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Q1 2024 Automotive Import/Export Market Trends Report

03 Introduction04 US Automotive Market Sentiment06 Signal US Wholesale Value Index10 US Auction Activity12 Retail Automotive Trends14 Vehicle Import Highlights 16 Market Trends Summary17 Recommendations Going Forward19 Appendix: How to Access this Data in SignalTable of Contents

IntroductionWelcome to Signal Technologies' Q1 2024 Market Trends Report. This edition provides a detailed analysis of the latest US wholesale market data, including wholesale values, auction volumes, retail days of supply, and import trends. This report not only presents our analysis amid an election year, but also shares best practices for utilizing the insights outlined here to maximize profitability and make the most informed vehicle buying, pricing, processing, and selling decisions. To learn how Signal has incorporated this data into our suite of products, please refer to the Appendix section of this report. Sincerely,Tane JillingsCo-founder & PresidentSignal Technologies 3© Signal Technologies 2024 | signal.vin

US Automotive Market SentimentThe US economy is buzzing, despite the uncertainties an election year typically brings.Approximately 275,000 jobs had been added in February, a sign that economic growth is still solid. In early March, the stock market was buzzing with the S&P 500 and Nasdaq hitting new highs, and during this same timeframe, Federal Reserve Chair Jerome Powell called the US economy “sustainable, solid, and strong.” Consumer confidence continues to rise, with spending and Gross Domestic Product (GDP) increasing in recent months. Publicly traded auto companies are riding this wave too, with ACVA and CVNA making noteworthy gains in the past month of 30% and 53% respectively. And, after almost two years of rate hikes, the US Federal Reserve just announced plans to make three rate cuts this year. 4© Signal Technologies 2024 | signal.vin

US Automotive Market SentimentThere’s a watchful eye on the auto loan market, specifically subprime borrowers, who were hit the hardest by high interest rates, high payments, more defaults, and tighter restrictions from lenders. There are mixed opinions across varied regions – some areas are reporting strong sales while others report challenges. The EV market faces its own set of issues. Ford cut prices on its electric Mustang Mach-E by up to $8,100, Nissan slashed prices on its Ariya EV by up to $6,000, and Tesla is wrestling with demand issues. Jaguar recently announced it was switching to all EVs, and then subsequently announced it was shutting down all operations.Despite these mixed sentiments, our data suggests that the auto industry - specifically the wholesale market - is performing well and a spring market is expected on the horizon.5© Signal Technologies 2024 | signal.vin

Signal US Wholesale Value Index6© Signal Technologies 2024 | signal.vinThe Signal Wholesale Value Index measures wholesale value changes week-over-week using a machine learning (ML) model and auction transaction data from the National Auto Auction Association (NAAA), representing 80% of all wholesale auction activity in the US. The variation in vehicles sold each week is accounted for by our ML model, giving an accurate depiction of true value changes as a result of changes in demand and supply.

© Signal Technologies 2024 | signal.vinVehicle values+ 1.2%WoWVehicle values+ 1.9%Last 4 Weeks7Signal US Wholesale Value IndexThe latest figures are promising: Vehicle values have jumped by 1.9% in the past month, with a notable 1.2% increase in just the last week – the largest rise we've observed in over a year.

© Signal Technologies 2024 | signal.vin8Signal US Wholesale Value Index ForecastGiven current market momentum, our data suggests that wholesale values could continue this upward trajectory well into April, backed by robust confidence levels reflected in our predictive models.

© Signal Technologies 2024 | signal.vin9Signal US Wholesale Value Index Comparison to the Last 2 YearsWhen examining the trajectory of wholesale values over the past two years, the data suggests that we're experiencing typical seasonal fluctuations in the market. Being prepared for potential shifts in the market and declines in values is crucial.

© Signal Technologies 2024 | signal.vinAuction transaction volume+ 2.6%WoWSince Q4 2023, auction volume has been steadily rising10The latest insights from the NAAA reveal a thriving and consistent upward trend in auction volumes. This trend spans all regions, vehicle types, and price brackets, hitting a record high since early 2022 when we first began monitoring this data. NAAA US Wholesale Auction Transaction Volume

© Signal Technologies 2024 | signal.vinAuction transaction volume+ 24.8%YoY11In the last two years, liquidity is at its highest levelYear-over-year, we're approaching a 25% increase in auction activity, indicating an exceptionally high level of market liquidity. This vibrant auction scene is mirrored within Signal's ecosystem as well, where import volumes have recovered from their lows in July of last year.NAAA US Wholesale Auction Transaction Volume

© Signal Technologies 2024 | signal.vinMarket Days of Supply36Lowest since April 2023Market Days of Supply- 2.2%WoWUsed market days of supply is rapidly decreasing12There’s been a pronounced drop in the Used Market Days of Supply, now at just 36 days. This suggests retail vehicles are selling faster, a trend that's been picking up speed with a recent 2.2% week-over-week drop. US Used Vehicle Market Days of Supply

© Signal Technologies 2024 | signal.vinUse retail salevolumes+ 5.2%WoWUsed inventory levels- 2.8%WoW13Used days of supply trend: Decreasing supply, increasing demandTwo key factors are driving this: 1. A spike in buyer demand.2. A tightening of inventory levels. Despite broader market uncertainties, these indicators point to a thriving spring market in the US automotive sector.

