Drive Market Share Gains Automotive Industry Insights: Q3 ......The Forrester Wave™: Database Marketing Service Providers, Q1 2006, Forrester Research Inc. January 10, 2006. National

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Drive Market Share Gains -Automotive Industry Insights: Q3, 2009

Jeffrey Anderson, Director of Consulting & Analytics

© 2010 Experian Information Solutions, Inc. All rights reserved. 2

Presentation Overview

Third Quarter 2009 Automotive Market Overview

• Vehicles in Operation (VIO)• Vehicle Registrations

• New and Used

• New Vehicle Market Share• Loyalty

• Corporate and Brand

• ‘Cash for Clunkers’


Understanding the Automotive Customer Leveraging Experian’s “best in class” data assets

50,000 + adults surveyed annually 8,000+ brands in 450+ product categoriesMeasures television viewing, newspaper and magazine readership, internet usage, radio listening plus mobile700+ psychographic measuresEasily extrapolated to any target file

25 million Internet usersinteracting with one million Websites across 160+ industriesAverage of 60 billion emails sent on behalf of clients per year

Consumer2 million credit inquiries daily1.3 billion transaction updates/month99.9% system availability1.3 second response rate220 million credit active consumers50 million public records

Business22 million businesses

235 million consumers, 113 million households1,500+ data attributes per recordAttitudinal segments and touch-points3,200 public and proprietary sources110 million catalogbuyers148 million magazine subscribers

Approximately 600,000 knownfraud records186+ million cross-industry credit applications215+ million consumer200 +demographic and credit records

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

NationalFraud

Database

600 million+ vehicles in U.S. (all 50 states & Wash. D.C.) and CanadaIncludes title, registration, mileage readings, key vehicle events5B+ vehicle history records, including 270M title brands and 92M accident related events

OnlineActivity

DatabasesCredit

Databases

ConsumerMarketing Databases

Simmons National

Consumer Study

NationalVehicle

Database

Integrated Information Assets


Data foundation

VIO

Loyalty

Market Share

NationalVehicle

Database

Comprehensive coverage• Over 600 million total vehicles – U.S. and Canada

• 280 million total vehicles in operation• 825 million titles, 950 million registrations• Seven Terabytes, over 18 billion rows

Direct Sources• Vehicle title and registration data in 50 U.S. states and D.C.• Many other sources, including fleet, auction, maintenance, inspection, warranty, dealer, police

Variety of Metrics• Registration Trends• VIO Reporting• Loyalty Studies


VEHICLESIN

OPERATION


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 nearly 240 million light duty vehicles on the road

• Down over 481,000 units from last quarter, likely contributed to by cash for clunker program

• Ford is the most prevalent make, followed by Chevrolet and Toyota

• Hyundai has more than 6.1 million light duty vehicles (ranked seventh)

• Passenger cars have retaken top place from trucks (50.03% vs. 49.97%)

• Average age of all cars and light trucks in operation is 9.8 years


0

2,000,000

4,000,000

6,000,000

8,000,000

10,000,000

12,000,000

14,000,000

16,000,000

18,000,000

Current VIO – Year Model

Source: Experian Automotive as of September 30, 2009 (U.S. light duty vehicles only)

80 percent of vehicles are less than 14 years old

80%


Current VIO – Vehicle Segment


Hybrid vehicles represent 0.65 percent of current VIO

2% 4% 6% 8% 10% 12% 14%


Current VIO – Percent Share


GM

Ford

Toyota

Honda

Chrysler

HyundaiNissan

Other

As vehicles age, luxury and collector brands make up larger

share of VIO

VIO

Sha

re In

dex

Model Year Range

Vehicles in Operation: Share by Brand


Total U.S. MidWest NorthEast South WestLight Truck 49.97% 49.6% 44.9% 51.9% 50.5%Passenger Car 50.03% 50.4% 55.1% 48.1% 49.5%

