Lmc Automotive Outlook Briefing

LMC AUTOMOTIVE OUTLOOK BRIEFING

Losing momentum as we round the final corner

Gregory Daco Chief US Economist [email protected]

October 2020 A less-than-ideal health situation entering flu season

1 An uneven impact across the world

GDP impact from coronavirus GDP level Q2 2020 vs Q4 2019, in % 5

0.3 0

-5

-7.2 -10 -8.4 -10.2 -11.5 -15 -13.4

-17.6 -17.3 -20 -18.9

-22.1 -25 -22.7 ES UK FR IT PT CA DE US JP AU CN Source: Oxford Economics/Haver Analytics Eurozone countries in blue

2 Questions: Use the question panel A surprising Phase 1 of the recovery

World: Economic surprise indices Index 300 US Eurozone UK 200

100

-100

-200

-300

-400 2012 2013 2014 2015 2016 2017 2018 2019 2020 Source : Oxford Economics/Haver Analytics

3 Absent a strong employment rebound, fiscal aid is key

4 Midwest states have become new hotspot

US: New cases of Covid-19 7-day MA of cases per 100,000 70 North Dakota 60 Florida South New York Dakota 50 Arizona Montana New Jersey 40 Wisconsin

Texas 30 California 20

0 Mar Apr May Jun Jul Aug Sep Oct

Source: Oxford Economics/Haver Analytics

5 Easy and rapid employment gains are behind us

US: Nonfarm payroll employment Millions 155

150

Sep 145 +0.7mn Feb-Apr: Aug: 140 -22.1mn +1.4mn July: +1.8mn 135 June: +4.8mn 130 May: +2.7mn 125

120 1998 2003 2008 2013 2018 Source: Oxford Economics/Haver Analytics

6 Unemployment rate still near recession peaks

US: U3 unemployment rate % 16 Apr: 14.7% 14

12 10.8% 10.0% 10 9.0% Sep: 7.8% 7.9% 8 7.1% 6.1% 6.3% 6

2 Average of 6 prior recessions 0 1960 1970 1980 1990 2000 2010 2020

Source: Oxford Economics/Haver Analytics

7 The low hanging fruits have been picked

8 The importance of fiscal aid

9 Rebound in consumer spending driven by low income earners

US: Consumer credit and debit card spending

% difference from January 2020 5 0 -5 -10 -15 -20 Low Income -25 Middle Income -30 High income -35 -40 13-Jan-20 20-Feb-20 31-Mar-20 08-May-20 17-Jun-20 27-Jul-20 Source: Oxford Economics/Opportunity Insights/Haver Analytics

10 The importance of fiscal aid

11 Savings provides temporary buffer, but it’s falling fast

12 US Recovery Tracker falls in final week of September

US: Recovery Tracker Financial Mobility (January 31st = 100) Production 100 Employment Demand Health Recovery Tracker 80

0 01/31 02/28 03/27 04/24 05/22 06/19 07/17 08/14 09/11

Sources: Oxford Economics Most regions lost ground in mid-September

US: State Recovery Tracker, by region %; 2/29=100 120 Northeast South Midwest Southwest & Mountains 100 Pacific

0 2/29 3/21 4/11 5/2 5/23 6/13 7/4 7/25 8/15 9/5 9/26 Note: Weighted by states' contribution to regional GDP Source: Oxford Economics/Haver Analytics A two-phased recovery

15 Rates held near zero until 2024…

16 Questions: Use the question panel on the right US Election: What do political models show?

17 Economic Election Models: Electoral college vote

18 Uncertainty across key states on election night

19 Trump vs Biden: a slower post-Covid recovery Multiple risks around the baseline

❑ The pace of the recovery has slowed markedly. We see the economy contracting 3.5% in 2020 but expect a relatively soft GDP 3.7% rebound in 2021.

❑ The economy has regained two thirds of the output lost in March and April, but many risks on the horizon: fiscal stimulus expiring, flu season approaching and election uncertainty rising

❑ The jobs rebound has been strong, but employment remains 10.7mn below pre-Covid levels. September gain was only 661k vs 1.4mn in August & the unemployment rate of 7.9% is still close to previous recession peaks.

❑ The pre-election uncertainty surrounding a fiscal stimulus package could represent a watershed moment for the US economy as fiscal stimulus is expiring and employment is slowing. The absence of additional fiscal aid would constrain GDP by 1.5% over the next year.

❑ Our Biden-lite scenario sees real GDP growth at 5.7% in 2021. This compares with 3.7% in our “status quo” policy baseline and 2.3% under a Trump sweep (presidency + Congress) scenario.

❑ Fed Chair Powell stressed the importance of conditional dovish forward guidance. The Fed will keep interest rates at the ELB until the economy is assessed to be at full employment and inflation has risen to 2% and is on track to moderately exceed 2% for some time.

21 Global headquarters Europe, Middle East Americas Asia Pacific Oxford Economics Ltd and Africa Abbey House Oxford New York Singapore 121 St Aldates London Philadelphia Hong Kong Oxford OX1 1HB Belfast Boston Tokyo UK Frankfurt Chicago Sydney Tel: +44 (0)20 185 268 900 Paris Los Angeles Melbourne Millan Toronto London Stockholm Mexico City 4 Millbank Cape Town London SW1P 3JA Dubai UK Tel: +44 (0)20 3910 8000

New York Frankfurt: 5 Hanover Square (8th floor) Marienstr. 15, 60329 Frankfurt am Main, Germany New York NY 10004 Tel: +49 69 96 758 658 USA Tel: +1 646 503 3050 Email: [email protected] Singapore: 6 Battery Road Website: # 38-05 www.oxfordeconomics.com Singapore 049909 Tel: +65 6850 0110 22 Questions: Use the question panel on the right Sales

What does the recovery look like?

