Passenger Car OEM Quarterly Data Book Q2 - 2012 Passenger Car OEM Quarterly Data Book (Q2 - 2012)

Published: August 2012

An AutomotiveWorld.com report published by:

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Tel: +44 (0)29 20 709 302 Fax: +44 (0)29 20 707 021 http://www.automotiveworld.com ABOUT THE EDITOR

Jonathan Storey Jonathan Storey has worked in the motor industry for more than fifteen years. Beginning as a financial analyst for Ford Motor Company, he later moved into the consultancy sector providing research, analysis and forecasting services for vehicle manufacturers, suppliers and regulatory authorities. He is the author of AutomotiveWorld.com reports: “World’s Car Manufacturers - a financial and operating review” and “World’s Truck Manufacturers - a financial and operating review”. He is also co-author of “Electric Vehicles- prospects for battery, fuel cell and hybrid powered vehicles”.

Polk-Marketing Systems The production and registration data for this quarterly report is supplied by Polk-Marketing Systems GmbH, one of the world’s leading suppliers of data to the automotive industry. Polk-Marketing Systems has provided planning and forecasting services to the automotive industry for over twenty-five years. It provides a full range of forecasting and consultancy services. Polk-Marketing Systems has its headquarters in Essen, Germany and offices in all the world’s major vehicle markets. Their comprehensive and ever-expanding databases are maintained and developed by more than 1,400 professionals worldwide and are regularly used by all the industry’s principal companies.

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All the estimates are based on assumptions, the authors’ calculations and publicly available data. AutomotiveWorld.com is not liable for misrepresentation or misuse of such information or validity of publicly available information. Contents iii

List of contentsList of contents ...... iii

List of figures ...... iv

Preface ...... v

Summary ...... 6

BMW Group ...... 8

Daimler ...... 11

Fiat Auto ...... 15

Ford Motor Company...... 21

Fuji Heavy Industries (Subaru) ...... 26

General Motors ...... 29

Honda Motor Company ...... 34

Hyundai Motor Company ...... 38

Mazda Motor Corporation ...... 41

Mitsubishi Motors Corporation ...... 44

Nissan Motor Company ...... 47

PSA Peugeot Citroën ...... 51

Renault Automobile ...... 55

Suzuki Motor Corporation ...... 58

Suzuki Motor Corporation ...... 58

Toyota Group ...... 61

VW Group ...... 66

Passenger Car OEM Quarterly Data Book Q2-2012 Contents iv

List of figures

Figure 1: Global car demand by month ...... 6 Figure 2: BMW results ...... 8 Figure 3: BMW model plans ...... 9 Figure 4: Daimler results ...... 11 Figure 5: Daimler model plans ...... 12 Figure 6: Fiat SpA results ...... 15 Figure 7: Fiat SpA model plans ...... 17 Figure 8: Ford results ...... 21 Figure 9: Ford model plans ...... 23 Figure 10: FHI results ...... 26 Figure 11: FHI model plans ...... 27 Figure 12: GM results ...... 29 Figure 13: GM model plans ...... 31 Figure 14: Honda results ...... 34 Figure 15: Honda model plans ...... 35 Figure 16: Hyundai Motor results ...... 38 Figure 17: Hyundai-Kia model plans ...... 39 Figure 18: Mazda results ...... 41 Figure 19: Mazda model plans ...... 42 Figure 20: Mitsubishi Motor results ...... 44 Figure 21: Mitsubishi Motor model plans ...... 45 Figure 22: Nissan results ...... 47 Figure 23: Nissan model plans...... 48 Figure 24: PSA results ...... 51 Figure 25: PSA model plans ...... 52 Figure 26: Renault results ...... 55 Figure 27: Renault model plans ...... 56 Figure 28: Suzuki results ...... 58 Figure 29: Suzuki model plans ...... 59 Figure 30: Toyota results ...... 61 Figure 31: Toyota model plans ...... 62 Figure 32: VW results...... 66 Figure 33: VW model plans...... 67

Passenger Car OEM Quarterly Data Book Q2-2012 Preface v

Preface

Welcome to the Q2-2012 issue of the Passenger Car OEM Quarterly Data Service. The principal aim of this publication is to provide a regular bulletin, rich in data, to give users a detailed summary on the state of the major car markets, car producing regions and carmakers worldwide. I believe the Passenger Car OEM Quarterly Data Service offers an unrivalled package of: consistency; scope; detail and value for money.

With effect from Q4-2011 the PDF copy of the data handbook includes only the Company Updates.

This provides the latest financial results of the leading carmakers and their consolidated subsidiaries. Also presented in this section are summaries and analyses of significant corporate activity, sales and production news and new product plans.

Please note all the figures giving percentage changes reflect comparisons with the year-ago data unless stated otherwise.

With effect from Q4-2011 we are pleased to announce a significant expansion of the new registration and production data, previously offered in PDF copy of the Quarterly Data Handbook:

Annual new registration data is now available at Region / Market / Group / Brand level for all 55 markets Annual new registration data is also available at Region / Market / Segment level for all 55 markets New registration data is shown for all groups and brands - previously minor OEMs were all included in "Other" Data on the top-25 best-selling models is available for all 55 markets Annual production data by brand is shown for 40 producing countries Quarterly production data by model is shown for 40 producing countries In total these changes represent an increase of more than 50% in the data offered. This enhanced level of detail means it is no longer practical to publish the range of tables and charts that were previously offered in PDF format. Therefore the data is available in Excel format only and users will be able to filter and sort the data to suit their own needs. If any user encounters a problem in manipulating the data please don't hesitate to contact us.

I hope you find this Quarterly service meets my aims and your expectations. All feedback will be welcomed.

