417GlobalAuto063d

Slide 1:Global Auto Industry Franklin Guo Dat Hong Rex Liu Reya Lu

Slide 2:Auto Manufacturing Industry Agenda Auto Manufacturing History & Regulation Business Strategy & Characteristics Global Auto Supply Chain Global Auto Sales & Production Analysis Industry Future Forecast

Slide 3:Auto Manufacturing History Eras of Invention (late 17th century – 1890s): A small steam car was demonstrated in 1678 The early automobiles manufacturing companies: Panhard et Levassor, Oldsmobile, Cadillac, Winton, Ford, etc. After 1930, the number of auto manufacturers declined sharply as the industry consolidated and matured. By 1960s, foreign competition arose as Japanese appeared as a serious auto manufacturing nation. Captive imports and badge engineering swept through the U.S. and UK, resulting in major acquisitions and merges by the end of 1960s.

Slide 4:Auto Manufacturing History As the 1973 oil crisis, automobile emissions control rules, Japanese and European imports, and stagnant innovation changed American industry. Small imported cars outperformed large American ones, and the domestic auto industry began to fail. Small performance cars from BMW, Toyota, and Nissan took the place of big-engined cars from America and Italy. Major M & A, alliance: GM---SAAB, Daewoo; Isuzu, Subaru, Suzuki Ford---Jaguar, Land Rover, Volvo; Mazda Benz---Chrysler Renault---Nissan

Slide 5:Regulation History Emission Regulation Act Since 1970, emissions from motor vehicles were regulated by Transport Canada under the authority of the Motor Vehicle Safety Act (MVSA) and it was later amended in 1993. In 1999, with the passage of the proposed amendment to the Canadian Environmental Protection Act (CEPA), automotive emissions regulations have become the responsibility of Environment Canada. In 2001, Canadian government published the Canada Gazette Part I to develop and implement services and measures over the next decade to further protect the health of Canadians and the environment by reducing emissions from vehicles, engines and fuels.

Slide 6:Industry Overview

Slide 7:The Automobile Design and Development Process

Slide 8:Auto Industry Business Strategy

Slide 9:Global Auto Ownership

Slide 10:Porter’s Model for Automakers Barriers to entry Weak supplier power The threats to substitute products is low However, are offset by Strong rivalry among competitors Bargaining power of consumers

Slide 11:Supply Chain

Slide 13:Auto Suppliers Facing a number of challenges including: A lack of pricing power, high labor costs, decreasing volume and increasing raw material costs; NAFTA-only suppliers are losing market shares to global suppliers. Suppliers are trying to increase value-added content, supply systems instead of components, technology innovations, etc. Acquisitions, joint ventures, etc.

Slide 14:M & A of Auto Suppliers

Slide 17:Gasoline Prices’ Impact on Auto

Slide 18:Changes in Gas Price vs. SUV & Hybrid Auto Sales Gasoline price has a positive correlation with the sales of hybrid auto and a negative correlation with the sales of SUV.

Slide 19:Global Auto Sales

Slide 21:Global Auto Production

Slide 23:Current Auto Manufacturing

Slide 26:Manufacturers’ Unit Price Comparison On average, vehicles from US car makers were sold for $21,597 in 2005, which was 13% below the comparable sales price for the Japanese car makers’. It was mainly due to: Missed design opportunities Heavy employee-level discounting Higher labor costs

Slide 27:Manufacturers’ Operating Margins Comparison US automakers’ operating margins are lower than their major competitors’.

Slide 28:Manufacturers’ Profits Per Unit Comparison

Slide 29:Cost Structure - CAPEX

Slide 30:Cost Structure – R&D

Slide 31:Cost Structure – Health & Pension The U.S. “Big Three” reported that pension and health cost them $1,500 per vehicle produced currently.

Slide 33:Interoperability Costs Imperfect interoperability impose costs due to higher costs of design and production and slower implementation of design changes.

Slide 34:Vehicle Ownership Forecast

Slide 35:U.S. Market Forecast

Slide 36:Auto Market Forecast

Slide 38:Global Auto Sales Forecast

Slide 40:Emission Standards Comparison

Slide 41:Emission Standards Comparison “ACEA agreement” is a voluntary agreement between European automobiles manufacturers association and the European Commissions. Its goal is to reduce 25% of 1995’s level of vehicle CO2 emissions by 2008. Automakers are questioned for failing to deliver the emissions cut. - Japan automakers joined the agreement later and aimed to reduce 23% in vehicle CO2 emissions by 2010 (from 1995 levels). Australia: voluntary commitment to improve fuel economy by 18% by 2010. Canada: has proposed a 25% improvement in fuel economy by 2010. China: Introduced new fuel economy standards in 2004; weight-based standards to be introduced in 2 phases (2005 and 2008). California: CARB approved GHG emissions reductions for automobiles, currently under legislative review. New York: Clean Cars Bill proposing to follow California standards is currently in committee. Several other NE states have indicated they will follow CA’s lead.

