North American Sales Forecast & WardsAuto Barometer North American Sales Forecast & WardsAuto Barometer Outlook for Q4 2015 and 2016 Haig Stoddard, Industry Analyst North American Sales Forecast & WardsAuto Barometer Forecast North America Light-Vehicle Sales Long-Term Outlook through 2020 Domestically Built Millions Import % Domestic (right scale) 22 84% 20 82% 18 16 80% 14 12 78% 10 8 76% 6 4 74% 2 0 72% 2009 Actual 2010 Actual 2011 Actual Haig Stoddard, Industry Analyst 2012 Actual 2013 Actual 2014 Actual 2015 Forecast 2016 Forecast 2017 Forecast 2018 Forecast 2019 Forecast 2020 Forecast North American Sales Forecast & WardsAuto Barometer WardsAuto 15-Month North American Outlook – Q4 2015/CY 2016 Industry Forecasts Sales-N.America (Yr/Yr % Change) 7% 7% 6% 6% 5% 5% 4% 4% 3% 3% 2% 2% 1% 1% 0% 0% Q1 2015 Q2 2015 Q3 2015 6% Q1 2016 Q2 2016 Q3 2016 Q4 2016 6% One less production day from 2015 5% Production-N.America (Yr/Yr % Change) Q4 2015 5% 4% 4% 3% 3% 2% 2% One more production day from 2015 1% 0% 1% 0% -1% -1% Q1 2015 Haig Stoddard, Industry Analyst Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016 North American Sales Forecast & WardsAuto Barometer North American Industry: Light-Vehicle Sales Domestically Built 2014 Actual Import 2015 Forecast 2016 Forecast 4.4 4.4 15.8 16.1 22 Millions 20 18 4.3 16 14 12 10 8 15.1 6 4 2 0 Haig Stoddard, Industry Analyst Fourteen-year high volume in U.S., record sales in Canada and Mexico, push North America light-vehicle sales to 20.3 million in 2015, the first time above 20 million Volume rises to 20.5 million in 2016, with nearly all gains from domestically sourced vehicles thanks to increased capacity (replacing imports) and U.S. demand for big trucks North American Sales Forecast & WardsAuto Barometer Forecast North American Light-Vehicle Sales by Major Segments (Domestically Built vs. Import) CUVs forecast for the biggest volume growth in 2016 and top 6 million units. Ironically, CUV gains strongest in imports due to heavy overseas sourcing of small and luxury versions. Pickups also up, but most other segments remain relatively flat. CUV Millions 2015 SMALL CAR 2016 2015 2016 MIDDLE CAR 2015 2016 PICKUP 2015 2016 7 6 5 4 3 2 1 0 Haig Stoddard, Industry Analyst Domestically Built Import SUV 2015 LUXURY CAR 2016 2015 2016 North American Sales Forecast & WardsAuto Barometer Forecast U.S. Light-Vehicle Sales - Domestically Built vs. Import Domestically Built 2014 Import 2015 2016 3.6 3.5 Millions 18 16 14 3.5 Economy, including some key fundamentals, continues to grow 12 Pent-up demand for new vehicles caused by the recession still exists 10 8 6 Sales forecast at 17.1 million units in 2015, rising to 17.3 million in 2016, with domestically produced volume more than offsetting a slight decline in imports. Why a record 7th consecutive Y/Y increase in 2016: 13.0 13.5 4 2 0 Haig Stoddard, Industry Analyst 13.8 Vehicle replacement (aging vehicles) Fuel prices remain relatively low Off-lease volume Interest rates expected to stay low enough to be a plus North American Sales Forecast & WardsAuto Barometer Forecast U.S. Light-Vehicle Sales by Major Segment (Domestically Built vs. Import) CUV volume up in 2016, with an influx of imports to meet demand for small and premiumpriced versions – could be underestimating Millions 2015 