Jonathan Storey (Editor)

Passenger Car OEM Quarterly Data Book Q2-2012 Section 1: Company updates 6

Summary

The continuing weakness of demand in western Europe, where passenger car demand fell by 7% in H1-2012 is emerging as one of the dominant themes of 2012.

Several of the European mass-market producers are having to intensify their cost reduction plans and try to gear their operations to lower breakeven points. Most recently PSA has been making headlines with its plan to close a French plant and cut jobs across all its domestic operations. There have also been reports of plans to share production with GM in Europe - which is similarly suffering substantial losses. However, such moves are unlikely in the near-term and it is the near-term problems that the companies have to deal with.

Other OEMs are facing similarly tough choices; for example Fiat has faced a 20% drop in its domestic market during H1-2012. Fiat is responding by reducing planned investments in Europe in 2012 by €500m and postponing the introduction of new models. It is also redoubling its efforts to form alliances and joint ventures and the past quarter has seen the announcement of a venture with Mazda, making use of the new MX-5 platform.

The growth in VW's earnings slowed in Q2-2012 but it remains in strong position in absolute and relative terms. During the past quarter it has tightened its hold on MAN Truck & Bus and made an organisational change to reflect the importance of commercial vehicles within the group and to exploit the potential synergies between MAN and Scania. The problems at Navistar have led to speculation that VW might be interested in extending its presence in the CV sector further, by acquiring the US firm. Where VW and acquisitions are concerned we have learned never to say never to such speculation.

The importance of China was also recognised in VW's organisational shake-up. The group delivered some 2.3 million vehicles in China in 2011 and reported a pro rata operating profit there of €2.6bn. A new Board of Management function for China is being set up to reflect the scale of this contribution.

Figure 1: Global car demand by month

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4,000 2010 2011 2012

3,500 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

New car regs (000s). Nafta, W.Europe, Japan & 34 other markets. Forecast status varies by market Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2010 4,204.4 3,854.2 5,552.1 4,517.5 4,570.4 4,873.4 4,512.9 4,236.4 4,940.3 4,506.8 4,696.3 4,769.3 2011 4,722.0 4,329.4 5,732.9 4,648.0 4,838.1 4,930.2 4,592.1 4,450.6 5,234.0 4,713.3 4,860.4 4,890.2 2012 4,549.9 4,745.7 6,018.3 4,397.7 4,797.6 4,832.0 4,582.9 4,319.1 4,589.8 4,570.8 4,445.1 4,327.8

Passenger Car OEM Quarterly Data Book Q2-2012 Section 1: Company updates 7

Company updates

Passenger Car OEM Quarterly Data Book Q2-2012 Section 1: Company updates 8

BMW Group

FINANCIAL NEWS Jan-Mar 2012

BMW Group reported its best first-quarter figures ever for sales, revenue and earnings. The performance reflected strong sales outside Europe, particularly in China but also in North America and Japan.

Group revenue rose 14.1% to €18.3bn. Earnings before interest and tax (Ebit) rose 18.8% to €2.1bn and net profit was 18.1% higher at €1.35bn. Revenue in the Automotive division increased by 12.4% to €16.2bn and pre-tax profit was 13.4% higher at €1.8bn.

Outlook For the full year the company expects unit sales to increase by under 10%, taking it to a record level of 1.7-1.8m vehicles. The full-year performance will be boosted by the new 3 Series sedan which has been available in all markets since February 2012. The company has reaffirmed the profitability targets already announced for 2012: a return on capital employed in excess of 26% and an Ebit margin of between 8% and 10% for the Automobiles segment.

Figure 2: BMW results

BMW Unit Q1-12 Yr to Dec 11 9Mo-11 H1-11 Q1-11 Yr to Dec 10

Group data Data % ch. Data % ch. Data % ch. Data % ch. Data % ch. Revenue € mils 18,293 14.1 68,821 13.8 50,472 15.4 33,925 22.1 16,037 28.9 Operating profit € mils 2,132 18.8 8,018 56.9 6,367 89.6 4,651 114.7 1,795 299.8 Pre-tax profit € mils 2,076 21.8 7,383 52.1 6,053 91 4,409 1,705 235.6 Net profit € mils 1,349 18.1 4,907 51.7 4,013 97 2,951 1,142 252.5 Employees 000's 101.3 5.4 100.3 5.1 100.4 4.1 96.9 1.5 96.0 0.3

