4.23.13

Americans Looking to Spend More on Nearly All Wish List Products, Services Americans are putting more expensive products and services on their Wish List including new and used cars. In addition, they are planning to spend more on those goods and services. Performed annually, the CNW Wish List measures the share of people who are financially able and moderately interested in making an acquisition of the listed products. For example, of Americans who are likely vacationers, nearly 47 percent say they plan to take a long vacation in the U.S. this year. That’s up more than 6 percent vs. a year ago. Anticipated budget for this year’s trip is higher by 2.2 percent. In last year’s survey, people said they were planning on spending about 1.6 percent less. Among the U.S. Key Market for automobiles, 14.8 2009 (for 2010) Long U.S. Vacation Personal Investments Earmarked savings Upgrade Housing Home electronics Home theatre / Big screen TV Interior Furnishings Home Addition Home garden / Landscape Used car in household New Vehicle Buy/Start Business Remodel kitchen Antique furnishings Home office Vacation home Foreign trip / Incl. Cruise

42.9% 30.4% 28.2% 26.4% 26.1% 20.6% 14.9% 14.2% 13.4% 13.9% 12.7% 12.1% 11.3% 7.7% 6.8% 5.3% 4.8%

percent said they planned on making a used-car acquisition. That’s up 8.6 percent with a 3 percent increase in anticipated budget. On the new-car side, 14.5 percent of the Key Market is looking to acquire a vehicle this year, up from last year’s 13.3 percent and 12.7 percent in 2010. New car intenders in this group say they will have a budget for the vehicle that is about 2.9 percent more than the amount reported in 2012.

Jitters Index

-0.68%

Recession for Most is Over For most of the industries represented in the Wish List, the recession is coming to a close. As seen with new and used cars, there has been a resurgence based on pent-

% Chng 2011 (for 2012) -5.30% Long U.S. Vacation 2.77% Earmarked savings -3.75% Home electronics -8.01% Personal Investments -1.14% Upgrade Housing 8.99% Home theatre / Big screen TV -15.34% Interior Furnishings -14.46% Used car in household -5.63% New Vehicle -1.42% Home Addition -7.30% Home garden / Landscape -24.84% Buy/Start Business -0.88% Remodel kitchen -17.20% Home office -13.92% Foreign trip / Incl. Cruise -38.37% Antique furnishings 0.00% Vacation home

44.2% 31.6% 27.7% 26.1% 25.9% 20.2% 16.6% 13.6% 13.3% 13.1% 12.9% 12.8% 11.7% 6.3% 5.7% 5.6% 4.1%

% Chng 5.90% 7.55% 8.75% 0.11% 2.41% 1.87% 15.94% 3.89% 11.43% -6.36% -9.23% 1.90% 5.59% -3.85% 6.34% -15.62% 0.24%

Antic Budget -1.6% 11.6% 8.4% 2.6% 1.9% -5.1% 2.9% 5.6% 2.7% 2.6% 8.1% 1.6% 1.8% 2.2% -5.6% -9.4% -11.1%

2012 (for 2013) Long U.S. Vacation Home electronics Earmarked savings Personal Investments Upgrade Housing Interior Furnishings Home theatre / Big screen TV Used car in household New Vehicle Home Addition Buy/Start Business Remodel kitchen Home garden / Landscape Foreign trip / Incl. Cruise Home office Antique furnishings Vacation home

46.8% 30.4% 29.7% 28.9% 26.9% 18.6% 18.2% 14.8% 14.5% 14.1% 13.2% 12.9% 12.4% 5.9% 6.4% 5.1% 4.0%

% Chng Antic Budget 6.02% 2.2% 9.48% 6.6% -5.98% 12.7% 10.64% 3.9% 3.94% 2.1% 11.94% 3.3% -9.67% -4.7% 8.60% 3.1% 9.13% 2.9% 7.78% 2.7% 3.04% 1.1% 10.41% 1.9% -3.72% 7.4% 2.81% 3.9% 2.88% 1.7% -8.72% -11.3% -2.92% -6.9%

Page 2… CNW Research: Retail Automotive Summary (Continued from page 1) up demand being sated. More important, the higher anticipated budgets for most of those goods and services indicates a willingness to dip into savings and to borrow a bit more in order to acquire that desired product.

