NJA Automobile Sector Research Analysts SECTOR REVIEW

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11 February 2015 Asia Pacific Equity Research Automobile Manufacturers (Automobiles & Components IN (Asia))

Jatin Chawla 91 22 6777 3719 [email protected] Different markets, common theme Bin Wang 852 2101 6702 [email protected] Figure 1: New launches and competitive intensity—key factors for stock-picking Jahanzeb Naseer 40% 100% 62 21 2553 7977 [email protected] 30% 75% Akshay Saxena 91 22 6777 3825 [email protected] 20% 50% Mark Mao 852 2101 6710 10% 25% [email protected] Bernard Kie 0% 0% 62 21 2553 7902 Great-Wall Tata Maruti Astra M&M BAIC Brilliance [email protected] % of portfolio from new products in CY16 % of portfolio by profits at high competitve risk (RHS)

Source: Company data, Credit Suisse estimates In this report, we make an attempt to analyse NJA stocks on product cycle and competitive intensity with a focus on China, India and Indonesia where these factors are easier to analyse compared to the stocks in Korea and Japan where the companies are more global in nature. ■ Shortening product cycles have increased the importance of launches. With product cycles becoming shorter in most markets, market share gains from new products have accelerated over the past few years. Market shares are an important determinant for stock prices especially under weak market conditions. New launches also help pricing and hence margins in initial years. Within our coverage universe, Tata Motors and Great Wall have the best product cycles, followed by Maruti. ■ Competitive intensity across markets intensive in SUVs. Indonesia is the least-competitive market followed by India and China. Across markets the bulk of launches are centered on SUVs. However, the impact will be much higher in India where the SUV market today has just two to three players with six new players set to enter. China is already a fragmented market, so the impact on profitability from new launches will not be much high. ■ Prefer Tata Motors, Great Wall and Maruti. Tata Motors stands out as the OEM with the highest share of volumes likely to come from new launches and the least threat from competition. The other stock that scores well on this framework is Maruti. Great Wall has high competitive intensity, but a very strong product cycle offsets it. Similarly, Astra's product cycle is not strong but low competitive intensity means that it is more leveraged to a recovery in the Indonesia market, where we are constructive.

DISCLOSURE APPENDIX AT THE BACK OF THIS REPORT CONTAINS IMPORTANT DISCLOSURES, ANALYST CERTIFICATIONS, AND THE STATUS OF NON-US ANALYSTS. US Disclosure: Credit Suisse does and seeks to do business with companies covered in its research reports. As a result, investors should be aware that the Firm may have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as only a single factor in making their investment decision.

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11 February 2015 Focus charts and tables

Figure 2: Expect market growth to pick up in both India Figure 3: Key trends in each market where competitive and Indonesia but to decelerate in China launches are focussed

15% Country Key trend Biggest segment is hatchback; a shift towards compact sedans and UVs whose India 10% combined share has risen from 25% to 40% over the past five years

Sedan is the biggest segment—the share 5% of low-end sedans has been declining but China that of SUVs and luxury is increasing (five- year CAGR of ~40% vs 20% market 0% growth)

PV market growth (%) Has largely been an MPV market; LCGC is gaining prominence with fuel subsidy -5% Indonesia going away and has reached ~14% of the India China Indonesia market in no time 2014 2015E 2016E

Source: Company data, Credit Suisse estimates Source: Company data, Credit Suisse estimates

Figure 4: Great Wall and Tata Motors rank the best on new Figure 5: Brilliance, Great Wall, M&M and BAIC have high product launches competitive risks but Astra has the lowest 40% 100% % of portfolio from new products in CY16 80% 30%

60%

20% 40%

20% 10% 0%

Low Medium High

Source: Company data, Credit Suisse estimates Source: Company data, Credit Suisse estimates

Figure 6: Ranking of each company Company Model pipeline (2H CY14-CY16) Competitive Intensity New untapped segments: upper sedan (Ciaz), compact Of key segments, intensity high only in compact sedans as Maruti Maruti UV, SUV, LCV along with small diesel engine vehicles successfully withstood the onslaught from MNCs in hatchbacks Will enter the fast-growing compact SUV space with two Competitive intensity is very high in the core UV segment as all M&M new launches, also joint products with Ssangyong among major PV players in India entering the segment Strong product cycle with three launches on Jaguar and High intensity in lower premium sedans and lower premium SUVs Tata Motors two on LR in the next one and half years but that is a smaller part of profits as RR twins contribute the bulk Both Toyota and Daihatsu should come up with new Fewer launches in Indonesia as the market is least competitive; Astra MPVs Astra on a strong footing in fast-growing LCGCs By far the strongest product cycle with three new Highest competitive risk on account of a large number of SUV Great Wall launches in both 2014 and 2015 launches expected in China Very weak product cycle with only two series (small High risk from a large number of competitive launches in both Brilliance segment) as all big model launches will be for later three series and X1 space Weak momentum on Hyundai with only new ix25 Competitive intensity high for Hyundai JV from Japanese; for BAIC offsetting all the positive momentum on Mercedes JV Mercedes JV competition in the lower premium sedans (new C class, GLA, GLA, CLA) Source: Company data, Credit Suisse estimates

NJA Automobile Sector 2 11 February 2015 New launches – key driver of stocks In this report, we make an attempt to analyse NJA stocks on product cycle and competitive intensity with a focus on China, India and Indonesia where these factors are easier to analyse compared to the stocks in Korea and Japan where the OEMs are more global in nature. With product cycles across markets becoming shorter, market share gains from new Shortening product cycles models have accelerated over the past few years. Our analysis suggests that market have increased the shares have a big impact on stock performance especially in muted market conditions. importance of new launches Also new launches help margins in the initial years as the pricing is stronger. Tata Motors and Great Wall rank the best with ~40% of volumes likely to come from new launches. We divide the various segments in each market into different levels of competitive intensity— high, medium and low. We believe investors should avoid stocks where much of the volumes come from high competitive intensity segments as margins in these segments are likely to shrink in the coming years. Brilliance, Great Wall, M&M and BAIC have >40% of their portfolios by profit exposed to these high risk segments, whereas Maruti, Tata Motors and Astra have >30% of their portfolios from high risk segments. India: SUV landscape to undergo a big shift Despite the recent slowdown in consumer spending, we believe that the India market will pick up in 2H FY16 as the macro environment will start improving. The recent trend of consumers upgrading to compact sedans and UVs should continue, and will be aided by Maruti, with launches in new several new launches lined up in these categories. The compact SUV segment, where segments, is well positioned seven new players will likely join, should witness a significant rise in competitive intensity. Maruti has launches in completely new segments which should help it grow faster than the market. Having withstood the new launch onslaught on hatchbacks over the past few years, Maruti is well placed in terms of competitive intensity. Despite the two new launches after a long gap, only 10% of Mahindra's volumes are likely to come from new products and, with competitive intensity in its core SUV space set to go up sharply, we believe that margin pressure will sustain. Tata Motors is best placed with 40% of volumes likely to come from new launches as it JLR best placed on both attempts to take the Jaguar brand to the next level with four new launches in the next two launches and competitive years. Given the high share of profits from the RR twins where competition is not much of intensity a concern, it is well placed from the competitive intensity angle as well. China: New launches critical in a slowing market After a slowdown in 2014, we expect volume growth to slow further to 5% in 2015-16. Expect market growth to However, SUVs/luxury should gain further share with ~30%/~15% CAGRs in the same period slow further to ~5%; as replacement demand in China is still only at 27% vs 75-90% in mature markets. The SUV however, SUV/luxury to space should see the most launches with 45/30 new launches planned in 2015/2016. grow faster at 30%/15% Great Wall has the best model cycle with ~40% of volumes coming from new launches. BAIC, whose entire profits come from the Hyundai JV, should be negatively impacted by the Japanese brands' continuous price cut pressure, especially given that it does not have any significant new launches in 2015-16. For BAIC, this should offset the positive Great Wall has the best momentum at its Mercedes-Benz JV. Brilliance should be hurt by new launches from all its model cycle; Brilliance the key competitors in the 3-series segment. It has no new launches in 2015 before the 2- weakest series (small segment) and X1 come in 2016. Indonesia: Market revival is the key We expect volumes to post a ~15% CAGR in 2014-16 after a 2% decline in 2014. Given the low competitive Indonesia has predominantly been a MPV market but with the fuel subsidy now gone the intensity, market growth focus is on fuel-efficient vehicles. Hence LCGCs (low cost green cars) have become matters more in Indonesia popular and within a year reached 14% of the market which stands to benefit Astra given its strong positioning in the segment. Moreover, for Indonesia, competitive intensity across segments is not high. So for Astra more than new launches industry volume growth is more important.

NJA Automobile Sector 3 11 February 2015 Sector valuation matrix

Figure 7: Sector valuation Company Currency CMP Market Cap P/E EV/EBITDA ROE P/B (LC) (US$ bn) 2015 2016 2015 2016 2015 2015 US Ford Motor Company USD 16 68.0 10.1 8.4 5.6 4.7 24.1 1.9 General Motors Corp. USD 38 52.4 8.6 8.1 2.8 2.5 17.3 1.3 European BMW EUR 105 74.9 11.0 10.6 4.1 3.9 15.0 1.6 Daimler EUR 82 97.2 11.8 10.8 4.4 3.9 15.1 1.7 Volkswagen EUR 209 108.6 8.8 7.8 3.3 2.9 12.0 1.0 PSA Peugeot Citroen EUR 13 11.4 14.0 10.8 3.3 2.7 7.3 1.0 Renault EUR 69 22.8 7.8 6.4 3.7 3.3 9.7 0.8 FCA EUR 12 17.2 12.9 8.7 3.1 2.7 9.9 1.4 Korean Hyundai Motor KRW 156,500 33.9 4.9 4.7 3.4 3.3 13.0 0.7 Kia Motors KRW 43,500 16.9 5.2 4.8 4.3 4.0 13.9 0.7 Astra International IDR 7,625 25.1 14.3 13.0 10.4 9.4 20.6 2.9 Japanese Toyota Motor JPY 7,713 204.7 10.0 9.1 5.7 5.3 14.6 1.4 Honda Motor JPY 3,843 55.0 10.0 8.9 4.2 3.8 10.3 1.0 Nissan Motor JPY 1,105 36.3 8.8 7.9 3.5 3.2 10.6 0.9 Suzuki Motor JPY 3,486 17.9 14.1 12.9 5.7 5.2 9.4 1.2 Chinese SAIC Motor Corp Ltd CNY 23 40.0 7.8 7.0 5.4 4.9 18.6 1.4 Brilliance China Automotive HKD 14 9.2 11.8 10.0 28.7 3.1 Dongfeng Motor Group HKD 12 12.6 7.2 6.5 3.3 1.8 17.5 1.2 Great Wall Motor HKD 46 20.2 12.9 10.9 7.9 6.5 28.0 3.3 Guangzhou Automobile HKD 7 7.6 10.2 8.1 55.1 42.1 25.3 1.2 BAIC Motor Corporation HKD 8 8.5 9.9 7.7 9.1 5.8 16.5 1.5 Geely Automobile Holdings HKD 3 3.6 11.5 10.2 4.3 3.7 16.7 1.4 Indian Hero Motocorp Ltd INR 2,721 9.2 15.6 13.7 11.3 9.6 47.6 6.9 Bajaj Auto Limited INR 2,267 11.1 16.3 14.2 11.2 9.5 32.3 5.0 Maruti Suzuki India Ltd INR 3,393 17.8 20.0 15.3 12.2 8.4 18.6 3.7 Tata Motors Ltd. INR 564 25.8 8.1 7.0 3.7 3.1 23.1 1.7 Mahindra & Mahindra INR 1,142 12.7 16.2 14.0 12.8 10.7 19.9 3.0 Ashok Leyland Ltd INR 61 3.0 34.6 17.9 16.5 10.4 9.8 3.4 Source: Company data, I/B/E/S Datastream. Note: All estimates are consensus estimates, 2015 refers to Mar-2016 for Indian and Japanese companies, Dec-2015 for others

NJA Automobile Sector 4 11 February 2015 New launches – key driver of stocks In this report, we make an attempt to analyse NJA stocks on product cycle and competitive intensity with a focus on China, India and Indonesia where these factors are easier to analyse compared to the stocks in Korea and Japan where the companies are more global in nature. With product cycles across markets becoming shorter, market share gains from new models have accelerated over the past few years, and thus, in our view, product cycles are becoming even more critical than earlier for stock performance. Amid weak market conditions, new launches typically help margins as pricing on products is much stronger in the initial years. Within our coverage, Tata Motors and Great Wall have the best product cycles with ~40% of volumes in the next two years likely coming from new launches. We divide the various segments in each market into different levels of competitive intensity—high, medium and low. We believe that investors should generally avoid stocks whose majority volumes come from high competitive intensity segments as margins in these segments are likely to shrink in the coming years. Brilliance, Great Wall, M&M and BAIC have >40% of their portfolios by profit exposed to these high risk segments, whereas Maruti, Tata Motors and Astra have >30% of their portfolios from high risk segments. Product cycle: Important for market share The first factor that we look into to evaluate stocks across the region (in what are markets dominated by largely locally produced vehicles) is product cycle. New models typically help both market share gains and profitability; hence, we believe investors should focus on companies with strong product cycles across markets. New launches is one of the most important factors that raises excitement about the stock—Great Wall's share price saw a steep rise during 2010-13, firstly due to continued new launches by the company and then in anticipation of the H8 launch. At the same time, as can be seen in the chart below, the disappointment due to a delay in the H8 launch has had a negative impact on the stock.

Figure 8: Great Wall's share price movement vs new product launches 50 Great Wall Share price H2 45 40 M4 35 C50 H6 30 C30 25 20 M2 15 orignially plan for H8 10 5 0 Jan-10 Jul-10 Feb-11 Sep-11 Apr-12 Nov-12 Jun-13 Jan-14 Aug-14

Source: Company data, Credit Suisse estimates New launches drive the market share Looking at the importance of new launches on market share, the best case in point is the Indian OEM—Mahindra & Mahindra. The company's market share in UVs increased from 40% in FY09 to 55% in FY12 as it had successful launches such as Xylo, Bolero Facelift, and XUV 500. But since then there have been no big exciting products for three years which led to a complete reversal of market share gains (more so because of the heightened competitive activity in the UV space in India).

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New successful launches (especially in untapped segments) increase a company's market share to an altogether different trajectory as seen from the case of Renault Duster, Ford Ecosport and Honda Amaze in India.

Figure 9: In the Indian market, M&M had gained market Figure 10: Successful launches (especially in the new share during a strong product cycle but lost share when segments) lead to a steep jump in market share for the the cycle was weak OEMs

60.0% 6.0% Quanto Market-share Bolero XU500 India PV market Facelift

50.0% 4.0%

Xylo Amaze launch

40.0% 2.0% Ecosport FY13-15: Weak launch FY09-12: Strong product cycle Duster product cycle launch 30.0% 0.0% FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 Jan-12 Apr-12 Jul-12 Oct-12 Jan-13 Apr-13 Jul-13

M&M market-share UVs Renault Ford Honda

Source: Company data, Credit Suisse estimates Source: Company data, Credit Suisse estimates Market share changes can have a big impact on stock price performance Given the relative differences in their product cycles over the last few years, despite being in the same market with relatively muted growth, the stock performance has varied significantly. Maruti Suzuki has outperformed Mahindra & Mahindra by 100% in the last three years as market share trends between the two companies have diverged. Whilst Maruti's passenger car market share has increased from 40% levels to >50% in the last three years; Mahindra's SUV market share has slipped from 60% levels to sub-40% levels. Whilst the recent divergence in stock performance has also been on account of weakness in tractors we believe the decline in market share has been a big factor in the same.