0%

10%

20%

30%

40%

50%

60%

Source: Experian Automotive as of September 30, 2009

Q3 2009 Vehicles in Operation (VIO):• Impact of Cash for Clunkers and preference for fuel

efficiency has helped drive cars back past trucks

Current VIO Trends – Vehicle Type


Current VIO Trends – Drive Wheels by Region

Source: Experian Automotive as of September 30, 2009

4WD AWD FWD RWDWest 23.9% 25.3% 21.1% 23.8%South 28.6% 21.9% 37.1% 53.0%NorthEast 19.8% 29.7% 16.6% 7.7%MidWest 27.7% 23.1% 25.3% 15.5%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

• Market showing slight shift toward 4WD and AWD vehicles

• Front Wheel Drive still dominates total volume by 2 to 1

Q3 2009 Vehicles in Operation (VIO):


0

5,000,000

10,000,000

15,000,000

20,000,000

25,000,000

30,000,000

35,000,000

40,000,000

45,000,000

50,000,000

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

smar

tH

umm

erM

aser

ati

MIN

IK

iaH

yund

aiM

ayba

chA

ston

Mar

tinSc

ion

Ben

tley

Lam

borg

hini

Land

Rov

erLe

xus

Aud

iB

MW

Infin

itiM

erce

des-

Ben

zPo

rsch

eSu

zuki

Acu

raTo

yota

Hon

daSu

baru

Nis

san

Cad

illac

Volv

oFr

eigh

tline

rSa

abM

itsub

ishi

Maz

daLi

ncol

nC

hrys

ler

Satu

rnVo

lksw

agen

Ferr

ari

Rol

ls R

oyce

Jeep

Che

vrol

etG

MC

Dod

geLo

tus

Pont

iac

Jagu

arFo

rdB

uick

Percent in Warranty Total VolumeSource: Experian Automotive as of September 30, 2009

Q3 2009 Vehicles in Operation (VIO):

An estimated 82.1% of all light vehicles do not have basic OEM warranties.

Perc

ent C

over

ed b

y O

EM W

arra

nty

Vehi

cles

in O

pera

tion

Current VIO Trends –Estimated Vehicles In Warranty


VEHICLE REGISTRATION


U.S. Automotive Market Overview

• Q3 2009 vs Q3 2008, new vehicle registrations have dropped only 270,000 units

• Compared to drops of more than 1.2 million units each in Quarters 1 and 2

14

Total Vehicle Registrations by Quarter

New Vehicle Registrations

Source: Experian Automotive

Used registrations are increasing in proportion to new registrations: 2.5x new in 2007, peaking at 4.2x in Q1 2009

2008 2009


U.S. Market – New Vehicle Registrations

New Vehicle Registrations

Prior to Q3, New vehicle

registrations in past 3 quarters were down an average of 1.3 million units per

quarter



Impact of Cash for Clunkers Program

July and August 2009


• New vehicle registrations resulting from Cash for Clunkers program represented one-third of all sales during July and August

• Even if Cash for Clunkers sales are not counted, Q3 would still show improvement vs. prior quarter over quarter comparisons


Used Vehicle Registrations

U.S. Market – Used Vehicle Registrations

Used vehicle registrations are actually up in Q3

2009, but still down 5.6 percent

overall YTD



New Vehicle Market Overview

New Vehicle Registrations – Q3 2009 vs. Q3 2008


• Overall, Q3 2009 down 269,939 units compared to Q3 2008

• However, Hyundai and Ford had gains in registrations (30% and 5% respectively)

• GM showed the largest unit drop (down 207,554 units), while GM and Chrysler shared largest percent drop (27% fewer sales), followed by Nissan (down 6%)

• Honda and Toyota were down slightly

Corporation


Segment Registration Trends Q3 2009 vs. Q3 2008

CUV –Entry Level

Small Car

Econ.

Hybrid Car

CUV –Mid

Range

Small Car

Budget

Mid-Range

Car Std.

