 9% 2% 1% 1% 2015 4% 7% 13% 5% 11% 11% 15% 18% 6% 1% 1% 0% 2016 3% 4% 8% 3% 8% 8% 15% 23% 14% 4% 2% 1% 0% 28

What s Coming Back in 2017? MY 2013 MY 2014 MY 2015 MY 2016 Freightliner 12,500 8,600 2,500 800 International 4,700 2,600 1,000 200 Kenworth 5,600 5,600 2,200 1,000 Mack 2,200 2,000 1,000 700 Peterbilt 5,600 5,700 2,700 1,100 Volvo 9,000 5,300 2,700 500 Western Star 300 400 200 0 Others 200 100 0 0 Total 39,900 30,400 11,300 4,300 29

300,000 U.S. New & Used Class 8 Sales 250,000 200,000 150,000 100,000 50,000 - US TOTAL Cl8 RS USED CL8 SALES 30

Used Truck Market Outlook Estimate used Class 8 sales will be 270,000 to 275,000 in 2016, slipping to 250,000 in 2017 Strong 2015 new truck sales and subsequent used truck sales lag added used inventory Prices expected to be down 10% in 2016 and stabilizing at that level in 2017 Mileage decline a bit further, but age unlikely to change by much 31

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