Augusto Amorim, Sr. Manager, Americas Vehicle Sales Forecasts Global Light Vehicle Outlook Briefing, Detroit October 15, 2020

US Monthly Sales ▪ Sales grew just in 1,800 18 February 1,600 16

Millions and

Thousands 1,400 14 September 1,200 12 ▪ September 1,000 10 SAAR was 800 8 at 97% of 600 6 February rate 400 4 200 2 ▪ Sales YTD 0 0 are down by Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 19% YoY, Retail Fleet SAAR losing 2.4 mn units Source: LMC Automotive © 2020 LMC Automotive Limited, All Rights Reserved. 2 Cars and MPVs are off by 33% YoY through September

Body Style Market Share ▪ Large Pickup was 100% the US market 80% leader in April 60% ▪ Cars are about 3 pp 40% down from Jan-Feb 20% ▪ SUVs 0% reached a Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec record high SUV Pickup Car MPV Van Sporty 53.5% share in June Source: LMC Automotive © 2020 LMC Automotive Limited, All Rights Reserved. 3 Premium sales have fluctuated more during the pandemic ▪ Pickups Status Market Share gave Non- 100% Premium an 89% share 80% of US sales in April

60% ▪ Premium reached a 40% 14.5% share in June

20% ▪ Lease extensions are now 0% hurting Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Premium Non-Premium Premium Super-Premium sales Source: LMC Automotive © 2020 LMC Automotive Limited, All Rights Reserved. 4 Prices keep breaking records and reached USD36,000

Average Transaction Prices in the US ▪ ATP has been above $37,000 USD35,000 $36,000 since June ▪ SUVs, $35,000 Large

$34,000 Pickups and Premium $33,000 bring prices up $32,000 ▪ Incentives $31,000 were below Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec USD4,000 2019 2020 in September Source: J.D. Power © 2020 LMC Automotive Limited, All Rights Reserved. 5 An 8% recovery is expected for next year, to 15.4 mn units

US Annual Sales 18

Millions -1.4% 17 1.6% 2.7% 4.9% 16 7.8% 15 17.0 -15.7% 16.6 16.9 14 16.2 15.4

13 14.3

12 2019 2020 2021 2022 2023 2024

Body Style Market Share 100%

18.7% 17.5% 17.0% 16.2% 80% 25.1% 20.9%

19.4% 19.6% 19.5% 19.8% 19.9% 60% 17.9%

40%

55.6% 55.6% 56.3% 48.8% 51.7% 53.9% 20%

0% 2019 2020 2021 2022 2023 2024 SUV Pickup Car MPV Van Sporty

Status Market Share in the US 100%

13.2% 13.2% 14.2% 14.4% 14.7% 14.9%

80%

86.6% 86.6% 85.6% 85.4% 85.0% 84.8%

60% 2019 2020 2021 2022 2023 2024 Non-Premium Premium Super-Premium

US Annual Sales

20 Millions 18

10 2019 2020 2021 2022 2023 2024 Base Premature easing Second wave Financial crisis Rapid upturn

3 2 -3% 6% -8% 2 -20% 11% 9% 13% Millions Millions 1 -27% 1 1.9 1.3 1.6 1.7 1.8 1.0 1.0 1.2 0 0 2019 2020 2021 2022 2019 2020 2021 2022

600 3 8% 26% 8% -43% -26% 400 13% 11% 2 -31% Millions 2.7 2.5 2.7 1 2.0 Thousands 200 438 302 341 378 0 0 2019 2020 2021 2022 2019 2020 2021 2022 Source: LMC Automotive © 2020 LMC Automotive Limited, All Rights Reserved. 10 Outlook

Americas Production – Building Back Up

Bill Rinna, Director, Americas Vehicle Forecasts Global Light Vehicle Outlook Briefing, Detroit October 15, 2020

▪ North America Production Outlook

▪ South America Production Outlook

2,000 1.60 ▪ Cumulative 1,800 impact of -2.8mn vehicles 1.40

1,600 Millions industry-wide 1.20 1,400 shutdowns 1,200 1.00 totalled 3.7k 1,000 0.80 working days and 2.8mn 800 0.60 Working Days Working 600 vehicles “lost”. 0.40 400 ▪ Plants were 0.20 200 down on - 0.00 average 45 March April May June days. Working Days Lost Volume Lost

Source: LMC Automotive 3 © 2020 LMC Automotive Limited, All Rights Reserved. Inventory remains very lean ▪ September US Light Vehicle Days' Supply inventory 140 5.00 increased 3.6% 119 120 from August but 95 4.00 100 87 970k fewer units 76 78 76 Millions 80 69 69 64 67 66 66 3.00 (-27%) YoY. 60 59 55 61 60 51 50 2.00 40 ▪ Last in, first out: 20 1.00 past two 0 0.00 months, dealers turning over half their start-of- month inventory. Yr-Ago Days' Supply Days' Supply 2019 Inventory 2020 Inventory ▪ GM had 190k less in inventory to start the year.

▪ In-demand NA-Built SUV NA SUV NA-Built Pickup NA Pickup Pickup and SUV Sales Production Sales Production 0 production -200 struggles to -400 keep up with

461k demand. Thousands -600 -800 ▪ Pickups have -1,000 been least

-1,200 531k 531k impacted on the -1,400 demand-side. -1,600 August YTD Change

▪ H2 overtime and low 18.0 base help offset +2.5% +17.1% 16.0 production constraints 3.33 0.19 -19.4% - capacity,

Millions 14.0 absenteeism, turnover. 12.0 -39.4% 10.0 ▪ Demand, inventory 8.0 16.2 15.3 rebuild drive 2021 6.0 13.10 rebound. 4.0 2.0 0.0 2019 H1 H2 2020 2021

▪ Mazda an outlier in ‘20 with full-year of CX-30. 55% 2020 2021 ▪ Tesla should see slight growth in ‘20 with new Model Y, 45% ‘21 gets more capacity w/expected Austin plant. 35% ▪ Toyota outpaces industry in ‘20 w/RAV4 resourcing, ’21 25% benefits with redesigned Highlander and Sienna. 15% ▪ Pandemic delayed GM’s T1 SUV launch, but those 5% models aid ‘21 growth, along with Bolt EUV. -5% ▪ Extended shutdowns for changeovers hurt Ford further -15% in ‘20, but ‘21 should benefit w/new Bronco, Bronco -25% Sport, Mustang Mach-E and updated F-150.

