U.S. Auto Industry Chartbook 4Q18

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Dwayne Greer
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1 U.S. Auto Industry Chartbook 4Q18 / 1 U.S. Auto Industry Chartbook 4Q18 January 2019

2 Key Messages Auto sales closed 2018 at 17.2 million units, virtually unchanged from the previous year Robust economic growth has been the main driver of auto sales Going forward, higher interest rates and a higher supply of offleasing vehicles will exert downward pressures on demand for new vehicles Retailers are expected to focus on the more lucrative used vehicle segment Electric vehicle sales increased 80% in 2018, surpassing 350,000 units. EV sales are expected to grow further in 2019

3 01 Sales U.S. Auto Industry Chartbook 4Q18 / 3

4 U.S. Auto Industry Chartbook 4Q18 / 4 Sales U.S. Total light weight vehicle sales (SAAR, million units) Total Domestic Imported

5 U.S. Auto Industry Chartbook 4Q18 / 5 Sales U.S. Total vehicle sales (SAAR, million units) Cars Light trucks Medium and heavy trucks (right axis)

6 U.S. Auto Industry Chartbook 4Q18 / 6 Sales U.S. Total vehicle sales (Share of total) 80% 70% 60% 50% 40% 30% 20% 10% 0% Trucks Cars

7 U.S. Auto Industry Chartbook 4Q18 / 7 Sales U.S. Domestic auto inventory/sales ratio (Seasonally adjusted)

8 1Q18 2Q18 3Q18 4Q18 1Q18 2Q18 3Q18 4Q18 1Q18 2Q18 3Q18 4Q18 1Q18 2Q18 3Q18 4Q18 1Q18 2Q18 3Q18 4Q18 1Q18 2Q18 3Q18 4Q18 1Q18 2Q18 3Q18 4Q18 1Q18 2Q18 3Q18 4Q18 1Q18 2Q18 3Q18 4Q18 1Q18 2Q18 3Q18 4Q18 1Q18 2Q18 3Q18 4Q18 U.S. Auto Industry Chartbook 4Q18 / 8 Sales U.S. Sales growth by brand (4Q18, yoy % change) BMW Daimler AG Fiat Chrysler Ford Honda Hyundai Mazda Nissan Subaru Toyota Volkswagen Source: BBVA Research and Bloomberg

9 01/01/ /01/ /01/ /02/ /02/ /03/ /03/ /04/ /04/ /05/ /05/ /06/ /06/ /07/ /07/ /07/ /08/ /08/ /09/ /09/ /10/ /10/ /11/ /11/ /12/ /12/ /12/ /01/2019 U.S. Auto Industry Chartbook 4Q18 / 9 Stock market Stock market indices (Index, 1/1/2018 = 100) S&P 500 North America Automobiles Valuation Peers Source: BBVA Research and Bloomberg

10 U.S. Auto Industry Chartbook 4Q18 / 10 Auto retailers U.S. Auto retailers: revenue by product segment (yoy % change) Q Q Q Q Q Q Q3 New Vehicle Sales Used Vehicle Sales Parts & Service Financial Services Source: BBVA Research and Bloomberg

11 U.S. Auto Industry Chartbook 4Q18 / 11 Prices U.S. Consumer price index: cars and trucks (yoy % change) 20% 15% 10% 5% 0% -5% -10% -15% New Used

12 U.S. Auto Industry Chartbook 4Q18 / 12 Prices U.S. Auto Prices , , , , Manheim used vehicles value index Edmunds Vehicle True Market Value (right axis) Source: BBVA Research, Haver Analytics and Bloomberg

13 U.S. Auto Industry Chartbook 4Q18 / 13 Financial conditions U.S. Interest rates (yoy % change) month new car loan 36-month used car loan 60-month new car

14 U.S. Auto Industry Chartbook 4Q18 / 14 Financial conditions U.S. Newly originated installment auto loans ($ billion, eop, 4-qtr moving avg.)

15 U.S. Auto Industry Chartbook 4Q18 / 15 Financial conditions U.S. Auto loan 90+ days delinquent (% of balance)

16 U.S. Auto Industry Chartbook 4Q18 / 16 Leasing U.S. Leasing penetration rate (%) Source: BBVA Research and Bloomberg

17 U.S. Auto Industry Chartbook 4Q18 / 17 Gasoline U.S. Spot price (cents per gallon)

18 02 Consumers U.S. Auto Industry Chartbook 4Q18 / 18

19 U.S. Auto Industry Chartbook 4Q18 / 19 Consumers U.S. Consumer sentiment index Current economic conditions Consumer expectations

20 U.S. Auto Industry Chartbook 4Q18 / 20 Consumers U.S. Plans to buy a car within 6 months (% of respondents)

21 U.S. Auto Industry Chartbook 4Q18 / 21 Consumers U.S. Nonfarm payroll growth and unemployment rate (yoy % change and %) 3% 2% 1% 0% -1% -2% -3% -4% -5% -6% Nonfarm payroll Unemployment rate (%, right axis)

22 U.S. Auto Industry Chartbook 4Q18 / 22 Consumers U.S. Household equity and home prices Owners equity in real estate (NSA billion $, left axis) FHFA house price index (yoy change, right axis) 10% 8% 6% 4% 2% 0% -2% -4% -6% -8% -10% -12%

23 03 Production U.S. Auto Industry Chartbook 4Q18 / 23

24 U.S. Auto Industry Chartbook 4Q18 / 24 Production U.S. Auto production Industrial production index: autos (2007=100, left axis) BEA Auto Production Estimate (SAAR, million units, right axis)

25 04 Structural U.S. Auto Industry Chartbook 4Q18 / 25

26 Miles per capita Million miles U.S. Auto Industry Chartbook 4Q18 / 26 Fundamentals Mean age of passenger cars in operation (years) Vehicle miles of travel (total and adjusted by labor force) Population adjusted (left axis) Total (right axis)

27 U.S. Auto Industry Chartbook 4Q18 / 27 Demographics U.S. Population projections by age (millions) years 65 years and over

28 Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q U.S. Auto Industry Chartbook 4Q18 / 28 Electric vehicles U.S. Electric vehicle sales (units)

29 05 Forecasts U.S. Auto Industry Chartbook 4Q18 / 29

30 U.S. Auto Industry Chartbook 4Q18 / 30 Forecast Auto sales (millions units) Real GDP growth* (% change) Unemployment rate (% avg.) Fed funds* (%, eop) 5-year Treasuries* (%, avg) *Forecast under revision Source: BBVA Research

31 U.S. Auto Industry Chartbook 4Q18 / 31 U.S. Auto Industry Chartbook 4Q18 January 2019

U.S. Auto Industry Chartbook 2Q18

U.S. Auto Industry Chartbook 2Q18 / 1 U.S. Auto Industry Chartbook 2Q18 July 2018 Key Messages Sales remain resilient backed by robust economic growth Automakers continue to benefit from consumers favoring