Not 1986, Though The world has changed, however. In CNW’s 1985 Wish List study, a new vehicle was third on the list of products/services of items consumers wanted to buy costing more than $2,000. A used vehicle was 14th on that list. A decade later, buying a used car for someone in the household climbed to fourth while a new vehicle dropped to 13th. In the latest survey, new and used are virtually tied at 8th and 9th, and in both cases, a smaller percentage of potential buyers actually had either on their wish list than in 1997.

cy1985 (for 1986) Long foreign trip New home New vehicle New furniture Remodel kitchen New boat Long U.S. vacation Personal investment Home electronics Vacation home Buy or start business In home computer Home addition/Upgrade Used car in hh Acoustic piano Hot tub Swimming pool

Other Industries Suffering; Some Gaining It’s interesting to note that items that were on the list in 1986 have all but disappeared. Hot tubs, swimming pools, new boats, and acoustic pianos – all products that had high appeal in the ‘80s. The concerns over regulations has also hurt the number of people who are willing or thinking about starting a business. Between 1986 and 1998, such plans doubled to 26 percent. And while such plans have increased in the latest survey compared to the previous year, it still remains less than half of the 1997 level. On the other hand, home electronics, not surprisingly, have displaced many of the other products and services, jumping from 9th in ‘86 to 2nd as of this year.

Cocooning Losing Favor During the depths of the recession, people began moving to products and services that were more homecentric. Remodeling kitchens, adding

40.2% 36.2% 31.2% 29.7% 29.6% 27.2% 26.4% 19.5% 19.4% 19.2% 13.6% 11.3% 10.8% 10.6% 7.7% 7.3% 5.3%

1997 (for 1998) Long US vacation In-home computer Home electronics Used car in household Upgrade housing Personal investment Buy / start business Remodel kitchen New furnishings Home addition Big screen TV / Home theater Long foreign trip New vehicle Home office Home garden Antique furnishings Vacation home / Time share

38.2% 31.6% 29.2% 28.1% 27.6% 27.5% 26.3% 25.4% 18.6% 17.9% 15.8% 15.3% 15.2% 13.4% 13.2% 12.1% 10.7%

decks and gardens, general upgrading of the existing house, adding a home office became ways of enhancing their lives. House prices had collapsed, so moving was out of the question for many. But the latest survey shows at least some of that cocooning beginning to subside. For example, adding a deck or landscaping or building a garden have all dropped in intentions. For 2010, about 13 percent of consumers said they would be spending money on those efforts. That slipped to 12.4 percent – down 3.7 percent from 2011. Interestingly, the intention to take a foreign trip including a cruise has edged upward, although still extremely low compared to 1986 when it topped the Wish List. CONTEXT: Beware that much of consumer spending plans this year are because of delayed purchases rather than new intentions. Americans sorely want to come out of their constrained spending mode brought on by the recession. But first they want to “catch up” on their previous wish lists before committing to anything new.

Page 3… CNW Research: Retail Automotive Summary

April Deliveries Set to Hit 1.3 Million April new-car sales are set to increase about 6.5 percent, based on the opening 15 days of the month. That continues to put full-year deliveries at the 15.6 million unit level. Floor Traffic at new-car dealerships is up about 8 percent as the weather begins to shake off winter or, at least, consumers are anticipating a nice Spring. Much of that floor traffic is coming to dealerships on Thursdays and Saturdays. Biggest driver for getting consumers into showrooms: Lease deals that offer some of the hotter models at low-lease payment rates. Prius, for example, at $299 per month. For buyers, regional discounts are spreading. Toyota, for example, is giving an additional $1,000 to anyone in the Northwest who trades in a competing Asian product. Closing ratios are also up, around 3.3 percent. Same store sales, when adjusted for new facilities and partial closures for remodeling or moving, are up 5 percent.

NEW Jan '13 Feb Mar Q1 13 Apr

Pent Up Dmnd Mo. '13 94,250 118,250 101,800 314,300 106,500

Pent Up Dmnd Mo. '12 106,300 109,500 97,500 313,300 101,000

12 v 11 Change 88.7% 108.0% 104.4% 100.3% 105.4%

One thing to watch carefully: Month-over-month sub-prime loan approvals fell in the opening weeks of April compared to March. The near-4 percent decline could have many possible reasons and be nothing more than a single-month anomaly, but some states are beginning to tighten up or threaten the finance industry with additional regulations if there is even the perception of taking advantage of lowincome consumers. On another front, leasing continues to take a growing share of overall sales. This month, it is running at a 27.5 percent rate, up 5.7 percent. On a year-over-year basis, Sub-Prime Approv. however, sub-prime approvals are v Last Mo. up nearly 35 percent. CONTEXT: April will be a solid bellwether of Spring and Summer sales as well as an indicator of total sales for the year. As it stands, 15.5 million looks like the floor for ‘13.