-35% ▪ FCA ‘20 hurt by lower MPV demand and changeovers,

‘21 rebound aided by Jeep product push.

GM VW

FCA

Ford

RNM

Tesla BMW

Honda Mazda

Toyota ▪ RNM’s demand-related production cuts in ‘19 were a

Subaru

Daimler Industry Hyundai precursor to poor ’20. Despite Van drops, ‘21 rebounds w/new Rogue, Pathfinder and QX60.

20 ▪ New programs prioritized based on importance/strategic 15 initiatives.

10 ▪ 5 programs throughout the New New Entries/Redesigns/Facelifts forecast were 5 cancelled – likely to be more. 0 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2020 2020 2021 2021 2021 2021 2022 2022 2022 2022 2023 2023 2023 2023

25 Millions 23.6 20.9 2.2 20 2.4 5.5 5.0 15 Canada Mexico 10 USA 15.9 13.5 5

0 2019 2027

Δ 1000s Growth % Δ Canada -232 -10% Mexico 525 11% USA 2,376 18% Total Capacity 2,668 13%

© 2020 LMC Automotive Limited, All Rights Reserved. Source: LMC Automotive 9 BEV plant capacity outpaces demand Production Excess Capacity Utilization ▪ Dedicated BEV 3.0 Millions 100% greenfield and 90% brownfield plants 2.5 80% blossom, but demand will likely 70% 2.0 lag. 1.8 1.7 60% 1.6 1.6 1.6 1.5 1.7 50% ▪ Short-term pain for long-term gain? 1.2 40% 1.0 30%

20% 0.5 .0 .1 .8 .8 .8 .9 .9 .6 .7 10% .4 .4 0.0 0% 2019 2020 2021 2022 2023 2024 2025 2026 2027

▪ NA production Production Excess Capacity Utilization remains strong on 25.0 90% falling import 80% volume, localization 6.6 6.3 5.9 5.7 5.5 and growth in non- 20.0 6.9 70% 3.1 3.9 4.7 7.0 Detroit brands. 7.9 60% Utilization remains 15.0 50% below 80%.

40% ▪ Pre-COVID levels 10.0 18.0 not expected until 17.0 16.9 17.1 17.3 17.7 17.9 30% 16.2 15.3 16.5 2022. 13.1 5.0 20% 10%

0.0 0% 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027

OEM CAGR 19-27 Capacity  Utilization ▪ Despite low utilization rates, GM 1.0% -150k 72% most OEMs Ford 0.9% -55k 77% expanding Toyota 2.9% 538k 88% capacity and FCA 0.0% 150k 76% growing. Honda -0.3% -60k 88% ▪ Investment in RNM -0.4% 100k 60% region drives Daimler 3.1% 168k 65% above industry Hyundai-Kia 3.0% 200k 76% growth. VW 1.8% 100k 63% BMW 2.0% 44k 72% ▪ Plants remain at risk. Subaru 1.7% 100k 96% Other 6.0% 1484k 41% Industry 1.3% 2.668mn 72%

▪ North America Production Outlook

▪ South America Production Outlook

4.0 70% ▪ Days’ supply sits at 20 days in 3.5 60% September, down

Millions +32.3% -32.2% 3.0 from 48 days in 50% March. (44-48 is 2.5 40% about average). 2.0 3.29 30% ▪ 2021 rebounds but 1.5 2.80 2.70 downside risks 2.51 20% 1.0 1.90 remain. 0.5 10% ▪ Long-term growth 0.0 0% supported by fresh 2019 2020 2021 2022 2027 products, Post-COVID Pre-COVID Utilization particularly SUVs.

700 50% ▪ Pandemic has 45% piled on an 600 610 already down 40% economy. Thousands 500 35% +48.4% 30% ▪ 2021 rebounds 400 -24.9% 25% but risk is high. 300 20% ▪ Long-term 200 416 15% growth assumes 328 366 246 10% stable 100 5% environment. - 0% 2019 2020 2021 2022 2027 Post-COVID Pre-COVID Utilization

We will return at: 09:30 EDT 14:30 BST

The New Normal

Coronavirus Impact on China Car Industry

John Zeng, Forecasting Director China The Global Light Vehicle Outlook Briefing October 15, 2020

▪ COVID-19 Impact to Marco Economy

▪ Passenger Car Market Overview

▪ Market Dynamics: Sales Distribution, Brand Origins and Segments

▪ Outlook

▪ China is ahead of the world from a recovery perspective but the risk of second wave of COV-19 is still high

▪ In May, a small scale of outbreak in Jilin province.

▪ In June, an outbreak of COVID-19 occurred in Beijing. Xinjiang th ▪ In July 16 , cases restarted in Xinjiang province. Qingdao

▪ In October 12th, new cases raised in Shandong province.

120 Xinjiang New cases 100 (July-August) Jilin Beijing 80 (May) (June-July) 60 40 Shandong 20 (October)

27/06/2020 04/08/2020 09/05/2020 11/05/2020 13/05/2020 15/05/2020 17/05/2020 19/05/2020 21/05/2020 23/05/2020 25/05/2020 09/06/2020 11/06/2020 13/06/2020 15/06/2020 17/06/2020 19/06/2020 21/06/2020 23/06/2020 25/06/2020 29/06/2020 01/07/2020 03/07/2020 05/07/2020 07/07/2020 09/07/2020 11/07/2020 13/07/2020 15/07/2020 17/07/2020 19/07/2020 21/07/2020 23/07/2020 25/07/2020 02/08/2020 06/08/2020 08/08/2020 10/08/2020 12/08/2020 14/08/2020 01/10/2020 13/10/2020