Slide 42:Emission Standards Comparison However, automakers are questioned for failing to deliver the emissions cut. Nissan, Suzuki, Mazda, Audi, Volvo, BMW and Volkswagen are the worst performers among a group of 20 manufacturers surveyed by the Institute for European Environmental Policy (IEEP) for T&E, the European Federation for Transport and the Environment. There will be additional manufacturing associated with CO2 emission constraints.

Slide 44:BMW GroupSymbol : Common [BMW] Preferred [BMW3]Primary Exchange: FrankfurtCurrency: Euro ($1 EUR = $1.27 USD) Key Share Information:

Slide 45:Common Stock Price (BMW)[Price in Euros] Last: $43.92 Change: $ -0.16 %Change: -0.36 Date: Nov. 23, 2006 Open: 44.10 Bid: N/A High: 44.36 Ask: N/A Low: 43.86 EPS: 4.23 Volume: 21,311 P/E: 10.43 52 Week 52 Week High: 45.97 Low: 35.68 Yield: 1.45% Beta: 0.80 Dividend per share: 0.64

Slide 46:BMW Common Stock 5 Year Performance

Slide 47:BMW Common Stock 1 Year Performance

Slide 48:Preferred Stock Price (BMW3)[Price in Euros] Last: $43.64 Change: -$0.25 %Change: -0.56 Date: Nov. 23, 2006 Open: 44.00 Bid: N/A High: 44.04 Ask: N/A Low: 43.28 EPS: 4.23 Volume: 3,367 P/E: 10.71 52 Week 52 Week High: 45.01 Low: 31.95 Yield: 1.50% Beta: N/A Dividend per share: 0.66

Slide 49:BMW Preferred Stock 5 Year Performance

Slide 50:BMW Preferred Stock 1 Year Stock Performance

Slide 52:Company Overview Established in 1916, originally founded as an aircraft engine manufacturer Head offices located in Munich, Germany One of the top 10 largest vehicle manufacturers in the world Produces automobiles and motorbikes under the following premium brands: BMW also operates successfully in the areas of financial services such as financing/leasing and asset management Conducts sales in approximately 40 international markets Has 15 production facilities spanning 7 countries Employs over 100,000 people globally

Slide 53:Important Company Milestones 1972 - BMW ventures into South Africa and sets up first production plant outside Germany 1992 – BMW ventures into North American and sets up first production plant in South Carolina 1994 – BMW acquires the British based Rover Group, landing the brands Rover, Land Rover, MINI, and MG 1998 – BMW acquires the Rolls-Royce brand from Volkswagen Group; however, vehicle production is prohibited until 2003 2000 – BMW sells the Rover brands at a loss; however, holds onto the MINI brand 2001 – BMW successfully introduces the MINI brand into the market 2003 – BMW re-launches the Rolls-Royce brand with the introduction of the $330,000 USD Phantom 2004 – BMW ventures into Asia and builds production plant in Shenyang, China

Slide 54:Company Management Dr. Norbert Reithofer Current Chairman of the Board of Management as of September 1, 2006 Born in 1956 - 1991 - 1994 Director of the Body-in-White Production Division - 1994 - 1997 Technical Director BMW South Africa - 1997 - 2000 President BMW Manufacturing Corporation, USA (South Carolina) - 2000 - 2006 Member of the Board of Management; Production

Slide 55:Company Management Dr. Helmut Panke Current Chairman of the Board of Management 2002-2006 Born in 1946 - 1976 – 1978 Researcher at the Swiss Institute of Nuclear Research - 1978 – 1982 Consultant at McKinsey & Co - 1982 – 1985 Head of planning & control at BMW - 1993 – 1995 CEO and Chairman of BMW (USA) - 2002 – 2006 Chairman of the Board of Management - 2006 Current member of the Board of Directors at Microsoft Education : University of Munich, B.Sc, 1968; MS, 1972; PhD, 1976