Avg. Delay Avg. Delay Mo. '13 Mo. '12 % Change Still Plan Acq 3.52 3.92 -10.2% 95.37% 3.97 3.87 2.6% 94.62% 3.74 3.59 4.2% 94.28% 3.74 3.79 -1.3% 94.8% 3.52 3.44 2.3% 94.07%

-3.94%

Sub-Prime Approv. v Last Yr.

34.7%

Closing Ratio Closing Ratio

3.28%

7.9%

12.88%

5.01%

Page 4… CNW Research: Retail Automotive Summary

Stats & Graphs Page

JITTERS INDEX

Fed

Gas

Child’s

Job

Day to Day

Condition of

Food

Local

Jitters

Taxes

Prices

Edu

Stability

Needs

Investments

Prices

Taxes

Index

Vs Previous Mo.

0.00%

1.42%

-2.79%

-2.46%

-1.85%

-0.29%

0.51%

0.00%

-0.38%

Vs Mo. ‘12

4.73%

1.54%

-10.68%

-5.99%

0.41%

-4.83%

5.78%

0.51%

0.19%

Remose

Remorse

Returned

Returned

Returned

Returned

cy01

New 3.13%

Used 6.21%

Sales New 17,186,360

Sales Used 42,623,717

New 537,933

Used 2,646,933

New 0.22%

New 1,183

Used 0.78%

Used 20,646

cy02

3.05%

6.28%

16,855,729

43,025,087

514,100

2,701,975

0.16%

823

0.75%

20,265

cy03

2.87%

6.19%

16,674,153

43,571,652

478,548

2,697,085

0.19%

909

0.76%

20,498

cy04

2.94%

6.34%

16,909,896

42,706,103

497,151

2,707,567

0.26%

1,293

0.75%

20,307

cy05

3.19%

6.05%

16,989,521

44,138,263

541,966

2,670,365

0.34%

1,843

0.72%

19,227

cy06

3.42%

5.71%

16,546,460

42,565,544

565,889

2,430,493

0.31%

1,754

0.77%

18,715

cy07

3.68%

5.36%

16,227,496

41,569,561

597,172

2,228,128

0.38%

2,269

0.83%

18,493

cy08

4.71%

5.49%

13,413,435

36,530,404

631,773

2,005,519

0.47%

2,969

0.89%

17,849

cy09

6.21%

7.31%

10,476,665

35,491,762

650,601

2,594,448

0.59%

3,839

0.92%

23,869

cy10

6.11%

7.92%

11,588,725

36,883,987

708,071

2,921,212

0.63%

4,461

1.06%

30,965

cy11

5.64%

7.24%

12,768,617

38,792,169

720,150

2,808,553

0.57%

4,105

0.94%

26,400

cy12

5.19%

6.83%

14,576,694

40,525,869

756,530

2,767,917

0.51%

3,858

0.92%

25,465

cy13 est.

5.02%

6.67%

15,250,000

41,000,000

765,550

2,734,700

0.48%

3,675

0.88%

24,065

Buyer’s Remorse Going Down Six months after making a new or used car purchase, a certain percentage of buyers begin to have buyer’s remorse, wondering why they acquired a car or truck at all. Based on the 2013 Purchase Path study, that figure has begun to shrink after the recession, although it still remains significantly higher than pre-recession years. For example, in 2001, only 3.13 percent of new-car buyers suffered remorse within six months. Today the figure is 5 percent, but lower than in ’09 through ’12.

10.00%

Buyers' Remorse (Six Months)

8.00% 6.00% 4.00% 2.00% 0.00%

New Used cy01 cy02 cy03 cy04 cy05 cy06 cy07 cy08 cy09 cy10 cy11 cy12 cy13 est.

Page 5… CNW Research: Retail Automotive Summary Document 106m Franchised Dealer Sales Independent Dealer Sales Casual (Private) Sales Total Sales