27/07/20203 29/07/20205 31/07/20207 16/08/20202

(bn RMB) GDP (bn RMB) Total retail sales of consumer goods 0% 60,000 2019 2020 YoY 5% 2019 2020 YoY 3.2% 10,000 -3.1% -5% 40,000 0% -1.6% -10% 5,000 -11.4% 20,000 -5% -6.8% -15% 0 -10% 0 -19.0% -20% Q1 Q2 H1 Q1 Q2 H1

(bn USD) Export National fixed asset investment (excluding farmers) (bn RMB) 10% 1,500 2019 2020 YoY 5% 2019 2020 YoY 30,000 4.6% 5% 0.2% 0% 1,000 0% 20,000 -3.1% -5% -5% -6.2% 500 -10% -10% 10,000 -15% -13.3% -16.1% 0 -15% 0 -20% Q1 Q2 H1 Q1 Q2 H1 © 2020 LMC Automotive Limited, All Rights Reserved. 4 Exports Show Surprising Surge as Global Economy Reopens

▪ China exports surged 9.9% in Sep despite Trump’s “tech grenade” and strong RMB appreciation. RMB VS USD ▪ Surge is powered by demands for lockdown goods overseas (medical supplies, electronics and work-from-home equipment. Supply chain disruption in India/Asean regions also shifted overseas orders back to China.

▪ Strong recovery of exports sectors boosted consumer confidence in coaster regions where the local economy more open to foreign trade

China Export 9.5% 9.9% 10% 7.2% 5% 3.5% 0.5% 0% -0.8% -2.3% -5% -3.3% -4.1% -6.2% -10% -6.6% -7.7% -9.0% -13.3% -15% -17.2% YoY Ytd YoY -20% 202001-02 202003 202004 202005 202006 202007 202008 202009 © 2020 LMC Automotive Limited, All Rights Reserved. 5 Outline

▪ COVID-19 Impact to Marco Economy

▪ Passenger Car Market Overview

▪ Market Dynamics: Sales Distribution, Brand Origins and Segments

▪ Outlook

CHINA PASSENGER VEHICLE SALES (CAAM WHOLESALES) Sales Volumes Sales YoY Growth Downswing Tax Cut Stimulus Payback COVID-19 8 31% 40% 7 30% 20% 18% 14% 15% 20% 6 15% 13%12% 9% 6% 7% 8% 10% 3% 4% 4% 2% 10% 5 0% 0% 0% -2% -8% -6% 0% 4 -15%-14%-14% -10% 3 -20%

In In millionunits Pre-buy effect: 4˜5 million extra 2 car sales estimated during the -30% 1 period -45% -40% - -50%

Source: LMC Automotive; CAAM Wholesales © 2019 LMC Automotive Limited, All Rights Reserved. 7 Retail Sales Followed the Wholesales Pace Tightly ❑ Gap between Wholesales and Retails stood at only 49,000 units in first 8 months, suggesting that newly added inventory level remained at low level

MONTHLY RETAIL SALES V.S WHOLESALES (2015 – AUG 2020)

Registration Wholesales 3.5 50% purchase tax cut 25% purchase tax cut 0.8 million gap: 3 4% of 2015 retail 0.48million gap: 0.68 million gap: 1.4 million gap: 82,408 gap sales 2% of 2016 retail 3% of 2017 retail 7% of 2018 retail 0.4% of 2019 retail 2.5 sales

sales sales sales 49k gap In Million Units Million In 2 Ytd Aug

1.5

0.5

201504 201611 201806 202001 201501 201502 201503 201505 201506 201507 201508 201509 201510 201511 201512 201601 201602 201603 201604 201605 201606 201607 201608 201609 201610 201612 201701 201702 201703 201704 201705 201706 201707 201708 201709 201710 201711 201712 201801 201802 201803 201804 201805 201807 201808 201809 201810 201811 201812 201901 201902 201903 201904 201905 201906 201907 201908 201909 201910 201911 201912 202002 202003 202004 202005 202006 202007 202008

Source: LMC Automotive; CAAM Wholesales (exports are removed from 2018) ; Vehicle Registrations (2016 onwards: Insurance Data) © 2019 LMC Automotive Limited, All Rights Reserved. 8 OEM Dynamics: Winners and Losers in Ytd Aug 2020

40% (0.6%, 171%) Brand Share & Growth in China

20%

0% 0.0% 1.0% 2.0% 3.0% 4.0% 5.0% 6.0% 7.0% 8.0% 9.0%

-20% Average -16% (12.8%, -21.9%)

-40% YTD YTD Growth

-60%

-80%

-100% Market Share (Ytd Aug 2020)

4 10% Ytd July 2019 Ytd July 2020 YoY 3.3% 3.5 -3.0% 0% -3.0% -6.0% -3.5%

Millions 3 -9.3% -10% -13.3% -16.7% -16.7% 2.5 -20% -27.9% 2 Retail average -21.5% -28.3% -30% -34.8% 1.5 -40% 1 -50%

0.5 -58.2% -60%

0 -70%

Mini

Fullsize Midsize Fullsize Fullsize Midsize

Compact Compact Compact

Fullsize Plus Fullsize Fullsize Plus Fullsize

Sub-Compact Sub-Compact Car MPV SUV

Market Concentration ( 105 active brands in the market in 2020) 100%

90.7% 89.3% Top 30 90% 88.4% 87.2% 87.9%

80.5% 80% 78.7% Top 20 75.4% 75.3% 76.1%

70%

60.6% Top 10 60% 56.3% 53.2% 50.9% 52.1% 50% 2016 2017 2018 2019 2020 YTD May

( 54 active local Chinese brands in the market in 2020) Market Concentration 100% 95.0% 91.3% 90.1% 90.4% 92.4% 90% Top 20 80% 77.1% 71.6% 71.1% 71.3% 73.4% Top 10 70% 60% 53.6% 50% 48.2% Top 5 44.1% 46.9% 46.4% 40% 2016 2017 2018 2019 2020 Ytd May

