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PwC Automotive Institute

*connectedthinking. PwC. Small World An Industry in Transition. PwC Automotive Institute. Powered by AUTOFACTS ®. Change. Private Equity. Green. Globalization. Alternative Fuels. BRIC. Hydrogen. Emerging Markets. Hybrid. CO2. VEBA. Oil Prices. Alternative Powertrain. China.

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PwC Automotive Institute

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  1. *connectedthinking PwC Small World An Industry in Transition PwC Automotive Institute Powered by AUTOFACTS®

  2. Change Private Equity Green Globalization Alternative Fuels BRIC Hydrogen Emerging Markets Hybrid CO2 VEBA Oil Prices Alternative Powertrain China Politics Consumer Spending Labor Relations Conservation Healthcare CAFE Economy Right Sizing People Credit Crunch Environment 75 Basis Points Flexibility

  3. Small WorldAn industry in transition • Globalization • The Owner • The Supplier • The Product

  4. GlobalizationGrowth is an emerging market phenomenon Contribution to Global Growth by Region 2007-2015 Global Light Vehicle Assembly Outlook 1990-2015 (millions) China 22% India 17% Russia 11% Germany 4% USA 7% Brazil 6% Iran 2%

  5. GlobalizationInvesting in emerging markets Global Light Vehicle Capacity Growth 2007-2015 by Alliance Group by Market Type (millions)

  6. The OwnerAutomotive transaction history Global Automotive M&A Activity 1998-2007

  7. The OwnerAutomotive transaction outlook • Positive indicators for the 2008 transactions market include: • Likely lower deal prices/multiples • Trade buyers attracted by current market conditions • Private equity remains interested in automotive • Continued auto sector restructuring provides deal flow • The weakening of the dollar is making US assets attractive • The number of global automotive deals has exceeded 500 annually for the last decade, and that trend is likely to continue

  8. The SupplierNavigating change • Low cost country sourcing • Global vehicle and powertrain design • Impact of global purchasing trend • Technology development • Price pressure

  9. The ProductGlobal designs for the local market • The Global Platform • Shared Powertrains • Common Manufacturing Process • Regional Preferences • Little Harmonization Source: Tata Motors Source: Ford Motor Company Source: Chrysler LLC

  10. PwC www.pwc.com/auto www.pwc.com/auto/institute Disclaimer: The information contained in this report represents the culmination of proprietary research conducted by the PwC Automotive Institute, an analytical group within the PricewaterhouseCoopers Knowledge Services Organisation. All material contained in this report was developed independently of any PricewaterhouseCoopers client relationship and does not represent the firm’s view as an auditor to any legal business entity. While every effort has been made to ensure the quality of information provided, no representation or warranty of any kind (whether expressed or implied) is given by PricewaterhouseCoopers as to the accuracy, completeness or fitness for any purpose of this document. As such, this document does not constitute the giving of investment advice, nor a part of any advice on investment decisions. Accordingly, regardless of the form of action, whether in contract, tort or otherwise, and to the extent permitted by applicable law, PricewaterhouseCoopers accepts no liability of any kind and disclaims all responsibility for the consequences of any person acting or refraining from acting in reliance on this document. “PricewaterhouseCoopers” refers to PricewaterhouseCoopers LLP, a limited liability partnership or, as the context requires, other member firms of PricewaterhouseCoopers International Limited, each of which is a separate and independent legal entity. All rights reserved. AUTOFACTS is a trademark of PricewaterhouseCoopers LLP and is registered in the United States, Canada, the European Union, and the United Kingdom by PricewaterhouseCoopers LLP. Reproduction or retransmission without prior written consent from the PwC Automotive Institute is strictly prohibited.

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