Anticipated Apr cy13

Actual Apr cy12

% Chng 13v12

YTD cy2013

YTD cy2012

% Chng 13v12

1,383,588

1,367,543

1.2%

4,048,433

3,688,879

9.7%

1,237,299

1,237,725

0.0%

3,724,980

3,512,261

6.1%

1,228,829

1,187,336

3.5%

3,520,740

3,492,418

0.8%

3,849,716

3,792,604

1.5%

11,294,153

10,693,558

5.6%

April Used Sales Up a Tick; FICO Lower 750 700 650 600

500

Used FICO Scores Lower The trend toward lower FICO scores among used-car buyers continues, falling to 561.3 in the opening days of April. The share of sub -670 credit-score buyers increased to 46.9 percent from March’s 46.37 percent and year-ago’s 35.22 percent. A new addition to the Used-Car FICO data (Document 125m at CNWbyWEB.com) is monthly tracking of retired military credit scores. While CNW has had the data since 1995, it has never before been part of a regular release. In April, Retired Military FICO was 609.8 for used cars and trucks. Except for eight months in 2008, retired military has remained in the 600s since 1995. CONTEXT: Expect the trend toward private party sales to continue for the next four months. Overall, however, all channels are going to finish the year ahead of 2012.

April: 609.8

550

cy85 cy95 cy01 Mar Sep Mar Sep Mar Sep Mar Sep Mar Sept Mar Sept Mar Sept Mar Sept Mar

April’s gain in used-car sales will be slight, up about 1.5 percent. Most of the increase will come from Private Party (casual) sales. Franchised new-car dealers’ used-car operations are set to increase a shade over 1 percent to 1.38 million units while Independent dealers will basically remain static compared to last year at 1.23 million. As expected and reported, the shift toward private party sales is increasing as the weather turns warmer and Spring begins.

Retired Military

Used FICO Score (Avg.) 640 620 600 580 560

April: 561.3

540 Jan Mar May July Sept Nov Jan Mar May July Sept Nov Jan Mar '11 '12 '13

Page 6… CNW Research: Retail Automotive Summary Document 107m

Jan. '13 Feb '13 Mar '13 Apr '13 Apr ’12 May '12 June '12 July '12 Aug '12 Sept '12 Oct '12 Nov. 12 Dec. '12 Percent Change Yr over Yr Month Over Month Price

Franchised Asking Price

Independent Asking Price

Franchised Trans Price

Franchised % of Asking

Independent Trans Price

Independent % of Asking

$11,336 $11,321 $11,806 $11,716 $11,507 $12,119 $11,684 $12,136 $12,103 $11,458 $11,419 $11,583 $11,186

$9,867 $9,892 $10,276 $10,143 $10,216 $9,987 $9,937 $9,842 $9,849 $10,172 $9,872 $9,991 $10,148

$10,558 $10,562 $11,112 $11,042 $10,958 $11,296 $10,802 $11,185 $11,138 $11,021 $10,553 $10,894 $10,654

93.14% 93.21% 94.12% 94.25% 95.23% 93.21% 92.45% 92.16% 92.02% 96.19% 92.42% 94.05% 95.24%

$9,158 $9,174 $9,640 $9,529 $9,576 $9,071 $9,069 $8,943 $8,936 $9,598 $9,019 $9,334 $9,452

92.81% 92.74% 93.81% 93.95% 93.74% 90.83% 91.27% 90.87% 90.73% 94.36% 91.36% 93.42% 93.14%

1.82% -0.76%

-0.71% -1.29%

0.77% -0.63%

-1.03% 0.14%

-0.49% -1.15%

0.22% 0.15%

Used Prices Squeeze a Gain in April For Franchised New-Car Dealers, April’s opening days were reason for some optimism. While retail asking prices were off about 0.76 percent vs. March, they were solidly ahead of last year by nearly 2 percent. Even actual transaction prices (excluding add-ons such as extended warranties), the core transaction price was up three-quarters of a percent. For Independent dealers, both asking and transaction prices were off a bit vs. year ago as well as vs. last month. The month-over-month figures are somewhat skewed because March saw an unusually big gain vs. February. For franchised dealers, transaction prices were up more than $500. The slip in April was barely $60 per unit, and, in fact, beating the transaction prices registered in both January and February. The same can be said for independent dealers.

