Pub. 5 Issue 1

24 3 JUNE 28, 2019 THE KERRIGAN AUTO RETAIL INDEX Power. “Used sales at franchised dealers are expected to increase by nearly 9% through the first half. Most significant for retailers is the greater profit opportunity due to higher front-end gross and F&I income earned compared with new vehicles. Overall combined new and used retailer profits through the first half are on pace to reach $23.4 billion, up 3.7% from last year. Shifting away from the traditional focus on volumes, 2019 remains on target to be one of the best years recorded.” One of The Kerrigan Index component stocks reported earnings in June. CarMax reported record first quarter results with net sales up 12% to $5.4 billion and net income up 12% to $267 million. Per vehicle profits were stable with used vehicle retail gross profit per unit at $2,215. CarMax also announced the continued rollout of its omnichannel capability, which offers a seamless buying experience to consumers who shop online, in store or both. The company has plans to implement this capability into most Florida dealerships this spring and will open its second customer experience center this summer in Kansas City, Kansas. Expansion of the omnichannel efforts, where CarMax offers customers online price estimates and appraisals, vehicle delivery and expedited vehicle pickup at its stores, is expected to continue this summer in North Carolina and Virginia. Group 1 Automotive announced its launch of AcceleRide, its online car buying platform which will be incorporated into Group 1 dealerships' websites. Through AcceleRide, customers can browse Group 1's inventory of more than 38,000 new and used vehicles, customize features, select financing and payment terms and coordinate delivery to their home, office or local dealership. It is currently available at 79 Group 1 dealerships and will be available at all 116 of its US stores by the end of summer. Other significant industry data include: • Per JD Power, the average new vehicle retail transaction price is expected to be $33,665, up 5% from last year. • Days to turn, the average number of days a new vehicle sits on a dealer lot before being sold to a retail customer, was 75 days through June 23 rd . This is up 6 days from 2018. • Average incentive spending per unit through the first half of the year was an estimated $3,788, down $130 from last year. Spending on cars is down $304 to $3,588, while spending on trucks/SUVs is down $65 to $3,871. • New vehicle consumer spending is expected to total $38.6 billion in June, down $800 million from last year’s level. • Trucks and SUVs accounted for 71.1% of new vehicle retail sales through June 23rd, the highest level ever for the month of June. • Fleet sales increased 3.9% in June and are expected to be 322,000 units for the month, representing roughly 22% of total light vehicle sales. Sources: Automotive News, JD Power, LMC Automotive, Cox Automotive, SEC Filings and Yahoo Finance About Kerrigan Advisors: Kerrigan Advisors is the leading thought partner and sell-side advisor to auto dealers in the US, having sold 79 dealerships in the last five years, including five of the Top 100 Dealership Groups , more than any other firm in the industry. Kerrigan Advisors works with auto retail’s leading families on their growth strategy, capital allocation, real estate and buy/sell transactions. Kerrigan Advisors is often asked to keynote top auto retail conferences, as well as leading manufacturer even ts. In addition to The Kerrigan Index™ monthly, the firm publishes a quarterly Blue Sky Report ® , the industry authority on blue sky multiples and buy/sell trends. To sign up to receive both reports, please email your contact information to info@kerriganadvisors.com or visit our website at www.kerriganadvisors.com.