Slide 56:BMW Group Shareholder Structure Overview

Slide 57:BMW Group Shareholder Structure Overview

Slide 58:BMW Share Buyback Program Approved by shareholders on May 12, 2005 BMW to buyback common shares up to a maximum of 10% of the company share capital By the end 2005, 13,488,400 common shares have been bought back (equivalent to 2% of the company’s share capital) Average price paid per share $37.49 Approximate total cost for the share buyback program in 2005: $506 million In 2006, up to 1.5 millions shares of preferred stock will be bought back for employee stock plan

Slide 59:BMW Group Production Figures

Slide 62:BMW Group Key Motorcycle Markets 2005

Slide 64:Factors Affecting Profitability Sharp rise in crude oil prices Reduced consumer buying power and demand Elevated price of raw materials such as steel and other metals Intense competition from Asian competitors Fluctuating currency exchange rate Large capital expenditure costs

Slide 65:BMW Group Capital Expenditure and Cash Flow Data

Slide 66:Financial Statements

Slide 72:BMW Group Growth Strategies Objective: increase volume of automobiles sold Producing more fuel efficient vehicles

Slide 73:BMW Group Growth Strategies Increasing consumer demand with by producing safer and more reliable vehicles

Slide 74:BMW Group Growth Strategies Introduction of the first luxury hydrogen hybrid car 745hL September 2005, BMW joins hybrid technology sharing partnership with GM and Mercedes to build gas-electric engines

Slide 75:BMW Group Growth Strategies Continued sales network expansion to meet the needs and demands of local consumer Continue to penetrate the dynamic Asian markets Beginning preparation to enter the Indian market Starting 2007, BMW will build a production plant in Chennai, India Move down market and target a younger demographic with less income with the 1 series

Slide 76:BMW Group Growth Strategies Continued roll out of new updated versions of existing vehicle models BMW New redesigned 3 series launched late 2005 New redesigned X5 launches late November 2006 New redesigned 7 series launches 2008 MINI New redesigned MINI Cooper launches late November 2006 Rolls Royce New convertible and coupe version of Phantom available late 2007

Slide 77:Fisher’s Analysis 1) Financial Skill Great financial performance with increasing profits Industry product leadership 2) People Factor Great management team; relatively good employee relationship 3) Investment Characteristics Limited growth space due to intense competition Low industry profit margin 4) Investment Price - P/E ratio is relatively low

Slide 79:Honda Motor Co., Ltd.

Slide 80:Agenda Current Financial Position Company Analysis Financial Analysis Semi-annual Financial Statements Annual Financial Statements Fisher’s Analysis Recommendation

Slide 81:Company Snap Shot Industry: Consumer Products (Automotive) Listed: NYSE (HMC-N) TSE (7267) Share price: US $34.870 P/E: 12.00 EPS: US $2.90 Dividend: US $0.51 Yield: 1.50% # of shares outstanding: 1,834,828,000

Slide 82:Chart: 1 Year (Daily) Source: Globeinvestor.com

Slide 83:Chart: 10 Years (Weekly) Source: http://money.cnn.com/

Slide 84:Chart: 3 Year Stock Performance Compared to DJTA Source: Globeinvestor.com

Slide 87:Credit Ratings As of March 31, 2006

Slide 88:Company Analysis

Slide 89:Overview Established in 1948 Four lines of business: Motorcycles Automobiles Power products and others Financial services Over 61 principal subsidiaries ~32 manufacturing facilities in 19 countries Total of about 144,785 full-time employees

Slide 90:History 1948 Honda Motor Co., Ltd. incorporated (capital: 1 million yen) 1949 First motorcycle manufactured 1953 H-type engine, Honda’s first power product, produced 1957 Listed on the Tokyo Stock Exchange 1962 ADRs issued at market price. Adopts consolidated accounting using U.S. SEC standards 1963 Honda’s first sports car (S500) and light truck (T360) released American Depositary Receipts (ADRs)American Depositary Receipts (ADRs)