CUV Small and Middle Cars continue to be crimped by CUVs – jobs and wage growth, low fuel costs a negative for cars Luxury Cars getting pinched by luxury trucks – influx of new product keeps volumes flat with 2015 SMALL CAR 2016 2015 2016 MIDDLE CAR 2015 2016 PICKUP 2015 2016 6 5 4 3 2 1 0 Haig Stoddard, Industry Analyst SUVs take small volume hit in 2016. New products that lifted 2015 start to lose luster, and much of the remainder of segment getting older – however, there is room for more competitive pricing Pickups, small and large, rise in 2016 – construction and housing expected to continue steady (if not robust) gains – potential for incentive activity could push volumes higher Domestically Built Import SUV 2015 LUXURY CAR 2016 2015 2016 North American Sales Forecast & WardsAuto Barometer Forecast Canada Light-Vehicle Sales - Domestically Built vs. Import Domestically Built Millions 2014 2015 Import 2016 2.0 1.8 1.6 0.41 0.39 0.36 1.5 1.5 1.4 1.2 1.0 0.8 1.4 0.6 0.4 0.2 0.0 Haig Stoddard, Industry Analyst Forecasting slight downturn in 2016 but still close to record highs. Canada likely met the technical definition of a recession in first-half 2015, but was not reflected in automotive sales. Will reach all-time record volume (1.88 million) for third consecutive year in 2015. There are economic issues that could impact the rest of 2015 and 2016 such as low oil prices, higher consumer debt and the possibility the Bank of Canada raises interest rates next year. However, the Canadian automotive market has a history of resilience and stability, with less volatility than the U.S. even during the recession. Also, solid U.S. economic growth is good for Canada’s export-dependent economy. Thus, more likelihood the 2016 forecast is low rather than high. North American Sales Forecast & WardsAuto Barometer Forecast Mexico Light-Vehicle Sales - Domestically Built vs. Import Domestically Built 2014 Import 2015 2016 Millions 1.4 1.2 0.50 0.52 1.0 0.42 0.8 0.6 0.4 0.71 0.81 0.2 0.0 Haig Stoddard, Industry Analyst 0.85 Forecasting record 1.31 million units in 2015, followed by an increase to 1.37 million next year; the 7th consecutive Y/Y gain. Economic growth expected to stay in line with the U.S., meaning sales should continue to increase in 2016. Hyundai entering market in mid-2014, and Kia starting up this past summer, have made the market more competitive, and most companies took market-share hits, although their volumes were up. The advent of Hyundai and Kia, though they do sell domestically produced vehicles in Mexico, increased import penetration in 2015 to over 38% from 37% in 2014. Import penetration is forecast to remain flat in 2016. CUVs are growing in Mexico but small cars, including a heavy mix of imported entry-level models, continue as the dominant segment with roughly 60% penetration. North American Sales Forecast & WardsAuto Barometer Forecast North American Light-Vehicle Production by Manufacturer 2014 Actual Millions 2015 Forecast 2016 Forecast 4.0 2014 Actual: 16.95 million 2015 Forecast: 17.46 million 2016 Forecast: 17.88 million 3.5 3.0 2.5 2.0 1.5 1.0 0.5 0.0 GM Ford FCA Toyota Honda Nissan Other Source: WardsAuto/AutoForecast Solutions Haig Stoddard, Industry Analyst North American Sales Forecast & WardsAuto Barometer Forecast North American Production