Figure 11: Maruti has outperformed Mahindra by 100% as market share trends between the two companies have diverged

2 60%

1.75 55%

1.5 50%

1.25 45%

1 40%

0.75 35%

0.5 30% Dec-11 Mar-12 Jun-12 Sep-12 Dec-12 Mar-13 Jun-13 Sep-13 Dec-13 Mar-14 Jun-14 Sep-14 Dec-14

Maruti outperformance vs Mahindra Maruti market share M&M market share

Source: Company data, Credit Suisse estimates

NJA Automobile Sector 6 11 February 2015

New launches drive pricing, too Other than market share gains, new successful launches lead to improved profitability as pricing is the strongest on new models with low discounts. For example, Maruti—be it refreshes on existing models such as new Alto and new Swift, or completely new models such as Ertiga and Celerio—enjoyed an extended period of low discounts after the launches. This is indeed the case for even premium vehicles as seen from the steep fall in discounts for some time when the new C-class was launched in China last year.

Figure 12: Steep fall in discounts on both new Wagon-R Figure 13: The impact is more pronounced for premium and new Alto when refreshes were launches vehicles—a fall in the new C-class discounts when launched last year

60 25% Launch of new Wagon-R in Apr-10 20%

40 15%

10% 20 Launch of new Alto 800 in Oct-12 5%

0 0%

Jan-09 Aug-09 Jun-10 Jan-11 Aug-11 Mar-12 Jan-13 Jan-14

Apr-14 Apr-12 Oct-12 Apr-13 Oct-13 Oct-14

Jun-12 Jun-13 Jun-14

Feb-14 Feb-12 Feb-13

Aug-12 Dec-12 Aug-13 Dec-13 Aug-14 Dec-14 Total Benefit Alto ('000 Rs/ vehicle) WagonR C-series discount in China

Source: Company data, Credit Suisse estimates Source: Company data, Credit Suisse estimates With product cycles across markets becoming shorter, market share gains from new models have accelerated over the past few years, and thus, in our view, product cycles are becoming even more critical than earlier for stock performance. Across the region, most of the new launches are concentrated in the SUV space. The share of SUVs has risen strongly in both India and China over the past few years and as this trend is expected to continue, much of the activity is focussed on this space. Given this, a company with upcoming launches in the SUV space will get twin gains if the launch is successful—faster segment growth and market share.

Figure 14: Share of SUVs in China has increased from Figure 15: Even in India, the share of UVs has increased ~5% to ~20% in the last 10 years from 15% to 22% in the last five years 25.0% 25.0%

20.0%

20.0% 15.0%

10.0% 15.0%

5.0%

0.0% 10.0% 2006 2007 2008 2009 2010 2011 2012 2013 2014 FY09 FY10 FY11 FY12 FY13 FY14 FY15YTD

Share of UV's in China Share of UV's in India

Source: Company data, Credit Suisse estimates Source: Company data, Credit Suisse estimates

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Details of product launches across markets

Figure 16: 2015 China new model plans (locally produced) Small (A0) Medium (A) Large (B) Luxury (C) SUV MPV Globals DF Nissan Lannia (Apr) Murano (May) / Qashqai (Nov)/ Venucia T70 (Jan) / QX50L (Mar) DF Honda Consept B (Aug) X-RV (Jan) DF PSA New C-Quatre (Nov) / Peugeot 308S (Apr) C3-XR (Jan) Zhengzhou Nissan MX6 Yusum GAC Honda New City (1Q) GAC Toyota GT03 Hybrid Levin New Highlander (1Q) GAC Fiat Cherokee (Oct) Shanghai GM Excelle GT (1Q) / Verano (3Q) New Malibu (4Q) P-lux (4Q) Shanghai VW New Fabia (2Q) Lamando (Jan) New SuperB (Jul) / Passat (4Q) New Touran(4Q) FAW VW New Magotan Beijing Hyundai New Sonata (1Q) Beijing Benz New C-Class standard (Apr) GLA (Mar+) / New GLK (Oct) Fujina Benz V-class DF Yueda Kia JFC sedan (Sep) KX3 (Mar) FAW Toyota New Crown (Feb) FAW Mazda CX-9 (4Q) Chang'an PSA DS4 (Oct+) Chang'an Ford Taurus (4Q) Edge (Jan) Chang'an Suzuki C-Sedan Grand Vitara (3Q) Qingling Rodeo (Oct+) Chery- JLR Evoque (1Q) / Freelander (3Q) Local Brands Great wall H8 (1Q) / Coupe C (2Q) / H7 (4Q) Geely Emgrande EV EC9 (1Q) / TX5 X7 SUV (Nov) BYD Speed EV S1 / S3 / "Yuan" / "Song" / "Tang" "Shang" (2Q) DF Fengshen L60 (Mar) AX3 (4Q) DF Liuzhou CM5 (4Q) DF Luxgen B-sedan GAC GA4 (Apr) GS4 (2Q) Shanghai Motor MG3 sedan (Jul) MG GS (1Q) Roewe D-MPV (Oct) Shanghai GM Wuling B-Sedan Baojun 560 (3Q) Wuling MPV Chang'an CS95 (4Q) Chery Arrizo 3 EV Arrizo 5 Arrizo 7 PHEV Arrizo M7 FAW Car C-Sedan Redflag SUV Besturn MPV FAW Xiali C-Sedan C-CUV Beijing Auto D80 X65 (1Q) / X55 (3Q) / C33 (3Q) BAIC Yinxiang S6 H2 Zotye Z600 T700 (Q4) Haima S3 / S9 JAC Heyue A20 / IEV5 S2 (3Q) M3 (Mar) / M6 JMC Ford Everest (Apr+) Southeast V7 DX7 (Mar+) Foton B-Sedan B-SUV (Jul+) Land wind X7(Jan+) Qoros C-CUV (Apr+) Lifan 330 Weichai M301 Huatai E90 B-CUV (Apr+) Zhonghua H7 V3 (2Q) Source: Company data, Credit Suisse

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Figure 17: 2016 China new model plans (locally produced) Small (A0) Medium (A) Large (B) Luxury (C) SUV MPV Globals DF Nissan New Sunny Maxima B-SUV (4Q) DF Honda new Civic (2Q) DF PSA New C5 New 3008 DF Renault C-SUV (1Q) Zhengzhou Nissan Paladin (2Q) GAC Honda New CrossTour (1Q) GAC Toyota SML-L SML-H GAC Fiat D-Sedan (Mar) Renegade (1Q) / Compass (4Q) GAC Mitsubishi Mirage (1Q) Shanghai GM New Aveo (4Q)Cruze L (1Q) / C-value (3Q)LaCrosse (1Q) SRX (1Q) New GL8 (2Q) Shanghai VW E-Sedan (Jan) Cross Blue (Oct+) / Skoda SUV FAW VW C-sedan / New Bora New A4 C-SUV Beijing Hyundai New Elantra (Jul) New ix35 (Jan) Beijing Benz new E-class / CLA (Apr) Fujina Benz New Vito Brilliance BMW 2-series (1Q) New X1 (3Q) DF Yueda Kia New Sportage R / Sorento FAW Toyota New Prius Volvo S90L XC90 Chang'an PSA Expert Chang'an Ford Jiayue Chang'an Mazda Mazda 2 Cinturx (local brand) CX3 Mazda 5 Chang'an Suzuki iV-4 (Jan+) Chery- JLR XE/ XF C-SUV(NG3) Local Brands Great wall New C30 (3Q) Geely new King Kong (4Q) Emgrand sedan (3Q) / Emgrand Cross (1Q) X6 SUV (Apr) BYD New G3 (2Q) "Han" S9 DF Fengshen G95 sedan (4Q) AX5 (4Q) DF Liuzhou DM5 DF Luxgen B-Hatch Beijing Auto D90 BAIC Yinxiang S5 GAC GA1 (1Q) GA8 (4Q) GS7 (4Q) Shanghai Motor New 550 (Jul) / MG6 (Dec) Shanghai GM Wuling New 630 (Jul) D-SUV Chang'an D-sedan C-MPV Chery New Cowin 5 Arrizo 9 Tiggo 6 (T15) FAW Car Besturn B50 FAW Xiali Weizhi V2 Haima M2 Southeast New V3 DX9 JAC New Rein JMC C-SUV (Oct) Transit Custom Lifan New 520 New 720 B-CUV Zotye 630 / 730 T500 Zhonghua V6 Source: Company data, Credit Suisse

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Figure 18: 2017 China new model plan (locally produced)

Small (A0) Medium (A) Large (B) Luxury (C) SUV MPV Globals DF Nissan New March Quest DF Honda New CRV / D-SUV DF PSA Citroen C-CUV DF Renault D-SUV Espace Zhengzhou Nissan GAC Honda TLX / Insight Acura SUV GAC Toyota New Camry EZ GAC Fiat 500 + (Oct) GAC Mitsubishi New Pajero Sport Shanghai GM New Regal New Captiva Shanghai VW New Tiguan / New Yeti Transporter FAW VW New Sagitar New CC New Q5 / Q1 Beijing Hyundai New Verna Grandeur Beijing Benz B class Fujina Benz Brilliance BMW 1-series / new 5-series E X1 DF Yueda Kia New K2 FAW Toyota Estima Volvo New XC60 Chang'an PSA D-Sedan Chang'an Ford New Fiesta New Focus Chang'an Mazda Chang'an Suzuki New Swift Chery- JLR XF Local Brands Great wall C50 New M2 / new H6 Geely CS11 CX11 BYD New S6 / "Min" New M6 DF Fengshen AX9 DF Liuzhou DF Luxgen B-CUV Beijing Auto New D20 New Eado BAIC Yinxiang GAC-Motor GS1 Shanghai Motor New W5 Shanghai GM Wuling New Lechi Chang'an New CX20 Chery Tiggo 2 (T17) FAW Car FAW Xiali New Xiali Haima Huatai New Boliger Qoros B-sedan JAC S9 Lifan Zotye Zhonghua New H530 New S50

Source: Company data, Credit Suisse

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Figure 19: Similar to China, launches in India are concentrated in SUVs; true for other emerging markets as well Compact Premium Compact Upper Compact MPV SUV Total no of hatchback Hatchback sedans sedans SUV new launches Maruti Above Swift Ciaz (end X-alpha S-cross 4 (2016) 2014) (2016) (2015) Honda Global Sub A Jazz (2015) Brio - cross Vezel (2016) 4 (2016) (2015) Hyundai ix25 (2015) Lodgy (2015) 2 Renault/Nissan Datsun Go+ (2015) 2 (2014), Towny (2016) GM Amber (2015) Adra (2016) 2 Tata Motors Bolt (2015) Zest (end 2 2014) Mahindra Urban 2 compact (2015), Rural compact (2015) VW Taigun (2016) 1 Fiat Avventura 1 (2015) Ford Ka (2015) Focus (2015) 2 Existing number of players 5 8 5 4 1 5 3 in segment No of new players entering 1 (Honda) 1 (Tata) 3 (All New) 1 (Maruti) 7 (All New) 2 (Renault, 3 (Maruti, the segment Nissan) Honda, Hyundai) Competitive intensity Low Medium High Medium Very High Medium High Source: Company data, Credit Suisse estimates

Figure 20: Competitive intensity in Indonesia is much lower hence market growth matters more for incumbents Hatchback MPV SUV Total no of launches Toyota/ Daihatsu UFC2 (2015), 2 IMV (2016) Honda Jazz (end 2014) Mobilio (end 2014) Vezel (2015), HR-V 4 (2015) Suzuki Economy (2016) 1 Nissan/ Datsun Go (2014) Go+ (2014) 2 Mitsubishi Delica (2014) New SUV (2016) 2 Total number of new 3 5 3 launches Competitive intensity Low Medium High Source: Company data, Credit Suisse estimates Tata Motors, Great Wall and Maruti best placed Most of our top auto OEM picks—Great Wall, Tata Motors and Maruti—are heading into a phase of strong product launches which should help them grow much faster than their respective markets. Moreover, all these companies have many SUV launches lined up which should further help them outperform the market. Tata Motors and Great Wall rank the best as they have ~40% of volumes coming from new product launches.

NJA Automobile Sector 11 11 February 2015

Figure 21: Great Wall and Tata Motors rank the best on new product launches 40%

30%

20%

10%

0% Great-Wall Tata Maruti Astra M&M BAIC Brilliance % of portfolio from new products in CY16

Source: Company data, Credit Suisse estimates Great Wall. "Coupe C" is 2015 key model, which will share the same chassis of H6 SUV but with a different powertrain—we estimate 8,000 unit sales/month after its debut in 2Q15.

Figure 22: Great Wall new model plans Model # Mini (A00) Small (A0) Medium (A) Large (B) Luxury (C) SUV MPV 2010 2 C30 (May) M2 (Mar) 2011 2 C50 (Nov) H6 (Aug) 2012 1 M4 (May) 2013 0 2014 3 H2 (Jul) / H1 (Nov) / H9 (Dec) 2015 3 H8 (1H) / Coupe C (1H) / H7 (2H) 2016 2 New C30 (2H) New H6 (1H) Source: Company data, Credit Suisse estimates Brilliance. No new products in 2015 before the 2-series MPV debut in 1Q16. However, we conservatively estimate only 30,000 unit sales from 2-series in 2016 as it is a niche product.

Figure 23: Brilliance BMW new model plans Model # Mini (A00) Small (A0) Medium (A) Large (B) Luxury (C) SUV MPV 2012 2 Long wheelbase 3 Series X1 2013 1 Standard wheelbase 3-series 2014 0 2015 0 2016 2 2-series (1Q) New X1 (3Q) 2017 2 1-Series (Jan) / New 5-Series (May) Source: Company data, Credit Suisse estimates BAIC. The Hyundai JV has only one new model lined up in 2015—new generation Sonata sedan. Compared with the existing eight generation Sonata, the ninth generation is kind of boring in terms of both interiors and exteriors, in our view, and very similar to the existing Hyundai Mistra sedan. We are conservative on this new car, and estimate only 70,000 unit Sonata sales in 2015 versus its peak 104,670 units in 2013.

NJA Automobile Sector 12 11 February 2015

Figure 24: BAIC group new model plans Model # Small (A0) Medium (A) Large (B) Luxury (C) SUV MPV 2015 8 Beijing Hyundai New Sonata (LFC) 1Q Beijing Benz C-Class standard (Apr) GLA (Mar) / New GLK (Oct) Beijing Auto D80 (4Q) X65 (1Q) / X55 (3Q) / X25 (3Q) 2016 5 Beijing Hyundai New Elantra (Apr) New ix35 (Jan) Beijing Benz new E-class (Jun) / CLA (Apr) Beijing Auto D90 Source: Company data, Credit Suisse estimates Tata Motors: JLR is entering a very strong phase of new product launches. Whilst the last two launches (RR, RR Sport) were margin leaders, the new launches going forward especially on the Jaguar side will be volume leaders; we expect a sharp pick-up in volume growth at JLR.

Figure 25: After a lull in 2014, JLR's product launch schedule is seen accelerating in 2015 and 2016 Segment Lower premium Middle premium Upper premium Lower premium Middle premium Upper premium cars cars cars SUV SUV SUV 2011 Evoque 2012 Range Rover 2013 RR Sport 2014 2015 XE XF Discovery Sport 2016 F-pace XJ Discovery Source: Company data, Credit Suisse estimates Maruti: In our view, the big model to watch out for from a Maruti perspective will be the compact SUV X-alpha which is likely to be launched at the Auto Expo 2016. Other than that the LCV foray will be interesting as to how the company handles the brand dilution.