SUV –Entry Level

Van -Mini

SUV –Lower Mid-

RangePickup –Full Size

• CUV and Small car segments had greatest unit increases in Q3 2009 when compared to Q3 2008

• SUVs, Minivans and Full Size Pickups showed largest drops


New

Reg

istra

tions


M&M’s (Market Movers)

Ranked by % change

New

Reg

istra

tions


Elantra up 22,353 units

Fusion up 16,569 units


Market ChangersN

ew R

egis

tratio

ns


Elantra and Corolla up

20,000+ unitsFusion and Escape

up a combined 30,000 units

Ranked by Unit Change

Ram and Tundra down 14,500 units

Silverado down 39,000 units


NVE (New Vehicle Entries) Q3 Performance

• Continued strength of Camaro• Further expansion of CUV category• New entries represent Nearly 200,000

additional sales last 12 months

New Vehicle RegistrationsSource: Experian Automotive


MARKET SHARE

OVERVIEW


Who is up? • Hyundai 2.2% share• Ford 1.1% share• Honda 0.4% share

GM

Ford

Toyota

Honda

Chrysler

Hyundai

Nissan

Other

2009

Manufacturer Market Share Analysis

Who is down? • GM -2.8% share• Chrysler -1.8% share• Toyota -0.1% share

2009 YTD vs 2008 YTD Market Share

GM

Ford

Toyota

Honda

Chrysler

Hyundai

Nissan

Other

2008



Q3 2009 vs Q3 2008 Market Share

25


• Subaru had highest proportional gain in market share, followed closely by Hyundai and Volkswagen

• Hyundai had highest point gain, followed by Ford and Toyota

• GM and Chrysler had large drops in share points (5% and 2% respectively)



Q3 2009 vs Q3 2008 Market Share

26


• Small sedans key to driving share increases for Subaru, Hyundai and Ford

• Declines across key CUV, Minivan and Full Size Pickups segments impacting share for GM and Chrysler



CUSTOMERLOYALTY


Loyalty Methodology

•Migration Measurement

•Multiple Levels

•Purchase Loyalty

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.

Provides complete view of repurchase activity

Disposal loyalty measure whether a new vehicle purchase matches a vehicle disposed of +/- 90 days of the new vehicle purchase.

Essentially tracking vehicle replacement

Owned Vehicle:

Honda

Honda

Honda

Acura


Q3 2009 Corporate Loyalty

29

• Toyota loyalty has dropped, but has gained top loyalty spot for first time

• Ford closing loyalty gap to GM• Hyundai continues to increase, closing in on Honda• Chrysler has dropped by 12 points from Q2 level

Market Overview - Loyalty

Corporate Loyalty by Month

• Ford had strong loyalty in August and September

• Chrysler had dramatic drop in loyalty in July and August



Brand Loyalty – Top Gainers for Q3 2009


• Porsche had the greatest proportional jump in loyalty, increasing more than 30 percent

• Porsche also had the highest percentage point increase, jumping by more than 3.5 points

• Ford had the second greatest point gain: more than 2.2 percentage points

Q3 2009 vs Q3 2008 Brand Loyalty: ranked by % change


Brand Loyalty by Model: Top 10

Q3 2009 Brand Loyalty

31


• Toyota Venzaowners were most loyal, with more than 60% returning to Toyota brand

• Ford vehicles made up five of the top ten in brand loyalty

• Toyota Priuswas ranked 7th

in brand loyalty


2007 – Who took from Whom?

Net Owner Migration

GM Ford

Toyota

ChryslerSource: Experian Automotive

Honda


2007 – Who took from Whom?

64,000

Net UnitsFord (471,254)GM (330,313)Chrysler (225,213)Honda 325,555Toyota 701,225

Net Owner Migration

GM Ford

Toyota

Chrysler

Honda



2009 First Nine Months: Who’s taking from Whom?

Net Owner Migration

Chrysler

Toyota

GM Ford

Honda



2009 First Nine Months: Who’s taking from Whom?

31,100

Net UnitsGM (212,132)Chrysler (100,574)Ford (62,191)Honda 180,315Toyota 231,394

Net Owner Migration

Chrysler

Toyota

GM Ford

Honda



CASH FOR CLUNKERS


Cash for Clunkers

Program OverviewTrade in old, low mpg vehicle for new, higher-mileage vehicleVouchers of $3,500 or $4,500 depending on vehicle type, mileage, etc. July 1 through August 24, 2009$3 billion in government fundsNetted 690,114 new vehicles sales

Study MethodologyMatch ‘clunker’ VINs to Experian NVDB: identify clunker participantsFind all those who disposed of same make/models as clunkers, but were notpart of clunker programTrack disposed vehicles and identify new vehicle purchasesCompare ‘Clunker’ participants vs ‘Non-Clunker’ vehicle disposers in terms of:

Brand loyalty, length of ownership, in-market frequencyBuyer characteristics such as age, income


Cash for Clunkers: What Brands were Purchased?

