U.S.

Auto Sales Chartbook

January 2020

2BBVA Research - U.S. Auto Sales Outlook. January 2020

New vehicle sales were 16.9 million in 2019, 1.7% less than in 2018

Although still solid, 2019 sales were the lowest since 2014

We expect new car sales to slow down further in 2020, due to slower

economic growth and less affordable vehicles

Stable interest rates should provide some relief to dealers and consumers

A robust supply of “off-leasing” units, high prices of new vehicles, and

access to credit will continue supporting sales of used units

PHEV and BEV sales declined to 319,554 in 2019 from 349,688 in 2018.

Electric pickup models may start production this year

The battle for CAFE targets, affordability and the phase out of the federal

tax credit for some companies could limit prospects for EVs

Main messages

3BBVA Research - U.S. Auto Sales Outlook. January 2020

Sales

U.S. TOTAL LIGHT WEIGHT VEHICLE SALES(SAAR, MILLION UNITS)

0

2

4

6

8

10

12

14

16

18

20

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

Total Domestic Imported

Source: BBVA Research and Haver Analytics

4BBVA Research - U.S. Auto Sales Outlook. January 2020

Sales

U.S. TOTAL VEHICLE SALES(SAAR, MILLION UNITS)

0.0

0.1

0.2

0.3

0.4

0.5

0.6

0.7

0

2

4

6

8

10

12

14

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

Cars Light trucks* Medium and heavy trucks (right axis)**

* 0-14,000 pounds GVWR

**14,001 pounds GVWR and over

Source: BBVA Research and Haver Analytics

5BBVA Research - U.S. Auto Sales Outlook. January 2020

Sales

U.S. TOTAL VEHICLE SALES(SHARE OF TOTAL)

0%

10%

20%

30%

40%

50%

60%

70%

80%

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

Trucks Cars

Source: BBVA Research and Haver Analytics

6BBVA Research - U.S. Auto Sales Outlook. January 2020

Sales

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

4.5

5.0

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

U.S. DOMESTIC AUTO INVENTORY/SALES RATIO(SEASONALLY ADJUSTED)

Source: BBVA Research and Haver Analytics

7BBVA Research - U.S. Auto Sales Outlook. January 2020

Sales

U.S. UNIT SALES BY BRAND*(4Q19, YOY % CHANGE)

As of 01/31/2020. Figures may be subject to revision.

Source: BBVA Research and Bloomberg

-30

-25

-20

-15

-10

-5

0

5

10

15

20

Audi

Kia

Ma

zd

a

BM

W

Hyun

dai

Ford

Me

rce

des-B

enz

Mitsubis

hi

Ho

nda

Toyota

Suba

ru

Fia

tChry

sle

r

Volk

sW

agen

GM

Nis

san

Tesla

8BBVA Research - U.S. Auto Sales Outlook. January 2020

Stock market

STOCK MARKET INDICATORS(INDEX, 1/1/2018 = 100)

*Fiat Chrysler Automobiles, Ford Motor Co., Tesla Inc., General Motors Co.

Source: BBVA Research and Bloomberg

60

80

100

120

140

160

180

200

01

/01

/201

8

22

/01

/201

8

12

/02

/201

8

05

/03

/201

8

26

/03

/201

8

16

/04

/201

8

07

/05

/201

8

28

/05

/201

8

18

/06

/201

8

09

/07

/201

8

30

/07

/201

8

20

/08

/201

8

10

/09

/201

8

01

/10

/201

8

22

/10

/201

8

12

/11

/201

8

03

/12

/201

8

24

/12

/201

8

14

/01

/201

9

04

/02

/201

9

25

/02

/201

9

18

/03

/201

9

08

/04

/201

9

29

/04

/201

9

20

/05

/201

9

10

/06

/201

9

01

/07

/201

9

22

/07

/201

9

12

/08

/201

9

02

/09

/201

9

23

/09

/201

9

14

/10

/201

9

04

/11

/201

9

25

/11

/201

9

16

/12

/201

9

06

/01

/202

0

27

/01

/202

0

S&P 500 North America Automobiles Valuation Peers* AutoNation CarMax Sonic Automotive Lithia Motors