© Signal Technologies 2024 | signal.vinVehicle Import Highlights14When it comes to the performance of specific makes and models, the trend remains consistent. Toyotas are quickly moving off lots, signaling robust demand. Conversely, sales for Jeeps and heavy-duty pickups, such as the Ram 3500 and Ford F-350 are sluggish. The following chart shows the top 50 imports by make and model.

© Signal Technologies 2024 | signal.vinTop 50 Imported Makes and Models20

Summary of Q1 2024 Market Trends• There are mixed sentiments in the marketplace. Economic indicators are strong, while consumers are cautious in an election year. • The EV sector is a shifting landscape, with price cuts and demand concerns at the forefront.• Wholesale values increased by 1.9% over the last four weeks and 1.2% week-over-week, marking a significant rise compared to last year.• The automotive market is tracking with typical seasonal trends, with an anticipated peak approaching in the spring.• A nearly 25% year-over-year increase in auction volume points to robust liquidity and active trading in the market.• Retail days of supply dropped to 36 days, indicating a faster sales cycle and increased demand for used vehicles.• Popular models like Toyotas are selling quickly, while certain trucks and heavy-duty pickups show slower movement.20© Signal Technologies 2024 | signal.vin

21© Signal Technologies 2024 | signal.vin• Keep an eye on US market trends: the current strength in wholesale values is an opportunity, but be ready for when the market starts to turn.• Stay informed with Signal's Wholesale Value Index to gauge the best times for buying and selling.• Implement Dynamic Depreciation insights to price competitively in a strong market and conservatively when the market softens.• Utilize the Signal Export Calculator to align your buy price with market conditions, factoring in all costs for a clear profit target.• Observe shifts in demand through Signal Marketability, adapting your sales strategy to ensure quick inventory turnover.• Focus on vehicles that are moving swiftly, like Toyotas, and be strategic with slower-moving inventory such as heavy-duty pickups.• Dwindling days of supply signals a rise in demand. Keep your inventory well-stocked with the vehicles buyers want most.Recommendations Going ForwardFor more information about our products, refer to the Appendix section of this report.

© Signal Technologies 2024 | signal.vinNavigating Exports with Data-Driven PrecisionUnderstanding vehicle exportation requires more than intuition; you need access to real-time, accurate data. With the insights provided in this report, from the current state of the US wholesale market to staying on top of depreciation, Signal offers the right data and tools for Canadian exporters. We arm you with the information you need to navigate a shifting market confidently, make more informed purchasing decisions, and secure your profits. 24

APPENDIXHow to Access this Data in Signal

Using the Right Data to Purchase VehiclesIn today’s market, it’s critical to use data to make the right decisions. Signal gives you all that data at your fingertips through VIN-level wholesale and retail insights, and the only Export Calculator that helps you arrive at the right Canadian price for a vehicle selling in the US market. 15© Signal Technologies 2024 | signal.vin

© Signal Technologies 2024 | signal.vinHighlights of Dynamic DepreciationOur Dynamic Depreciation tool is built on top of the Signal Wholesale Value Index. It provides market-informed depreciation data to help you be more price-competitive in a strong market and more conservative in a soft market. 16

© Signal Technologies 2024 | signal.vinUp-to-date unbiased wholesale values using Signal ExportSignal Market Guide (SMG) uses machine learning and artificial intelligence on top of millions of wholesale transactions to pinpoint the wholesale value of a vehicle. Dealers use SMG to stay up-to-date on current wholesale values, value changes over the last 4 weeks, and trendlines in the last four months.17

© Signal Technologies 2024 | signal.vinInsights into wholesale and retail demandSignal Marketability provides real-time marketability data reflecting US vehicle demand by tracking market trends and regional buyer interests.It’s built on an extensive database of weekly wholesale transactions to track Retail Days of Supply by comparing inventory against sales rates per Year, Make, and Model (YMM). It spans multiple US regions and is categorized by YMM. 18

© Signal Technologies 2024 | signal.vinDifference between wholesale and retail pricingRetail Value Insights provides up-to-date information about what retail prices vehicles are selling for in the US.This helps you make strategic purchase and pricing decisions north of the border, understand which vehicles are in demand south of the border, maximize your profits, and minimize risk. 19

To learn how Signal Technologies can help your business, contact:sales@signal.vin