Unit sales 000's 425.5 11.2 1,669.0 14.2 1,232.6 16.0 833.4 19.7 382.8 21.3 BMW 000's 356.5 11.0 1,380.4 12.8 1,021.9 14.5 689.9 17.8 321.2 20.8 Mini 000's 68.2 12.1 285.1 21.7 208.2 24.1 141.9 29.8 60.9 22.9 Rolls-Royce 000's 0.8 6.5 3.5 30.5 2.4 41.3 1.6 64.1 0.7 159.1 Per unit Revenue € 42,989 2.6 41,235 (0.4) 40,948 (0.5) 40,708 2.0 41,899 6.3 Operating profit € 5,010 6.8 4,804 37.3 5,166 63.4 5,581 79.3 4,690 229.6 Pre-tax profit € 4,879 9.5 4,424 33.2 4,911 65 5,291 4,455 176.8 Net profit € 3,170 6.3 2,940 32.8 3,256 70.2 3,541 2,984 190.6 Per employee Revenue € 180,654 8.2 686,111 8.3 502,764 10.8 349,948 20.3 166,974 28.5 Operating profit € 21,055 12.7 79,935 49.3 63,423 82.1 47,977 111.5 18,689 298.7 Pre-tax profit € 20,502 15.5 73,605 44.8 60,295 84 45,480 17,752 234.7 Net profit € 13,322 12.0 48,920 44.4 39,974 89.6 30,441 11,890 251.5 Sales units 4.2 5.4 16.6 8.7 12.3 11.4 8.6 18.0 4.0 20.9 Return on revenue Operating profit % 11.7 0.5 11.7 3.2 12.6 4.9 13.7 5.9 11.2 7.6 Pre-tax profit % 11.3 0.7 10.7 2.7 12.0 4.8 13.0 6.5 10.6 6.5 Net profit % 7.4 0.3 7.1 1.8 8.0 3.3 8.7 4.5 7.1 4.5 Revenue by division Automobile € mils 16,159 12.4 63,229 16.8 46,391 20.3 31,047 27.6 14,373 34.7 Motorcycle € mils 448 12.8 1,436 10.1 1,181 9.3 847 7.2 397 13.1 Financial Services € mils 4,800 14.8 17,510 5.4 12,640 1.3 8,364 2.0 4,183 4.5 Intra-group € mils (3,114) (13,354) (9,740) (6,333) (2,916) PBT by division Automobile € mils 1,820 13 6,823 76 5,647 131.2 3,902 237.0 1,605 630 Motorcycle € mils 37 23.3 41 (36.9) 60 (27.7) 77 (7.2) 30 0.0 Financial Services € mils 434 1.2 1,790 47.4 1,527 66.2 1,173 95.2 429 93.2 Intra-group € mils (215) (1,271) (1,181) (743) (359)

Notes: (1) Q1 is Jan-Mar, Q2 is Apr-Jun, Q3 is Jul-Sep, Q4 is Oct-Dec (2) % ch is change vs corresponding year-ago data (3) Full-year data taken from annual report may not reconcile to quarterly data due to restatements. (4) Per Unit & Per Employee data include non-automotive op's

Passenger Car OEM Quarterly Data Book Q2-2012 Section 1: Company updates 9

Corporate news  In June 2012, BMW and Toyota two signed a Memorandum of Understanding aimed at long-term strategic collaboration in four fields: joint development of a fuel cell system, joint development of architecture and components for a future sports vehicle, collaboration on powertrain electrification and joint research and development on lightweight technologies. This followed agreements between the two companies in November 2011 for BMW to supply Toyota with diesel engines in Europe from 2014; and in March 2012 for collaborative research in the field of next-generation lithium-ion battery cells.

The MoU is consistent with the original agreement in 2011 which included the commitment to identify and discuss other possible collaborative projects.

 The announcement of BMW's collaboration with Toyota was soon followed by confirmation of the planned break-up of BMW Peugeot Citroën Electrification, the joint venture with PSA for the development, production and purchasing of hybrid and electric powertrain components, which was officially launched only in October 2011. Both events are a consequence of the alliance between PSA and GM.

SALES & MODEL PLANS Figure 3: BMW model plans Lifecycle Lifecycle Brand Model Segment Start End BMW 1 Series City Small 2014 2021 BMW 1 Series Lower Medium 2011 2018 BMW 1 Series Touring Lower Medium 2014 2021 BMW 1 Series Gran Turismo (GT) Lower Medium 2013 2020 BMW 1 Series Coupé Lower Medium 2007 2013 2 Series (1 Series coupe BMW Lower Medium 2012 2019 replacement) BMW 3 Series Upper Medium 2011 2018 BMW 3 Series Touring Upper Medium 2005 2012 BMW 4 Series (3 Series coupe) Coupe/Convertible 2013 2021 BMW 4 Series (3 Series convertible) Coupe/Convertible 2014 2022 BMW 4 Series (3 Series coupe 4-dr) Coupe/Convertible 2015 2022 BMW 5 Series Executive 2010 2017 BMW 5 Series Touring Executive 2011 2018 BMW 5 Series Gran Turismo (GT) Executive 2009 2016 BMW 6 Series coupe Coupe/Convertible 2011 2018 BMW 6 Series convertible Coupe/Convertible 2012 2019 BMW 6 Series Gran Coupe (4-dr) Executive 2011 2018 BMW 7 Series Executive 2008 2015 BMW i3 City 2013 2020 BMW i8 Coupe/Convertible 2014 2016 BMW Family Activity Sports Tourer 2014 2022 BMW Compact Activity Tourer 2015 2023 BMW JOY (Compact Sports Commuter) 2016 2024 BMW X1 SUV 2009 2015 BMW X2 (3-dr) SUV 2016 2023 BMW X3 SUV 2011 2018 BMW X4 Crossover 2014 2021 BMW X5 SUV 2007 2014 BMW X6 Crossover 2008 2015 BMW X7 (not confirmed) SUV 2013 2021 BMW Z2 Coupe/Convertible 2015 2022 BMW Z4 Coupe/Convertible 2009 2016

Passenger Car OEM Quarterly Data Book Q2-2012 Section 1: Company updates 10

Mini Countryman Crossover 2010 2016 Mini Coupé & Roadster Coupe/Convertible 2011 2018 Mini sub-Mini City 2016 2023 Mini Mini Small 2007 2013 Mini MiniVan Compact MPV 2016 2023 Mini Paceman Crossover 2013 2017 Rolls-Royce Ghost Executive 2009 2017 Rolls-Royce Ghost Coupe Executive 2012 2020 Rolls-Royce Ghost long wheelbase Executive 2011 2017 Rolls-Royce Phantom Coupe Executive 2007 2017 Rolls-Royce Phantom Drophead Convertible Executive 2007 2017 Rolls-Royce Phantom replacement Executive 2012 2021