9BBVA Research - U.S. Auto Sales Outlook. January 2020

Dealers

57 57

61

65

5960

57

5354

5556

40

45

50

55

60

65

70

Q2-1

7

Q3-1

7

Q4-1

7

Q1-1

8

Q2-1

8

Q3-1

8

Q4-1

8

Q1-1

9

Q2-1

9

Q3-1

9

Q4-1

9

Franchise

55

57

5556

55

57

51

53

5655

53

70

6867

69

72 72

68

66

7273

66

50

53

5152

50

52

46

48

51

49 49

40

45

50

55

60

65

70

75

Q2-1

7

Q3-1

7

Q4-1

7

Q1-1

8

Q2-1

8

Q3-1

8

Q4-1

8

Q1-1

9

Q2-1

9

Q3-1

9

Q4-1

9

Overall Franchise Independent

HOW WOULD YOU DESCRIBE THE

CURRENT USED-VEHICLE SALES

ENVIRONMENT?

HOW WOULD YOU DESCRIBE THE

CURRENT NEW-VEHICLE SALES

ENVIRONMENT?

Source: Cox Automotive, Dealer Sentiment Index 4Q19

Good

Poor

10BBVA Research - U.S. Auto Sales Outlook. January 2020

Prices

U.S. CONSUMER PRICE INDEX: CARS AND TRUCKS(YOY % CHANGE)

-15%

-10%

-5%

0%

5%

10%

15%

20%

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

New Used

Source: BBVA Research and Haver Analytics

11BBVA Research - U.S. Auto Sales Outlook. January 2020

Prices

U.S. AUTO PRICES

(INDEX, 2009 = 100)

80

90

100

110

120

130

140

150

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

Manheim Used Vehicle Value Index Edmunds Vehicle True Market Value

Source: BBVA Research, Haver Analytics and Bloomberg

12BBVA Research - U.S. Auto Sales Outlook. January 2020

Financial conditions

U.S. INTEREST RATES(%)

Source: BBVA Research and Haver Analytics

0%

1%

2%

3%

4%

5%

6%

2011 2012 2013 2014 2015 2016 2017 2018 2019

48-month new car loan

36-month used car loan

60-month new car loan

Federal Open Market Committee: Fed Funds Target Rate: Upper Limit (%)

13BBVA Research - U.S. Auto Sales Outlook. January 2020

Financial conditions

0

20

40

60

80

100

120

140

160

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

Source: BBVA Research and Haver Analytics

U.S. NEWLY ORIGINATED INSTALLMENT AUTO LOANS($ BILLION, EOP, 4-QTR MOVING AVG.)

14BBVA Research - U.S. Auto Sales Outlook. January 2020

Financial conditions

0%

1%

2%

3%

4%

5%

6%

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

U.S. AUTO LOAN 90+ DAYS DELINQUENT(% OF BALANCE)

Source: BBVA Research and Haver Analytics

15BBVA Research - U.S. Auto Sales Outlook. January 2020

Leasing

U.S. LEASING PENETRATION RATE(%, 3-MONTH MOVING AVERAGE)

0

5

10

15

20

25

30

35

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

Source: BBVA Research and Haver Analytics

16BBVA Research - U.S. Auto Sales Outlook. January 2020

Leasing

OFF-LEASE RETURNS AND SUPPLY* (MILLIONS UNITS)

*Assumes 36-month lease terms

Source: Bloomberg and BBVA Research

2.532.77

3.24

4.09

4.48

5.075.34

5.13 5.19

0

1

2

3

4

5

6

2014 2015 2016 2017 2018 2019 2020 2021 2022

17BBVA Research - U.S. Auto Sales Outlook. January 2020

Gasoline

U.S. RETAIL GASOLINE PRICE(AVERAGE CENTS PER GALLON)

0

50

100

150

200

250

300

350

400

450

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

Source: BBVA Research and Haver Analytics

02Consumers

19BBVA Research - U.S. Auto Sales Outlook. January 2020

Consumers

Source: BBVA Research and Haver Analytics

UNIVERSITY OF MICHIGAN: CONSUMER SENTIMENT INDEX

0

20

40

60

80

100

120

140

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

Current economic conditions Consumer expectations

20BBVA Research - U.S. Auto Sales Outlook. January 2020

CONFERENCE BOARD: CONSUMER PLANS TO BUY A CAR WITHIN 6 MONTHS(% OF RESPONDENTS)

Source: BBVA Research and Haver Analytics

Consumers

8%

9%

10%

11%

12%

13%

14%

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

21BBVA Research - U.S. Auto Sales Outlook. January 2020

Consumers

U.S. UNEMPLOYMENT RATE(%)