Used Vehicle Days' Supply 52 50 48 46 44 42 40

April: 51.37

Page 7… CNW Research: Retail Automotive Summary

Kontos Kommentary Summary Wholesale used vehicle prices rose seasonally but fell annually in March, indicating a softening overall pricing environment compared to the last three Spring/tax seasons. The softening is to be expected as used vehicle prices had risen to high levels relative to new vehicle prices and as used vehicle supplies, including those from tradeins on higher new vehicle sales, have begun growing. Still, strong retail sales of used and certified-pre-owned vehicles provided demand support that prevented prices from softening further. Details According to ADESA Analytical Services’ monthly analysis of Wholesale Used Vehicle Prices by Vehicle Model Class1, wholesale used vehicle prices in March averaged $10,028 – up 2.9% compared to February but down 5.6% relative to March 2012. At the model class segment level, used vehicle prices seemed to emulate patterns seen in new vehicle sales data in that fullsize pickup trucks and small SUVs and crossovers had strong prices that perhaps mirrored solid demand for these vehicles at new car dealerships. The rebounding construction economy is most probably playing a role in higher pickup prices, while small SUVs and crossover prices are being impacted by the growing popularity of these flexible, relatively fuel-efficient and welloptioned vehicles. Conversely, larger SUVs and crossovers have experienced significant year-over-year price declines through the first quarter. Prices for used vehicles remarketed by manufacturers were up 2.1% month-over-month, but down 2.8% yearover-year. Prices for fleet/lease consignors were up 5.2% sequentially, but down 2.4% annually. Dealer consignors saw a 4.0% average price increase versus February 2013, but a 7.8% downturn versus March 2012.

Wholesale Used Vehicle Price Trends Average Prices ($/Unit) Mar-13 Feb-13 Mar-12

Latest Month Versus: Prior Month Prior Year

Total All Vehicles

$10,028

$9,747

$10,625

2.9%

-5.6%

Total Cars Compact Car Midsize Car Fullsize Car Luxury Car Sporty Car

$9,189 $7,065 $8,520 $7,883 $12,057 $13,053

$8,854 $6,910 $8,262 $7,413 $11,963 $12,144

$9,922 $7,684 $8,970 $8,416 $13,335 $14,163

3.8% 2.2% 3.1% 6.3% 0.8% 7.5%

-7.4% -8.0% -5.0% -6.3% -9.6% -7.8%

Total Trucks Mini Van Fullsize Van Mini SUV Midsize SUV Fullsize SUV Luxury SUV Compact Pickup Fullsize Pickup

$9,753 $6,929 $9,982 $11,227 $6,911 $10,647 $18,144 $7,550 $11,790

$9,531 $6,910 $9,952 $10,993 $6,560 $10,130 $18,583 $7,459 $11,532

$10,286 $7,600 $9,772 $11,409 $7,447 $12,648 $19,572 $8,090 $11,656

2.3% 0.3% 0.3% 2.1% 5.4% 5.1% -2.4% 1.2% 2.2%

-5.2% -8.8% 2.2% -1.6% -7.2% -15.8% -7.3% -6.7% 1.1%

Total Crossovers

$13,572

$13,398

$14,176

1.3%

-4.3%

Based on data from CNW Marketing/Research, retail used vehicle sales were the highest for March since 2006 and were up 17.3% year-over-year for franchised dealers and 7.1% for independent dealers. March sales of certified used vehicles hit an all-time high, with sales of 190,065 -- up 9.0% from March 2012 (174,337, the previous high), and 21.1% higher than February 2013 -- based on data from Autodata.

Page 8… CNW Research: Retail Automotive Summary cy13 All Sales Percent Change v Previous Year

Jan 1,042,721 14.2%

Feb 1,191,841 3.7%

March 1,452,521 3.4%

Fleet and Commercial Use Total Fleet (Monthly Approximates) Percent Change v Previous Year FLEET COMMERCIAL VALUE -- Per Unit FLEET COMMERCIAL VALUE -- Total $Bllns Percent Change v Previous Year Government Fleet Share Gov't of Total Sales Percent Change v Previous Year

37.11% 386,954 7.3% $29,447 $11.39 16.04% 15,537 1.49% -17.4%

37.23% 443,722 5.9% $29,466 $13.07 14.46% 18,235 1.53% -22.2%

39.24% 569,969 9.9% $29,807 $16.99 18.68% 22,659 1.56% -19.7%

Small Business Fleet and Commercial Use Share Small Business of Total Sales Percent Change v Previous Year

46,505 4.46% 29.3%

55,778 4.68% 17.8%

70,012 4.82% 17.0%

Medium Business Fleet and Commercial Use Share Medium Business of Total Sales Percent Change v Previous Year

85,712 8.22% -3.4%

111,676 9.37% -4.3%

136,827 9.42% -9.1%

Large Business Fleet, Daily Rental, Commer. Share Large Business of Total Sales Percent Change v Previous Year

239,200 22.94% 10.1%

258,034 21.65% 11.4%

340,471 23.44% 21.7%

70.00%

Share Retail

Fleet-Commercial Sales Rise Again March saw a comfortable ten-percent increase in Commercial/Fleet sales with an 18.7 percent boost in vehicle value (excluding upfitting). Nearly 570,000 C/F sales represented 39 percent of all sales in March, the highest percentage of 2013. While government fleet sales were off about 20 and Medium-size business sales were down nine percent, small and large business fleets including daily rentals more than made up the difference, up 17 percent and 21.7 percent respectively. As a share of total sales, government is beginning to edge back up and now stands at 1.6 percent. Expect this figure to regain some quicker momentum as state governments find themselves in dire need of replacing older vehicles for police, services and construction. Small businesses will be the harbinger of the economy, as always. The gains made thus far this year are both telling and encouraging. While the year-overyear gains have shrunk, share of total sales continues to rise.