 Group sales in H1-2012 were a company record at 900,539 units, an 8.1% increase. Sales of the BMW brand were up by 8.3% at 747,064 units and Mini sales rose by 7.0% to 151,875 units.  Demand for the 1 Series Hatch 5-door rose by 51% to nearly 90,000 units, the new 3 Series sedan rose by 15.4% to 136,000 units and sales of the X3 were 38.4% higher at 74,098 units. Sales of the Mini Countryman rose 23.4% to nearly 50,000 units and the Mini brand made useful gains in a number of overseas markets including China, Japan and the US.  The new 3 Series sedan will be joined by a new 3 Series touring later this year. Also in 2012 the company is expected to show the replacement for the 1 Series coupe, prior to its market launch in 2013. The new model is to be badged as the 2 Series, as will the cabriolet version due in 2014. The new approach to badging will be extended in 2013 when the new 3 Series coupe will debut, badged as the 4 Series.  The Mini range is to expand from its current six models to up to ten by 2020, including a 5-door wagon, a van and possibly a sedan. PRODUCTION  In July, BMW announced plans to invest an additional £250m in Mini production across the UK by the end of 2015. This is in addition to the £500m it allocated in June 2011. UK capacity is expected to be insufficient to meet Mini‟s expansion plans and the company is in talks to build vehicles at the NedCar plant in the Netherlands. In July 2012 Mitsubishi announced the sale of the Nedcar plant to VDL for €1, on condition that the 1,500 employees there do not lose their jobs. VDL is reported to be in discussion with BMW about producing Mini models at the plant.  In early July BMW produced the 25,000th car at its Chennai plant in India, less than six years after operations began. Chennai builds the 3 Series, 5 Series and X1 models. In the first six months of 2012 BMW delivered 4,457 cars to customers in India.  BMW has outlined plans to invest €125m across its Dingolfing and Landshut plants in Germany next year to produce key components for its i range of electric vehicles. Dingolfing will provide the batteries, the E-gear and aluminium structure of the chassis for the i3 along with the front axle, frond end and rear chassis modules for the i8. Landshut will provide the electric motors and a range extender and high-voltage battery and motor gear units for the two models, along with carbon fibre reinforced plastic body parts. The investment will create a total of 500 new jobs.

Passenger Car OEM Quarterly Data Book Q2-2012 Section 1: Company updates 11

Daimler

FINANCIAL NEWS Jan-Jun 2012 Daimler's second-quarter earnings were lower than a year earlier but ahead of subdued expectations as all divisions except trucks reported lower earnings.

Group revenue rose by 9.7% to €29bn with increases in all divisions except buses. Group Ebit fell by 13% to €2.24bn.

Mercedes-Benz cars reported a 5% rise in revenue to €15.4bn as sales rose by 4% to a record 370,400 units, helped by rises of 21% in the US and 14% in China. However, the division's Ebit fell by 16% to €2.2bn and the margin fell by 2.1pts to 8.6%.

Figure 4: Daimler results

Daimler Unit H1-12 Q2-12 Yr to Dec 11 H1-11 Q2-11 Yr to Dec 10

Group data Data % ch. Data % ch. Data % ch. Data % ch. Data % ch. Revenue € mils 55,895 9.5 28,884 9.7 106,540 9.0 51,067 10.3 26,338 4.9 Ebit / Op. profit € mils 4,373 (5.2) 2,243 (13.1) 8,755 20.4 4,612 40.0 2,581 22.7 Pre-tax profit € mils 3,996 (9.3) 2,017 (20.0) 8,449 27.5 4,404 53.1 2,521 33.8 Net profit € mils 2,931 1.6 1,515 (11.1) 6,029 29.0 2,884 49.9 1,704 29.9 Employees 000's 273.7 2.9 273.7 2.9 271.4 4.3 266.1 3.3 266.1 3.3

Unit sales (5) 000's 1,072.4 8.4 570.3 8.1 2,111.1 11.4 989.4 10.0 527.6 6.3 M-Benz car 000's 708.7 6.0 370.4 3.6 1,381.4 8.2 668.4 7.9 357.6 4.4 Daimler truck 000's 229.9 27.2 122.2 33.6 425.8 19.8 180.7 17.1 91.5 9.1 Van, bus 000's 133.9 (4.6) 77.7 (1.0) 303.9 15.4 140.3 12.0 78.6 11.9 Per unit Revenue € 52,120 1.0 50,643 1.5 50,466 (2.2) 51,615 0.3 49,916 (1.3) Operating profit € 4,078 3,933 (19.6) 4,147 8.1 4,661 4,892 15.4 Pre-tax profit € 3,726 3,536 (26.0) 6,116 17.8 4,451 4,778 25.9 Net profit € 2,733 2,656 (17.7) 2,856 15.8 2,915 3,229 22.2 Per employee Revenue € 204,183 6.4 105,513 6.6 392,601 4.5 191,899 6.8 98,973 1.6 Operating profit € 15,974 8,194 (15.5) 32,262 15.4 17,331 9,699 18.8 Pre-tax profit € 14,597 7,368 (22.2) 31,135 22.2 16,549 9,473 29.6 Net profit € 10,707 5,534 (13.6) 22,217 23.6 10,837 6,403 25.8 Sales units 3.9 5.4 2.1 5.1 7.8 6.8 3.7 6.5 2.0 2.9 Return on revenue Operating profit % 7.8 (1.2) 7.8 (2.0) 8.2 0.8 9.0 1.9 9.8 1.4 Pre-tax profit % 7.1 (1.5) 7.0 (2.6) 7.9 1.2 8.6 2.4 9.6 2.1 Net profit % 5.2 (0.4) 5.2 (1.2) 5.7 0.9 5.6 1.5 6.5 1.2 Revenue by division M-Benz car € mils 30,301 6.3 15,364 4.9 57,410 7.5 28,507 11.3 14,647 4.5 M-Benz truck € mils 15,512 20.3 8,129 22.3 28,751 19.7 12,890 20.2 6,648 13.6 Van, bus & Other € mils 6,254 0.6 3,436 0.8 13,597 9.9 6,217 5.6 3,409 7.1 Services € mils 6,400 7.7 3,260 12.1 12,080 (5.5) 5,941 (6.9) 2,907 (12.5) Other & intra-group € mils (2,572) - (1,305) - (5,298) - (2,488) - (1,273) - Ebit/Op. profit by div'n M-Benz car € mils 2,566 (10.1) 1,314 (16.1) 5,192 11.5 2,854 30.8 1,566 13.8 M-Benz truck € mils 907 2.3 524 10.5 1,876 41.8 887 106.3 474 58.0 Van, bus & Other € mils 205 (49.6) 140 (47.6) 997 49.7 407 30.9 267 29.6 Services € mils 682 3.2 338 (0.6) 1,312 57.9 661 127.9 340 98.8 Other & intra-group € mils 13 - (73) - (622) - (197) - (66) - Notes: (1) Q1 is Jan-Mar, Q2 is Apr-Jun, Q3 is Jul-Sep, Q4 is Oct-Dec (2) % ch is change versus corresponding year-ago data (3) Full-year data is taken from annual report. It may not reconcile to quarterly data due to restatements. (4) Per Unit & Per Employee data include non-automotive op's. (5) Divisional unit sales may not add to Group total due to intra-company transactions re Sprinter in Nafta

