July 3, 2017

“Higher depreciation continued in Sub-Compact Car and Compact Car segments driven by recent drop in gasoline prices. The average US gas price per gallon has dropped by over ten cents in the last three weeks.”

Anil Goyal, Senior Vice President of Automotive Valuation and Analytics

Model Years: 2008-2014, Volume Weighted Wholesale Average Values, Weekly Change from 6/23/17 to 6/30/17

Truck Values Remained Relatively Stable Last Week

Volume-weighted, overall car segment values declined by 0.31% last week. In comparison, the market

values had decreased on average by 0.35% per week in the previous four weeks.

In car segments, Sub-Compact Car and Compact Car segments performed the worst, decreasing by

0.52% and 0.85%, respectively.

Volume-weighted, overall truck segment (including pickups, SUVs and vans) values decreased by just

0.03% last week, better than the average decrease of 0.17% per week in the previous four weeks.

In truck segments, Sub-Compact Luxury Crossover/SUV and Compact Luxury Crossover/SUV values

dropped the most by 0.37% and 0.27%, respectively.

-$31-0.52%

-$68-0.85%

-$17-0.18%

-$21-0.18%

-$13-0.08%

-$3-0.01%

-$103-0.30%

-$25-0.16% -$90

-0.22%

-$35CARS

-0.31%

-1.0%

-0.8%

-0.6%

-0.4%

-0.2%

0%

WEE

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-$18-0.14%

-$17-0.14%

-$11-0.07%

+$1+0.00%

-$68-0.37%

-$55-0.27%

-$14-0.06%

-$30-0.09%

-$8-0.06%

$00%

+$26+0.16% +$4

+0.03%

+$23+0.12%

-$5TRUCKS-0.03%

-0.6%

-0.4%

-0.2%

0%

+0.2%

+0.4%

WEE

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2

July 3, 2017

Sentiment from the Auction Lanes

Our editors and personnel attend about 60 auctions every week across the country to provide key insights:

“Pickup trucks are still king here. Mid-size and compact sedans struggled more than the past few weeks.” Jim in WA

“Dealers say they are building inventory around the July 4th Holiday.” David in TX

“The dealers say they need inventory and are searching all of the resources to find their type of vehicles.” Matt in CO

“Had a lot of comments about high prices from dealers trying to buy nice, low mileage trucks.” Roy in NC

“Most of the sales resulted from online buyers as there weren’t many people in the lanes.” Herb in PA

Retention Ranking of Crossover/SUV Segments 2015 Model Year, Wholesale Average as Percent of Typically-Equipped MSRP

While new entrants continue to arrive in the Sub-Compact Crossover segment, early models in this new

segment have not performed well in comparison to other Crossover/SUV segments.

Vehicle Highlight 2018 Toyota C-HR is a new sub-compact crossover vehicle. Under the hood is a 2.0 L inline 4-cylinder engine producing 144 HP and 139 lb-ft of torque linked to a CVT powering the front wheels. MSRP will range from $22,500 in the XLE to $24,530 in the XLE Premium. A few competitors include the Honda HR-V, Nissan Juke, Mazda CX-3 and Jeep Renegade.

This week’s report includes our Monthly Edition Supplement on Specialty Markets.

3

July 3, 2017

Early June Auctions Achieve Strong Results “In addition to the usual assortment of muscle cars and American classics,

collectible vehicles of all types, including vintage motorcycles and pre-WWII

European exotics, had strong showings at the various auctions held in late May and

the first part of June. We expect this pattern to continue for the remainder of the summer and into fall.”

Eric Lawrence, Director of Specialty Markets

RM Sotheby’s Villa Erba Sale, held on the scenic shores of Lake Como in Italy, was very successful, with total sales topping $28,000,000. Coach built pre-WWII cars drew the most attention and the highest bids.

Mecum’s Vintage Motorcycle Auction, held in Las Vegas, achieved sales of $4,400,000 on the sale of 339 classic motorcycles, with a conversion rate of 80%. Vincents and Indians accounted for seven of the top ten sales. Surprisingly, no Harley-Davidsons cracked the top ten, although their overall sales numbers were solid.

Bonhams’ Greenwich and Leake’s Tulsa auctions were also quite successful, accounting for $7,380,000 and $8,100,000 respectively, with corresponding sell through rates of 94% and 74%. Bonhams’ sale was held in conjunction with the Greenwich Concours d’Elegance, and Leake marked its 45th anniversary in Tulsa.

