ExpertEye European Automotive Report Q3 2016

European Passenger Car Residual Value Trends . Residual values across Europe are still rising as the new car demand lifting the automotive industry. There remains a lot of risks going forward, as already discussed, but the sales rate per population shows there remains pent up demand which should ensure that new cars going out now should come back into the used car market in 2019 with a reasonable degree of profit. RVs in mainland Europe are expected to continue to rise during 2017 in most countries recovering much of what was lost during the economic crisis. However there will be some % RV Index - 36 months / 90,000 kms RV% forecasters see a reduced car parc and continuing strong 120 115 110 105 100 95 90 2010 2011 EU Average Italy UK 2012 2013 2014 France Spain Index 100 = Values in 2010 2015 2016 Germany Portugal Source: ExpertEye AG regional and segmental differences. The Spanish market has fully recovered from a residual value perspective and as such values are stabilising in general although SUVs continue to increase. Italy has also seen strong increases in RVs which in part is due to the rising economic sentiment as national pride seems to have overtaken the austerity frustration. RVs in France and Germany have recovered at a much slower pace than Spain or the UK and therefore the growth through 2017 is merely about the markets righting themselves. However with both countries holding general elections in 2017 and the recent Trump/Brexit shock results we could potentially see both countries, as well as Italy, seeing some surprise results which in turn could have a short term negative effect on RVs. RVs in Portugal may look depressed from the index but this is distorted by the 2010 index point by when Portugal had already seen RVs rallying plus its automotive taxation system keeps the market sheltered from some of the more extreme conditions suffered elsewhere. For the UK RVs are set to continue to fall as the unfavourable exchange rate pushes up prices for household essentials which will put downward pressure on larger items like used cars. European Automotive Report - 2016 Quarter 3 11

ExpertEye European Automotive Report Q3 2016 | Page 12