(6) Chrysler no longer reported as continuing operation from Q2-07. Q1-06 onwards has been restated

Passenger Car OEM Quarterly Data Book Q2-2012 Section 1: Company updates 12

The decline mainly reflected:

 a less favourable model mix;  a less favourable geographic mix;  higher R&D expense.

The company also points to changes in non-current provisions and the effects of changes in interest rates which led to higher charges on earnings. Favourable exchange rate movements provided a partial offset to these adverse factors.

The truck division reported an 8% rise in its Ebit to €524m, though the margin declined by 0.9pts to 5.2%. On a recurring basis the profit increase was 10.3% as the year-ago figure was raised by €11m non-recurring gain in connection with an insurance pay out for the Japanese earthquake and tsunami. The company attributes the increase mainly to higher sales and favourable exchange rates but the margin decline was attributable to weaker demand in Brazil and higher R&D spending.

Outlook Over the full year Daimler expects global car demand to grow by around 4%, led by the US and Japanese markets. The Mercedes-Benz Car division is expected to outperform the global market and to report higher sales (year-on- year) in the next three quarters.

The company has kept its earnings forecasts fairly vague, saying it expects divisional Ebit in:

 Mercedes-Benz Cars to be "in the magnitude of the prior year" - which presumably means close to, but lower than the prior year level;  Daimler Trucks to be at least at the prior-year level;  Mercedes-Benz Vans to be "in the magnitude of the prior year";  Daimler Buses to be below the prior-year level;  Daimler Financial Services to be slightly below the prior-year level.

Corporate news In June Daimler reduced its stake in Tesla Motors. Blackstar InvestCo, the Daimler-affiliated investment vehicle, transferred 3.25 million Tesla shares (40% of its stake) to Aabar Investments, the Abu Dhabi sovereign-wealth fund which is a major shareholder in Daimler. Blackstar remains Tesla‟s third- largest shareholder, with a 7.5% stake. The continuing importance of Tesla to Daimler was confirmed by an announcement soon after that it is to supply components for an electric version of the B-Class (see below).

SALES & MODEL PLANS Figure 5: Daimler model plans Lifecycle Lifecycle Brand Model Segment Platform Start End BYD-Daimler new electric passenger car TBA TBA 2013 TBA brand Maybach 57 & 62 Executive W240/V240 2002 2013 Mercedes-Benz A-Class Lower Medium W169 2004 2012 Mercedes-Benz A-Class Lower Medium MFA 2012 2018 Mercedes-Benz GLC / BLK Compact SUV MFA 2013 2019 Mercedes-Benz B-Class Lower Medium W169 2005 2011 Mercedes-Benz New B-Class Lower Medium MFA 2011 2018 Mercedes-Benz CLC (poss. 'BLS') Coupe MFA 2013 2019 Mercedes-Benz CLC (poss. 'BLS') estate Coupe MFA 2013 2019 Mercedes-Benz C-Class Coupe Coupe W204 2011 2015 Mercedes-Benz C-Class sedan / estate Upper Medium TBA 2007 2014 Mercedes-Benz C-Class cabrio Upper Medium MRA 2015 2023 Mercedes-Benz CL Coupe W221 2006 2013 Mercedes-Benz CLS coupe 4-dr Coupe W212 2010 2016

Passenger Car OEM Quarterly Data Book Q2-2012 Section 1: Company updates 13

Mercedes-Benz CLS estate Executive MRA 2012 2019 Mercedes-Benz E-Class Executive W212 2009 2016 Mercedes-Benz GL-Class SUV W165 2012 2019 Mercedes-Benz GLK-Class SUV 2008 2015 Mercedes-Benz M-Class SUV W165 2011 2018 Mercedes-Benz MLC Crossover MRA 2014 2021 Mercedes-Benz R-Class Crossover W164 2005 2015 Mercedes-Benz S-Class Coupe Coupe W222 2013 2020 S-Class standard Mercedes-Benz Executive W222 2012 2019 wheelbase Mercedes-Benz S-Class LWB Executive W222 2013 2020 S-Class 4-seat Mercedes-Benz Coupe/Convertible W222 2014 2021 convertible Mercedes-Benz SLK-Class Coupe/Convertible W204 2011 2017 Mercedes-Benz SLS AMG Coupe W212 2010 2014 Mercedes-Benz SLC AMG roadster Convertible W212 2014 2022 Smart Forfour Small Edison 2013 2019 Smart Fortwo City MCC Smart 2007 2014