Notable Recent Auction Sales Include:

1950 Vincent Black Shadow $95,000 (Mecum)

1932 Indian Chief $77,000 (Mecum)

1937 Bugatti Type 57 Atalante Prototype $3,300,000 (RM)

2015 Porsche 918 Weissach Spyder $1,570,000 (RM)

1965 Ferrari 275 GTS Cabriolet $1,970,000 (RM)

1975 Lamborghini Countach LP400 Periscopio $900,000 (RM)

1990 Ferrari F40 Coupe $880,000 (Bonhams)

1993 Bugatti EB110 Coupe $605,000 (Bonhams)

2006 Ford GT Coupe $305,000 (Leake)

1960 Cadillac Eldorado Biarritz Convertible $129,250 (Leake)

Villa Erba. Photo courtesy of RM Sotheby’s.

13500

14000

14500

15000

15500

16000

16500

Vintage Pony Cars

SPECIALTY MARKETS:

COLLECTIBLE CARS

4

July 3, 2017

RV Values at Auction Soften as Wholesale Activity Slows “The wholesale values of both towables and motor homes were lower last month,

and the volume of vehicles that were sold at auction also dropped off quite a bit.

This is a fairly normal seasonal pattern for this time of year, as most dealers have been aggressively

stocking up their inventory for the past several months to be ready for their prime selling seasons. What

we are seeing now is more selective buying to fill holes on their lots and to replace sold units.” Eric Lawrence, Director of Specialty Markets

For Motor Homes (including Class A, B, and C)

Average selling price was $40,244, down $905 (2.1%) from previous month

One year ago, the average selling price was $42,010

Auction volume was down 20% from the previous month

For Towables (including Travel Trailers and Fifth Wheels)

Average selling price was $11,835, down $1,756 (12.9%) from previous month

One year ago, the average selling price was $11,352

Auction volume was down 14.2% from previous month

30000

32000

34000

36000

38000

40000

42000

44000

46000

Jan

-13

Feb

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Feb

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-16

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-17

Feb

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Motor Home Value Trends

9000

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10500

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11500

12000

12500

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13500

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Jan

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Jan

-15

Feb

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-16

Feb

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-17

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Travel Trailer and Fifth Wheel Value Trends

SPECIALTY MARKETS:

RECREATIONAL VEHICLES

5

July 3, 2017

Powersports Market Approaches Seasonal Shift “The Powersports market appears to have reached its peak level for 2017 as values for most of the on-road segments begin to decline this month, while prices for soon to be in-demand fall units are starting to rise.”

Scott Yarbrough, Motorcycle & Powersports Editor

Late June/early July typically sees most of the Powersports market reach peak values at the auctions as warm weather continues to draw buyers to showrooms for the next few months, keeping retail demand strong, but it also marks the turning point at the wholesale level where dealers become more selective about what units they add to their inventory as they want to draw down the number of street bikes heading into cooler weather.

The biggest decliners this month are Scooters, down nearly 3%, followed closely by the Street Bikes, down almost 2%. The Cruisers faired a little better, only down a bit over 1%. All of these segments will surely continue to drop in value going forward, with only a few highly desirable units likely to buck overall market trends.

This month’s biggest gainers are the off-road segments, which usually do better as we approach the fall. Dirt bikes are up by a little under 3%, with Dual Sports up by nearly 2%. ATVs are also up by 1.5%, but the larger Utility Vehicles have not followed suit. They are down around 1%, continuing a trend we have seen over the past nine months or so of returning to more “normal” levels of price performance compared to their “red hot” value retention over the past several years.

1.5%

-1.1%

-0.3%

2.7%1.8%

-2.7%-1.7% -1.7%

-0.9%

-0.3%

-3.0%

-2.0%

-1.0%

0.0%

1.0%

2.0%

3.0%Motorcycle & Powersports Percent Changes June to July 2017

SPECIALTY MARKETS:

POWERSPORTS

6

July 3, 2017

Values of Traditional Long Nose Trucks Are Dropping!

“The Long Hood, Long Wheelbase Big Power Conventionals have

lost a little of their grip on Value Retention and are dropping more

in recent sales.”

Charles Cathey, Editor – Heavy Duty Truck Data

It started showing up a couple of months back, and towards the end of April

and in May, these trucks, late models mostly, dropped quite a bit, although the older they get the depreciation

slows up quite a bit. For a while we have talked about how Over the Road Tractors continue to depreciate.