2016 2017 2018 2019 2020 Ytd May BRAND Share BRAND Share BRAND Share BRAND Share BRAND Share Changan 11.7% Geely 12.1% Geely 14.5% Geely 15.3% Geely 17.6% Haval 9.6% Changan 10.3% Baojun 9.2% Changan 10.1% Changan 14.3% Geely 7.8% Baojun 9.9% Changan 9.0% Haval 9.6% Haval 10.0% Baojun 7.7% Haval 8.3% Haval 8.0% Baojun 7.6% Roewe 5.9% Beijing 7.2% Dongfeng 6.3% Trumpchi 5.6% BYD 5.6% Chery 5.8%

Market Concentration Top 20 100% 99.6% 99.8% 99.9% 99.9% 99.97% 91.4% 93.0% 94.1% 90% 88.7% 89.2% Top 10 80% 74.6% 77.6% 69.4% 70% 65.5% Top 5 60.9% 60% 50% 2016 2017 2018 2019 2020 Ytd May

2016 2017 2018 2019 2020 Ytd May BRAND Share BRAND Share BRAND Share BRAND Share BRAND Share Volkswagen 24.0% Volkswagen 25.5% Volkswagen 26.6% Volkswagen 28.3% Volkswagen 25.9% Buick 9.6% Honda 11.4% Honda 12.3% Honda 14.1% Toyota 17.8% Honda 9.5% Buick 9.8% Toyota 11.5% Toyota 13.5% Honda 14.8% Hyundai 9.0% Toyota 9.7% Nissan 10.1% Nissan 10.8% Nissan 11.0% Toyota 8.9% Nissan 9.1% Buick 9.0% Buick 7.9% Buick 8.1% © 2019 LMC Automotive Limited, All Rights Reserved. 13 Competition Situation Is Much Stable In Premium Segment

( 22 active premium brands in the market in 2020)

Market Concentration 100% 95.8% 94.9% 96.0% 95.4% 96.8% Top 10 90% 80.6% 81.2% 80.8% 81.9% Top 5 80% 79.6% 69.9% 70% 67.9% 67.8% 67.6% 68.8% Top 3 60% 2016 2017 2018 2019 2020 Ytd May

2016 2017 2018 2019 2020 Ytd May BRAND Share BRAND Share BRAND Share BRAND Share BRAND Share Audi 26.7% Mercedes-Benz 23.3% Audi 23.2% Mercedes-Benz 23.0% Mercedes-Benz 24.5% Mercedes-Benz 21.6% Audi 23.1% Mercedes-Benz 23.0% BMW 22.9% BMW 23.6% BMW 21.6% BMW 21.6% BMW 21.6% Audi 21.7% Audi 20.7% Cadillac 5.7% Cadillac 6.6% Cadillac 7.8% Cadillac 6.8% Lexus 6.9% Lexus 5.0% Lexus 5.0% Lexus 5.7% Lexus 6.4% Volvo 6.2% © 2019 LMC Automotive Limited, All Rights Reserved. 14 Expansion of Chinese Brands Are Forced To Be Delayed

Great Wall’s plan to India market Zotye’s plan to US and Europe market o Zotye has the plan to entry US and Europe market, but the OEM is overwhelmed by the Covid-19 pandemic

o China's Great Wall agrees to buy General Motors' India plant in January,as the Lynk&Co’s plan to Europe market Chinese automaker expands overseas amid slowing domestic demand. o Lynk&Co has the plan to entry Europe market, but Obliged to delay its plan for the Covid-19 pandemic

CN US EU KR JP ❑ Volvo’s current production capacity in China also provides a global export 700 business in addition to meeting domestic Volvo exported 44k cars market demand. However, with the 600 from China in 2019 change of the international business environment, Volvo will no longer export 500

Thousands Chinese-made cars to the U.S. and European markets, given the U.S.-China 400 trade dispute, said Hanken Samuelson, Volvo’s chief executive 300

200 Buick exported 34k cars 100 from China in 2019

0 ❑ As tensions grow between China and US, 2019 potential uncertainty hangs over GM’s export to north American market PV Export CN US EU KR JP Grand Total by BR 2019 421,964 141,885 52,289 50,208 14,117 680,463 Share 62.00% 20.90% 7.70% 7.40% 2.10% 100% © 2019 LMC Automotive Limited, All Rights Reserved. 16 China PV Market Sales Outlook

Sales Volumes Sales Growth 30.0 60.0% 50.0% 25.0 47.4% 40.0% 20.0 36.0% 30.0% 15.0 20.0% 19.0% 16.7% 12.2% 12.9% 10.0% 9.5% 6.8% 10.0% 10.0 8.3% 8.1% 6.3% 4.8% In million units million In 3.8%3.3% 2.4% 0.0% 5.0 -3.9% -8.9%-8.6% -10.0% - -20.0%

Asia on Rebound

May Arthapan, Director Asia Pacific Global Light Vehicle Outlook Briefing, (Detroit) October 15, 2020

▪ Emerging markets (India and ASEAN) most distressed

% GDP (YoY Change) 12 1998 2020 2021 9 6 3 0 -3 -6 -9 -12 Asia China India ASEAN Japan Korea

▪ Sales and production expected to rebound to pre-pandemic level in September

2.5 2019 2020 2021 2022 Sales: 15.6m (-5%) Sales: 12.6m (-19%) Sales: 14.0m (+12%) Sales: 14.7m (+5%) Build: 21.8m (-4%) Build: 17.3m (-21%) Build: 20.2m (+17) Build: 21.3m (+6%) 2.0

1.5 Millions

1.0

LV Production Sales 0.5

0.0

30 2020 30 2021 25 25 -4.8 -2.5 20 20

Millions -2.7 -1.7 15 15 -22% 10 -1.9 10 -0.6 -11% -11% 5 -18% -20% 5 -6% 0 0 Sales Export Production Sales Export Production

Pre- Post-COVID Pre- Post-COVID

© 2020 LMC Automotive Limited, All Rights Reserved. Sales = Total LV sales including imports 4 Indian market hardest hit in region but with provisional uptick ▪ Autumn peak-season demand, preference for private cars, robust rural demand (with risk)