Figure 26: After launching refreshes from 2011 to 2013; focus going forward is on new segments & nameplates Compact Premium Compact Upper Compact MPV SUV LCV hatchback Hatchback Sedans sedans SUV 2011 New Swift 2012 New Alto 800 New Dzire Ertiga 2013 New WagonR 2014 Celerio Ciaz 2015 S-cross Carry 2016 Above Swift X-alpha Source: Company data, Credit Suisse estimates

NJA Automobile Sector 13 11 February 2015

Competitive intensity The second factor that we look into is competitive intensity. We believe that investors should avoid the stocks whose most volumes come from high competitive intensity segments as margins in these segments are likely to shrink in the coming years. Of the three countries, China is by far the most competitive as no firm has more than a 20% market share, whereas the largest firm has over a ~45% market share in both India (Maruti) and Indonesia (Astra). China is also the most fragmented market with many players while Indonesia is most concentrated as the Japanese OEMs corner ~90% of the market. Hence, in China new launches do not materially alter the competitive intensity (as almost every segment is highly competitive with a number of OEMs present in each segment), but new products do give extra volumes.

Figure 27: China is the most competitive market followed by India and Indonesia

0.40

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0.00 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Herfindahl index China India Indonesia

Source: Company data, Credit Suisse estimates We divide the various segments in each market into different levels of competitive intensity—high, medium and low. Not surprisingly, most of the launches are concentrated in the segments where market is evolving—for instance, in India most launches take place in the SUV and compact sedan space, while in China it is in the luxury and SUV space. Astra is by far best placed on this factor given fewer competitive launches announced in the Indonesian market with the company also being on a very strong footing in the LCGC space. Maruti sees very low competitive intensity in the hatchback space as it has successfully withstood the onslaught from global MNCs over the past few years. The highest new launches take place in the SUV space in the China market given market size gains and the large number of firms but, as discussed above, it is not such a big factor as the China market has always been fragmented.

NJA Automobile Sector 14 11 February 2015

Figure 28: Risk to portfolio (as % of volumes) from the competitive threat

100%

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0% Astra Maruti M&M BAIC Tata Brilliance Great-Wall

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Source: Company data, Credit Suisse estimates Much more important than volumes is profit contribution of each segment where get slightly different results on this parameter. So for Tata, the contribution from lower premium sedans and lower premium UVs is high by volume (where competitive intensity is high), but low by profit as the RR twins contribute the bulk of profitability. Brilliance, Great Wall, M&M and BAIC have >40% of their portfolios by profit exposed to these high risk segments, whereas Maruti, Tata Motors and Astra have >30% of their portfolios from high risk segments.

Figure 29: Risk to portfolio (as % of profits) from the competitive threat 100%

80%

60%

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0% Astra Tata Maruti M&M Brilliance BAIC Great-Wall

Low Medium High

Source: Company data, Credit Suisse estimates

NJA Automobile Sector 15 11 February 2015 India: SUV landscape to undergo a big shift The recent slowdown in consumer discretionary spending notwithstanding, we believe that the India car market volumes will pick up in 2H FY16 as the macro environment will start improving—a decline in interest rates, a pick-up in government spending, benefit from lower fuel prices, etc. The latest trend of consumers upgrading to compact sedans and UVs should continue and will be aided by the many new launches lined up in these categories. The compact SUV segment is likely to witness the most significant increase in competitive intensity as seven companies are set to enter the segment in the next two years. Tata Motors is best placed with 40% of volumes likely to be come from new launches as it attempts to take the Jaguar brand to the next level with four new launches in the next two years. Given the high share of profits from the RR twins where competition is not too much of a concern, it is well placed from the competitive intensity angle. Maruti has launches in completely new segments which should help it grow faster than the market. Having withstood the new launch onslaught on hatchbacks over the past few years, Maruti is well placed as far as competitive intensity is concerned. Despite two new launches after a long gap, only 10% of Mahindra's volumes are likely to come from new products and, with competitive intensity in its core SUV space set to go up sharply, we believe that margin pressure for Mahindra will sustain. See growth revival after four straight years of subdued growth The PV industry is in the middle of one of the worst slowdowns with four consecutive years of flattish growth. Earlier, there never had been even three slow years. Hence there is a lot of pent-up demand for cars and an economic recovery could bring that to the forefront. The election results, which led to the formation of a single-party majority government at the centre after a long time, bought about a brief recovery but the growth has again slowed post that. We see a recovery in FY16 as the macro environment should improve with lower inflation and ownership costs have come down significantly with lower fuel prices. Given still very low auto penetration (India greatly lags even the other emerging markets), we see plenty of headroom for growth in the long run and the car industry should comfortably grow at ~12-15%.

Figure 30: Four straight years of subdued growth—see Figure 31: Over the past three years, affordability has growth recovery in FY16 improved with a slower rise in ownership costs

Domestic PV's growth 10,000 12%

30%

9,500 8%

20%

9,000 4% 10%

8,500 0% 0%

8,000 -4% -10% FY11 FY12 FY13 FY14 FY15 FY16

Monthly ownership costs % YoY increase (RHS)

Source: Company data, Credit Suisse estimates Source: Company data, Credit Suisse estimates

NJA Automobile Sector 16 11 February 2015

Market shifting from entry towards compact and UVs India is largely a small car market as vehicles with a base price less than ~US$10,000 (which we call as A and B segments) form ~80% of the market. Over the past few years, a gradual up-trading has taken place with the share of A segment vehicles declining from 60% in 2007 to 35% in 2014. At the same time, the share of B segment vehicles increased from 20% to 45% during the same time. This reflects in growth rates of these segments as A segment vehicles (entry, compact hatchback and vans) have witnessed the slowest growth while B segment vehicles (compact sedans and UVs) grown the fastest. One reason contributing to the faster growth of the B segment is the unique nature of excise (12-16% higher duty if vehicle is >4 metre in length). Hence, compact sedans and compact UVs (<4 metre in length) have looks of bigger vehicles and are priced attractively and thus have enjoyed a very high growth rate over the past few years. Going forward, the progression from B to C segments will take time because of this excise duty structure unless the differential excise duty structure changes with GST implementation. The other trend shaping up (mirroring the global trend) has been the increasing share of UVs whose proportion has increased from 13% to 22% of the market over the past five years with both MPVs and SUVs too seeing faster growth other than compact UVs.

Figure 32: A and B segment vehicles (less than Rs600,000 Figure 33: Compact sedans and UVs (both upper and base price) constitute ~80% of market compact) have seen the highest growth past few years Vans (A) 20% Luxury (D) 7% 3% Entry (A) 13% 4 year CAGR growth (FY11-15) MPV (C) 8% SUV (C) 10% 5% Compact hatchback (A) Upper Sedan 14% (C) 6% 0%

Entry UV (B) 7%

Premium -10% Compact Sedan hatchback (B)

(B) 20%

Vans Entry

17%

Entry UV Entry Upper UV Upper

Current proportion of market Sedan Upper

Premium hatch Premium Compact hatch Compact Sedan Compact Source: Company data, Credit Suisse estimates Source: Company data, Credit Suisse estimates Competitive intensity concentrated in UVs and compact sedans Given the faster growth in compact sedans and UVs, not surprisingly, much of the competition with regards to the new launches will be concentrated here. 2009-13 saw all the global auto majors focus on the hatchback segment (where Maruti has had a dominant share) but most of them did not achieve much success. Now the focus has shifted towards UVs, where nearly all the major players have some or other launches planned, and the compact sedans segment, which already saw many launches last year.

NJA Automobile Sector 17 11 February 2015

Figure 34: UVs and compact sedans set to see heightened competition Segment Recent and expected launches in next few years No. of existing No. of new OEMs entering OEMs Compact hatchback Nissan (Datsun), Renault (Towny), Honda (Global Sub A) 5 1 (Honda) Premium Hatchback Honda (Jazz), Maruti (New), Tata (Bolt) 8 1 (Tata) Compact Sedans GM (Amber), Tata (Zest), Ford (Ka) 5 3 (All New) Upper sedans Maruti (Ciaz), Ford (Focus) 4 1 (Maruti) GM, Fiat (Avventura), Hyundai (GS), Maruti, VW (Taigun), Compact SUV 1 7 (All New) M&M (2 models), Honda MPV Nissan (Go+), Renault (Lodgy) 5 2 (Renault, Nissan) SUV Maruti (S-cross), Tata (new), Honda (Vezel), Hyundai 3 3 (Maruti, Honda, Hyundai) Source: Company data, Credit Suisse estimates Maruti Suzuki 15% of CY16 volumes to come from new launches Maruti is the leader in the India passenger vehicles market with a ~45% share. Its market share has increased ~500 bp over the past two years driven by its strong presence in rural India (which has grown faster than urban) and new launches in the compact hatchback segment. Suzuki has an aggressive launch plan going forward. Against a normal trend of one new model per year, it is targeting three new models per year for the next few years. Most of these launches are intended to plug the gaps in its portfolio. At the same time, Maruti is spending on improving its product development capabilities to respond faster to market demand. Maruti is still not present in ~15% of the market—upper sedan, compact UV and SUV—the last two are fast-growing segments. It also has many other launches slated over the next two years (Figure 35), which together at ~275,000 units will form ~15% of company's volumes in CY16 and will nearly contribute to half of ~20% volume growth we have pencilled in in our numbers. Figure 35: Maruti—new segments and niches to be targeted in the next few years Maruti Incremental units (annual) Comment Upper sedan 48,000 Entered the segment that is 6% of market with the recently launched Ciaz SUVs 30,000 Will enter the segment that is 5% of market with the launch of S-cross early 2015 Compact UVs 60,000 Likely launch in 2016, segment is currently ~2% of market but is growing very fast Premium hatchback 24,000 New hatchback above Swift to compete directly with Hyundai i20 and Honda Jazz LCVs 30,000 Will enter the commercial vehicle segment with likely a launch mid-2015 Small diesel engine in the A 75,000 First vehicle in the A segment to provide a diesel option, can provide big volume segment delta; likely launch in both Wagon-R and Celerio Source: Company data, Credit Suisse estimates 50% of portfolio at low risk and only 23% has a high competitive risk Maruti is comparatively better placed in terms of the adverse effect from competition. In nearly half of its portfolio by volume, i.e., (A-segment vehicles which contribute 33% of profits), competitive threat is low. The threat is medium for 27% of portfolio by volume (37% by profits) and high for 22% of portfolio (30% by profits).

NJA Automobile Sector 18 11 February 2015

Figure 36: Competitive risk for Maruti Maruti Segment volume contribution (CY16E) Segment profit contribution (CY16E) Competitive threat Entry 21% 11% Low Compact hatchback 21% 17% Low Premium hatchback 18% 23% Medium Compact sedan 16% 22% High Upper sedan 3% 5% Medium Compact UV 4% 5% High SUV 2% 3% High MPV 4 7% Medium Vans 10% 7% Low Source: Company data, Credit Suisse estimates Mahindra Only 10% of CY16 volumes to come from new launches Mahindra is the third biggest player in the India passenger vehicles industry and the leader in the UV segment. From 2010 to 2012, the company's overall PV market share increased 500 bp (from 7% to 12%) driven by the SUV boom in the country with Mahindra benefitting from relatively benign competition in the UV space. However, since then many firms such as Maruti (MPV), Renault Nissan (SUV), Ford (compact UV) and Honda (MPV) have come up with new launches resulting in M&M's share in the UV segment dropping from 55% in 2012 to 37% now. One of the key reasons for the company losing share, per management, has been its absence from the fast-growing compact SUV segment. To rectify this, the company plans to come up with two new launches in this space this year (Figure 37)—one will have car- like characteristics and will be targeted at urban customer, and the second will have SUV- like features with rural customers as target. These are the only two major launches slated for the next two years and will contribute to more than half of the ~20% CAGR (2014-16) we have for M&M's UV portfolio in our numbers. At an aggregate level, though, given that M&M is well diversified with presence in LCV, M&HCV, 3Ws and compact sedan spaces, the share of these launches would be much lesser. At ~70,000 annual units combined, these two models will contribute to ~10% of M&M's auto volumes in 2016, in our numbers.

Figure 37: M&M—new segments and niches to be targeted in the next few years M&M Incremental units (annual) Comment First launch in the compact UV space, absence from which contributed to M&M losing UV Compact UV1 36,000 share, will take on Ford Ecosport and targeted at urban customers Another compact SUV targeted at rural customers, M&M will come up with new petrol Compact UV2 36,000 engines on these models too Large SUV 24,000 Possibly another SUV in 2017 which will be the first joint product with Ssangyong New LCV 24,000 M&M is very strong in >2T, new vehicle may target <2T space where Tata Ace dominates Source: Company data, Credit Suisse estimates Only ~20% of portfolio has low competitive risk For M&M, given the disappointing volume performance over the past two years, it has its hopes pinned on new compact UV launches in 2015. However, as we noted above, this is by far the most competitive space in the India market with all major companies having new launches planned. Other segments for the company (pickups, SUVs, etc.) face medium to high competition and the only relatively safe portfolio is rural UV (Bolero), which contributes to just ~20% of volumes and is seen dwindling going forward as the quality of roads in rural India improves.

NJA Automobile Sector 19 11 February 2015

Figure 38: Competitive risk for M&M in different UV segments M&M Segment volume contribution (CY16E) Segment profit contribution (CY16E) Competitive threat Rural UV 21% 23% Low Compact UV 11% 7% High SUV 18% 31% High MPV 1% 1% Medium Pickups (LCVs) 34% 35% Medium M&HCVs 2% 1% High Cars (compact sedan) 1% 0% High 3W's 11% 2% Medium Source: Company data, Credit Suisse estimates Tata Motors ~40% of portfolio to come from new launches Given that the Tata Motors stock is largely leveraged to JLR (which drives ~95% of profits), we look at the dynamics of the premium vehicles industry for Tata Motors. JLR has one major gap in its portfolio which is the lower segment in premium cars and the company will aim to plug the same with the upcoming launch of Jaguar XE. Following this, Jaguar will also launch a crossover on the same platform in a year and these two models should together constitute ~100,000 units annually. Other than brand new models, a new model on an existing brand (refreshes) is also a key driver of volumes in premium vehicles. Typically, premium OEMs have strictly adhered to the policy of launching new models on existing brands within seven years of the original launch. JLR had historically been lagging on the same but since the acquisition by Tata, the company has stepped up refresh frequency and is now largely in line with peers. The current generation Freelander, Discovery and Jaguar XF are now all approaching seven years and should all be refreshed in the next two years. Adding all new launches (XE and crossover), total volumes from these new launches should be ~300,000 units (~40% of JLR's CY16 volumes). Figure 39: JLR—new launches and refreshes over CY14-16E Tata Motors Annual units Comment Discovery Sport 80,000 Replacement of current Freelander Jaguar XE 60,000 Will give the company a foothold in the biggest segment of premium cars The normal cycle in premium vehicles is seven years, and a new model refresh usually New Jaguar XF 60,000 leads to a volume uptick in the initial years Jag crossover 30,000 Following XE, first crossover of Jaguar will come on the same platform New Discovery 65,000 New Discovery will come on the same platform as new RR, RR Sport Source: Company data, Credit Suisse estimates ~25% of portfolio at high competitive risk To assess the competitive intensity, we look at the launch plans of the Big 3 German OEMs—BMW, Mercedes and Audi—which are the key competitors of JLR. The threat is low for 8% of portfolio (25% by profits)—primarily RR, which has very little competition— but high for 50% of portfolio by volume (but only 25% of profits)—both lower premium cars and SUVs. Typically in premium vehicles, upper-end vehicles contribute disproportionately high to profits and lower competition in these segments augurs well for JLR.