 Like BMW, Mercedes-Benz car sales in the first six months of 2012 were at a record level, rising 6.9% to 652,924 units and it reported record first-half sales in several markets including the US, Canada, China, UK and Russia.  The increase reflected higher sales of most models including the C-Class (+14.9%), new B-Class (+9.7%), CLS (+38.9%), M-Class (+32.7%), G-Class (+18.5%), and GL-Class (+7.2%). Smart sales were 1.4% higher at 55,593 units. As well as its routine replacement cycles, Mercedes-Benz is introducing at least ten all-new models by 2015. The compact class is probably the most important of these. Although the new A-Class and B-Class are, strictly speaking, replacement models, they are new from the ground up and represent a new approach by Mercedes- Benz to this sector. As such they should offer much more effective competition against the 1 Series, the X1 (another example of a competitor being more innovative) the A3, Volvo V40 etc. Mercedes is aiming to double its volumes in this sector to around 400,000upa. The market reception for the B-Class has been positive and Mercedes is optimistic about the forthcoming (mid- September) launch of the new A-Class, with 40,000 orders already booked by late July. Indeed, such if the level of optimism that the company has announced a contract with Valmet to supply an additional 100,000 units of the A-Class over the four years through 2016 (see 'Production' for more details).

 An electric version of the B-class will be launched in the US in 2014. It will be based on a new front-wheel- drive platform and will use battery packs, electric motor and other components supplied by Tesla Motors - in which Daimler holds a 4.7% stake. An electric version of the Smart ForTwo went on sale in the US in June and 127 units were sold.

PRODUCTION  Production of cars by Mercedes-Benz rose year-on-year by 4% to 719,587 units in H1-2012. The company is aiming to produce 1.52m cars in 2012.  As mentioned above, Daimler has announced an expansion of its planned production of the A-Class. Rather than increasing its own facilities it has opted to outsource production to the Finnish contract manufacturer Valmet Automotive. The agreement provides for Valmet to produce more than 100,000 units of the A-Class from 2013 through 2016. Following the launch of the B-Class at Rastatt, Germany in September 2011 and Kecskemét, Hungary in March 2012, production of the A-Class at Rastatt, started in July 2012. Valmet Automotive, originally started as a joint venture with Saab-Scania, has produced models for a variety of manufacturers including Saab, Renault, Opel, Porsche and Fisker.

Passenger Car OEM Quarterly Data Book Q2-2012 Section 1: Company updates 14

 Total investment at Rastatt for the production of the new compact models is around €1.2bn. In the first phase €600m was used for the construction of a new bodyshell building and for tools, and a further €600m is being invested in 2012 and 2013 for a second wave of expansion. These new investments are slated for modifications of the assembly and corresponding equipment installations in the bodyshell production. Another €400m will be invested in the powertrain plants in 2012 and 2013 for production of components solely used in the new compact models.  Production of the new GL-Class started at the Mercedes-Benz Tuscaloosa plant in Alabama in June. In October 2011, Daimler confirmed that, as of 2014, the Tuscaloosa facility will be one of the four global production locations of the successor generation of the current Mercedes-Benz C-Class, and will build these vehicles for the North American market. In 2015, an entirely new Mercedes-Benz model will also be added as the plant's fifth product. The company said at the time that it will invest US$350m in this project, which will bring an additional 400 jobs to the plant.

Passenger Car OEM Quarterly Data Book Q2-2012 Section 1: Company updates 15

Fiat Auto

FINANCIAL NEWS Jan-Mar 2012 The takeover of Chrysler has looked even more astute over recent months as several of Fiat's traditional markets have turned down, leaving the former Fiat Auto operations in the red but the group result has been kept comfortably in the black by Chrysler's strong performance in the recovering US market.

Over the first quarter consolidated revenue was €20.2bn and Ebit was €895m, a margin of 4.4%. Comparisons with the reported year-ago figures are not worthwhile as Chrysler was not a consolidated subsidiary at that time.

Figure 6: Fiat SpA results

Fiat SpA Unit Q1-12 Yr to Dec 11 9Mo-11 H1-11 Q1-11 Yr to Dec 10

Group data Data % ch. Data % ch. Data % ch. Data % ch. Data % ch. Revenue € mils 20,221 119.6 59,559 66.0 39,915 51.0 22,363 24.3 9,210 7.1 Trading profit € mils 866 245.0 2,392 115.1 1,627 105.2 776 44.5 251 9.1 Operating profit € mils 895 256.6 3,336 236.3 2,628 242.2 1,834 256.8 251 8.2 Pre-tax profit € mils 520 239.9 2,185 209.5 1,796 254.9 1,514 471.3 153 10.1 Net profit € mils 379 - 1,651 643.7 1,386 740.0 1,274 - 37 - Employees 000's 200.6 44.2 197.0 43.0 195.7 40.6 196.4 41.1 139.1 5.3