400 2019: 3.5m (-12%) 2020: 2.4m (-31%) 2021: 2.9m (+19%) GDP: 4.9% GDP: -10.0% GDP: 9.2%

300 Thousands

200

100

Jul Jul Jul

Apr Oct Oct Apr Apr Oct

Jan Jan Jun Jun Jan Jun

Mar Mar Mar

Feb Feb Feb

Nov Dec Nov Dec Nov Dec

Aug Sep Aug Sep Aug Sep

May May May

PV LCV Sales

500 2019: 4.2m (-11%) 2020: 2.9m (-31%) 2021: 3.5m (+22%) 400 2025 (5 yrs set back)

Thousands 300

200

100

Jul Jul Jul

Apr Oct Oct Apr Apr Oct

Jan Jan Jun Jun Jan Jun

Mar Mar Mar

Feb Feb Feb

Nov Dec Nov Dec Nov Dec

Aug Sep Aug Sep Aug Sep

May May May

PV LCV

400 2019: 3.3m (-1%) 2020: 2.3m (-31%) 2021: 2.8m (+23%) GDP: +4.4% GDP: -4.2% GDP: +6.3%

300 Thousands

200

100

Jul Jul Jul

Apr Oct Oct Apr Apr Oct

Jan Jan Jun Jun Jan Jun

Mar Mar Mar

Feb Feb Feb

Nov Dec Nov Dec Nov Dec

Aug Sep Aug Sep Aug Sep

May May May

PV LCV

500 2019: 4.1m (-4%) 2020: 2.7m (-35%) 2021: 3.6m (+34%) 400

Thousands 300

200

100

Jul Jul Jul

Apr Oct Oct Apr Apr Oct

Jan Jan Jun Jun Jan Jun

Mar Mar Mar

Feb Feb Feb

Nov Dec Nov Dec Nov Dec

Aug Sep Aug Sep Aug Sep

May May May

Production for domestic sales For export

1,200 2019: 9.2m (-1%) 2020: 7.7m (-17%) 2021: 8.5m (+11%) 1,000 GDP: +0.7% GDP: -5.7% GDP: +2.5% (Stimulus @20% of GDP)

800 Thousands 600

400

200

Jul Jul Jul

Apr Oct Oct Apr Apr Oct

Jan Jan Jun Jun Jan Jun

Mar Mar Mar

Feb Feb Feb

Nov Dec Nov Dec Nov Dec

Aug Sep Aug Sep Aug Sep

May May May

For domestic sales For export

▪ 89 all-new and redesigned models in 2020-2021, 30 of which are SUVs

500 450 2019: 3.9m (-2%) 2020: 3.7m (-4%) 2021: 4.2m (+12%) 400 GDP: +2.0% GDP: -1.0% GDP: +2.9% 350 Thousands 300 250 200 150 100 50

Jul Jul Jul

Apr Oct Oct Apr Apr Oct

Jan Jan Jun Jun Jan Jun

Mar Mar Mar

Feb Feb Feb

Nov Dec Nov Dec Nov Dec

Aug Sep Aug Sep Aug Sep

May May May

Production for domestic sales For export

▪ 15 all-new and redesigned models in 2020-2021

▪ Asian economy is in worst shape, considerably worse than during the 1998 financial crisis.

▪ Situation is most disconcerting in emerging markets (India and ASEAN) which are less equipped to cope with economic and market shocks.

▪ India is hardest hit in the region, with a two-month national lockdown and with the economy and market already struggling before the pandemic. Recovery will be slow and painful. Structural problems in the economy and banking sector add to the pressure.

▪ ASEAN has also suffered a severe volume loss. Risk of further movement restrictions is imminent. Depressed export and tourism are detrimental to the regional economy.

▪ The Japanese market is on gradual rebound though risk of a rapid rise in new infection cases is imminent. Export recovery will be slow given the state of the European and US market.

▪ Quick response to the pandemic and vehicle tax cuts paid off in Korea. Export recovery will be slower and with risk.

European Auto Industry: Recovery Incomplete

Justin Cox, Global Director, Production Global Light Vehicle Outlook Briefing, (Detroit) October 15 2020

2010 2005 2006 2007 2008 2009 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

© 2020 LMC Automotive Limited, All Rights Reserved. Source: LMC Automotive 2 Pan European LV Sales: Incentives, ’Big-5’ markets. Core Stimulus: mid year 2020 Status France: €535 Fund €7k bonus: BEVs costing<€45k Cut to €6k from 2021 €2k bonus: some PHEVs costing<€50k Cut to €1k from 2021 Scrapping incentives for older cars Fund exhausted Germany: €9k bonus: BEVs costing<€40k. Tapers to €65k. Continues €6.75k bonus: PHEVs costing<€40k. Tapers to €64k Continues Temporary VAT cut from 16% to 19% Ends 31 Dec 2020 Italy: €3.5k cash for clunkers: stipulations exist. €8k bonus for ZEV purchases (with scrappage) €5k bonus for ZEV purchases (without scrappage) Scrappage fund boosted from €150mn to €450mn Exhaustion? Spain: €400-€4000 cash for clunkers bonus scheme €250mn Fund sufficient till end 2020? Available on lowest-emitting 45% of market. UK: No Sales stimulus No Stimulus

4.5

4.0 Millions Germany 3.5

3.0 France 2.5 UK 2.0 Italy 1.5 Spain 1.0 16.5

0.5

0.0 Jan Feb Mar Apr May Jun Jul Aug Sep

350 Spain 300 France 250 Source: ECDC UK 200

150

100 Italy 16.5 50 Germany 0

Total Pan-Europe Light Vehicle Market

24 FY: 16.5mn FY: 19.0mn -20.2% +14.9% 19

14 FY: 20.6mn FY: 20.6mn FY: 20.7mn +3.7% +0.1% +0.5% 9

Sales Volume (mnVolume units/year) Sales 4

Jul-17 Jul-18 Jul-19 Jul-20 Jul-21

Jan-18 Jan-17 Jan-19 Jan-20 Jan-21

Sep-19 Sep-17 Sep-18 Sep-20 Sep-21

Nov-17 Nov-18 Nov-19 Nov-20 Nov-21

Mar-17 Mar-18 Mar-19 Mar-20 Mar-21

May-17 May-18 May-19 May-20 May-21 SAAR Mov.Avg.