Slide 91:History 1977 ADRs listed on the New York Stock Exchange (NYSE) Consolidated financial disclosure begins 1983 Cumulative automobile production reaches 10 million units 1995 Cumulative automobile production reaches 30 million units 2004 Honda enter cooperative agreement with GE to jointly market the independently developed HF118 jet engine 2006 Implementation of two-for-one stock split for common shares 1981 Listed on the London Stock Exchange 1983 Listed on the Zurich, Geneva and Basel stock exchanges Cumulative automobile production reaches 10 million units Listed on the Paris Stock Exchange 1989 Common stock-to-ADR exchange ratio changed from 10 shares of common stock to 1 ADR, to 2 shares of common stock to 1 ADR. Common stock-to-ADR exchange ratio changed from 2 shares of common stock to 1 ADR, to 1 share of common stock to 2 ADRs 2006Common stock-to-ADR exchange ratio changed from 0.5 share of common stock to one ADR, to one share of common stock to one ADR 1981 Listed on the London Stock Exchange 1983 Listed on the Zurich, Geneva and Basel stock exchanges Cumulative automobile production reaches 10 million units Listed on the Paris Stock Exchange 1989 Common stock-to-ADR exchange ratio changed from 10 shares of common stock to 1 ADR, to 2 shares of common stock to 1 ADR. Common stock-to-ADR exchange ratio changed from 2 shares of common stock to 1 ADR, to 1 share of common stock to 2 ADRs 2006Common stock-to-ADR exchange ratio changed from 0.5 share of common stock to one ADR, to one share of common stock to one ADR

Slide 92:Corporate Governance

Slide 93:Corporate Governance Takeo Fukui President, CEO, and Rep Director An engineer Joined Honda since 1969 President since 1998 CEO since 2003 Satoshi Aoki Executive VP and Rep Director Joined Honda since 1969 Promoted to Executive VP in summer 2005 Takeo Fukui President, CEO, and Rep Director Joined Honda since 1969 An engineer Career: Honda Motor Company, 1969–1979, engineer; Honda R&D Company, 1979–1982, chief engineer; Honda Racing Corporation, 1982–1983, chief engineer; 1983–1985, director; 1985–1987, executive vice president; Honda R&D Company, 1987–1988, managing director; Honda Racing Corporation, 1987–1988, president; Honda Motor Company, 1988–1990, director; Honda R&D Company, 1990–1991, senior managing director; Honda Motor Company, 1991–1992, general manager of Motorcycle Development; 1992–1994, general manager of Hamamatsu Factory, Motorcycle Operations; Honda of America Manufacturing, 1994–1996, executive vice president and director; Honda Motor Company, 1996–1998, managing director; Honda of America Manufacturing, 1996–1998, president and director; Honda R&D Company, 1998–2003, president; Honda Motor Company, 1999–2003, senior managing and representative director; 2003–, president and CEO. Takeo Fukui President, CEO, and Rep Director Joined Honda since 1969 An engineer Career: Honda Motor Company, 1969–1979, engineer; Honda R&D Company, 1979–1982, chief engineer; Honda Racing Corporation, 1982–1983, chief engineer; 1983–1985, director; 1985–1987, executive vice president; Honda R&D Company, 1987–1988, managing director; Honda Racing Corporation, 1987–1988, president; Honda Motor Company, 1988–1990, director; Honda R&D Company, 1990–1991, senior managing director; Honda Motor Company, 1991–1992, general manager of Motorcycle Development; 1992–1994, general manager of Hamamatsu Factory, Motorcycle Operations; Honda of America Manufacturing, 1994–1996, executive vice president and director; Honda Motor Company, 1996–1998, managing director; Honda of America Manufacturing, 1996–1998, president and director; Honda R&D Company, 1998–2003, president; Honda Motor Company, 1999–2003, senior managing and representative director; 2003–, president and CEO.

Slide 94:Lines of Business Motorcycles Automobiles Power products and Others Financial services

Slide 95:Fields of Business Research & Development ASIMO HondaJet Next generation powertrains Manufacturing & Distribution Local production plants to meet local demand Sales & Services Emphasis on customer satisfaction

Slide 96:R&D Efforts

Slide 97:Key Regions of Operation Japan Centers for R&D, manufacturing, and customer service North America Honda’s overall largest market Europe Increasing brand popularity Asia China – increasing production facilities Others Honda has over 80% market share in Brazilian motorcycle industry

Slide 98:Unit Sales Breakdown ~53% from motorcycles, ~17% from automobiles, and ~30% from power products

Slide 99:Revenue and Operating Margin

Slide 100:Business Segment Information

Slide 101:Revenue Breakdown by Business Segments (%)

Slide 102:Geographic Segment Information

Slide 103:Revenue Breakdown by Geographic Segments (%)

Slide 104:Risk Factors Exchange and interest rate risks Market condition/Intensity of competition Political condition Relationship with suppliers of raw materials Legal and regulatory risks Environmental and governmental regulations Patents and trademarks