Big Gain in Fleet-Commercial Value

The value of C-F vehicles in the first quarter hit $41 billion with April’s figure the largest of the year at nearly $17 billion. Also in March, the per-unit value climbed to its highest level of 2013 to $29,807. Add significant upfitting and the auto industry including accessory manufacturers added more than a third to the value of those vehicles.

62.50% 55.00% 47.50% 40.00%

CONTEXT: With about 70 percent of all sales now going to pure retail (including retail to trades and small business), the industry seems to be back on track with consumers. But the C-F segment will be responsible for the industry eventually climbing back to 16-plus million units. Historically, the C-F sales have accounted for 43 to 45 percent of sales. In this smaller market, the C-F sales level should be above the historic level, not behind it. And while C-F has been at the forefront of sales gains thus far this and most of last year, it has to pick up the pace with the “backfill” coming from pure consumer retail.

Page 9... CNW Research: Retail Automotive Summary February 2013

Working Out Kinks in Uneven Product Availability; Electrics Being Force Fed to Buyers Sales in March showed little that is indicative of consumer behavior or economic shifts. Mostly, the solid sales numbers showed the uneven product availability in the marketplace right now. Events of the day or week are driving people toward or away from certain types of vehicles. For example, fuel prices appear to have stabilized, so Budget Cars had their lowest share of total sales thus far in ‘13. Full-size pickups would have taken even a larger share of sales if some of the new products and/or features had been available. Instead, many dealers were left with F150s when contractors were looking for F250s or gas engine models when the farmer/ranger segment wanted diesel. A major part of the problem is the inability to match today’s forecasts with tomorrow’s demand. While that has always been an issue, current automaker thinking is to not overbuild products and keep them in storage lots. Getting better balance on the production and demand see-saw has become gospel at most automakers. This from an industry that grew up on building as many as possible even if it exceeded demand. One advantage of over-building was the availability of virtually any model in any configuration for any customer’s desires.

Budget Car

Economy Car

1.94%

13.68% 13.24%

1.71% 1.64%

Entry Level Utility Vehicle

12.64%

Electric Car

11.57%

11.48%

0.26% 0.20% 11.27%

0.22%

Some are saying electric vehicles are “gaining traction.” Not quite the correct analogy. EVs are actually being pushed over a cliff with massive incentives. And for good reason. It’s to every automaker’s advantage to put as many EVs into the market as possible to meet the EPA’s increasingly stringent fuel economy standards. Do people want an electric? Fiat is about to find out. It will be leasing its 500e for the same rate as its base model. Some say it will cost Fiat $10,000 per electric car it sells. The company says it will build electric 500s in a quantity that meets demand “and not one unit more.”

Page 10… CNW Research: Retail Automotive Summary February 2013 Full Size Pickup 11.89%

Full Size Van 11.95%

1.51% 1.49% 11.43%

1.47%

Luxury Car

Lower Midrange 11.06%

1.53%

10.93% 1.42% 1.38%

10.59%

Lower Mid Range Utility Vehicle

Large Utility Vehicle

9.74%

9.55%

1.51% 9.07% 1.31%

1.49%

Full size pickups and vans are usually clear indicators of the health of the business community. Unfortunately, the full-size pickup share of sales in March dipped a half percentage point vs. February. The good news: It wasn’t because of discouraged businesses. The primary reasons: The unavailability of the certain pickup configurations for those looking for a work truck. For example, contractors report they can’t find mid-priced F-150s. Most are either high-end or entry level, neither of which is suitable for the trades. Full-size vans, on the other hand, are well stocked and well configured, having the best month of 2013.

Page 11… CNW Research: Retail Automotive Summary February 2013

Midi-Van 0.30%

Mid Range Utility-Vehicle 2.73%

0.30% 0.25% 2.49% 2.41%

Minivan

Near Luxury Car 3.42%

3.52%

3.42%

2.83%

3.42% 3.34%

Premium Car

Premium Mid-Range Car

0.29%

4.20%

0.25%

0.25%

4.16%

3.99%

Mid-size vans, like pickups, were in relatively short supply and of those on the lots, most were high-end models directed more at the consumer market than the business customer. Virtually all of the share decline in March can be traced to small and medium size businesses postponing a midi-van acquisition until the “right” units are available.