© 2020 LMC Automotive Limited, All Rights Reserved. Source: LMC Automotive 6 Europe Base Forecast– Demand by Major Market Light Vehicle sales (millions) 25 20.7 20 19.0 6.1 16.5 6.0 15 1.8 5.3 1.7 2.7 1.5 2.4 10 1.5 2.0 1.2 2.1 1.0 1.8 1.5 5 3.9 3.2 3.5

2.7 2.1 2.4 - 2019 2020 2021 France Germany Italy Spain UK Russia RoE

W Europe 65%

E Europe 20%

Asia 7%

N America 6%

Africa 1%

Middle East 1%

S America 0% Source: LMCA European LV Trade Flow Forecast

20%

-20% 2020: 16.9mn (-20% YoY) -40%

-60%

-80%

120 113 6,000

Stock Level (000s) 100 5,000

78 Days Supply Days 80 4,000 65 65 65 60 61 59 57 60 3,000 (000s) Levels Stock Days Supply 40 2,000

20 1,000

© 2020 LMC Automotive Limited, All Rights Reserved. Source: LMC Automotive 10 Europe: Model Program Disruption 45 Pre-COVID-19 Post-COVID-19 40 35 30 25 20 15 10 5 0 2020Q1 2020Q2 2020Q3 2020Q4 2021Q1 2021Q2

2020 2021 2022 2023 All Pan-Europe 79 95 99 104 VW Grp 82 96 97 100 RNM 80 98 106 111 PSA 73 94 102 105 Daimler Grp 76 91 91 94 BMW Grp 82 87 90 95 Ford Grp 81 98 95 100 FCA 77 96 106 125 Hyundai Grp 80 97 104 109 Toyota 84 96 103 104 Geely (Volvo) 84 92 89 85 Tata (JLR) 76 104 112 129

30.0 Pan-Europe CAGR*: 1.6%

1.8% 0.8%

Millions 25.0 2.8% 3.2% -0.4% 4.2% 4.4% CAGR* 2.8% -4.1% 4.9% 18.5% E Europe : 2.8% 20.0 Russia : 4.3% E Europe -20.1% Turkey : 1.6% Hungary : 4.7% 15.0 Romania : 5.2%

10.0 CAGR* W Europe : 0.9% W Europe Germany : 1.5% 5.0 Spain : 0.9% France : 0.5% Sweden : -3.8% 0.0 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 *Compound Annual Growth Rate, 2019-2027

© 2020 LMC Automotive Limited, All Rights Reserved. Source: LMC Automotive Risk Hot Spots: No-Deal Brexit • Risk of No-Deal Brexit has Impact on Global LV Sales (000s) grown following negotiation tensions - 2021 2022 2023 2024 • Trade obstacles are likely to increase costs, delays and -100 prices in a number of sectors.

• Reduced economic activity will Thousands -200 undermine auto markets with the UK worst hit. Europe • The UK imports almost 70% of -300 its LVs from the EU, with Germany a key source. -400 • UK exports over half its LV output to EU. • 80% of non-domestic UK auto -500 content is from EU. ROW • Lower domestic UK scale, rules -600 of origin thresholds and higher costs: threat to future investment and long-run viability of UK mass -700 auto manufacturing.

We will return at: 10:35 EDT 15:35 BST

Alexa Auto: Voice in the Car ARIANNE WALKER, CHIEF EVANGELIST, ALEXA AUTOMOTIVE

US Adults That Have Used a Voice Assistant in the Car1

252 Million U.S. Adult Population 129.7 Million in-car

1 Source: Voicebot.ai In-Car Voice Assistant Consumer Adoption Report 2020 Amazon Confidential, ©2020, Amazon.com or its affiliates. All rights reserved. Voice assistants are projected to be embedded in nearly 90% of new vehicles sold globally by 2028. -- Sam Abuelsamid, Principal Research Analyst, Navigant Research at Automotive World, Oct. 2019

Built-in voice recognition

Could use more features. You have to say“ very specific things.

It does not have all the features like Alexa. Not knowing the proper language (term) to “ use to complete“ some tasks.

It never works when I try to use [it]. Can never understand my words no matter how I don’t like that it is outdated and can’t really slow or normal“ I speak. be updated...“

It does very poorly understanding what I’m …is not always up to date. saying. It’s gets it wrong more often than “right. “

SATISFACTION WITH VOICE INTERACTIONS

8.08 7.43 7.42

7.08

5.98

5.00 In-Home Cloud-Based Cloud-Based Cloud-Based Traditional In- Phone Aftermarket Built-In Vehicle Voice Projection Device Voice Assistant Recognition

Q: Using a 1 to 10 scale, how would you rate your experience with your built-in vehicle voice assistant? N=2172 Q: Using a 1 to 10 scale, how would you rate your experience with the below voice assistant while in your vehicle? Phone projection N=1467 Aftermarket device N=113 Built-in N=189 Q: Using a 1 to 10 scale, how would you rate your experience with your in-home voice assistant device? N=4989 2019 J.D. Power/Alexa Automotive In-Vehicle Voice Connectivity Study Amazon Confidential, ©2020, Amazon.com or its affiliates. All rights reserved. Voice Satisfaction

SATISFACTION WITH VOICE INTERACTIONS

8.08 7.43 7.42

7.08

5.98

5.00 In-Home Cloud-Based Cloud-Based Cloud-Based Traditional In- Phone Aftermarket Built-In Vehicle Voice Projection Device Voice Assistant Recognition