by Quarter Millions PRODUCTION TRAILING 12-MO QUARTERLY AVG. 4.8 4.8 4.7 4.7 4.6 4.6 4.5 4.5 4.4 4.4 4.3 4.2 4.1 4.3 4.5 Q1/2015 Q2/2015 4.4 4.7 4.3 4.3 Q4/2015 Q1/2016 4.5 4.3 4.4 4.2 4.1 4.0 4.0 Q3/2015 CAPACITY UTILIZATION Q2/2016 Q3/2016 Q4/2016 TRAILING 12-MO. UTILIZATION 108% 110% 106% 108% 104% 106% 107% 102% 104% 100% 102% 100% 98% 96% 104% 99% 98% 97% 100% 100% 99% 94% 98% 96% 94% Q1/2015 Q2/2015 Haig Stoddard, Industry Analyst Q3/2015 Q4/2015 Q1/2016 Q2/2016 Q3/2016 Q4/2016 North American Sales Forecast & WardsAuto Barometer Forecast North American Production by Car Segment Group Millions 0 1 2 3 4 Thrust of small-car increase from Mazda beginning production for Toyota – Yaris and Scion iA – off its SkyActiv-B platform. Export output also a positive factor, offsetting weak demand in North America Small Car Weak demand causing production cut; nearly every major platform in this group will drop – one notable exception is GM-Epsilon (new Malibu) Middle Car 2015 2016 Large Car Luxury Car Haig Stoddard, Industry Analyst Demand for full-size cars all but dried up and getting worse. Dominated by Chevrolet Impala, Ford Taurus and Fiat-Chrysler LX-platform vehicles Majority of N. American luxury-car sales come from imports. Of the ~80 vehicles in this segment, only one-third have year-over-year sales increases, and only a handful of those are domestically produced. Increased production largely due to replacement of overseas sourcing (Lexus ES) North American Sales Forecast & WardsAuto Barometer Forecast North American Production by Light-Truck Segment Group Millions 0 1 2 3 4 5 CUV SUV 2015 2016 PICKUP SMALL VAN LARGE VAN Haig Stoddard, Industry Analyst 6 Production increase would be stronger except many of the hottest vehicles, besides such vehicles as the Europe-built Fiat 500X, Jeep Renegade and South Korea-made Buick Encore, are luxury imports. Also, capacity constraints are causing some manufacturers to dual-source by bringing in more overseas-built versions (Chevrolet Trax, Honda HRV, Nissan Rogue, Toyota RAV4). Decline based on Nissan ending Xterra in August and Armada in December, and that 2015 included some inventory catch-up for GM’s large SUVs. (Note: some signs are pointing to a boom in Q4 SUV sales in the U.S., which could drain inventory enough to lift 2016 production above 2015) Demand continues to rise. Output could go higher if FiatChrysler and GM decide to get more competitive with Ford while it finally enjoys some year-over-year sales gains from the redesigned F-150 Largely a rebound from lost production in 2015 when FiatChrysler closed its Windsor plant for three months to begin tooling for the new Chrysler Town & Country coming next year Demand expected relatively flat with competition a little stiffer from import models North American Sales Forecast & WardsAuto Barometer General Motors North American Timeline 2015-2016 Camaro transitions to Alpha architecture; production shifts to Lansing GR from Oshawa. Resume second shift at Lansing GR Production slowed for inventory control on cars Next-generation Volt started at Hamtramck Q1/2015 Q2/2015 Q3/2015 Add Cadillac CT6 in Hamtramck Q4/2015 PRODUCTION Q1/2016 TRAILING 12-MO QUARTERLY AVG. Millions Q2/2016 Q3/2016 Q4/2016 Next-generation Buick LaCrosse starts; production shifted to Hamtramck