Slide 105:Growth Strategies Motorcycles Equipping scooters with automatic transmission Equipping more models with PGM-FI and other features that provide superior environmental performance Launching new models Offering the first motorcycles with airbags Increasing production capacity in Asia Beginning production in Argentina 2007 Sales forecast: 10,840,000 units

Slide 106:Growth Strategies Automobiles Launching new model of SUV and refine existing models Expanding light truck models Expanding sales and services centers in Asia to meet increasing demand Expanding production capacity to meet demand in Brazil 2007 Sales forecast: 3,720,000 units

Slide 107:Growth Strategies Power products Supplying cost-competitive general-purpose engines from Asia Extending sales of compact, home-use cogeneration system from Japan to the US 2007 Sales forecast: 5,880,000 units

Slide 108:News Nov. 21, 2006 2007 Honda CR-V and Pilot Earn Insurance Institute for Highway Safety TOP SAFETY PICK Award 2007 Acura RDX Earns an Insurance Institute for Highway Safety TOP SAFETY PICK Award Nov. 7, 2006 HondaJet Named Winner of Popular Science's 2006 Sept. 27, 2006 HondaJet Goes on Sale at National Business Aviation Association Convention 2007 Honda CR-V and Pilot Earn Insurance Institute for Highway Safety TOP SAFETY PICK Award Pilot and all-new CR-V earn the Institute's highest crash safety ratings    TORRANCE, Calif. 11/21/2006 -- The all-new 2007 Honda CR-V, along with the 2007 Honda Pilot, were among seven SUVs to earn 2007 Insurance Institute for Highway Safety (IIHS) TOP SAFETY PICK Awards. The annual award, given to SUVs for the first time this year, recognizes vehicles that perform best in protecting passengers in front, side and rear crashes, based on their ratings in the Institute's tests. "Honda is honored that IIHS awarded their highest safety rating of 'TOP SAFETY PICK' to both the Pilot and the all-new CR-V, recognizing the advances Honda continues to make through our 'Safety for Everyone' commitment," said John Mendel, senior vice president of American Honda Motor Co., Inc. "Having both the CR-V and Pilot earn IIHS TOP SAFETY PICK awards demonstrates that mainstream and affordable Honda SUVs can achieve the highest levels of crash protection in these types of tests." As part of Honda's "Safety for Everyone" initiative, all trim levels of the 2007 Honda CR-V and the 2007 Honda Pilot include side curtain airbags with a rollover sensor as standard equipment. These airbags further complement the vehicles' existing standard driver's and front passenger's airbags (SRS), front-side air bags with passenger-side Occupant Position Detection System and Vehicle Stability Assist(TM) (VSA(R)). In addition, the CR-V utilizes Honda's Advanced Compatibility Engineering(TM) (ACE(TM)) body structure. 2007 Acura RDX Earns an Insurance Institute for Highway Safety TOP SAFETY PICK Award All-new SUV One of Only Three Luxury SUVs to Receive Honor for 2007  TORRANCE, Calif 11/21/2006 -- The all-new 2007 Acura RDX was one of only three luxury SUVs (out of 13 total vehicles) to earn a 2007 Insurance Institute for Highway Safety TOP SAFETY PICK Award. The annual award, given to SUVs for the first time this year, recognizes vehicles that perform best in protecting passengers in front, rear and side crashes based on their ratings in the Institute's tests. "We are very pleased that the RDX is being recognized for its outstanding safety ratings by the IIHS," said Dick Colliver, executive vice president, sales. "It is our goal to continue to offer Acura customers peace of mind by providing safety through advanced technology." The Acura RDX went on sale in August and is equipped with the latest safety technologies. Like the entire Acura lineup, it features the application of front side airbags with passenger-side Occupant Position Detection System (OPDS), side curtain airbags for front and rear outboard seats and Vehicle Stability Assist(TM) (VSA(R)) as standard equipment. In addition, RDX utilizes Advanced Compatibility Engineering(TM) (ACE(TM)) body structure which helps to disperse collision forces over a larger frontal area. In addition to safety technologies, the RDX features engineering breakthroughs for Acura, including the luxury division's first turbocharged and intercooled engine, and the first adaptation of the Super Handling All-Wheel Drive(TM) (SH-AWD(TM)) system to an SUV. Additional Acura information and downloadable high-resolution images are available at HondaJet Named Winner of Popular Science's 2006 Advanced light jet selected in magazine's Aviation & Space category   TORRANCE, Calif. 