Unit sales 000's 1,062.3 103.6 4,057.1 93.7 2,205.2 39.9 1,272.8 16.5 521.8 (2.5) Fiat Auto 000's 452.0 (12.8) 2,032.9 (2.3) 1,547.4 (1.3) 1,087.0 0.0 518.6 (2.6) Chrysler 000's 607.0 2,011.0 648.0 179.0 Ferrari/Maserati 000's 3.3 4.3 13.2 7.4 9.8 10.9 6.8 11.3 3.2 13.2 Per unit Revenue € 19,035 7.8 14,680 (14.3) 18,100 8.0 17,570 6.8 17,652 9.8 Operating profit € 843 75.1 822 73.6 1,192 144.7 1,441 206.4 481 11.0 Pre-tax profit € 490 66.9 539 59.7 814 153.8 1,190 390.5 293 12.9 Net profit € 357 403.1 407 283.9 629 500.6 1,001 1,089.0 71 (280.7) Per employee Revenue € 100,812 52.3 302,298 16.1 203,982 7.4 113,891 (11.9) 66,191 1.7 Operating profit € 4,462 147.4 16,932 135.2 13,430 143.3 9,340 152.8 1,804 2.8 Pre-tax profit € 2,592 135.8 11,090 116.5 9,178 152.4 7,711 304.9 1,100 4.5 Net profit € 1,890 610.6 8,380 420.2 7,083 497.3 6,488 881.3 266 (267.3) Sales units 5.3 41.2 20.6 35.5 11.3 (0.5) 6.5 (17.5) 3.7 (7.4) Return on revenue Operating profit % 4.4 1.7 5.6 2.8 6.6 3.7 8.2 5.3 2.7 0.0 Pre-tax profit % 2.6 0.9 3.7 1.7 4.5 2.6 6.8 5.3 1.7 0.0 Net profit % 1.9 1.5 2.8 2.2 3.5 2.8 5.7 5.2 0.4 0.6 Revenue by division Fiat Gp Automob's € mils 27,980 0.4 21,085 1.7 14,565 2.6 7,015 2.6 Chrysler € mils 23,609 12,609 3,325 Mass market brands € mils 18,184 Ferrari € mils 2,251 17.3 1,605 19.0 1,080 19.6 491 18.6 Maserati € mils 588 0.3 445 2.3 303 0.7 135 6.3 Luxury / Performance € mils 660 Fiat Powertrain € mils 4,450 5.7 3,438 10.2 2,436 15.7 1,196 35.0 Magneti Marelli € mils 2,015 5,860 8.5 4,400 11.2 3,026 13.2 1,486 16.7 Other & intra-group € mils (638) (5,179) 26.4 (3,667) 15.6 (2,372) 8.4 (1,113) 18.8 Trading profit by division Fiat Gp Automob's € mils 430 (29.2) 445 (4.9) 317 (6.2) 130 (15.0) Chrysler € mils 1,345 706 150 Mass market brands € mils 831 Ferrari € mils 312 3.0 212 10.4 135 16.4 53 35.9 Maserati € mils 40 66.7 26 62.5 18 50.0 9 125.0 Luxury / Performance € mils 71 Fiat Powertrain € mils 131 (6.4) 98 (1.0) 69 27.8 23 0.0 Magneti Marelli € mils 36 181 84.7 127 84.1 84 86.7 34 78.9 Other & intra-group € mils (43) (47) (21.7) 13 (125.5) 3 (110.7) 2 (125.0)

Notes: (1) Q1 is Jan-Mar, Q2 is Apr-Jun, Q3 is Jul-Sep, Q4 is Oct-Dec (2) % ch is change versus corresponding year-ago data (3) Full-year data taken from annual reportt may not reconcile to quarterly data due to restatements. (4) Per Unit & Per Employee data include non-automotive op's

Passenger Car OEM Quarterly Data Book Q2-2012 Section 1: Company updates 16

Excluding Chrysler, Fiat's first-quarter revenue fell by 5.7% to €8,685m mainly reflecting volume declines in Europe, where trading conditions were generally weak, particularly in Italy where not only did demand fall by 21% but production and shipments for Fiat were also affected by strikes in the car transport sector.

For Ferrari and Maserati, which Fiat now reports under the heading Luxury and Performance Brands, revenues increased 11.5% to €0.7bn. For the Components division revenue was stable at €2.0bn.

Chrysler and the former Fiat Auto operations are now reported under the heading Mass-market Brands, with the headline results being split between four regions: NAFTA, LATAM, APAC and EMEA.

The consolidated trading profit was €866m. Excluding Chrysler, Fiat made a trading loss of €(6)m compared with a year-ago profit of €251m. Consolidated Ebit was €895m, falling to €12m excluding Chrysler. The decline in like for like profit was attributable to two regions:

EMEA (Europe, Middle East, Africa) - where the mass-market brands incurred a loss of €(170)m; Latin America - where Ebit dropped to €235m from a reported €285m in Q1-2011.

Outlook The renewed downturn in Europe has caused Fiat to doubt the volume assumptions underpinning its financial forecasts and the Group‟s plans for Europe up to the end of 2014. As the outlook is uncertain the company has offered its full-year forecasts in a range determined by two broad scenarios ranging from continuing depressed trading conditions in Europe to a gradual stabilisation and recovery at the of 2012. Accordingly its forecasts are as follows:

 Revenue: > €77bn;  trading profit: €3.8-4.5bn;  net profit: €1.2-1.5bn;  net industrial debt: €5.5-6.0bn.

The company also said it will continue its strategy of targeted alliances to optimise capital commitments and reduce risks.

