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July 15, 2014

July 15, 2014. Auction Industry Leaders, Class III, Spokane, WA. Your Homework. The wholesale market was strong and active and climbing in April when we last met. Has it turned, when did it turn and by how much? Relate this to values, consignment and conversion.

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July 15, 2014

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  1. July 15, 2014

  2. Auction Industry Leaders, Class III, Spokane, WA

  3. Your Homework • The wholesale market was strong and active and climbing in April when we last met. Has it turned, when did it turn and by how much? Relate this to values, consignment and conversion. • Do you think the wholesale market is better or worse today than one year ago in 2013: values and volumes of offerings? • Gas prices are getting the headlines. What do you feel they will peak at? What effects/reactions do you expect?

  4. Is the market better or worse? The Broad View A solid spring: Strong tax season activity Later beginning of strength: Winter delayed Lasted longer on the calendar: Solid through 2nd week of May

  5. Most recent market changes

  6. Previous month market changes

  7. Previous year ago period market changes

  8. Better than previous 3 month period

  9. Year ago 3 month period

  10. Better than annual forecast

  11. Year ago 12 month market changes

  12. Is the Market Better or Worse? This Month, Quarter or Year over Year? In each comparable period The answer is lower depreciation today: Except May to June 2014

  13. Supply Levels Growing NAAA physical auction volume: 2013 marked the second consecutive year of increase in unit volume since 2007. The number of units entered increased 4.3 percent to 15.2 million. The number sold grew 4.2 percent to 8.2 million for a conversion rate of 54.2 percent. Dealer-consigned vehicles represented the largest number of units sold at 58.8 percent. Financial/fleet accounted for 34.3 percent.

  14. Supply Levels Growing NAAA physical auction volume: Increased consignment and sales volume 2013 over 2012 Expect the same increase in 2014 Total new sales levels 15.6M in 2013 16.1M in 2014 projected 16.5M in 2015 projected Off lease increasing Part of trade-ins: just know when and sometimes where

  15. EOT Oversupply? High penetration of lease in New England Creates a tough remarketing area Online and Upstream to distribute the volume Transportation services Extra Reconditioning: Front Line Ready

  16. Annual Depreciation Trends 2011: -7.7% 2012: -12.4% 2013: -12.8% 2014: -13.5% projected 2015: 15.5%

  17. 3 segments increased during June 14 increased in last month of 1stQtr MPT, MVC & FPT show strength Greater than traditional depreciation: All Cars, mostly small

  18. Solid Annual Market Changes 7 under 10% depreciation: All truck related Only the Prestige Luxury Cars over pre-recession annual depreciation

  19. End of 1stQtr Results 1stQtr Results If history repeats, second qtr could be better. Must overcome strong March.

  20. End of 2ndQtr Results 2ndQtr Results -5.2% -3.3% History did repeat, second qtr was better as spring market extended into May.

  21. Truck Market Continues Better Depreciation 2ndQtr market changes

  22. 1stQtr market changes Cars and Trucks almost identical change for quarter

  23. Mazda activity Spring market seasonality is prevalent in the compact cars

  24. Mazda activity Mazda5 also affected by the spring market strength

  25. Mazda activity As the volumes have increased the seasonality spikes have leveled out somewhat

  26. Mazda activity CX-7 closing gap to segment in 2014

  27. Mazda activity Smoother movement in this segment in 2013 & 2014

  28. Land Rover activity Model fairing better than segment in 2014

  29. BMW activity Mix in segment varied Increased supply of 2010 EOT in current wholesale market?

  30. Toyota Activity Every March there is a climb Spring market seasonality is prevalent in the compact cars

  31. Toyota Activity Combination of Hybrid, Electric and Plug-in reached 3.7%: Wards

  32. Toyota Activity 2014 brings better retention in relation to segment average

  33. Seasonality variations

  34. Seasonality variations

  35. Seasonality variations

  36. Seasonality variations

  37. Gas prices Heading up!

  38. Gas prices $.21 over year ago Less volatility in 2014, but lower overall points Will the current price trend continue?

  39. Gas prices Notice the level pricing of diesel throughout the year: Does this encourage more diesel products, car and truck?

  40. Heading to the 3rd quarter What do you expect? Are there certain concerns? Any additional questions or comments? Is your mobile app setup?

  41. Set Up Academy Members w/Mobile App? • Complementary mobile app for each of you throughout the Auction Academy program. • Auto and specialty markets: iPhone or Android

  42. Set Up Academy Members w/Mobile App? Values

  43. Questions? Just call or email Ricky Beggs VP, Managing Editor 770.533.5221 w, 404.915.4215 c Rbeggs@BlackBookUSA.com Tim West, VP, North American Auction Director 770.533.5230 w, 404.915.2428 c Twest@BlackBookUSA.com

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