NJA Automobile Sector 20 11 February 2015

Figure 40: Competitive intensity in the premium vehicle segment Segment JLR models in the segment Competitive launches (CY14-16E) Lower premium cars XE XE (2015), A4 (2015), C class (2014) Middle premium cars XF XF (2015), 5 series (2016), E class (2016) Upper premium cars XJ,XK XJ (2016), 7 series (2015), A8 (2016) Lower premium SUV Evoque, Freelander, Defender, Jag crossover Freelander (2015), Jag crossover (2016), X4 (2014), Q5 (2016), GLA (2014), GLK (2015) Middle premium SUV Discovery, RR Sport Discovery (2016), X6 (2015), X7 (2016) , Q7 (2014) Upper premium SUV RR None Source: Company data, Credit Suisse estimates

Figure 41: Competitive risk for JLR in different premium vehicle segments Tata Motors Segment volume contribution (CY16E) Segment profit contribution (CY16E) Competitive threat Lower premium cars 10 3% High Middle premium cars 10% 4% Medium Upper premium cars 5% 2% Medium Lower premium SUV 43% 24% High Middle premium SUV 24% 41% Medium Upper premium SUV 9% 26% Low Source: Company data, Credit Suisse estimates

NJA Automobile Sector 21 11 February 2015 China: New launches critical in a slowing market After a remarkable ~20% CAGR in volumes since 2005, 2014 marked a slowdown to 13%. We expect growth to slow further to a 5% CAGR in 2015-16. However, segments like SUVs and luxury should continue to gain shares with ~30% and ~15% CAGRs in the same period as replacement demand in China is still only at 27% vs 75-90% in mature markets. Given this trend, the SUV space is likely to see many new launches with 45 and 30 new launches planned in 2015 and 2016, respectively. Given the already highly fragmented nature of the market, this does not materially alter the competitive intensity in the segments, but new products do give extra volumes. Great Wall has the best new model pipeline among the Chinese stocks with ~40% of volumes likely to come from new model launches. BAIC, whose entire profit comes from the Hyundai JV, should hence be negatively impacted by the Japanese brands' continuous price cuts, especially given that it does not have any significant new launches lined up in 2015-16. For BAIC, this should offset the positive momentum at its Mercedes JV. Brilliance will be hurt by new launches from all its key competitors in the 3-series segment. It has no new launches in 2015 before the 2-series (small segment) and X1 come in 2016. Market growth to moderate… At ~19 mn units, China is the largest market in the world with PV sales in the country having witnessed a 20%+ CAGR since 2005. This remarkable growth was mainly driven by a fast-growing domestic economy and rising individual incomes, with real GDP growing by ~10% in the period. Of late, there have been concerns about the macro environment in the country with falling commodity and property prices; growth slowed to 13% in 2014 with discounts increasing across models. We expect further moderation in PV industry growth to 6% and 4% in 2015 and 2016, respectively.

Figure 42: China has grown at robust 20% over the past decade; see moderation ahead

25,000,000 50%

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2010 2004 2005 2006 2007 2008 2009 2011 2012 2013 2014

2015E 2016E

China Passenger Vehicle Sales % YoY

Source: Company data, Credit Suisse estimates …but there are segments which will grow much faster China has largely been a sedan market with Chinese customers' preference for bigger vehicles rather than smaller hatchbacks. Mass segment sedan is the largest segment of the market with the total share at ~60% followed by SUVs/ MPVs at ~30% and luxury at ~10%. Within sedans, while the low-end vehicles (usually engine size less than 1.6L) are the biggest in terms of volume share, their share has come down over the years. Sales of

NJA Automobile Sector 22 11 February 2015 these low-end PVs have underperformed the sector resulting in the share of A00+A0+A class declining from ~70% in 2005 to ~50% today. The other market trend has been high growth of SUVs (five-year CAGR of 40%) and luxury (five-year CAGR of 35%). Hence, there has been a gradual up-trading in the market with the share of low-end sedans declining and that of SUVs and luxury growing. This has also been driven by customers tending to choose bigger vehicles to upgrade/replace their existing cars.

Figure 43: China is largely a sedan market, which Figure 44: Share of low-end sedans has come down over constitutes ~60% of market the years while that of SUVs and luxury has increased Mini (A00) MPV 50% 2% 10% Small (A0) 11% 40%

30% SUV 21% 20%

Medium (A) 10% Luxury (C) 37% 9% 0% Large (B) 10% -10% Mini (A00) Small (A0) Medium Large (B) Luxury (C) SUV MPV (A) China market segmentation 5 Year CAGR growth (2009-14)

Source: Company data, Credit Suisse estimates Source: Company data, Credit Suisse estimates We expect the trend of faster growth in SUVs and luxury to continue. We expect SUVs to see a 31% CAGR and luxury a 16% CAGR vs PV industry CAGR of 5% over 2014-16. This should be driven by (1) relatively low luxury and SUV penetration in China (compared to developed countries such as the US) and (2) an increase in replacement demand as a proportion of sales with customers typically choosing to upgrade to larger vehicles. Only 27% of sales in 2014 were replacement sales, well below mature markets' 75-90%.

Figure 45: China SUV segment sales volume forecast Figure 46: China luxury brands' sales volume forecast

12,000,000 120% 3,000,000 80%

10,000,000 100% 2,500,000 60% 8,000,000 80% 2,000,000

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0 0% 0 0%

2013 2009 2012 2006 2007 2008 2009 2010 2011 2012 2014 2006 2007 2008 2010 2011 2013 2014

2015E 2016E

2016E 2015E

Total SUV YoY growth Total Luxury YoY growth

Source: China auto market, Wards Auto, Credit Suisse estimates Source: Company data, Credit Suisse estimates

NJA Automobile Sector 23 11 February 2015

Competitive intensity, too, concentrated on SUV and luxury China’s auto sector is highly competitive with more than 50 auto-makers and the industry being relatively fragmented. Foreign brands dominate, with their Chinese JVs accounting for ~70% of China’s PV sales. Generally, JVs launch more new models than domestic brands resulting in steady increases in their market shares. Given cooling sales in China’s PV market, OEMs are focused on gaining market shares with several competitive new launches planned over the next two years. Not surprisingly, given the market shift, much of the competitive intensity is concentrated in the high growth SUVs and luxury space. Luxury brands are getting cheaper with increased localisation— apart from the G3 (Audi, BMW, Merc), Cadillac and Volvo who have already localised; players like Infiniti, JLR are establishing their plants in China. Moreover, luxury brands are planning to introduce their entry level models (Audi A3 sedan) to further squeeze the share from mass market brands.

Figure 47: China luxury brands localisation roadmap—new locally made model pipeline 2014 2015 2016 2017 2018 2019 A3 New A4 (Apr) Q1 (Oct) New A6L New Q3 Audi New Q5 (Jul) 2-Series (Jan) 1-Series (Jan) X3 (Jan) New 3-series BMW New X1 (May) New 5-Series (May) New C-class long GLA SUV (Mar) CLA (Apr) B-class A-class New GLK (Oct) New E-class (Jun) Mercedes-Benz New C-class standard V-Class MPV (Jan) XC60 S90L New S60L Volvo XC90 Classisc New XC60 XC100 XC40 V40 Evoque Discovery sport D-SUV New Evoque Land Rover XE (Jan) XF (Jan) Cadillac ATS L LTS SRX Lincoln SUV Infiniti Q50L sedan QX50L SUV QX70 New QX50 Lexus ES NX Acura D-SUV DS 5LS / DSX7 DS 4 DS6 DS3 DS D-CUV Source: Company data, Credit Suisse estimates Similarly, buoyed by the strong jump in SUV sales in the country, most OEMs have aggressive pipelines in the segment. In particular, more entry level compact SUVs are set to be launched by both the global and local brands, such as Honda Vezel, Chevrolet Trax, Hyundai ix25, Haval H2, JAC S3 and Haima S5; this should further push the SUV sector boom, by squeezing the sedan segment.

NJA Automobile Sector 24 11 February 2015

Figure 48: China new SUV model pipeline (2015 and 2016) Global Brands 2015 2016 Local Brands 2015 2016 Murano (May) / Qashqai (Aug) Great wall H8 (1Q) / Coupe C (2Q) / H7 (4Q) New H6 (2Q) DF Nissan QX70 (2Q) / B-SUV (4Q) Venucia T70 (Jan) / QX50L (Jan) Geely X7 SUV X6 SUV DF Honda X-RV (Jan) D-SUV (1Q) BYD S3 / "Yuan" S1 / "Song" DF PSA C3-XR (Jan) C4 Catus DF Fengshen AX3 (3Q) AX5 (3Q) DF Renault Captur (4Q) D-SUV (4Q) DF Luxgen GAC Honda New CrossTour (1Q) GAC-Motor GS4 (2Q) GS1 / GS7 (4Q) GAC Toyota New Highlander (1Q) Shanghai Motor GAC Fiat Cherokee (Oct) Renegade (1Q) / Compass (4Q) Shanghai GM Wuling C-SUV (Jul+) D-SUV Shanghai GM SRX (1Q) Chang'an CS95 (4Q) Shanghai VW Cross Blue (Oct+) / Skoda SUV Chery Tiggo 6 FAW VW New Q5 / C-SUV Beijing Auto X65X (1Q) / X55 (3Q) / C33 (3Q) Beijing Hyundai New ix35 (Dec+) Youngman T5 (Dec+) Beijing Benz GLA (Mar+) / New GLK (Oct) Zhonghua V3 (1Q) Brilliance BMW New X1 (3Q) Zotye T700 (Q4) T500 DF Yueda Kia KX3 (Mar) New Sportage R Haima S3 / S9 FAW Mazda CX-9 (4Q) JAC S2 (3Q) S9 Volvo XC90 classic (4Q) Southeast DX7 (Mar+) Chang'an PSA FAW Xiali Chang'an Ford Edge (Jan) Huatai B-CUV (Apr+) Chang'an Suzuki Grand Vitara (3Q) iV-4 (Jan+) Foton B-SUV (Jul+) Qingling Rodeo (Oct+) Land wind X7 (Jan+) Chery- JLR Evoque (1Q) / Freelander (3Q) Qoros C-CUV (Apr+) JMC Ford Everest (Apr) Lifan B-CUV Zhengzhou Nissan Paladin (2Q) Weichai Model # count 21 17 Model # count 24 12 Source: Company data, Credit Suisse Great Wall Aggressive new SUV models should drive up sales Of all the companies in the region, Great Wall has by far the strongest product cycle. After couple of weak years, including 1H14, without much of an activity on the new model front, Great Wall has entered a new era on model launches. The company is rapidly increasing its SUV range with launches in compact SUV (H1, H2), mid-sized SUVs (Coupe C, H7) and large-sized SUVs (H8, H9). We expect Great Wall's SUV portfolio to witness a 37% CAGR over CY14-16 leading to ~28% growth in overall volumes. These new launches should contribute to ~40% of volumes in CY16 and likely to deliver positive surprises in terms of both top-line and margin expansion.

Figure 49: Strongest product pipeline with three new launches in 2014 and 2015 Great Wall Incremental units (annual) Launch period Haval H1 120,000 End-CY14 Haval H2 180,000 Mid-CY14 Coupe C 90,000 1H CY15 Haval H7 50,000 4Q CY15 Haval H8 36,000 1H CY15 Haval H9 36,000 End-CY14 Source: Company data, Credit Suisse estimates Highest competitive intensity but do not read too much into it Given that SUV is the dominant segment of Great Wall (contributing to ~80% of volumes and nearly ~90% of profits), it is by far at the maximum risk from increasing competitive intensity. However, as we have noted above, with the SUV segment continuing to see a boom in the country along with that Great Wall itself has the strongest SUV pipeline, we do not see it as much of a threat.

NJA Automobile Sector 25 11 February 2015

Figure 50: Competitive risk for Great Wall Great Wall Segment volume contribution (CY16E) Segment profit contribution (CY16E) Competitive threat SUV 81% 87% High Sedan (Medium A) 7% 5% Medium Pickup 12% 8% Low Source: Company data, Credit Suisse estimates Brilliance Weak pipeline in a good market While we like Brilliance's rosy long-term growth as a proxy for the China luxury car segment, near term it has a weak model pipeline. Apart from brand new models, for premium car makers a new platform for an existing model also drives sales; however for Brilliance even that is missing. Of the three BMW models being produced by the Brilliance- BMW JV, 3-series is set for refresh only by 2019, 5-series by 2017 and X1 by end-2016. There was no new product/refresh in 2014 nor any planned for 2015, before the new 2- series and new generation X1 SUV arrive in 2016. The new 2-series is expected to garner modest volumes at only ~30,000 units which will translate into 9% of Brilliance's CY16 volumes. High competitive intensity in both lower premium sedans and SUVs Splitting Brilliance's portfolio into two segments—lower luxury (3-series, X1) and upper luxury (5-series)—competitive intensity is high in the lower luxury space. In the lower premium sedan space, the Mercedes-Benz new C-class long wheelbase was launched in Sep-14 and the standard wheelbase is likely to come in 1Q15. Audi A4 and XE are expected to hit the market in early 2016. Thus all the key competitors will have new products in the next two years. In the lower premium SUV space, there will be competition from new Mercedes GLA and new Land Rover Freelander (Discovery Sport), in our view.

■ 3-series segment: Mercedes-Benz new C-class standard wheelbase(1Q15), Audi new A4L (2016), Jaguar XE (2016)

■ 5-series segment: Cadillac E-sedan (2Q 2016), Volvo S90L (2016)

■ X1 segment: Mercedes-Benz GLA (1Q 2015), Land Rover Freelander (2015) Both these segments roughly contribute equal to the company's profitability in CY16; hence half of Brilliance's portfolio is at medium competitive risk and other half at high. But as we noted with Great Wall above, this is not a big of a concern as the luxury segment, too, along with the SUV segment, is expected to continue outpacing market growth.

Figure 51: Competitive risk for Brilliance Brilliance Segment volume contribution (CY16E) Segment profit contribution (CY16E) Competitive threat Lower luxury (3 series, X1) 55% 48% High Upper luxury (5 series) 45% 52% Medium Source: Company data, Credit Suisse estimates BAIC Weak product cycle for Hyundai JV; Mercedes JV on a strong footing BAIC Motor consists of three key businesses—Hyundai JV, Mercedes-Benz JV, and its own-brand vehicle operations. Entire profit is contributed by the Hyundai and Mercedes operations, with the own brand business incurring a sizeable loss on low utilisation. Hyundai JV has a weak model cycle with only product refreshments planned for 2015 and 2016, and no new launches or segment opportunity. 2014 saw one launch—ix25 (small SUV) which should make it just one major launch in three years. This is the reason for the company to have lost market share in 2014. In 2015, Beijing Hyundai has just one new

NJA Automobile Sector 26 11 February 2015 model—the new-generation Sonata large-sized sedan, followed by new Elantra mid-sized sedan and the new ix35 SUV in 2016, all of which are just routine model generation changes. Hence it is likely to see further deterioration in market share in 2015-16 with an earnings decline. On the other hand, Beijing Benz has entered a new era on model activity since 2014. After weak 2012, 2013 and 1H14 (due to a lack of new products), it has now many new launches lined up. Following the next generation C-class launched in 2014, the other launches planned are next generation GLK SUV, new GLA SUV and new CLA sedan. Hence Beijing Benz has a very high growth story but we believe that it is factored in its rich valuations.