Source: BBVA Research and Haver Analytics

0%

2%

4%

6%

8%

10%

12%

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

22BBVA Research - U.S. Auto Sales Outlook. January 2020

Consumers

-2500

-2000

-1500

-1000

-500

0

500

1000

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

U.S. NONFARM PAYROLL(QUARTERLY CHANGE, THOUSAND)

23BBVA Research - U.S. Auto Sales Outlook. January 2020

U.S. HOUSEHOLD EQUITY AND HOME PRICES

Source: BBVA Research and Haver Analytics

Consumers

-12%

-10%

-8%

-6%

-4%

-2%

0%

2%

4%

6%

8%

10%

0

2000

4000

6000

8000

10000

12000

14000

16000

18000

20000

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

Owners equity in real estate (NSA billion $, left axis) FHFA house price index (yoy change, right axis)

03Production

25BBVA Research - U.S. Auto Sales Outlook. January 2020

U.S. AUTO PRODUCTION

Source: BBVA Research and Haver Analytics

Production

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

4.5

5.0

0

20

40

60

80

100

120

140

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

Industrial production index: autos (2007=100, left axis) BEA Auto Production Estimate (SAAR, million units, right axis)

04Structural

27BBVA Research - U.S. Auto Sales Outlook. January 2020

MEAN AGE OF PASSENGER CARS IN

OPERATION (YEARS)

Source: BBVA Research and Haver Analytics

Fundamentals

VEHICLE MILES OF TRAVEL(TOTAL AND ADJUSTED BY POPULATION)

8.0

8.5

9.0

9.5

10.0

10.5

11.0

11.5

12.0

20

04

20

05

20

06

20

07

20

08

20

09

20

10

20

11

20

12

20

13

20

14

20

15

20

16

20

17

20

18

0

500000

1000000

1500000

2000000

2500000

3000000

3500000

0

2000

4000

6000

8000

10000

12000

14000

19

82

19

84

19

86

19

88

19

90

19

92

19

94

19

96

19

98

20

00

20

02

20

04

20

06

20

08

20

10

20

12

20

14

20

16

20

18

Millio

n m

iles

Miles p

er

cap

ita

Population adjusted (left axis) Total (right axis)

28BBVA Research - U.S. Auto Sales Outlook. January 2020

U.S. POPULATION PROJECTIONS BY AGE(SHARE OF 16 & ABOVE)

Source: BBVA Research and Haver Analytics

Demographics

29% 28% 25% 24% 24%

51%47%

46% 46% 45%

20% 25% 29% 31% 31%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2010 2020 2030 2040 2050

16-29 years 30-54 years 65 years and over

29BBVA Research - U.S. Auto Sales Outlook. January 2020

U.S. ELECTRIC VEHICLE SALES*(UNITS)

Figures may be subjected to revision. Includes PHEV and BEV

Source: BBVA Research and Bloomberg New Energy Finance

Electric vehicles

0

20000

40000

60000

80000

100000

120000

140000

Q1 2

011

Q2 2

011

Q3 2

011

Q4 2

011

Q1 2

012

Q2 2

012

Q3 2

012

Q4 2

012

Q1 2

013

Q2 2

013

Q3 2

013

Q4 2

013

Q1 2

014

Q2 2

014

Q3 2

014

Q4 2

014

Q1 2

015

Q2 2

015

Q3 2

015

Q4 2

015

Q1 2

016

Q2 2

016

Q3 2

016

Q4 2

016

Q1 2

017

Q2 2

017

Q3 2

017

Q4 2

017

Q1 2

018

Q2 2

018

Q3 2

018

Q4 2

018

Q1 2

019

Q2 2

019

Q3 2

019

Q4 2

019

05Forecasts

31BBVA Research - U.S. Auto Sales Outlook. January 2020

Source: BBVA Research

Forecasts

2015 2016 2017 2018 2019 2020 2021 2022

New-vehicle sales

(millions units)17.5 17.5 17.2 17.2 16.9 16.7 16.8 16.8

Real GDP growth*

(% change)2.9 1.6 2.2 2.9 2.3 1.8 2.0 2.0

Unemployment rate

(% avg.)5.3 4.9 4.4 3.9 3.7 3.7 3.9 4.0

Fed funds*

(%, eop)0.50 0.75 1.50 2.50 1.75 1.75 1.75 2.25

5-year Treasuries*

(%, avg)1.5 1.3 1.9 2.7 1.96 1.76 1.90 2.06

U.S.

Auto Sales Chartbook

January 2020