from Fairfax Y/Y % CHG. (right scale) 10% 9% 0.95 6% 4% 0.90 0% 0.85 0.80 Add Chevrolet Bolt in Orion; end production of Buick Verano Overseas-built Buick Cascada and mid-CUV start sales Production slows end of 2015 through early 2016 due to changeovers to redesigned Malibu, Cruze; end of SRX; other plant changes Wentzville added third shift to meet demand for Colorado and Canyon 1.00 At Spring Hill: Cadillac XT5 starts Q1; redesigned Acadia in Q2 (production shifted from Lansing Delta) 5% 4% 2% 0% -2% -5% 0.75 -8% 0.70 -10% Q1/2015 Q2/2015 Haig Stoddard, Industry Analyst Q3/2015 Q4/2015 Q1/2016 Q2/2016 Q3/2016 Q4/2016 North American Sales Forecast & WardsAuto Barometer Ford North American Timeline 2015-2016 End Lincoln MKS in Chicago Production slowed for changeovers to new F-150 at two plants; changeover to new Edge and MKX at Oakville; inventory control on cars, which underwent a severe slump in demand Q1/2015 Add new Lincoln Continental (D8/CD4 platform) at Flat Rock Q2/2015 Q3/2015 Q4/2015 Q1/2016 PRODUCTION Q2/2016 Q3/2016 Q4/2016 Continued weakness for cars in general, more plants taking summer downtime, will lower Y/Y comparisons Ramp-up of new products, and weak year-ago totals, lift Y/Y comparisons 0.85 Changeover to redesigned F-SuperDuty (T3 platform) at Kentucky Truck TRAILING 12-MO QUARTERLY AVG. Y/Y % CHG. (right scale) 25% Millions 20% 19% 0.80 15% 15% 13% 10% 0.75 0.65 5% 5% 2% 0.70 2% 0% -5% -7% -9% -10% 0.60 -15% Q1/2015 Q2/2015 Haig Stoddard, Industry Analyst Q3/2015 Q4/2015 Q1/2016 Q2/2016 Q3/2016 Q4/2016 North American Sales Forecast & WardsAuto Barometer Fiat-Chrysler North American Timeline 2015-2016 Production slowed with 3-month shutdown of Windsor minivan plant for early tooling for new Town & Country in 2016 Q1/2015 Q2/2015 Next-generation Town & Country (RU platform) starts in Windsor Q3/2015 Q4/2015 Q1/2016 Q2/2016 PRODUCTION 0.80 0.75 TRAILING 12-MO QUARTERLY AVG. Q3/2016 Q4/2016 Production down Y/Y as projected demand weakens for Dart, LX cars and (to a lesser extent) mid-size SUVs Expected production slowdown – timing could change - for early tooling at Toluca for compact Jeep CUV in 2017 Millions Jeep Compass and Patriot end production at Belvidere Y/Y % CHG. (right scale) 10% 6% 5% 3% 0.70 -1% 0.65 -5% 0.60 -4% -4% -6% -5% -9% 0.55 0% -10% 0.50 -15% Q1/2015 Q2/2015 Haig Stoddard, Industry Analyst Q3/2015 Q4/2015 Q1/2016 Q2/2016 Q3/2016 Q4/2016 North American Sales Forecast & WardsAuto Barometer Toyota North American Timeline 2015-2016 Y/Y comparisons skewed up due to lost production in 2014 caused by severe weather Q1/2015 Redesigned Tacoma (285T platform) began in San Antonio and Tijuana Q2/2015 Q3/2015 Q4/2015 Lexus ES (MC platform) added at Georgetown. Replaces Japan-sourced version 0.60 0.55 PRODUCTION* Millions 8% Subaru ends Camry production for Toyota; all Camry production consolidated at Georgetown Begin sales of redesigned Toyota Yaris and new Scion iA, both built by Mazda in Mexico. (Data not included in Toyota production totals.) Q1/2016 Q2/2016 Production began of next-generation Lexus RX (TNGA platform) in Cambridge TRAILING 12-MO QUARTERLY AVG. Q3/2016 Stronger truck output lifts volume Q4/2016 Weak demand for cars hurts output Y/Y % CHG. (right scale) 10% *Production includes Camry output for Toyota by Subaru; excludes