Figure 52: BAIC—new launches over the next two years BAIC Incremental units (annual) Launch period ix 25 (SUV) 100,000 3Q CY14 GLA (luxury) 40,000 Mid-CY15 New GLK (luxury) 20,000 End-CY15 New CLA sedan 16,000 Mid-CY16 Source: Company data, Credit Suisse estimates While the competitive intensity in China is moderate in the sedan space where most of Beijing Hyundai's products are concentrated, we see threat from Japanese brands' low- price strategy (from the previous 15-20% premium to Hyundai's pricing to almost the same level currently) and Chinese local brands' upward penetration (from the previous >20% discount to Hyundai's pricing narrowing to around 15% currently). Decelerating China auto demand had led to widespread mass-market brand price drops, i.e., new-generation Toyota Corolla's price tag lower by 16% since its debut in June 2014 to Rmb107,800, very close to Hyundai Elantra Langdong's Rmb105,800. For Beijing Benz, as noted above, competitive intensity is high in the luxury space. However, we are not too concerned given the booming luxury market in the country and also that Beijing Benz itself has a strong product pipeline.

Figure 53: Competitive risk for BAIC BAIC Segment volume contribution (CY16E) Segment profit contribution (CY16E) Competitive threat Small (A0) 19% 0% Low Medium (A) 26% 15% Medium Large (B) 12% 20% Medium Luxury (C) 6% 20% High SUV 26% 40% High MPV 11% 5% Low Source: Company data, Credit Suisse estimates

NJA Automobile Sector 27 11 February 2015 Indonesia: Market revival is the key The Indonesia market has witnessed a 10% CAGR since 2005; however, 2014 saw a volume decline of 2%. We expect the Indonesia market to recover strongly and post a ~15% CAGR over 2014-16 with interest rates having likely peaked out in 4Q14. Indonesia has predominantly been a MPV market, but with the fuel subsidy having gone now the focus is on fuel-efficient vehicles. Hence LCGCs (low cost green cars) have become popular and within a year reached 14% of the market which stands to benefit Astra given its strong positioning in the segment. Moreover, for Indonesia, competitive intensity across segments is not very high; at the same, for Astra, more than new launches industry volume growth is more important. Expect market growth to surprise positively in 2015 The overall direction for automotive growth in Indonesia has been positive over the past decade as domestic vehicle sales have seen a ~10% CAGR since 2005. Low interest rates had helped to boost consumption and economic growth. However, 2014 saw a bit of slowdown in volumes (a 2% decline) given the cooling economy, elevated interest rates and election concerns. We believe that the slowdown is more of a cyclical story rather than a structural one and that 2015 could be a turnaround year for the industry with the economy bottoming in 4Q14, interest rates likely peaking and the liquidity situation potentially improving. We are expecting a ~15% CAGR over 2014-16. Indonesia still has a relatively low vehicle ownership rate with 4W penetration per capita being at less than 5%.

Figure 54: After a slowdown in 2014, we expect industry Figure 55: MPV (primarily 4x2) and pick-ups are the to recover to 15% growth biggest segment of market

2.0 60%

1.6 40% Mn units Mn

1.2 20% Others 0.8 0% 26%

0.4 -20% 4x2 LCGC 57%

0.0 -40% 14%

2004 2010 2002 2003 2005 2006 2007 2008 2009 2011 2012 2013 2014

2015E 2016E Sedan 4x4 Indonesia Industry 4W volumes YoY 2% 1% Source: Company data, Credit Suisse estimates Source: Company data, Credit Suisse estimates MPV/UV segment has led growth until now; LCGCs gaining momentum Indonesia is predominantly an MPV/UV market, with ~60% of the cars being MPVs/UVs (MPV is mainly 4x2). The MPV segment has also grown relatively fast than the overall industry over the past decade. One reason which has contributed to the popularity of MPVs in Indonesia is the preference for big, family-type cars and also the heavily subsidized fuel scheme in the country (used to be up to 50% of international prices), which allows fuel-inefficient cars, like MPV/UVs, to flourish. With the fuel subsidy now being eliminated we expect shift towards fuel-efficient cars. Furthermore, worsening traffic congestion in large cities may also induce vehicle users to search for more fuel-friendly cars (mostly hatchback/LCGC models) while the development in the MPV/UV segment will be slightly hampered. Since the emergence of LCGCs in 2H13, demand for ex-LCGCs have taken quite a significant impact, with YoY growth for

NJA Automobile Sector 28 11 February 2015 ex-LCGCs entering negative territory and the proportion of LCGCs increasing to as much as ~14% in one year.

Figure 56: MPVs and SUVs have led growth until now… Figure 57: …but since their emergence in 2H13, LCGCs are gaining prominence 20% 100% 17% 90% 16% 80% 70% 12% 12% 11% 60% 9% 50% 40% 8% 30% 20% 4% 10% 0% 0%

Jul-13 Jul-14

Jan-13 Jan-14

Mar-13 Mar-14

Nov-14 Nov-13

Sep-13 Sep-14

May-13 May-14 -4% 4x2 4x4 Sedan Others Total Ex-LCGC LCGC

Source: Company data, Credit Suisse estimates Source: Company data, Credit Suisse estimates Competitive intensity The Indonesia market is dominated by the Japanese brands, which together command ~90% of the market. Given that MPV/SUV and pick-ups form ~70% of the market, not surprisingly most of the activity has been focused on these segments. We believe that there will be a number of future new model launches that will be more focused on fuel efficiency, mainly hatchback/LCGC models. Companies such as Honda and Nissan have entered the market with a new vigour. Honda's new MPV launch, Mobilio, has got a very good response contributing to ~50% of volumes in 2014. Honda is also planning to launch another new model, Honda HR-V, in early 2015. Overall, not many material launches have been announced officially yet.

Figure 58: New model pipeline Company Recent and expected launches Toyota/ Daihatsu UFC2 (MPV), IMV Honda Mobilio (MPV), Jazz (Hatchback), Vezel (SUV), HR-V (SUV) Suzuki Economy Hatchback Nissan/ Datsun Go (Hatchback), Go+ (MPV) Mitsubishi New Delica (pickup), SUV Source: Company data, Credit Suisse estimates Astra International Astra International is the leader in the Indonesia vehicles market with a ~51% market share. Since 2002, Astra has managed to maintain its market share higher than 40%, and managed to reach 65% during the peak in 2006. ~10% of portfolio to come from new launches Toyota and Daihatsu, the two main brands sold by Astra, have largely been able to successfully defend their dominant positions until now. The lack of new models did hurt Astra little bit in 2014 as it lost a ~2% market share in 4Ws. Our view is that Astra needs to step up its focus on model launches. Astra does not have a very clear new model launch pipeline; the only indication that our research has provided is that Toyota may be coming out with some sort of a new IMV (International Multipurpose Vehicle) and Daihatsu with its UFC2 model, which is the sister car of its Xenia model. If these launches come about in

NJA Automobile Sector 29 11 February 2015

2015 then this could lead to a change in perception and sentiment around stock significantly. We expect UFC2 to lead to some bit of cannibalisation of Daihatsu Xenia and incremental volumes from the model to half of current Xenia's volumes which would work out to ~40,000 units in 2016. Similar is the case with IMV, which would cannibalise some bit of Toyota Innova's volumes. Together, we expect these two models to contribute to ~10% of Astra's volumes in 2016. Figure 59: Astra—new launches over the next two years Astra Incremental units (annual) Comment UFC2 40,000 Similar segment as Daihatsu Xenia which is 8% of Astra, so some cannibalisation New Innova 40,000 Should garner similar volumes as Toyota Innova Source: Company data, Credit Suisse estimates Just 15% of portfolio has high competitive risk While a number of new launches might come up in the LCGC space, we expect Astra to remain the dominant player here (currently has a ~70% share). Despite a number of other LCGC models already being launched in last one year (Honda Brio Satya, Suzuki Wagon R), Astra's brands—Agya and Ayla—have maintained their share. This should sustain as (1) Astra has the largest network and the most comprehensive aftersales service, which are likely to be even more important factors for the low-cost segment, (2) the LCGC segment is likely to be the most price sensitive and naturally will be more focused on the resale value of the vehicle and (3) the broad product and price range allows it to compete in various segments as well as be nimble in positioning. Furthermore, Astra has the first-mover advantage and dislodging the dominant player is much harder than what is usually assumed when a new player comes to town. Hence in the fastest-growing LCGC segment, we expect competitive threat to be low for Astra. We see competitive risk high only in SUVs and trucks which together form just ~15% of Astra by volume (20% by profit). For the other key segments—MPV and pick-ups— competitive threat is medium.

Figure 60: Competitive risk for Astra Astra Segment volume contribution (CY16E) Segment profit contribution (CY16E) Competitive threat LCGC 18% 10% Low Non LCGC hatchback 5% 6% Medium Sedan 2% 4% Low MPV 47% 52% Medium SUV 11% 15% High Pickups 11% 9% Medium Trucks 5% 4% High Source: Company data, Credit Suisse estimates

NJA Automobile Sector 30 11 February 2015

Asia Pacific / India Automobile Manufacturers

Tata Motors Ltd.

(TAMO.BO / TTMT IN) Rating OUTPERFORM*

Price (11 Feb 15, Rs) 559.25 Target price (Rs) 650.00¹ Upside/downside (%) 16.2 ■ Back in the driving seat Mkt cap (Rs mn) 1,530,507 (US$ Enterprise value (Rs mn) 1,897,02924,618) ■ Strong product cycle combined with capacity expansion to drive Number of shares (mn) 2,736.71 volumes. JLR volume growth had slipped to low single digits. However, that Free float (%) 66.0 is set to change on the back of a very strong product cycle with a new 52-week price range 605.1 - 374.3 launch every quarter for the next 7-8 quarters. We believe JLR can report a ADTO - 6M (US$ mn) 47.0 20%-plus volume growth in FY16. Volume growth should be driven by (1) new launches, (2) China JV helping reduce prices, and (3) the UK capacity *Stock ratings are relative to the coverage universe in each analyst's or each team's respective sector. expansion. JLR has amongst the highest share of revenues coming from ¹Target price is for 12 months. new product launches.

Research Analysts ■ XE: Can it be Jaguar's 'Evoque'? We like JLR's positioning of the XE as a Jatin Chawla premium product in the mass-market-like entry-level luxury segment. The XE 91 22 6777 3719 has also got the thumbs up from valuation firms which estimate its residual [email protected] value to be better than its peers. This combined with its class-leading fuel Akshay Saxena efficiency means that it should be able to make a mark on the fleet segment as 91 22 6777 3825 well, which is ~25% of sales for this segment in developed markets. The [email protected] success of XE should alleviate concerns about JLR meeting emission norms.

■ Higher margins can sustain. JLR margins improved from ~15% to ~19% on higher share from RR and RR Sport. Despite being two years old, RR twin volumes have held up well. This, combined with the benefit from favourable FX (~500 bp at current rates) and platform consolidation, should help maintain margins. While JLR is not insulated from a China slowdown, we believe it is better placed due to the start of domestic production and expanding distribution. ■ Attractive relative valuation. JLR is trading at 4x FY16E EV/EBITDA, in line with its historical valuations and peers such as BMW, despite much stronger volumes and earnings growth. Even when compared with other large-cap Indian auto stocks which are trading at >20% premium to their historical multiples, Tata Motors looks more attractive.

Share price performance Financial and valuation metrics

Year 3/14A 3/15E 3/16E 3/17E Price (LHS) Rebased Rel (RHS) Revenue (Rs mn) 2,328,336.6 2,640,036.2 2,999,079.0 3,337,079.5 600 140 EBITDA (Rs mn) 374,029.1 439,112.6 496,748.4 549,039.3 500 120 EBIT (Rs mn) 263,247.5 306,413.1 333,223.2 348,205.2 400 Net profit (Rs mn) 139,910.2 167,722.9 213,764.0 245,584.9 300 100 EPS (CS adj.) (Rs) 43.47 52.11 66.41 76.29 200 80 Feb-13 Jun-13 Oct-13 Feb-14 Jun-14 Oct-14 Change from previous EPS (%) n.a. 0 0 0 Consensus EPS (Rs) n.a. 58.2 69.2 80.3 The price relative chart measures performance against the S&P EPS growth (%) 40.2 19.9 27.5 14.9 BSE SENSEX IDX which closed at 28533.97 on 11/02/15 P/E (x) 12.9 10.7 8.4 7.3 On 11/02/15 the spot exchange rate was Rs62.17/US$1 Dividend yield (%) 0.37 0.42 0.42 0.42 EV/EBITDA (x) 4.9 4.3 3.8 3.2 Performance Over 1M 3M 12M P/B (x) 2.7 2.2 1.8 1.4 Absolute (%) 7.1 6.3 49.4 — ROE (%) 27.1 22.8 23.3 21.5 Relative (%) 3.6 4.1 9.3 — Net debt/equity (%) 46.8 44.6 32.8 19.1

Source: Company data, Thomson Reuters, Credit Suisse estimates.

NJA Automobile Sector 31 11 February 2015

Tata Motors Ltd. TAMO.BO / TTMT IN Price (11 Feb 15): Rs559.25, Rating:: OUTPERFORM, Target Price: Rs650.00, Analyst: Jatin Chawla Target price scenario Key earnings drivers 3/14A 3/15E 3/16E 3/17E Scenario TP %Up/Dwn Assumptions Dom CV volumes 421,313 370,531 473,546 543,596 XE big success, Domestic business too Dom PV volumes 145,334 136,179 136,368 149,435 Upside 800.00 43.05 revives fast Dom gross margins (1.41) (2.49) 2.79 4.80 Central Case 650.00 16.23 JLR volumes 429,861 474,923 579,411 659,392 JLR gross margins 17.5 19.1 18.2 17.8 Global macro environment turns adverse; Downside 400.00 (28.48) slowdown in China luxury spend