Page 12… CNW Research: Retail Automotive Summary February 2013 Premium Sporty Car 0.30%

Premium Utility Vehicle 0.30%

3.07%

3.00%

0.28%

2.62%

Standard Mid Range Car 12.39%

Small Pickup 1.70%

12.37% 1.61% 11.99%

1.49%

Sport Utility Pickup 0.20%

Touring Car

0.21% 0.16%

1.93% 1.67%

2.13%

Whether by chance or design, the Touring Car market has the right mix of products in the right configurations. The month-to-month increase in share of sales is a reflection of that supplydemand balance, lacking in virtually all other market segments.

Page 13… CNW Research: Retail Automotive Summary February 2013

Traditional Car

Ultra Upscale Car 0.02%

0.02% 0.01%

0.00%

0.00%

0.00%

Ultra Luxury Sporty Car

Upper Mid-Range Utility

0.05% 0.04%

1.89% 0.04%

1.79% 1.69%

Ultra-Premium Utility Vehicle 0.05%

Upper Premium Sporty Car 0.19%

0.06% 0.05% 0.18%

0.19%

The Upper Mid-Range Utility market may well be saturated and coming down off of a high in terms of share of overall sales. The demographic profile of the people who normally fit into this segment were only moderately impacted by the recession and continued buying vehicles throughout the down economic period. Since there is little pentup demand for Upper M-RU models, manufacturers of these products have to find “fresh blood’ to maintain sales levels. That’s an expensive proposition and perhaps left for another day.

Page 14… CNW Research: Retail Automotive Summary March 2013

Jean Halliday’s

Tie-Ins Setting the Stage for Audi, Mazda Gotta Question How Comics and Luxury Brand Cohabitate

Audi New Iron Man Deal: Marvel or Misstep? Audi is in the midst of an astonishing global promotion tied to its co-branding with Marvel and the upcoming Iron Man 3 movie, arriving in theaters May 3. The automaker is touting that some lucky person will make ”comic book history” and get to see their name in a Marvel comic book. Entrants must drive the story by visiting www.steerthestory.com and come up with the final frame of Iron Man's battle against villain Blizzard's icy attack. Audi is advertising the co-branded push with Marvel in this YouTube video Loren Angelo, a marketing exec with Audi of America, called the deal “a strategic collaboration for us.” He likened the R8's innovation leadership to the Iron Man character, which has “consistently evolved throughout the trilogy as he masterminds new trends.” It's not surprising that Audi is doing some sort of promotion related to the newest Iron Man flick. The brand had product placement and ad deals with Marvel for the first two Iron Man movies. And Robert Downey Jr. will be back in the starring role of Tony Stark, who will drive an Audi, all-electric, R8 e-tron sports car prototype in the movie. His girlfriend Virginia “Pepper” Potts, again played by Gwyneth Paltrow, will be driving an Audi S7 Sportback., What is surprising is this promotion. It just doesn't seem fitting for a progressive, luxury car brand. What's the promotion's target? Comic book readers? Artists? When the last Iron Man movie opened in May 2010, then-distributor Paramount Pictures reported via exit polling that the first weekend crowd was 60% male and 60% over 25 years old. So, one could argue Audi is trying to build brand awareness and future consideration among young males. Still, what sort of geek wants to win this thing and get their name in a comic book? I mean wouldn't you rather win an R8? Just because this kind of thing has never been done before doesn't make it a fitting co-branding deal. The whole thing just feels forced.

These kind of “drive the stories” promotions are really starting to gain momentum in the market place. Audi asked consumers to vote on YouTube for one of three endings for its Super Bowl commercial this year. And Ford Motor Co.'s Lincoln brand turned to Twitter to help generate story line ideas for its Super Bowl ad. It was the first time Tweets helped generate ideas for a spot in the Big Game. While Lincoln's push got a lot of ink, the resulting Super Bowl commercial was a big yawn. Only people in on the whole experiment “got it.” It's encouraging to see automakers trying