Mazda output for Toyota (products based on Mazda platform) 8% 6% 6% 0.50 4% 4% 0.45 4% 2% 1% 0.40 0% -1% 0.35 -2% -2% 0.30 -2% -4% Q1/2015 Q2/2015 Haig Stoddard, Industry Analyst Q3/2015 Q4/2015 Q1/2016 Q2/2016 Q3/2016 Q4/2016 North American Sales Forecast & WardsAuto Barometer Honda North American Timeline 2015-2016 Redesigned Honda Civic (GCP platform) begins in Alliston 1 and Greensburg Redesigned Honda Pilot (2SL platform) begins in Lincoln Q1/2015 Q2/2015 Q3/2015 Q4/2015 New Honda Ridgeline pickup (2SL platform) starts in Lincoln Q1/2016 Q2/2016 Sales begin of Japanbuilt Honda HRV in addition to NA-built models End Honda Crosstour production in East Liberty 0.60 PRODUCTION Millions 0.55 Q3/2016 Honda HRV (GCP platform) production shifts to El Salto from Celaya TRAILING 12-MO QUARTERLY AVG. Q4/2016 Redesigned Honda CRV (GCP platform) begins in Alliston 2, East Liberty and Greensburg Y/Y % CHG. (right scale) 9% 8% 8% 7% 0.50 7% 6% 6% 5% 0.45 Redesigned Honda Odyssey (2SL platform) starts in Lincoln 5% 4% 3% 0.40 3% 2% 2% 0.35 0.30 6% 1% 1% Q1/2015 0% Q2/2015 Haig Stoddard, Industry Analyst Q3/2015 Q4/2015 Q1/2016 Q2/2016 Q3/2016 Q4/2016 North American Sales Forecast & WardsAuto Barometer Nissan North American Timeline 2015-2016 Redesigned Nissan Titan (D23/F-Alpha platform) begins in Canton Redesigned Nissan Maxima (D platform) begins in Smyrna Q1/2015 Q2/2015 Q3/2015 Nissan Xterra (D23/F-Alpha platform) permanently ends production 0.50 PRODUCTION Millions Q4/2015 New subcompact Nissan CUV (CMF-B platform) begins in Cuernavaca Q1/2016 Q2/2016 Nissan Armada (D23/F-Alpha platform) permanently ends production Q3/2016 Q4/2016 Y/Y gains from increased CUV output and cars for non-US markets TRAILING 12-MO QUARTERLY AVG. Y/Y % CHG. (right scale) 5% 5% 4% 0.45 3% 2% 0.40 1% 1% 0% 1% 0% 0% -1% 0.35 2% -1% -2% -2% 0.30 -3% Q1/2015 Q2/2015 Haig Stoddard, Industry Analyst Q3/2015 Q4/2015 Q1/2016 Q2/2016 Q3/2016 Q4/2016 North American Sales Forecast & WardsAuto Barometer Rest of Industry North American Timeline Tesla adds Model X Redesigned Hyundai Elantra (HD platform) begins in Montgomery Mazda began output of Scion iA/Toyota Yaris for Toyota Q1/2015 Q2/2015 Q3/2015 Redesigned Kia Optima (NF/CM platform) began in West Point Millions 0.80 PRODUCTION 14% 0.70 Subaru begins first-time N.American production of Impreza (SGP platform) in Lafayette Q4/2015 Q1/2016 Mitsubishi permanently ends production at Normal, IL, plant; Outlander Sport – RVR in Canada - to be sourced from Japan Kia begins firsttime N.American production of Forte (HD platform) at new plant in Monterrey Q2/2016 Subaru ends production of Camry (MC platform) for Toyota in Lafayette Q3/2016 VW begins firsttime N.American production of Audi Q5 (MLB platform) at new plant in San Jose Chiappa TRAILING 12-MO QUARTERLY AVG. Q4/2016 VW begins production of new midsize CUV (MQB platform) in Chattanooga – resume third shift Y/Y % CHG. (right scale) 15% 12% 0.60 10% 8% 7% 0.50 9% 10% 5% 2% 0.40 0% -1% 0.30 0.20 -5% Q1/2015 Q2/2015 Haig Stoddard, Industry Analyst Q3/2015 Q4/2015 Q1/2016 Q2/2016 Q3/2016 Q4/2016 North American Sales Forecast & WardsAuto Barometer WardsAuto North American Outlook – Part 1 Q4 2015/Q1 2016 Product and Plant Actions Sales start dates in italics are WardAuto estimations Company Brand Series