Income statement (Rs mn) 3/14A 3/15E 3/16E 3/17E Per share data 3/14A 3/15E 3/16E 3/17E Sales revenue 2,328,337 2,640,036 2,999,079 3,337,080 Shares (wtd avg.) (mn) 3,219 3,219 3,219 3,219 Cost of goods sold 1,804,869 2,042,521 2,322,386 2,587,815 EPS (Credit Suisse) (Rs) 43.5 52.1 66.4 76.3 SG&A 117,164 121,543 141,871 160,244 DPS (Rs) 2.07 2.33 2.33 2.33 Other operating exp./(inc.) 32,274 36,859 38,074 39,981 BVPS (Rs) 204 254 318 392 EBITDA 374,029 439,113 496,748 549,039 Operating CFPS (Rs) 100 110 136 157 Depreciation & amortisation 110,782 132,699 163,525 200,834 Key ratios and 3/14A 3/15E 3/16E 3/17E EBIT 263,248 306,413 333,223 348,205 valuation Net interest expense/(inc.) 48,751 39,393 37,196 30,551 Growth(%) Non-operating inc./(exp.) (15,953) (20,212) (20,044) (20,569) Sales revenue 23.3 13.4 13.6 11.3 Associates/JV — — — — EBIT 38.6 16.4 8.7 4.5 Recurring PBT 198,544 246,809 275,984 297,086 Net profit 41.4 19.9 27.5 14.9 Exceptionals/extraordinaries (9,854) (500) — — EPS 40.2 19.9 27.5 14.9 Taxes 47,648 76,356 67,616 72,786 Margins (%) Profit after tax 141,042 169,953 208,368 224,300 EBITDA 16.1 16.6 16.6 16.5 Other after tax income (537) (1,517) 6,110 21,999 EBIT 11.3 11.6 11.1 10.4 Minority interests 594.5 713.4 713.4 713.4 Pre-tax profit 8.5 9.3 9.2 8.9 Preferred dividends — — — — Net profit 6.01 6.35 7.13 7.36 Reported net profit 139,910 167,723 213,764 245,585 Valuation metrics (x) Analyst adjustments — — — — P/E 12.9 10.7 8.4 7.3 Net profit (Credit Suisse) 139,910 167,723 213,764 245,585 P/B 2.74 2.21 1.76 1.43 Cash flow (Rs mn) 3/14A 3/15E 3/16E 3/17E Dividend yield (%) 0.37 0.42 0.42 0.42 EBIT 263,248 306,413 333,223 348,205 P/CF 5.58 5.10 4.10 3.57 Net interest (47,338) (40,221) (38,612) (33,979) EV/sales 0.79 0.72 0.62 0.53 Tax paid (31,301) (76,356) (67,616) (72,786) EV/EBITDA 4.92 4.32 3.76 3.23 Working capital 29,816 23,897 32,925 29,865 EV/EBIT 6.99 6.19 5.61 5.09 Other cash & non-cash items 108,082 139,498 178,831 233,516 ROE analysis (%) Operating cash flow 322,507 353,232 438,751 504,821 ROE 27.1 22.8 23.3 21.5 Capex (323,073) (374,750) (374,500) (374,500) ROIC 23.5 19.6 19.7 18.3 Free cash flow to the firm (566) 173,321 258,158 323,259 Asset turnover (x) 1.07 1.08 1.08 1.07 Disposals of fixed assets — — — — Interest burden (x) 0.75 0.81 0.83 0.85 Acquisitions — — — — Tax burden (x) 0.75 0.69 0.75 0.75 Divestments — — — — Financial leverage (x) 3.30 2.97 2.69 2.47 Associate investments — — — — Credit ratios Other investment/(outflows) (16,290) — — — Net debt/equity (%) 46.8 44.6 32.8 19.1 Investing cash flow (339,362) (374,750) (374,500) (374,500) Net debt/EBITDA (x) 0.83 0.83 0.68 0.44 Equity raised 74,556 — — — Interest cover (x) 5.4 7.8 9.0 11.4 Dividends paid (6,663) (7,500) (7,500) (7,500) Net borrowings 64,139 713 713 713 Source: Company data, Thomson Reuters, Credit Suisse estimates. Other financing cash flow — — — — Financing cash flow 132,032 (6,787) (6,787) (6,787) 12MF P/E multiple Total cash flow 115,176 (28,305) 57,464 123,535 25 Adjustments — — — — Net change in cash 115,176 (28,305) 57,464 123,535 20 Balance sheet (Rs mn) 3/14A 3/15E 3/16E 3/17E Cash & cash equivalents 297,118 239,901 268,828 363,825 15 Current receivables 105,742 144,259 164,321 183,128 Inventories 272,709 283,407 322,218 359,008 10 Other current assets 370,534 397,858 427,915 460,977 5 Current assets 1,046,103 1,065,425 1,183,282 1,366,938

Property, plant & equip. 508,316 622,294 721,639 803,416 0 Investments 106,867 106,867 106,867 106,867 2010 2011 2012 2013 2014 2015 Intangibles 515,226 643,299 754,928 846,817 Other non-current assets — — — — Total assets 2,176,512 2,437,884 2,766,716 3,124,038 12MF P/B multiple Accounts payable 573,157 641,746 728,569 808,558 Short-term debt 153,837 153,837 153,837 153,837 7 Current provisions 201,610 221,771 243,948 268,343 6 Other current liabilities 116,860 128,547 141,401 155,541 5 Current liabilities 1,045,464 1,145,900 1,267,754 1,386,278 Long-term debt 452,586 452,586 452,586 452,586 4 Non-current provisions — — — — 3 Other non-current liab. 18,221 18,221 18,221 18,221 2 Total liabilities 1,516,271 1,616,707 1,738,561 1,857,085 Shareholders' equity 656,034 816,257 1,022,521 1,260,606 1 Minority interests 4,206 4,920 5,633 6,347 0 Total liabilities & equity 2,176,512 2,437,884 2,766,716 3,124,038 2010 2011 2012 2013 2014 2015

Source: IBES

NJA Automobile Sector 32 11 February 2015

Asia Pacific / China Automobile Manufacturers

Great Wall Motor

(2333.HK / 2333 HK) Rating OUTPERFORM*

Price (11 Feb 15, HK$) 46.25 Target price (HK$) 50.00¹ Upside/downside (%) 8.1 Strong product cycle to drive volumes Mkt cap (HK$ mn) 174,229 (US$ 22,469) Enterprise value (Rmb mn) 130,792 ■ Aggressive new SUV launches should drive up sales and margins. Number of shares (mn) 3,042.42 Great Wall's new SUV pipeline should hit a historical high in the next 12 Free float (%) 44.0 52-week price range 46.2 - 27.0 months, with a protracted launch pipeline that includes H6 AT (1H15), H2 ADTO - 6M (US$ mn) 41.3 AT(1H15), Couple C (1H15), H8 (1H15), and H7 (2H15). The H1 and the H9

were recently launched in 4Q14. *Stock ratings are relative to the coverage universe in each analyst's or each team's respective sector. ■ Improving "Great Wall" branding to support high-end market ¹Target price is for 12 months. penetration. According to the 2014 Hurun brand list, Great Wall was the

Research Analysts No.1 Chinese auto brand with a brand value of Rmb11.5 bn, up 70% YoY Bin Wang from Rmb6.8 bn in 2013. Great Wall's brand image has already caught up 852 2101 6702 with some mass-market global brands, such as Peugeot and Kia. The recent [email protected] sales performance of the H9 high-end SUV which sold ~3,000 units is a case Mark Mao 852 2101 6710 in point. Thus, we are bullish on its high-priced H8/H9 SUV performance and [email protected] believe this offers a good growth potential for Great Wall by expanding the addressable market-size via high-end market penetration. ■ Strong near-term catalysts: Key near-term catalysts include (1) further volume spike in H6 and H2 sales on the back of the automatic transmission version launch in 1H15, (2) the re-launch of the H8 high-end SUV in April 2015 and (3) potential 1Q15 result beat (estimated Rmb3.0 bn) to be released in April 2015.

Share price performance Financial and valuation metrics

Year 12/13A 12/14E 12/15E 12/16E Price (LHS) Rebased Rel (RHS) Revenue (Rmb mn) 54,727.3 57,700.0 85,320.6 104,397.0 60 160 EBITDA (Rmb mn) 10,953.3 11,200.8 16,278.7 19,055.9 50 140 EBIT (Rmb mn) 9,798.3 9,456.2 14,186.3 16,615.5 40 120 Net profit (Rmb mn) 8,223.6 7,972.0 11,994.5 14,068.8 30 100 EPS (CS adj.) (Rmb) 2.70 2.62 3.94 4.62 20 80 Feb-13 Jun-13 Oct-13 Feb-14 Jun-14 Oct-14 Change from previous EPS (%) n.a. 0 0 0 Consensus EPS (Rmb) n.a. 2.65 3.57 4.23 The price relative chart measures performance against the EPS growth (%) 44.5 -3.1 50.5 17.3 MSCI CHINA F IDX which closed at 6863.32 on 11/02/15 P/E (x) 13.8 14.2 9.4 8.1 On 11/02/15 the spot exchange rate was HK$7.75/US$1 Dividend yield (%) 2.2 2.1 3.2 3.7 EV/EBITDA (x) 12.2 11.7 7.7 6.2 Performance Over 1M 3M 12M P/B (x) 4.0 3.4 2.7 2.2 Absolute (%) 10.3 24.7 25.7 — ROE (%) 33.2 25.9 31.7 30.0

Relative (%) 6.8 22.5 -14.4 —

Net debt/equity (%) net cash net cash net cash net cash Source: Company data, Thomson Reuters, Credit Suisse estimates.

NJA Automobile Sector 33 11 February 2015

Great Wall Motor 2333.HK / 2333 HK Price (11 Feb 15): HK$46.25, Rating:: OUTPERFORM, Target Price: HK$50.00, Analyst: Bin Wang Target price scenario Key earnings drivers 12/13A 12/14E 12/15E 12/16E Scenario TP %Up/Dwn Assumptions Sales volume 770,619 730,775 1,025,00 1,202,00 Upside — — —0 —0 Central Case 50.00 8.11 — — — — Downside — — — —

— — — — Income statement (Rmb mn) 12/13A 12/14E 12/15E 12/16E Per share data 12/13A 12/14E 12/15E 12/16E Sales revenue 54,727 57,700 85,321 104,397 Shares (wtd avg.) (mn) 3,042 3,042 3,042 3,042 Cost of goods sold 40,538 43,108 64,053 79,117 EPS (Credit Suisse) 2.70 2.62 3.94 4.62 SG&A 4,643 5,251 7,252 8,874 DPS(Rmb) (Rmb) 0.82 0.79 1.18 1.39 Other operating exp./(inc.) (1,407) (1,860) (2,263) (2,649) BVPS (Rmb) 9.2 11.0 13.8 17.0 EBITDA 10,953 11,201 16,279 19,056 Operating CFPS (Rmb) 2.97 3.09 4.25 5.13 Depreciation & amortisation 1,155 1,745 2,092 2,440 Key ratios and 12/13A 12/14E 12/15E 12/16E EBIT 9,798 9,456 14,186 16,615 valuation Net interest expense/(inc.) (95.9) (93.9) (141.1) (229.7) Growth(%) Non-operating inc./(exp.) (33.7) — — — Sales revenue 31.7 5.4 47.9 22.4 Associates/JV 59.2 62.4 130.3 112.9 EBIT 44.5 (3.5) 50.0 17.1 Recurring PBT 9,920 9,613 14,458 16,958 Net profit 44.5 (3.1) 50.5 17.3 Exceptionals/extraordinaries — — — — EPS 44.5 (3.1) 50.5 17.3 Taxes 1,688 1,634 2,458 2,883 Margins (%) Profit after tax 8,232 7,978 12,000 14,075 EBITDA 20.0 19.4 19.1 18.3 Other after tax income — — — — EBIT 17.9 16.4 16.6 15.9 Minority interests 8.5 6.4 5.4 6.4 Pre-tax profit 18.1 16.7 16.9 16.2 Preferred dividends — — — — Net profit 15.0 13.8 14.1 13.5 Reported net profit 8,224 7,972 11,994 14,069 Valuation metrics (x) Analyst adjustments — — — — P/E 13.8 14.2 9.4 8.1 Net profit (Credit Suisse) 8,224 7,972 11,994 14,069 P/B 4.05 3.37 2.70 2.19 Cash flow (Rmb mn) 12/13A 12/14E 12/15E 12/16E Dividend yield (%) 2.20 2.11 3.18 3.73 EBIT 9,798 9,456 14,186 16,615 P/CF 12.5 12.1 8.8 7.3 Net interest (62.3) (93.9) (141.1) (229.7) EV/sales 2.44 2.27 1.47 1.13 Tax paid (1,688) (1,634) (2,458) (2,883) EV/EBITDA 12.2 11.7 7.7 6.2 Working capital (1,194) (176) (894) (559) EV/EBIT 13.6 13.8 8.9 7.1 Other cash & non-cash items 2,185 1,838 2,233 2,670 ROE analysis (%) Operating cash flow 9,039 9,390 12,927 15,614 ROE 33.2 25.9 31.7 30.0 Capex (7,133) (4,291) (4,291) (4,291) ROIC 44.5 34.6 45.7 48.0 Free cash flow to the firm 1,906 4,890 8,427 11,114 Asset turnover (x) 1.04 0.97 1.08 1.08 Disposals of fixed assets 171.0 — — — Interest burden (x) 1.01 1.02 1.02 1.02 Acquisitions — — — — Tax burden (x) 0.83 0.83 0.83 0.83 Divestments — — — — Financial leverage (x) 1.88 1.77 1.88 1.87 Associate investments — — — — Credit ratios Other investment/(outflows) 265.9 (209.1) (209.1) (209.1) Net debt/equity (%) (24.3) (28.2) (34.7) (42.0) Investing cash flow (6,696) (4,500) (4,500) (4,500) Net debt/EBITDA (x) (0.62) (0.84) (0.89) (1.14) Equity raised — — — — Interest cover (x) (102) (101) (101) (72) Dividends paid (2,495) (2,392) (3,598) (4,221) Net borrowings 182.2 — — — Source: Company data, Thomson Reuters, Credit Suisse estimates. Other financing cash flow (92.1) 156.2 265.9 336.2 Financing cash flow (2,405) (2,235) (3,332) (3,884) 12MF P/E multiple Total cash flow (62) 2,655 5,095 7,229 16 Adjustments (10.9) — — — 14 Net change in cash (73) 2,655 5,095 7,229 12 Balance sheet (Rmb mn) 12/13A 12/14E 12/15E 12/16E 10 Cash & cash equivalents 6,991 9,646 14,740 21,970 Current receivables 18,205 19,193 28,381 34,727 8 Inventories 2,764 2,939 4,367 5,394 6 Other current assets 3,067 3,234 4,779 5,847 4 Current assets 31,026 35,012 52,268 67,938 2 Property, plant & equip. 18,646 21,259 23,528 25,454 0 Investments 53.2 53.2 53.2 53.2 2010 2011 2012 2013 2014 2015 Intangibles 2,445 2,588 2,727 2,860 Other non-current assets 434.3 434.4 434.4 434.4 Total assets 52,605 59,346 79,010 96,740 12MF P/B multiple Accounts payable 15,252 16,219 24,099 29,766 Short-term debt 182.2 182.2 182.2 182.2 4.0 Current provisions — — — — 3.5 Other current liabilities 7,406 7,593 10,981 13,194 3.0 Current liabilities 22,839 23,994 35,262 43,143 2.5 Long-term debt — — — — 2.0 Non-current provisions — — — — Other non-current liab. 1,757 1,757 1,757 1,757 1.5 Total liabilities 24,597 25,751 37,019 44,900 1.0 Shareholders' equity 28,003 33,583 41,979 51,827 0.5 Minority interests 12.1 12.1 12.1 12.1 0.0 Total liabilities & equity 52,605 59,346 79,010 96,740 2010 2011 2012 2013 2014 2015

Source: IBES

NJA Automobile Sector 34 11 February 2015

Asia Pacific / India Automobile Manufacturers

Maruti Suzuki India Ltd

(MRTI.BO / MSIL IN) Rating OUTPERFORM* FOCUS LIST STOCK Price (11 Feb 15, Rs) 3,463.95 Target price (Rs) 4,300.00¹ Upside/downside (%) 24.1 Best play on India recovery Mkt cap (Rs mn) 1,046,390 (US$ Enterprise value (Rs mn) 858,51516,831) ■ Entry into new segments to drive growth: Maruti has a very strong Number of shares (mn) 302.08 product cycle over the next two years whereby it will enter new segments Free float (%) 43.8 such as SUVs and LCVs and expand the diesel market by launching an 52-week price range 3,724.8 - 1,581.8 ADTO - 6M (US$ mn) 18.3 800cc diesel engine. This should enable the company to gain 5% market

share in the next three years and grow at a 5% higher rate than the industry. *Stock ratings are relative to the coverage universe in each analyst's or each team's respective sector. ■ Improving affordability to drive volume growth: The Indian car industry ¹Target price is for 12 months. has now had four weak years and the recent trend in volumes since festive season suggests that this trend could continue. Maruti has outperformed the Research Analysts industry by growing at 13% compared to a 4% growth for the industry. It is Jatin Chawla 91 22 6777 3719 best positioned to leverage on any recovery in industry growth; we expect [email protected] industry growth to pick up to double-digit levels in FY16.

■ Number of margin levers once volume growth comes back: Maruti's margin expansion so far has been driven largely by Yen benefits. Assuming the indirect Yen impact, margins should be ~15% in 4QFY15. Street estimates of 15% margins for FY17 could thus have upsides if industry returns to double-digit volume growth as that would drive both discount reduction (potential ~150 bp) and operating leverage (another 150 bp). ■ Re-rating done, earnings growth to drive stock: Maruti has seen a strong re-rating from 11x to 20x in the last 18 months. We reckon re-rating is now largely done; stock performance will be driven by EPS growth. We expect a ~40% EPS CAGR for the stock over the next two years.