Page 15… CNW Research: Retail Automotive Summary March 2013 new tools to try to reach and engage new, younger prospects. But these kind of co-branding efforts really need to relate to the soul of the car brand. Sky's the Limit For Mazda In another movie deal, Mazda USA has linked up with the upcoming space thriller “Star Trek Into Darkness” to help launch the new Mazda6. Mazda is also using the tie-in to tout its SKYACTIV Technology that improves driving, safety and fuel economy with these claims on YouTube: “See the Future Today” and “Turning science fiction into science.” These kind of comparisons make sense, What doesn't make sense is the movie trailer Mazda uploaded on YouTube this month. Mysteriously, there's no Mazda in the clip. For now, the carmaker is mum on other ways it will promote this marriage. Look for more info from Mazda on how it will extend this Star Trek flick deal this month. Honda's Shout Out to Dads Honda made a pitch to dads this month via an online road trip of three popular blogging fathers, who traveled nearly 2,000 miles in the 2013 Crosstour. During their 30-plus hours of driving, they blogged and posted some 8 hours of video. Andy Herald and Charlie Capen of HowToBeADad.com were joined by David Vienna of TheDaddyComplex.com in their drive in Honda's crossover from Los Angeles to the Dad 2.0 Summit in Houston, Texas. Here's their story On the surface, it doesn't look like Honda got much in return for loaning the Crossfire to this trio and for footing the bill for their trip. The YouTube video Honda posted about the adventure didn't generate that many viewsunder 2,000 views in a week. But the Daddy Complex bloggers got more bounce. They managed 27,500 “likes” on their Facebook page and 54 Tweets Probably more important were several comments from viewers that the Crosstour Adventure portrayed fathers in a positive light, instead of the often bumbling characters shown in the media. With women influencing some 85% of all car purchases, it's smart to woo men with kids. Showing cool Dads having fun in the Crosstour can give the whole brand a more male-friendly aura, like Pontiac did with its Montana minivan and cowboy ads. The Crosstour, arrived as a 2010 model as the Accord Crosstour and

Mazda’s Star Trek tie-in

Honda’s Dad Tour has always been aimed at family-oriented folks. The 2013 version is beefier and better looking, but with a sticker price ranging from the high $20,000s to high $30,000, we wonder how many parents with kids can shell out that kind of dough. Still, it's safe to say Honda got a much bigger pay back for this tour than its minimal investment.

CNW Research: Retail Automotive Summary

Back Page *Deliveries not sales Based on First 15 Days of April

Apr 1-15

Apr 1-15

% Chng

Actual Sales

Apr '13

Full Mo

cy2013

cy2012

13 v 12

Apr '12

Sales

Change

New Cars

Extension

Detroit 3

199,672

188,134

6.1%

199,379

211,607

6.1%

Asian

185,364

168,088

10.3%

353,964

390,344

10.3%

51,027

46,662

9.4%

87,208

95,366

9.4%

436,063

402,884

8.2%

640,551

697,317

8.9%

234,162

221,693

5.6%

330,982

349,598

5.6%

5.1%

182,105

191,303

5.1%

38,518

26.6%

European Ttl Pass. Cars New Trucks Detroit 3 Asian European

66,782

63,571

7,316

5,780

26.6%

30,431

Ttl Lt. Trucks

308,260

291,044

5.9%

543,518

579,419

6.6%

Ttl Industry

744,323

693,928

7.3%

1,184,069

1,276,736

7.8%

Apr 1-15

Full Apr

% Chng

Prev Mo

Prev Mo

% Chng

cy2013

cy2012

13 v 12

cy2013

cy2012

13 v 12

Lease Share

27.6%

26.1%

5.7%

27.1%

26.1%

3.8%

Floor Traffic - New

90.88

84.2

7.9%

87.4

83.47

4.7%

Floor Traffic - Used

94.91

87.25

8.8%

93.49

86.23

8.4%

Apr 1-15

Prev Yr

% Chng

% Chng

Pent Up Demand

Units

cy2013

cy2012

Same Mo '12

Prev Mo

Mar '13

106,500

Avg. New MSRP

$37,984

$37,004

2.65%

-0.02%

Mar '12

101,000

Total Discounts

$5,477

$5,129

6.78%

0.19%

% Change

5.4%

Manufacturer Incentives

$4,197

$3,671

14.33%

0.83%

Dealer Incentives

$1,280

$1,458

-12.21%

-1.87%

Purchase Delay

Months

Core Transaction Price****

$32,507

$31,875

1.98%

-0.05%

Mar '13

3.52

% Mfg Incentive of MSRP

11.05%

9.92%

11.4%

Mar '12

3.44

% Ttl Discounts of MSRP

14.42%

13.86%

4.0%

% Change

2.3%