Action Mfr. Assembly Source Segment BMW BMW 1-Series New vehicle BMW Germany Luxury Low er Import Oct 2015 BMW BMW X1 Next generation BMW Germany CUV Luxury Small Import Oct 2015 Daimler Mercedes GLC New vehicle Daimler Germany CUV Luxury Small Import Oct 2015 Daimler Mercedes Metris New vehicle Daimler Spain Van Small Import Oct 2015 FCA Chrysler Tow n & Country Next generation FCA Windsor Van Small Mar 2016 May 2016 GM Buick Cascada New vehicle GM Poland Middle Specialty Import Mar 2016 GM Cadillac CT6 New vehicle GM Hamtramck Luxury Middle Nov 2015 Jan 2016 GM Cadillac XT5 New vehicle GM Spring Hill CUV Luxury Middle Feb 2016 Arp 2016 GM Chevrolet Camaro Next generation; plant change GM Lansing GR Middle Specialty Oct 2015 Jan 2016 GM Chevrolet Cruze Next generation GM Lordstow n Small Upper Feb 2016 Apr 2016 GM Chevrolet Malibu Next generation GM Fairfax* Middle Low er Nov 2015 Jan 2016 GM Chevrolet Spark Next generation GM South Korea Small Low er Import Oct 2015 GM Chevrolet Volt Next generation GM Hamtramck Luxury Low er Jul 2015 Oct 2015 Honda Acura NSX New vehicle Honda Marysville PMC Luxury Sport Aug 2015 Oct 2015 Honda Honda Civic Next generation Honda Alliston 1 Small Upper Aug 2015 Oct 2015 Honda Honda Civic Next generation Honda Alliston 2 Small Upper Sep 2015 Oct 2015 Honda Honda Civic Next generation Honda Greensburg Small Upper Sep 2015 Oct 2015 * Current-generation Malibu continues in Hamtramck until Q2 2016. Haig Stoddard, Industry Analyst Production Start Sales Start North American Sales Forecast & WardsAuto Barometer WardsAuto North American Outlook – Part 2 Q4 2015/Q1 2016 Product and Plant Actions Sales start dates in italics are WardAuto estimations Company Brand Series Action Mfr. Assembly Source Segment Hyundai/Kia Hyundai Elantra Next generation Hyundai South Korea Small Upper Dec 2015 Jan 2016 Hyundai/Kia Kia Optima Next generation Kia West Point, South Korea Middle Low er Aug 2015 Oct 2015 Jag.-L.Rover Jaguar XF Next generation Jaguar UK Luxury Middle Import Oct 2015 Mazda Mazda Mazda CX-3 New vehicle Mazda Japan CUV Small Import Q3 2015 Mazda Mazda Mazda CX-9 Next generation Mazda Japan CUV Large Import Oct 2015 Mazda Mazda Mazda5 Next generation Mazda Japan CUV Middle Import Oct 2015 Mitsubishi Mitsubishi L200 Next generation Mitsubishi Thailand Pickup Small Import Oct 2015 Nissan Nissan Titan Next generation Nissan Canton Pickup Large Sep 2015 Nov 2015 Toyota Lexus ES Sourcing change Toyota Georgetow n Luxury Low er Aug 2015 Oct 2015 Toyota Lexus LS Next generation Toyota Japan Luxury Upper Import Oct 2015 Toyota Lexus RX Next generation Toyota Cambridge CUV Luxury Middle Sep 2015 Oct 2015 Toyota Toyota Mirai New Vehicle Toyota Japan Luxury Upper Import Oct 2015 Toyota Toyota Prius Next generation Toyota Japan Middle Upper Import Dec 2015 Toyota Toyota Tacoma Next generation Toyota San Antonio, Tijuana Pickup Small Jul 2015 Oct 2015 Toyota Toyota Yaris Next generation Mazda Salamanca Small Low er Aug 2015 Oct 2015 Volksw agen Audi TT Next generation Volksw agen Hungary Luxury Sport Import Oct 2015 Haig Stoddard, Industry Analyst Production Start Sales Start North American Sales Forecast & WardsAuto Barometer Thank You, Haig Stoddard Senior Industry Analyst, WardsAuto hstoddard@wardsauto.com 248-799-2619 Haig Stoddard, Industry Analyst