SATISFACTION WITH VOICE INTERACTIONS

8.08 7.43 7.42

7.08

5.98

5.00 In-Home Cloud-Based Cloud-Based Cloud-Based Traditional In- Phone Aftermarket Built-In Vehicle Voice Projection Device Voice Assistant Recognition

SATISFACTION WITH VOICE INTERACTIONS

8.08 7.43 7.42

7.08

5.98

5.00 In-Home Cloud-Based Cloud-Based Cloud-Based Traditional In- Phone Aftermarket Built-In Vehicle Voice Projection Device Voice Assistant Recognition

DESIRE FOR SAME SERVICE IN CAR

Definitely Would Not

Definitely Probably Don’t Probably Would Would Know Would Not

67% 16%

Q: Would you want to have the same brand of in-home voice assistant device installed in your next vehicle? N=5002

2019 J.D. Power/Alexa Automotive In-Vehicle Voice Connectivity Study Amazon Confidential, ©2020, Amazon.com or its affiliates. All rights reserved. Top 3 benefits of in-home voice service installed in vehicle

1. I would already know how to use the feature

2. Consistent experience

3. My preferences are already known or would be more adaptable

2019 J.D. Power/Alexa Automotive In-Vehicle Voice Connectivity Study Amazon Confidential, ©2020, Amazon.com or its affiliates. All rights reserved. Amazon Confidential, ©2020, Amazon.com or its affiliates. All rights reserved. “Alexa, how’s “Alexa, how’s the weather?” traffic look?”

“Alexa close my “Alexa, start garage door.” my meeting.”

Top Desires of In-Vehicle Voice Service

Navigation 91% Musical entertainment 75% Driver warnings 72% Vehicle controls 72% Automotive services 65% Personal needs 58% Reading entertainment 41% Vehicle education 23% Other 3%

Q: What are the top 5 items you would want your vehicle voice assistant to be capable of doing, that your current vehicle command system cannot? N=5002

2019 J.D. Power/Alexa Automotive In-Vehicle Voice Connectivity Study Amazon Confidential, ©2020, Amazon.com or its affiliates. All rights reserved. “Alexa, play top hits.” “Alexa, join my conference call.”

“Alexa, find gas.” “Alexa, defrost my car.”

Amazon Confidential, ©2020, Amazon.com or its affiliates. All rights reserved. Amazon Confidential, ©2020, Amazon.com or its affiliates. All rights reserved. EXAMPLES OF SKILLS SPECIFICALLY DESIGNED FOR AUTOMOTIVE

“Alexa, open Urgently.” “Alexa, find parking.”

“Alexa, ask what3words to navigate “Alexa, ask Parkbob, what parking to cloth grit dice.” rules apply here.”

“Alexa, where can I find gas nearby?”

“Alexa, roll down the windows.”

EMBEDDED AFTERMARKET PROJECTION

Arianne Walker, Chief Evangelist, Alexa Automotive [email protected]

Impact

Global Automotive Summary

100

90 Sept. 20 88.7mn 80

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

© 2020 LMC Automotive Limited, All Rights Reserved. Source: LMC Automotive 2 LV demand in all regions see major contraction World – 76.3mn, down 16% from 2019 Europe China N. America 25.5 -7% 23.8 20.7 -20% 16.5

-17% 20.2 16.8

2019 2020 2019 2020 2019 2020 Rest of Asia Units: millions 15.7 -19% S. America 12.6 4.1 -29% 2.9

2019 2020 2019 2020

Global Sales % Change YTD August 2020 from YTD August 2019

Industry

Pickup/LCV

MPV

Van

SUV

Sporty

Car

-40% -35% -30% -25% -20% -15% -10% -5% 0%

Cumulative Projected Volume Loss Forecast Development (relative to pre-pandemic forecast) 100 2020 2021 2022 0 95.1 95 94.4 -10

Millions 90.3 89.7 Millions -20 -14 90 -22 +10% +6% -30 -28 84.3 85 -40 76.3 -50 80 -60 75 -16% Forecast Scenario Range 100 70 90 80 65 70 2014 2015 2016 2017 2018 2019 2020 2021 2022 60 Oct-20 May-20 Dec-19 50 2020 2021 2022 High (V) Low (L) Base Forecast © 2020 LMC Automotive Limited, All Rights Reserved. Source: LMC Automotive Key markets medium-term recovery path

CAGR Global Sales ‘20-’23 ▪ Global CAGR at nearly 8% Brazil 13.4% 2020-2023, with most emerging Eastern Europe 10.7% markets outperforming mature. ROW 10.2% India 8.7% ▪ China and South Korea are in a much stronger position in 2020 Western Europe 8.8% so recovery is less than other Global LV Sales 7.8% markets. China 5.8% US 5.1% ▪ Growth into the longer term is Japan 3.6% still dependent on stability in mature markets and further S. Korea 0.1% growth in newer markets.

150 Tesla Model Y Hyundai Tucson

214 100

Audi A3 122 Upcoming… 50

68 69 62 52 55 58

0 Ford Mustang Mach E Ford F-150 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 2020 2020 2020 2020 2021 2021 2021 2021

20% • Marked improvement in 10% performance with YTD 0% August off -26%. -10% -20% • Sep-Dec now expected -30% up 2% from same period -40% in 2019, as inventory -50% rebuild ramps up. -60% -70% Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec • 2020 expected down - 17% from Pre-Covid-19, improvement of 3.1mn 89.4 74.0 92.5 -17% -8% units from May. 84.7 • 2021 expected down -8% 2020 2021 from Pre-Covid-19

Pre-Covid-19 Current Pre-Covid-19 Current forecast, up 2.5mn.

China 61% Global Utilization 45% 51% 90% 2017 2020 2023 80% Asia-China 73% 69% 70% 55% 64% 60% 2017 2020 2023

50% Europe 73% 71% 51% 55% 40%

2017 2020 2023

2011 2023 2007 2008 2009 2010 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2024 85% North Am 73% 62%

2017 2020 2023

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