11/07/2006 -- HondaJet, an advanced light jet that went on sale last month, has been selected by Popular Science magazine as the winner of the publication's 2006 "Best of What's New" Award in the Aviation & Space category. The HondaJet was chosen from among dozens of aviation products for its breakthrough design and innovative features, representing a significant step forward in its category. "We're honored that HondaJet was selected for this respected award," said Michimasa Fujino, who led the HondaJet development team and is now president & CEO of Honda Aircraft Company, Inc. "Our objective was to design and develop an advanced light jet that would create new value for personal and business aviation. We appreciate this award recognizing our success in creating something truly innovative." HondaJet, which recently entered the "very light jet" market, features several innovations that help it achieve far better fuel efficiency, larger cabin and luggage space and higher cruise speed than conventional aircraft in its class. Innovations include a patented over-the-wing engine-mount, a natural-laminar flow (NLF) wing and fuselage nose, and an advanced all-composite fuselage structure. Each year, the editors of Popular Science review thousands of products in search of the top 100 tech innovations of the year; breakthrough products and technologies that represent a significant leap in their categories. The winners - the Best of What's New - are awarded inclusion in the much-anticipated December issue of Popular Science, the most widely read issue of the year since the debut of Best of What's New in 1987. Best of What's New awards are presented to 100 new products and technologies in 10 categories: Automotive, Aviation & Space, Computing, Engineering, Gadgets, General Innovation, Home Entertainment, Home Tech, Personal Health and Recreation. The result of 20 years of aviation research, HondaJet's NLF wing and NLF fuselage nose were developed through extensive analyses and wind-tunnel testing. These designs help HondaJet achieve low drag. Its patented over-the-wing engine-mount configuration helps eliminate the need for a structure to mount the engines to the rear fuselage, maximizing space in the fuselage for passengers and luggage. By determining the optimal position for the engines, the over-the-wing mount actually reduces drag at high speed to improve fuel efficiency. The advanced all-composite fuselage structure consists of a combination of honeycomb sandwich structure and co-cured stiffened panels, reducing weight and manufacturing costs. HondaJet is also outfitted with a state-of-the-art all-glass flight deck with an integrated avionics system that displays all information digitally on a high resolution flat display, and also has an autopilot function. Founded in 1872, Popular Science is the world's largest science and technology magazine; with a circulation of 1.45 million and 6.5 million monthly readers. Each month, Popular Science reports on the intersection of science and everyday life, with an eye toward what's new and why it matters. Popular Science is published by Time4 Media, a subsidiary of Time Inc., which is a wholly owned subsidiary of Time Warner Inc. Based in Greensboro, N.C, Honda Aircraft Company, Inc., is pursuing FAA type certification and production certification for its advanced light jet, with the goal of completing certification in three to four years, followed by the start of production in the U.S. and delivery of the first plane in 2010. The company began accepting sales orders last month. HondaJet Goes on Sale at National Business Aviation Association Convention    TORRANCE, Calif. 09/27/2006 -- HondaJet, an innovative advanced light jet, will go on sale for the first time at the National Business Aviation Association (NBAA) annual meeting and convention, October 17-19 in Orlando, Florida. HondaJet, featuring a revolutionary over-the-wing engine mount and other technical advances, will be exhibited at booth #5495 along with a full-scale interior mock up display. A news conference will be held at the HondaJet booth Tuesday, October 17 at 10:30 a.m. Members of the HondaJet development team and newly created sales team will be on hand throughout the convention, including Michimasa Fujino, president & CEO of Honda Aircraft Company, Inc., the leader of the development team. Honda previously announced that the 6- to 7-passenger HondaJet will enter the very light jet market and begin accepting orders in fall 2006. Honda Aircraft Company, Inc. was established in August 2006, for the development, production and sales of HondaJet, and will pursue FAA type certification and production certification in the U.S. Honda Aircraft Company's goal is to complete certification of HondaJet in three to four years, followed by the start of production and delivery of the first plane in 2010. HondaJet features several innovations that help it achieve far better fuel efficiency, larger cabin and luggage space and higher cruise speed than conventional aircraft in its class. Innovations include a patented over-the-wing engine-mount, a natural-laminar flow (NLF) wing and fuselage nose, and an advanced all-composite fuselage structure. The 59th Annual NBAA meeting and convention will be held at the Orange County Convention Center in Orlando, Florida, October 17, 18 and 19. To learn more about NBAA, visit www.nbaa.org. For more information on HondaJet visit honda.com. 2007 Honda CR-V and Pilot Earn Insurance Institute for Highway Safety TOP SAFETY PICK Award Pilot and all-new CR-V earn the Institute's highest crash safety ratings  

