Page 7 - MIADA-Q1-2022

KONTOS KOMMENTARY
2022 Kontos Outlook

By Tom Kontos, Chief Economist, KAR Global

2021 was a banner year for wholesale I also anticipate more stable wholesale Disclaimer: The views and analysis provided
vehicle values. On a full-year basis, we saw values—in other words no dramatic rises herein relate to the vehicle remarketing
values above pre-COVID/2019 levels by or falls in 2022. We will likely see a return industry as a whole and may not relate
30% for the year, as a perfect storm in used to pre-pandemic seasonal patterns with the directly to KAR Global. The views and
vehicle demand faced a perfect drought in usual uptick during tax season in the spring, analysis are not the views of KAR Global,
used vehicle supply—much of which was and a gradual softening the rest of the year. its management or its subsidiaries; and their
brought on by the chip shortage. accuracy is not warranted.
In general, I will be keeping my eye on
As we look ahead to 2022 and the economy—focusing on employment, Forward-Looking Statements: The
what the year may bring for our inflation and GDP growth. One area that statements contained in this report and
industry, there are several key is of major concern to many economists statements that the company may make
things to keep in mind and look out is inflation and the spillover impacts that orally in connection with this report that
might accelerate higher interest rates that are not historical facts (including, but
for as the year unfolds—consider could potentially make new and used not limited to, expectations, estimates,
this my Kontos Krystal Ball: vehicles less affordable. assumptions and projections regarding
the industry and business) may be
Repossessions will probably be the “first As we transition to renewables from fossil forward-looking statements. Words such
responders” to the used car shortage. fuels and electric vehicles from internal as “should,” “may,” “will,” “anticipates,”
Because of government stimulus plus combustion engines, it’s going to be costly “expects,” “intends,” “plans,” “believes,”
deferrals and forbearance programs that and will take a while to figure out how “seeks,” “estimates,” “promises”, “likely
banks and lenders have provided, people we will produce and consume energy in to” and similar expressions identify
were able to postpone or avoid potential a new way. These things take time and forward-looking statements. Forward-
repossessions. We will possibly now see an will be expensive in the near term. This is looking statements are subject to risks
uptick in repos as these programs are slowly important to keep in mind, as we see more and uncertainties that could cause actual
phased out—not back to pre-pandemic and more electric vehicles entering the car results to differ materially from the
levels, but we should see increases. ecosystem. results projected, expressed or implied by
the forward-looking statements. Factors
In mid-2022, I suspect we will be talking In short, 2021 brought us new records in that could cause or contribute to such
a whole lot less about the chip shortage, as pricing and new lows for inventory. I’m differences include those matters disclosed
manufacturers use creative new approaches looking forward to analyzing trends for all in the company’s Securities and Exchange
to address this problem. New car inventory of our customers and partners throughout Commission filings. The company does not
will move closer to normal helping used 2022 with the hope that greater stability will undertake any obligation to update any
vehicle demand stabilize. be beneficial to both. n forward-looking statements.

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