Upstream venues have pulled some of the real nice used trucks out before they reach auction. This is another factor

affecting the average sale price. There are still more buyers than sellers, so we expect similar results as long as this

mismatch holds up. Conventional/ Vocational Trucks continue to do well.

DATE

Construction/Vocational Over the Road Trucks & Tractors Regional Tractors MODEL

YEARS Value $ Change % Change Value $ Change % Change Value $ Change % Change

06/01/17 81,956 -309 -0.4% 65,403 -1081 -1.6% 55,668 -803 -1.4% 2014-2015

05/01/17 82,265 -426 -0.5% 66,484 -512 -0.8% 56,471 -499 -0.9% 2014-2015

2014-2015 HD Construction/Vocational segment dropped an average of $309 (0.4%) in May compared to the average decline of $426 (0.5%) in April.

2014-2015 HD Over the Road Tractor segment dropped an average of $1081 (1.6%) in May compared to the average drop of $512 (0.8%) in April.

2014-2015 HD Regional Tractor segment dropped an average of $803 (1.4%) in May compared to the average depreciation of $499 (0.9%) in April.

DATE

Construction/Vocational Over the Road Trucks & Tractors Regional Tractors MODEL

YEARS Value $ Change % Change Value $ Change % Change Value $ Change % Change

06/01/17 40,668 -289 -0.7% 29,940 -700 -2.3% 21,702 -427 -1.9% 2006-2013

05/01/17 40,957 -280 -0.7% 30,640 -542 -1.7% 22,129 -430 -1.9% 2006-2013

2006-2013 HD Construction/Vocational segment dropped an average of $289 (0.7%) in May compared to the $280 (0.7%) in April.

2006-2013 HD Over the Road Tractor segment dropped an average of $700 (2.3%) in May compared to $542 (1.7%) average depreciation in April.

2006-2013 HD Regional Tractor segment dropped an average of $427 (1.9%) in May compared to the average drop of $430 (1.9%) in April.

-$2,000

-$1,500

-$1,000

-$500

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Average Wholesale Value Changes (Market)

Construction/Vocational Over the Road Trucks & Tractors Regional Tractors

SPECIALTY MARKETS:

HEAVY DUTY

7

July 3, 2017

Limited Supply Softens Depreciation

“Scarcity in Used Supply Is Helping to Stabilize Wholesale Values.”

Josh Giles, Senior Truck Editor

Overall the wholesale market continues its downward trend. Late model units

(2014-2015) performed well in June. This segment dropped an average of $70 (0.02%) last month. Medium

duty buyers are running their units longer than they have in recent years, therefore used supply in many

areas is limited. This is helping to improve overall depreciation. Most of the newer units you see at auction

are there for a reason and their transaction prices reflect their undesirability.

Older units (2006-2013) also retained their values well in June. These units dropped an average of $86

(0.05%). The strength of the pre-emissions units is forcing many 2006-2007 and older models to be worth

just as much if not more than some 2008 and newer units. As used supply dwindles, these older units are

more desirable than ever. It is going to be interesting to watch these units as more and more late models

are released into the market, putting even more pressure on the 2008 – 2016 model year trucks.

DATE

Medium Duty MODEL

YEARS

DATE

Medium Duty MODEL

YEARS Value $ Change % Change Value $ Change % Change

07/01/17 40,773 -70 -0.2% 2014-2015 07/01/17 17,663 -86 -0.5% 2006-2013

06/01/17 40,844 -353 -0.9% 2014-2015 06/01/17 17,749 -222 -1.2% 2006-2013

With no signs of increasing too much in the near future, fuel is one of the few pieces of the industry that we

hope drop in value. The current national average for a gallon of diesel is $2.49. This is $0.05 cheaper than

last month. Unfortunately, this is also $0.06 more expensive than this time last year. Hopefully these stable

prices will continue for a while.

1745 N. Brown Rd., Suite 130, Lawrenceville, GA 30043| 1.866.452.1400

www.blackbook.com| info@blackbook.com Opt-in to receive reports from Black Book at http://www.blackbook.com/insights/market-insights

-$0.04-$0.04-$0.01

+$0.03

+$0.00-$0.02

+$0.06+$0.09

+$0.16+$0.19+$0.18

+$0.25

-$0.10

-$0.05

+$0.00

+$0.05

+$0.10

+$0.15

+$0.20

+$0.25

+$0.3006/19/1706/12/1706/05/1705/29/1705/22/1705/15/17

Diesel Price Changes

Price Chg/Week Price Chg/Year

SPECIALTY MARKETS:

MEDIUM DUTY