Slide 109:Financial Analysis

Slide 110:Financial Highlights

Slide 113:2006 Capital Expenditure Breakdown by Business Segments

Slide 114:Forecasted 2007 Cap. Ex. Breakdown by Business Segments

Slide 115:Semi-annual Financial Statements

Slide 116:Semi-annual Financial Highlights

Slide 117:Financial Results

Slide 118:Important Factors

Slide 131:Annual Financial Statements

Slide 138:Fisher’s Analysis

Slide 139:Superiority in Financial skills, Production, Marketing, Research Clear, easy to read annual reports and financial statement Financial statements not prepared in accordance with the US GAAP Steady increase of capital expenditure Over 30 principal manufacturing facilities About 145,000 full-time employees ~5% of total revenue used toward R&D

Slide 140:People Factor Experienced management team Promote from within CEO is customer-oriented Executives and managers make up the board of directors, this may decrease the effectiveness of corporate governance and increase risk for stakeholders

Slide 141:Investment Characteristics of Some Business Strong market position Diversified into related businesses where there are strategic fits and benefited from economies of scope

Slide 142:P/E Ratio P/E ratio: 12.00 Competitor P/E ratios: General Motors: 40.00 BMW: 10.43 Ford Motors: 0.00 (negative EPS) Toyota: 14.70 Nissan: 0.00 (0 EPS)

Slide 143:Recommendation

Slide 144:BUY

Slide 145:General Motors

Slide 146:Table of Contents Stock price Company Background Company Analysis Financial Highlight (06 3rd Quarter report ? 05 Annual report) Income statement Balance sheet Cash flow statement Conclusion & Recommendation

Slide 147:Current Position onNov. 24, 2006

Slide 148:5-Year Stock Price

Slide 149:1-Year Stock Price

Slide 150:GM vs. S&P/TSX Composite Index

Slide 151:Definitions GMA – GM Auto GMNA - GM North America GME - GM Europe GMLAAM - GM Latin America / Africa / Mid-East GMAP - GM Asia Pacific GMAC – General Motors Acceptance Corporation

Slide 152:Background The world's largest automaker Founded in 1908 Global industry sales leader for 75 years GM today employs 327,000 people in the world Huge labor pension cost Global headquarters in Detroit, Michigan, USA GM manufactures its cars and trucks in 33 countries

Slide 153:GM’s Products In 2005, 9.17 million GM cars and trucks were sold globally under the following brands: GM operates one of the world's leading finance companies GMAC Financial Services, which offers automotive, residential and commercial financing and insurance. GM's OnStar subsidiary is the industry leader in vehicle safety, security and information services.

Slide 154:GMA & GMAC Revenue Share - Nine months ended September 30, 2006

Slide 155:Global Partnerships Majority shareholder of GM Daewoo Auto & Technology Co. of South Korea Has product, powertrain and purchasing collaborations with Suzuki Motor Corp. and Isuzu Motors Ltd. of Japan. Advanced technology collaborations with DaimlerChrysler AG BMW AG of Germany Toyota Motor Corp. of Japan Vehicle manufacturing ventures with Toyota Suzuki Shanghai Automotive Industry Corp. of China AVTOVAZ of Russia Renault SA of France

Slide 156:Type of Vehicle and Market Share

Slide 157:Management Key people G. Richard Wagoner, Jr. Chairman & CEO since May 1, 2003 Joined GM since 1977 BA in economics from Duke University MBA from Harvard Business School Frederick (Fritz) A. Henderson Vice Chairman and CFO since Jan. 1, 2006 Joined GM since 1984 BBA from the University of Michigan MBA from Harvard Business School Robert A. Lutz Vice Chairman, Global Product Development since Sept. 1, 2001 Former CEO of Excide Technologies & Vice Chairman of Chrysler Corporation BA in production management from the University of California-Berkeley MBA from the University of California-Berkeley Degree of doctor of management from Kettering University

Slide 158:The World's Largest Automaker GM's largest national market in order: the United States China Canada the United Kingdom and Germany. Global market share for vehicles sales: 14.2%(2005) from 14.4%(2004)

Slide 159:Declining Revenue High oil price GM produce high horse power vehicles Used to be American consumers’ favorite People switch to low oil consumption vehicles Japanese cars Korean cars

Slide 160:Competitive Position

Slide 161:Financial Statement Analysis The 2006 3rd Quarter Report Ended at September 30, 2006

Slide 165:2006 Quarter Revenue Breakdown- Auto & Financing and Insurance Operations