38

Brands Purchased by Clunker Disposers


Brands Disposed in Clunker Program


Cash for Clunkers: Brand Loyalty

39

Brand Loyalty for Clunker vs Non-clunker


• Overall loyalty to disposed brands was more than twice as high for those not part of cash for clunkers

• One explanation could be that it is due to condition of (and experience with) their vehicles versus those that were disposed in clunker program

Disposed Vehicle



40



• Large differences in brand loyalty across board for clunker vs. non-clunker disposers

• Clunker participants disposing of a Toyota were most likely to repurchase same brand

• Just over three percent of Chrysler clunker trade-ins were replaced with another Chrysler vehicle

• Smallest clunker vs. non-clunker difference among Pontiac and Mazda ownersDisposed Brand



41



• Among pickups, Toyota Tundra clunker disposers were most likely to return to brand, Dodge Ram least likely

• Toyota Previa and Honda Passport clunker disposers were more likely than non-clunker counterparts to return to brand

• Chrysler T&C clunker owners least likely to return to brand

• Toyota 4Runner very similar for clunker and non-clunker disposers

Disposed Vehicle

Pickups Minivans SUVs


Cash for Clunkers: What Brands were Purchased?

42

Top Brands Purchased by Clunker Disposers


Ford:

Toyota:

Dodge:

Chrysler: Honda:

Chevrolet:


Cash for Clunkers: In-Market Impact

43

Number of Months since Last New Vehicle Purchase


• Vehicles traded in for Clunker vouchers were on average nearly 3 years older than non-clunker vehicles disposed for new vehicle purchase

Average Age in Months of Disposed Vehicle

• Those participating in clunker program had been out of new vehicle market for 20 months longer on average when compared to non-clunker owners

Disposed Vehicle

Disposed Vehicle


Cash for Clunkers: Incremental or Pull Ahead?

44

In-Market Model: Clunker vs Non-clunker


• Clunker participants were more than 20 percent less likely to be ranked high in model that predicts likelihood of purchasing a new vehicle

In-Market Model Rank

Clu

nker

vs

Non

-Clu

nker

Inde

x

• Clunker participants were less likely to be in-market for a new vehicle when compared to non-clunkers

• Conversely, those taking part in clunker program were more likely to be ranked in lowest in-market ranking


Cash for Clunkers: Who Participated?

45

Age of Clunker vs Non-clunker Disposers


• Clunker participants were more likely to be 45 – 64 years of age when compared to non-clunker vehicle disposers

• Greatest difference in 45-54 age range, which represented one-third of clunker participants

Age of Vehicle Disposer


Cash for Clunkers: Who Participated?

46

Income of Clunker vs Non-clunker Disposers

Source: Experian AutomotiveHousehold Income of Vehicle Disposer

• Clunker participants were more likely to have household income of $50,000 to $174,999 when compared to non-clunker vehicle disposers

• Largest differences in $75k-$99k, and $100-$124k

• Clunker owners appeared to be waiting for right time to enter new vehicle market


Conclusions

New and used registrations seem to have hit bottom in early 2009, and appear to be on upswingGM and Chrysler will need quick success with current and upcoming products to stem declines in market shareNewer segments such as CUV (now at 60+ vehicles) continue to expand, but are pulling sales from existing SUV and minivan categories Finding right mix of vehicles for right-size segments will be challenge for manufacturers as fuel prices and politics intertwineNew vehicles with unique features and appeal can have immediate affect on sales, market share, and loyaltyBattle for market share continues to be interesting, as Ford and Hyundai successes continue, GM moves on with four brands, and smaller manufactures seize opportunityCash for Clunkers program accounted for a quarter of Q3 new vehicle registrations, but debate will likely continue on the overall incremental impact and ROI of this program


Questions?


Documents

Drive Market Share Gains Automotive Industry Insights: Q3 ......The Forrester Wave™: Database Marketing Service Providers, Q1 2006, Forrester Research Inc. January 10, 2006. National