The Role of Europe in the Strategies of Leading OEMs Christoph B. Stürmer Associate Director

1. The Role of Europe in the Strategies of Leading OEMs Christoph B. Stürmer Associate Director Automotive Markets Division

2. Global Insight – Who we are • Over 600 staff, 23 offices in 13 countries • Fully independent and privately owned • 43-year tradition of excellence for leadership in economic information and forecasting • Over 3,800 client organizations around the world • Recognized as a leading forecaster in surveys by authoritative sources such as Reuters - USA Today - The Wall Street Journal - Sunday Times - Central Bank of Sweden • Our Misssion: “We are committed to helping our clients prepare better plans and reach more effective decisions that will make them more successful, which in turn will contribute towards improved global productivity and a better standard of living for people everywhere.”

3. Automotive Markets Division – What we do ADVISORY SERVICES DIVISION AUTOMOTIVE MARKETS DIVISION BUSINESS INTELLIGENCE DIVISION DATA PRODUCTS DIVISION FINANCIAL MARKETS DIVISION INFORMATION TECHNOLOGY DIVISION • Advisory Services Division.ASD serves all aspects of consulting work across all divisions. ASD also includes the Energy Markets Group and the U.S. Federal Government Group. • Automotive Markets Division. AMD serves all aspects of the automotive market, from OEM’s to component suppliers and other organizations that are part of the automotive market. • Business Intelligence Division. BID is responsible for the product development, sales and support of our Business Intelligence products to all markets around the world. The only exception is sales to financial markets. • Data Products Division. DPD serves the data needs for all of Global Insight (except for certain specialized databases, e.g., automotive, maintained by other groups) and sets the data standards for the entire company, including attribution, documentation, update and maintenance. • Financial Markets Division. FMD is responsible for our business with financial institutions, including investment banks, asset managers, commercial banks, consumer finance companies and insurance companies. • Information Technology Division. ITD is responsible for IT development and support for all of Global Insight.

4. AMD Range of Products and Services • On-road Vehicle Forecast Reports • World Light Vehicles • World Trucks • Regional Reports • OEM Perspective • Global Forecast Databases • Global Production • Global New Sales/ Registrations • Global Parc • Production-based component, system, module supplier and technology share databases • Single- and multi-client dedicated research • Strategic consulting and market research

5. Europe – Which Europe? Emerging Europe Economic Area Industrial Europe Political Union Cultural Area Currency Zone New Europe

6. Industrial Europe Traditional high-tech locations Fully Integrated in EU, WTO, etc. High labour cost Abundant, experienced workforce High purchasing power Large markets New Europe Historic high-tech locations Increasing integration into EU, WTO, etc. Rising labour cost Abdundant, educated workforce Low purchasing power Small markets Three Kinds of Europe Emerging Europe • Selected high-tech capabilities • Beginning integration into WTO • Low labour cost • Available educated workforce • Low purchasing power • Large potential markets

7. Industrial Europe Belgium France Luxembourg Germany Italy Netherlands Denmark Ireland United Kingdom Greece Portugal Spain Austria Finland Sweden Switzerland Norway New Europe Cyprus Czech Rpublic Estonia Hungary Latvia Lithuania Malta Poland Slovakia Slovenia Bulgaria Romania Countries of European Economic Area Emerging Europe • Belarus • Croatia • Kazachstan • Russia • Turkey • Ukraine • Uzbekistan

8. Light Vehicle Sales in Europe

9. Light Vehicle Production in Europe

10. Automotive Growth 2006-2012

11. Global Light Vehicle Sales

12. Global Light Vehicle Production

13. 2006 Global Footprint - World

14. 2006/2012 Growth Profile - World

15. 2006 Global Footprint – Premium Brands

16. 2006/2012 Growth Profile – Premium Brands

17. 2006 Global Footprint – Volume Brands

18. 2006/2012 Growth Profile – Volume Brands

19. The Role of Europe – Key Findings • Europe must be regarded as 3 different sub-regions • Industrial Europe • New Europe • Emerging Europe • Risks and Opportunities are different in each sub-region • Market Size, purchasing power • Political environment, regulations, infrastructure • Labour cost, availability, experience/ education • Starting points of manufacturers differ widely • Historical production build-up • Key sales markets • Brand and retail affinity

20. The Role of Europe – Key Recommendations • Don‘t underestimate the staying power of „old“ Europe • Allocate ressources strategically – it‘s not all about China • Analyze absolute volume potential, not just growth rates • Develop a detailed mutual understanding of strategy • Are you in a seller or buyer market? • How vulnerable is your business model to changes in cost structure? • How dependent is your business model on people vs. machines? • Establish a living and open partnership • Don‘t rely on contacts through purchasing/sales only, but integrate strategic planning, marketing, R&D as well • Establish high-level contacts to OEM through senior management/ owners: be „part of the family“

21. European R&D Centres Mazda Toyota Ford VW PSA Nissan GM Renault Hyundai/Kia BMW DaimlerChrysler Honda Mitsubishi Fiat

22. Enjoy the rest of the conference! Christoph Stuermer Associate Director, Western Europe E-mail: christoph.stuermer@globalinsight.com