Slide 166:2006 Quarter GMA Net Income by Region

Slide 167:2006 Quarter GMAC Net Income by Division

Slide 169:06~07 EPS Estimates

Slide 170:Segment Reporting

Slide 171:GMA Revenue Share by Region- Nine months ended September 30, 2006

Slide 172:Financial Statement Analysis 2005 Annual Report

Slide 173:General Idea about the Performance of GM in 2005 GM is losing big money in North America GMA’s global sales revenue is good (growth) GMAC is making money We can see that the auto division is dragging the company performance

Slide 174:Breakdown of GMA’s Loss by region in 2005

Slide 175:Breakdown of GMAC’s profit in 2005

Slide 176:Financial Highlights (In USD as of 12/31/2005) Total Revenue 192,604,000,000 EBITDA 31,516,000,000 Net Loss (10,567,000,000) Total Assets 476,078,000,000 Current Assets 99,414,000,000 Total Liabilities 461,481,000,000 Current Liabilities 117,963,000,000 Long Term Debt 202,177,000,000 Stockholders' Equity 14,597,000,000

Slide 177:GM’s Main Challenges Huge legacy cost burden Inability to adjust structural costs in line with falling revenue

Slide 178:GM’s Legacy Challenge Huge retiree population ? Huge cost for health care & pensions 11.5 active employees support 1 retiree in 1962 1 active employee supports 3.2 retirees in 2005 Health care bills totaled $5.3 billion in 2005 No other company has this much health-care obligation (!!!Big competitive disadvantage)

Slide 179:Estimated Future Employee Benefit Payments

Slide 180:Consolidated Balance Sheet - Asset

Slide 181:Consolidated Balance Sheet- Liabilities and Stockholders’ Equity

Slide 182:Breakdown for Balance Sheet- Asset

Slide 183:Breakdown for Balance Sheet- Liabilities and Stockholders’ Equity

Slide 187:Loss from Continuing Operations

Slide 188:2005 to 2004 Comparison Net sales fell to $192.6 billion from 193.5 billion Net loss of $10.6 billion from Net income of $2.8 billions Unfavorable results primarily due to losses at GMNA GMAC net income declined to $2.4 from $3.0 billion

Slide 189:Reasons for Unfavorable results in 2005 GMNA market share and product mix Revenue declining Delphi Chapter 11 Proceeding GM recorded a charge of $5.5 billion Including the benefit guarantees for certain former GM U.S. employees who transferred to Delphi GMNA restructuring and global asset Impairments Health-care cost escalation

Slide 190:Factors for Loss in GMNA Unfavorable product mix ($2.2 billion loss) Reduced in demand for higher margin large utility vehicles (reaching the end of the life cycle) Production volume decreases ($2.1 b. loss) Market share decline Reduction in dealer inventories Unfavorable material costs ($700 mil. loss) Increased health-care expenses ($600 mil. loss) Escalating health care cost trends Advertising and sales promotion cost increase ($500 mil. loss) Restructuring charge ($1.7 b. loss) After-tax impairment charge ($552 mil. loss)

Slide 191:North America Turnaround Plan Keep raising the bar in the execution of great cars and trucks Revitalize sales and marketing strategy Significantly improve cost competitiveness Address health-care and pension legacy cost burden

Slide 192:GMNA Turnaround Plan Highlight Cease production at 12 U.S. plans by 2008 Reduce 30,000 manufacturing positions Work with United Auto Workers to reduce health-care obligations by $15 billion Modify pension benefits Reduce salaries of top executives Reduce dividend by 50%

Slide 194:Consolidated Cash Flow Statement (cont.)

Slide 196:Supplementary Information for Cash Flow Statement (cont.)

Slide 197:GM Profitability Plan Keep working on cost reduction Growing revenue around the world Invest in technology, better fuel efficiency Revitalizing sales and marketing strategy

Slide 198:Significant Events Delphi Bankruptcy GMAC – Pending Sale of 51% controlling interest Discussions with Renault and Nissan Sale of investments in Isuzu and Suzuki Sale of Regional Homebuilder

Slide 199:GM-Fisher’s Analysis 1) Financial Skill Bad financial performance in GMA Depending on profits from GMAC 2) People Factor Great management team Relatively bad employee relationship (cutting pension expense) 3) Investment Characteristics Limited growth space due to intense competition Low industry profit margin (negative profit) 4) Investment Price P/E ratio is High Increasing stock price if turn the Net loss around

Slide 200:Recommendation