Share price performance Financial and valuation metrics

Year 3/14A 3/15E 3/16E 3/17E Price (LHS) Rebased Rel (RHS) Revenue (Rs mn) 437,006.0 498,283.5 603,947.5 736,479.4 4000 180 EBITDA (Rs mn) 50,959.0 64,054.9 89,924.9 115,275.5 3000 EBIT (Rs mn) 30,115.0 39,827.7 64,044.7 87,392.3 2000 130 Net profit (Rs mn) 27,830.0 36,123.1 55,541.5 74,007.0 1000 EPS (CS adj.) (Rs) 92.15 119.61 183.91 245.06 0 80 Feb-13 Jun-13 Oct-13 Feb-14 Jun-14 Oct-14 Change from previous EPS (%) n.a. 0 0 0 Consensus EPS (Rs) n.a. 119 167 223 The price relative chart measures performance against the S&P EPS growth (%) 16.3 29.8 53.8 33.2 BSE SENSEX IDX which closed at 28533.97 on 11/02/15 P/E (x) 37.6 29.0 18.8 14.1 On 11/02/15 the spot exchange rate was Rs62.17/US$1 Dividend yield (%) 0.35 0.43 0.58 0.72 EV/EBITDA (x) 17.8 13.4 8.6 5.6 Performance Over 1M 3M 12M P/B (x) 5.0 4.3 3.6 2.9 Absolute (%) — 4.0 106.8 — ROE (%) 14.1 16.0 20.9 22.9 Relative (%) 0.7 -0.6 92.9 — Net debt/equity (%) net cash net cash net cash net cash

Source: Company data, Thomson Reuters, Credit Suisse estimates.

NJA Automobile Sector 35 11 February 2015

Maruti Suzuki India Ltd MRTI.BO / MSIL IN Price (11 Feb 15): Rs3,463.95, Rating:: OUTPERFORM, Target Price: Rs4,300.00, Analyst: Jatin Chawla Target price scenario Key earnings drivers 3/14A 3/15E 3/16E 3/17E Scenario TP %Up/Dwn Assumptions Volumes (Units) 1,155,04 1,291,00 1,515,97 1,792,05 Volume growth rises to 25% on improving Margins (%) 11.70 12.95 14.97 15.71 4,000.0 Upside 15.48 macro, discounts come down, INR — — — — 0 appreciates further helping margins — — — —

4,300.0 — — — — Central Case 24.14 0 INR depreciates more, discounts stay 2,500.0 Downside (27.83) high, domestic volume growth remains 0 muted at 5%

Income statement (Rs mn) 3/14A 3/15E 3/16E 3/17E Per share data 3/14A 3/15E 3/16E 3/17E Sales revenue 437,006 498,284 603,947 736,479 Shares (wtd avg.) (mn) 302.0 302.0 302.0 302.0 Cost of goods sold 313,145 352,725 421,323 513,414 EPS (Credit Suisse) (Rs) 92 120 184 245 SG&A 72,902 81,504 92,700 107,790 DPS (Rs) 12.0 15.0 20.0 25.0 Other operating exp./(inc.) — — — — BVPS (Rs) 695 798 961 1,180 EBITDA 50,959 64,055 89,925 115,276 Operating CFPS (Rs) 212 209 293 366 Depreciation & amortisation 20,844 24,227 25,880 27,883 Key ratios and 3/14A 3/15E 3/16E 3/17E EBIT 30,115 39,828 64,045 87,392 valuation Net interest expense/(inc.) 1,759 1,407 1,126 901 Growth(%) Non-operating inc./(exp.) 8,229 9,110 10,162 11,531 Sales revenue 0.3 14.0 21.2 21.9 Associates/JV — — — — EBIT 27.2 32.3 60.8 36.5 Recurring PBT 36,585 47,530 73,081 98,023 Net profit 16.3 29.8 53.8 33.2 Exceptionals/extraordinaries — — — — EPS 16.3 29.8 53.8 33.2 Taxes 8,755 11,407 17,539 24,016 Margins (%) Profit after tax 27,830 36,123 55,542 74,007 EBITDA 11.7 12.9 14.9 15.7 Other after tax income — — — — EBIT 6.9 8.0 10.6 11.9 Minority interests — — — — Pre-tax profit 8.4 9.5 12.1 13.3 Preferred dividends — — — — Net profit 6.4 7.2 9.2 10.0 Reported net profit 27,830 36,123 55,542 74,007 Valuation metrics (x) Analyst adjustments — — — — P/E 37.6 29.0 18.8 14.1 Net profit (Credit Suisse) 27,830 36,123 55,542 74,007 P/B 4.99 4.34 3.61 2.94 Cash flow (Rs mn) 3/14A 3/15E 3/16E 3/17E Dividend yield (%) 0.35 0.43 0.58 0.72 EBIT 30,115 39,828 64,045 87,392 P/CF 16.3 16.6 11.8 9.5 Net interest 6,470 7,703 9,036 10,630 EV/sales 2.07 1.72 1.28 0.88 Tax paid (7,479) (11,407) (17,539) (24,016) EV/EBITDA 17.8 13.4 8.6 5.6 Working capital 14,180 2,808 6,989 8,682 EV/EBIT 30.0 21.6 12.1 7.4 Other cash & non-cash items 20,844 24,227 25,880 27,883 ROE analysis (%) Operating cash flow 64,130 63,159 88,411 110,572 ROE 14.1 16.0 20.9 22.9 Capex (37,548) (35,210) (40,210) (40,210) ROIC 27 50 136 (615) Free cash flow to the firm 26,582 27,949 48,201 70,362 Asset turnover (x) 1.43 1.44 1.47 1.48 Disposals of fixed assets — — — — Interest burden (x) 1.21 1.19 1.14 1.12 Acquisitions — — — — Tax burden (x) 0.76 0.76 0.76 0.75 Divestments — — — — Financial leverage (x) 1.46 1.43 1.41 1.39 Associate investments — — — — Credit ratios Other investment/(outflows) — — — — Net debt/equity (%) (68) (78) (94) (111) Investing cash flow (37,548) (35,210) (40,210) (40,210) Net debt/EBITDA (x) (2.78) (2.93) (3.02) (3.44) Equity raised — — — — Interest cover (x) 17.1 28.3 56.9 97.0 Dividends paid (3,975) (4,881) (6,391) (7,901) Net borrowings — — — — Source: Company data, Thomson Reuters, Credit Suisse estimates. Other financing cash flow — — — — Financing cash flow (3,975) (4,881) (6,391) (7,901) 12MF P/E multiple Total cash flow 22,607 23,068 41,810 62,461 25 Adjustments — — — — Net change in cash 22,607 23,068 41,810 62,461 20 Balance sheet (Rs mn) 3/14A 3/15E 3/16E 3/17E Cash & cash equivalents 94,428 117,496 159,306 221,767 15 Current receivables 14,137 16,119 19,538 23,825 Inventories 17,059 19,451 23,576 28,749 10 Other current assets 32,567 34,012 35,529 37,122 5 Current assets 158,191 187,078 237,947 311,463

Property, plant & equip. 107,904 118,887 118,217 115,543 0 Investments 13,048 13,048 13,048 13,048 2010 2011 2012 2013 2014 2015 Intangibles — — — — Other non-current assets 26,214 26,214 41,214 56,214 Total assets 305,357 345,227 410,426 496,268 12MF P/B multiple Accounts payable 60,329 68,258 82,733 100,888 Short-term debt — — — — 4.5 Current provisions — — — — 4.0 Other current liabilities 8,757 9,456 11,030 12,611 3.5 Current liabilities 69,086 77,714 93,762 113,498 3.0 Long-term debt 20,625 20,625 20,625 20,625 2.5 Non-current provisions — — — — 2.0 Other non-current liab. 5,866 5,866 5,866 5,866 1.5 Total liabilities 95,577 104,205 120,253 139,989 1.0 Shareholders' equity 209,780 241,022 290,173 356,279 0.5 Minority interests — — — — 0.0 Total liabilities & equity 305,357 345,227 410,426 496,268 2010 2011 2012 2013 2014 2015

Source: IBES

NJA Automobile Sector 36 11 February 2015

Companies Mentioned (Price as of 11-Feb-2015) Ashok Leyland Ltd (ASOK.BO, Rs64.35) Astra International (ASII.JK, Rp7,875, OUTPERFORM, TP Rp8,000) BAIC Motor Corporation Limited (1958.HK, HK$8.07, UNDERPERFORM[V], TP HK$6.8) BMW (BMWG.DE, €104.7) Bajaj Auto Limited (BAJA.BO, Rs2291.95) Brilliance China Automotive Holdings Limited (1114.HK, HK$13.74, NEUTRAL, TP HK$15.0) Daimler (DAIGn.DE, €82.16) Dongfeng Motor Group Company Limited (0489.HK, HK$11.52) Ford Motor Company (F.N, $16.09) Geely Automobile Holdings Ltd (0175.HK, HK$3.29) General Motors Corp. (GM.N, $37.52) Great Wall Motor (2333.HK, HK$46.25, OUTPERFORM, TP HK$50.0) Guangzhou Automobile Group (2238.HK, HK$7.03) Hero Motocorp Ltd (HROM.BO, Rs2752.45) Honda Motor (7267.T, ¥3,843) Hyundai Motor (005380.KS, W157,000) Kia Motors (000270.KS, W44,000) Mahindra & Mahindra (MAHM.BO, Rs1133.2, NEUTRAL, TP Rs1400.0) Maruti Suzuki India Ltd (MRTI.BO, Rs3463.95, OUTPERFORM, TP Rs4300.0) Nissan Motor (7201.T, ¥1,104) PSA Peugeot Citroen (PEUP.PA, €13.29) Renault (RENA.PA, €69.03) SAIC Motor Corp Ltd (600104.SS, Rmb23.12) Suzuki Motor (7269.T, ¥3,486) Tata Motors Ltd. (TAMO.BO, Rs559.25, OUTPERFORM, TP Rs650.0) Toyota Motor (7203.T, ¥7,713) Volkswagen (VOWG_p.DE, €209.1)

Disclosure Appendix

Important Global Disclosures Jatin Chawla, Akshay Saxena, Bin Wang, Jahanzeb Naseer, Mark Mao and Bernard Kie each certify, with respect to the companies or securities that the individual analyzes, that (1) the views expressed in this report accurately reflect his or her personal views about all of the subject companies and securities and (2) no part of his or her compensation was, is or will be directly or indirectly related to the specific recommendations or views expressed in this report.

3-Year Price and Rating History for Astra International (ASII.JK)

ASII.JK Closing Price Target Price Date (Rp) (Rp) Rating 27-Feb-12 6,870 6,589 U 14-Mar-12 7,305 6,589 N 25-Apr-12 7,090 6,700 27-Jul-12 6,650 6,850 04-Oct-12 7,750 9,000 O 29-Oct-12 7,850 9,400 01-Mar-13 8,100 9,502 25-Apr-13 7,350 9,000 24-Sep-13 6,400 8,370

25-Feb-14 6,700 8,370 * UNDERPERFORM 16-Jun-14 7,250 9,000 NEUTRAL OUTPERFORM 30-Oct-14 6,900 8,000 * Asterisk signifies initiation or assumption of coverage.

NJA Automobile Sector 37 11 February 2015

3-Year Price and Rating History for BAIC Motor Corporation Limited (1958.HK)

1958.HK Closing Price Target Price Date (HK$) (HK$) Rating 07-Jan-15 8.90 6.80 U * * Asterisk signifies initiation or assumption of coverage.

UNDERPERFORM

3-Year Price and Rating History for Brilliance China Automotive Holdings Limited (1114.HK)

1114.HK Closing Price Target Price Date (HK$) (HK$) Rating 22-Feb-12 9.49 6.70 U 24-Oct-12 9.56 11.00 O * 08-Jan-13 10.10 12.00 29-May-13 8.82 11.50 23-Oct-13 13.86 NR 11-Mar-14 10.96 12.00 N * 06-Aug-14 14.44 15.00 * Asterisk signifies initiation or assumption of coverage.

UNDERPERFORM OUTPERFORM N O T RA T ED NEUTRAL

3-Year Price and Rating History for Great Wall Motor (2333.HK)

2333.HK Closing Price Target Price Date (HK$) (HK$) Rating 08-Jan-13 25.45 30.00 O * 18-Feb-13 31.75 37.50 25-Mar-13 28.05 35.00 25-Apr-13 34.50 46.00 11-Mar-14 33.10 36.00 N * 08-May-14 32.80 30.00 21-Jul-14 29.15 29.00 09-Oct-14 31.70 30.00 12-Oct-14 32.15 * 13-Oct-14 32.20 30.00 N OUTPERFORM NEUTRAL 23-Oct-14 32.50 29.00 27-Oct-14 31.00 48.00 O 04-Dec-14 38.20 50.00 * Asterisk signifies initiation or assumption of coverage.

NJA Automobile Sector 38 11 February 2015

3-Year Price and Rating History for Mahindra & Mahindra (MAHM.BO)

MAHM.BO Closing Price Target Price Date (Rs) (Rs) Rating 14-Feb-12 716.71 835.66 O 03-Apr-12 707.26 831.66 31-May-12 651.43 819.66 08-Aug-12 722.45 874.64 15-Oct-12 857.05 848.65 N 25-Oct-12 857.20 857.65 08-Jan-13 957.41 891.63 08-Feb-13 882.44 886.64 03-Apr-13 844.20 881.64 30-May-13 1004.19 949.61 OUTPERFORM NEUTRAL 14-Aug-13 873.04 969.60 13-Nov-13 894.93 1009.59 22-Apr-14 1023.88 1209.50 O 19-May-14 1098.25 1349.45 02-Jun-14 1239.94 1350.00 11-Aug-14 1308.40 1410.00 22-Sep-14 1371.45 1470.00 N 31-Oct-14 1303.40 1400.00 * Asterisk signifies initiation or assumption of coverage.

3-Year Price and Rating History for Maruti Suzuki India Ltd (MRTI.BO)

MRTI.BO Closing Price Target Price Date (Rs) (Rs) Rating 13-Feb-12 1225.50 1021.00 U 05-Mar-12 1315.55 1671.00 O 03-Apr-12 1308.50 1669.00 30-Apr-12 1369.90 1619.00 04-Jun-12 1068.00 1422.00 30-Jul-12 1120.15 1341.00 15-Oct-12 1338.20 1551.00 30-Oct-12 1394.55 1565.00 08-Jan-13 1574.50 1632.00 N

25-Jan-13 1600.20 1694.00 UNDERPERFORM 04-Mar-13 1393.05 1687.00 OUTPERFORM NEUTRAL 03-Apr-13 1305.60 1619.00 29-Apr-13 1680.70 2163.25 O 25-Jul-13 1414.20 1820.00 03-Sep-13 1273.20 1540.00 28-Oct-13 1513.00 1760.00 25-Nov-13 1679.75 1960.00 28-Jan-14 1563.20 2080.00 15-Mar-14 1737.10 2220.00 22-Apr-14 1974.25 2340.00 19-May-14 2214.25 2700.00 01-Jul-14 2584.85 3020.00 25-Aug-14 2802.40 3500.00 01-Dec-14 3389.65 4000.00 27-Jan-15 3685.20 4300.00 * Asterisk signifies initiation or assumption of coverage.

NJA Automobile Sector 39 11 February 2015

3-Year Price and Rating History for Tata Motors Ltd. (TAMO.BO)

TAMO.BO Closing Price Target Price Date (Rs) (Rs) Rating 14-Feb-12 267.90 255.00 N 31-Mar-12 275.70 271.00 29-May-12 275.90 269.00 30-Jul-12 221.65 224.00 09-Aug-12 239.35 218.00 U 07-Nov-12 269.25 226.00 08-Jan-13 314.15 390.00 O 14-Feb-13 296.70 385.00 03-Apr-13 257.60 365.00

10-Sep-13 349.20 400.00 NEUTRAL 11-Nov-13 377.15 440.00 UNDERPERFORM OUTPERFORM 09-Jan-14 368.15 450.00 10-Feb-14 364.00 465.00 22-Apr-14 429.05 470.00 N 19-May-14 444.35 500.00 29-May-14 423.80 480.00 11-Aug-14 447.40 510.00 23-Sep-14 517.80 640.00 O 17-Nov-14 545.10 650.00 * Asterisk signifies initiation or assumption of coverage. The analyst(s) responsible for preparing this research report received Compensation that is based upon various factors including Credit Suisse's total revenues, a portion of which are generated by Credit Suisse's investment banking activities As of December 10, 2012 Analysts’ stock rating are defined as follows: Outperform (O) : The stock’s total return is expected to outperform the relevant benchmark*over the next 12 months. Neutral (N) : The stock’s total return is expected to be in line with the relevant benchmark* over the next 12 months. Underperform (U) : The stock’s total return is expected to underperform the relevant benchmark* over the next 12 months. *Relevant benchmark by region: As of 10th December 2012, Japanese ratings are based on a stock’s total return relative to the analyst's coverage universe which consists of all companies covered by the analyst within the relevant sector, with Outperforms representing the most attractive, Neutrals the less attractive, and Underperforms the least attractive investment opportunities. As of 2nd October 2012, U.S. and Canadian as well as European ra tings are based on a stock’s total return relative to the analyst's coverage universe which consists of all companies covered by the analyst within the relevant sector, with Outperforms representing the most attractive, Neutrals the less attractive, and Underperforms the least attractive investment opportunities. For Latin Ame rican and non-Japan Asia stocks, ratings are based on a stock’s total return relative to the average total return of the relevant country or regional benchmark; prior to 2n d October 2012 U.S. and Canadian ratings were based on (1) a stock’s absolute total return potential to its current share price and (2) the relative attractiveness of a stock’s total return potential within an analyst’s coverage universe. For Australian and New Zealand stocks, 12-month rolling yield is incorporated in the absolute total return calculation and a 15% and a 7.5% threshold replace the 10-15% level in the Outperform and Underperform stock rating definitions, respectively. The 15% and 7.5% thresholds replace the +10- 15% and -10-15% levels in the Neutral stock rating definition, respectively. Prior to 10th December 2012, Japanese ratings were based on a stock’s total return relative to the average total return of the relevant country or regional benchmark. Restricted (R) : In certain circumstances, Credit Suisse policy and/or applicable law and regulations preclude certain types of communications, including an investment recommendation, during the course of Credit Suisse's engagement in an investment banking transaction and in certain other circumstances.

Volatility Indicator [V] : A stock is defined as volatile if the stock price has moved up or down by 20% or more in a month in at least 8 of the past 24 months or the analyst expects significant volatility going forward.

Analysts’ sector weightings are distinct from analysts’ stock ratings and are based on the analyst’s expectations for the fundamentals and/or valuation of the sector* relative to the group’s historic fundamentals and/or valuation: Overweight : The analyst’s expectation for the sector’s fundamentals and/or valuation is favorable over the next 12 months. Market Weight : The analyst’s expectation for the sector’s fundamentals and/or valuation is neutral over the next 12 months. Underweight : The analyst’s expectation for the sector’s fundamentals and/or valuation is cautious over the next 12 months. *An analyst’s coverage sector consists of all companies covered by the analyst within the relevant sector. An analyst may cover multiple sectors.

NJA Automobile Sector 40 11 February 2015

Credit Suisse's distribution of stock ratings (and banking clients) is:

Global Ratings Distribution Rating Versus universe (%) Of which banking clients (%) Outperform/Buy* 45% (54% banking clients) Neutral/Hold* 38% (49% banking clients) Underperform/Sell* 15% (45% banking clients) Restricted 2% *For purposes of the NYSE and NASD ratings distribution disclosure requirements, our stock ratings of Outperform, Neutral, and Underperform most closely correspond to Buy, Hold, and Sell, respectively; however, the meanings are not the same, as our stock ratings are determined on a relative basis. (Please refer to definitions above.) An investor's decision to buy or sell a security should be based on investment objectives, current holdings, and other individual factors.

Credit Suisse’s policy is to update research reports as it deems appropriate, based on developments with the subject company, the sector or the market that may have a material impact on the research views or opinions stated herein. Credit Suisse's policy is only to publish investment research that is impartial, independent, clear, fair and not misleading. For more detail please refer to Credit Suisse's Policies for Managing Conflicts of Interest in connection with Investment Research: http://www.csfb.com/research-and- analytics/disclaimer/managing_conflicts_disclaimer.html Credit Suisse does not provide any tax advice. Any statement herein regarding any US federal tax is not intended or written to be used, and cannot be used, by any taxpayer for the purposes of avoiding any penalties.

Price Target: (12 months) for Mahindra & Mahindra (MAHM.BO) Method: Our target price for Mahindra is based on a sum of the parts value of Rs 1,400 whereby we attribute a value of Rs960 at 8x Sep-16 EBITDA (inline with historic mean) to the core auto business and Rs440 for its subsidiaries - valuing its listed subsidiaries at a 32% discount to market price.

Risk: The key downside risks to our target price of Rs 1,400 for Mahindra is if its new launches in UV's fail or poor monsoons impact tractor sales. A quick turnaround at Ssangyong or its CV business will be a positive surprise.

Price Target: (12 months) for Maruti Suzuki India Ltd (MRTI.BO) Method: We value Maruti Suzuki India Ltd at a multiple of 17.5x our Dec-16 EPS (earnings per share) forecast, giving us a target price of Rs4,300. Our multiple of 17.5x is a 10% premium to its historic average mutliple; which we believe is justified given that we are currently in a downcycle for passenger vehicles in India.

Risk: Risks that could impede achievement of our Rs4,300 target price for Maruti Suzuki include INR depreciation vs JPY, discounts staying high and car demand in India being weaker than expected.

Price Target: (12 months) for Tata Motors Ltd. (TAMO.BO) Method: We set a sum-of-the-parts (SOTP)-based target price of Rs650 for Tata Motors. We value the domestic business (Rs56/share) at 8x Dec- 16E EBIDTA (earnings before interest, depreciation, tax and amortisation). We value JLR (Rs604/share) at 4.5x Dec-16E EBIDTA, along with other subsidiaries (Rs26/share) and net of debt (Rs36/share).

Risk: The key risks that could impede achievement of our Rs650 target price for Tata Motors include: a slowdown in the Chinese luxury car market and a crackdown by the Chinese authorities on JLR's premium pricing in China which could have a significant impact on its margins

Price Target: (12 months) for Astra International (ASII.JK) Method: Our Rp8,000/share target price for Astra International is based on our sum-of-the-parts valuation analysis. We value the automotive division by applying a FY15E price to earnings ratio (P/E) at 17.0x, agricultural division at 15.5x, financing division at 10.2x, heavy equipment division at 16.0x, and others at 11.0x.

Risk: Potential risks to our Rp8,000/share target price for Astra International include: competition risk, regulatory risk in the form of import duties, plus a significant deterioration in the macro economy, particularly at the consumer confidence level, which has a high correlation with car sales, and liquidity in auto financing, which has a high correlation with motorcycle sales volume.

Price Target: (12 months) for BAIC Motor Corporation Limited (1958.HK) Method: Our target price HK$ 6.8 (30% downside) is based on sum-of-the-parts (SOTP) method. We use 10x 2015 P/E to value Beijing Benz JV, and 7x 2015 P/E for combined Hyundai & own-brand operations), implying a blended 8.4x 2015E P/E.

NJA Automobile Sector 41 11 February 2015

Risk: The major upside risks are (A) own-brand loss narrow, thanks to its better-than-expected product mix. The own-brand's upcoming new products are either high-price large-size sedans (D80 and D90) or SUVs (X25, X55 and X65), which might notable improve the product mix and result in a margin improvement and loss-reduction . (B) Hyundai JV's margin rise on better-than-expected SUV sales. As China is experiencing a SUV sector boom, Hyundai's SUV portfolio (ix25, Tucson, ix35 and Santa Fe) might surprise on the upside, resulting in earnings growth. Key downside risk comes from reducing car makers' bargaining power over dealers after revision of "Automobile Sales Management Method".

Price Target: (12 months) for Great Wall Motor (2333.HK) Method: We derive our target price of HK$50 for Great Wall Motor from a DCF (discounted cash flow)-based methodology, implying 10x 2015E P/E, in line with its historical average.

Risk: Risks that could impede achievement of our HK$50 target price for Great Wall Motor include the following: Downside risk is mainly on new model delay. We are concerned that the H8 might be further delayed from the currently planned 1H2015, which might harm its relatively highend image and lead to a possible delay of the new H7 launch as well. Another key risk is the increasing price competition in the SUV segment. Although the SUV segment's long-term picture looks rosy, we see increasing downward pressures on margins and prices. Great Wall might start to feel the pain amid a very sharp rise in supply from local peers as they adopt aggressive strategies to penetrate this high-growth/highmargin market.

Price Target: (12 months) for Brilliance China Automotive Holdings Limited (1114.HK) Method: Our HK$15 target price for Brilliance China Automotive Holdings is based on 11x 2015E EPS (earnings per share), which implies 11x 2014E P/E (price-to-earnings), at slightly discount to its two-year average forward P/E of 12x but at a premium to mass-market brand car makers, i.e. Dongfeng, GAC, Geely and Great Wall.

Risk: Risks that could cause the share price to diverge from our HK$15 target price for Brilliance China Automotive Holdings include the following: The major upside risk is better-than-expected margin. If the BMW JV decides to scale back its electric vehicle R&D expense, it could greatly help improve its profit. The major downside risks are (1) investors' interest dilution due to luxury peer Hong Kong IPO, i.e., Beijing auto (Benz JV), ( 2) heavier price discount especially on BMW 3-series, due to tough competition in 2014, especially from new generation Mercedes-Benz C-class sedan. The new C class is greatly improved from last generation, with a bigger size wheelbase, 80mm longer, and appealing exterior design inspired by new S Class.

Please refer to the firm's disclosure website at https://rave.credit-suisse.com/disclosures for the definitions of abbreviations typically used in the target price method and risk sections.

See the Companies Mentioned section for full company names The subject company (MAHM.BO, TAMO.BO, 1114.HK, VOWG_p.DE, 005380.KS, 2238.HK, F.N, BMWG.DE, 0489.HK, 7267.T, 600104.SS, GM.N, 000270.KS, HROM.BO) currently is, or was during the 12-month period preceding the date of distribution of this report, a client of Credit Suisse. Credit Suisse provided investment banking services to the subject company (TAMO.BO, 1114.HK, VOWG_p.DE, 005380.KS, 2238.HK, F.N, BMWG.DE, 0489.HK, 7267.T, 600104.SS, GM.N, 000270.KS) within the past 12 months. Credit Suisse provided non-investment banking services to the subject company (F.N, GM.N) within the past 12 months Credit Suisse has managed or co-managed a public offering of securities for the subject company (TAMO.BO, VOWG_p.DE, 005380.KS, F.N, BMWG.DE, 7267.T, GM.N) within the past 12 months. Credit Suisse has received investment banking related compensation from the subject company (TAMO.BO, 1114.HK, VOWG_p.DE, 005380.KS, 2238.HK, F.N, BMWG.DE, 0489.HK, 7267.T, 600104.SS, GM.N, 000270.KS) within the past 12 months Credit Suisse expects to receive or intends to seek investment banking related compensation from the subject company (MAHM.BO, MRTI.BO, TAMO.BO, 1114.HK, VOWG_p.DE, 005380.KS, 2238.HK, 0175.HK, F.N, BMWG.DE, 0489.HK, 7269.T, 7267.T, 600104.SS, GM.N, 000270.KS, 7203.T, 7201.T, HROM.BO) within the next 3 months. Credit Suisse has received compensation for products and services other than investment banking services from the subject company (F.N, GM.N) within the past 12 months As of the date of this report, Credit Suisse makes a market in the following subject companies (F.N, 7267.T, GM.N, 7203.T, 7201.T). Credit Suisse may have interest in (ASII.JK) As of the end of the preceding month, Credit Suisse beneficially own 1% or more of a class of common equity securities of (MAHM.BO, 2333.HK, 2238.HK, 0489.HK, HROM.BO).

For other important disclosures concerning companies featured in this report, including price charts, please visit the website at https://rave.credit- suisse.com/disclosures or call +1 (877) 291-2683. Important Regional Disclosures Singapore recipients should contact Credit Suisse AG, Singapore Branch for any matters arising from this research report.

NJA Automobile Sector 42 11 February 2015

The analyst(s) involved in the preparation of this report have not visited the material operations of the subject company (MAHM.BO, MRTI.BO, TAMO.BO, ASII.JK, 1958.HK, 2333.HK, 1114.HK, VOWG_p.DE, PEUP.PA, 005380.KS, RENA.PA, 2238.HK, 0175.HK, F.N, BAJA.BO, BMWG.DE, 0489.HK, 7269.T, 7267.T, ASOK.BO, 600104.SS, DAIGn.DE, GM.N, 000270.KS, 7203.T, 7201.T, HROM.BO) within the past 12 months Restrictions on certain Canadian securities are indicated by the following abbreviations: NVS--Non-Voting shares; RVS--Restricted Voting Shares; SVS--Subordinate Voting Shares. Individuals receiving this report from a Canadian investment dealer that is not affiliated with Credit Suisse should be advised that this report may not contain regulatory disclosures the non-affiliated Canadian investment dealer would be required to make if this were its own report. For Credit Suisse Securities (Canada), Inc.'s policies and procedures regarding the dissemination of equity research, please visit http://www.csfb.com/legal_terms/canada_research_policy.shtml. The following disclosed European company/ies have estimates that comply with IFRS: (VOWG_p.DE, PEUP.PA, RENA.PA, F.N, BMWG.DE, DAIGn.DE, 7201.T). Credit Suisse has acted as lead manager or syndicate member in a public offering of securities for the subject company (TAMO.BO, VOWG_p.DE, PEUP.PA, 005380.KS, 2238.HK, F.N, BMWG.DE, 7267.T, GM.N, 7203.T) within the past 3 years. As of the date of this report, Credit Suisse acts as a market maker or liquidity provider in the equities securities that are the subject of this report. Principal is not guaranteed in the case of equities because equity prices are variable. Commission is the commission rate or the amount agreed with a customer when setting up an account or at any time after that. To the extent this is a report authored in whole or in part by a non-U.S. analyst and is made available in the U.S., the following are important disclosures regarding any non-U.S. analyst contributors: The non-U.S. research analysts listed below (if any) are not registered/qualified as research analysts with FINRA. The non-U.S. research analysts listed below may not be associated persons of CSSU and therefore may not be subject to the NASD Rule 2711 and NYSE Rule 472 restrictions on communications with a subject company, public appearances and trading securities held by a research analyst account. Credit Suisse (Hong Kong) Limited ...... Bin Wang ; Mark Mao Credit Suisse Securities (India) Private Limited ...... Jatin Chawla ; Akshay Saxena PT Credit Suisse Securities Indonesia ...... Jahanzeb Naseer ; Bernard Kie

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NJA Automobile Sector 43 11 February 2015

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