Corporate news  Towards the end of July Fiat and PSA reached agreement for Fiat's shareholding in the Sevelnord joint venture to be transferred to PSA on or before December 31, 2012 at a nominal value. Sevelnord will continue to produce LCVs for the two groups until Euro6 emissions standards come into effect at the end of 2016.  In early July Fiat notified VEBA (Voluntary Employee Beneficiary Association, a trust established to pay health care benefits for retirees from Chrysler) of Fiat‟s exercise of its option to purchase a portion of the interest held in Chrysler by VEBA. The option covers about 3.3% of Chrysler‟s outstanding equity and following the purchase Fiat will hold a 61.8% stake in Chrysler.  In May Fiat and Mazda signed a non-binding Memorandum of Understanding for the development and manufacturing of a new roadster for the Mazda and Alfa Romeo marques based on Mazda‟s next-generation MX-5 rear-wheel-drive architecture. Although Fiat has denied it is looking to take a stake in Mazda, a deepening of this new relationship is not impossible - Fiat's CEO, Sergio Marchionne, has acknowledged that Fiat is looking for an Asian partner following the announcement of the alliance between PSA and GM. At the Geneva Show in March, Marchionne commented: “We talk continuously with Suzuki; we talk with Mazda; we talk with everyone.”  Sergio Marchionne has indicated that the company will reduce planned investments in Europe in 2012 by €500m in response to the continuing market weakness. Fiat has stopped additional investments and postponed the introduction of new models in Europe. Marchionne said that the new Grande Punto model, which was originally scheduled to be built beginning in 2013, "is one of the projects we are reconsidering in line with the changes" of the market in Europe. He also acknowledged that Fiat is discussing partnerships "with several people, and in some cases our architectures, including the one for the Punto, are involved in the talks."

Passenger Car OEM Quarterly Data Book Q2-2012 Section 1: Company updates 17

SALES & MODEL PLANS Figure 7: Fiat SpA model plans Lifecycle Lifecycle Brand Model Segment Start End Abarth 500 & 500C City 2008 2015 Abarth Punto Evo Supersport Small 2009 2013 Abarth Roadster Sports 2013 2020 Alfa Romeo 147 Lower Medium 2000 2010 Alfa Romeo 159 Upper Medium 2005 2012 Alfa Romeo 4C Sports 2013 TBA Alfa Romeo 8C Sports 2007 2011 Alfa Romeo C-SUV 'Kamal'? (X3, Q5 rival) Crossover 2013 2020 Alfa Romeo D SUV SUV 2015 2022 Giulia sedan followed by st. Alfa Romeo Upper Medium 2014 2021 wagon Alfa Romeo Giulietta Lower Medium 2010 2017 Alfa Romeo Large Sedan Executive 2014 2021 Alfa Romeo MiTo Lower Medium 2008 2013 Alfa Romeo MiTo five-door Lower Medium 2013 2020 Alfa Romeo Spider replacement Convertible 2014 2022 Chrysler 200 Sedan / Convertible Upper Medium 2011 2013 Chrysler 200 Sedan / Convertible Upper Medium 2013 2019 Chrysler 300 Upper Medium 2010 2016 Chrysler 300 Hybrid Upper Medium 2013 2016 Chrysler CUV (250X) Crossover 2013 2020 Chrysler New compact (100C?) Lower Medium 2013 2020 Chrysler Sebring Upper Medium 2007 2010 Chrysler Small Car (Java) Small 2013 2020 Chrysler Town & Country/Grand Voyager MPV 2007 2014 Town & Country/Grand Voyager Chrysler MPV 2014 2021 replacement Dodge Atos by Dodge City 2002 2012 Dodge Attitude Small 2005 2011 Dodge Attitude replacement Small 2011 2017 Dodge Avenger Upper Medium 2006 2012 Avenger replacement (reportedly Dodge Upper Medium 2012 2019 dropped) Dodge Caliber Lower Medium 2006 2011 Dodge Challenger Coupe 2008 2015 Dodge Challenger replacement Coupe 2015 2022 Dodge Charger Upper Medium 2010 2016 Dodge Charger replacement Upper Medium 2016 2022 Dodge Dart Lower Medium 2012 2018 Dodge Durango SUV 2010 2017 Dodge Durango replacement SUV 2017 2024 Dodge Grand Caravan MPV 2007 2014 Dodge Grand Caravan replacement MPV 2014 2021 Dodge Journey Crossover 2008 2014 Dodge Journey replacement Crossover 2014 2020 Dodge Magnum? Upper Medium 2014 2021 Dodge Nitro Crossover 2006 2011 Nitro replacement under Dodge Crossover TBA TBA consideration Dodge Stinger Small 2013 2020

Passenger Car OEM Quarterly Data Book Q2-2012 Section 1: Company updates 18

Dodge Viper (Branded 'SRT Viper'?) Coupe 2012 2020 Ferrari 458 Italia Sports 2009 2016 Ferrari 599 GTB Fiorano, GTO & GTS Sports 2006 2012 Ferrari 612 Scaglietti Sports 2004 2011 Ferrari California Sports 2008 2015 Ferrari FF Sports 2011 2017 Fiat 500 & 500C City 2007 2015 Fiat 500 EV City 2012 2015 Fiat 600 City 1995 2010 Fiat 600 City 2013 2020 Fiat Bravo/Ritmo Lower Medium 2006 2013 C-Sedan (Bravo/Ritmo Fiat Lower Medium 2012 2019 replacement) Fiat Croma Upper Medium 2005 2011 Fiat Doblò / Panorama Compact MPV 2009 2017 Fiat 500L Compact MPV 2012 2019 Fiat Freemont Crossover 2011 2014 Fiat Grande Punto/Punto Evo Small 2005 2013 Fiat Idea Compact MPV 2003 2011 Fiat Linea Lower Medium 2006 2014 Fiat Linea replacement Lower Medium 2014 2021 Fiat Mille/Uno City 1984 2013 Fiat Multipla MPV 2012 2019 Fiat Novo Uno & Uno Way City & Crossover 2010 2021 Fiat Palio, Siena & Albea Small 1997 2011 Palio, Siena & Albea Fiat Small 2011 2018 replacements Fiat Panda City 2003 2015 Fiat Panda 3 City 2011 2018 Fiat Qubo & Trekking Compact MPV & Crossover 2008 2017 Fiat Sedici Lower Medium 2005 2013 Fiat Sedici replacement B-SUV Lower Medium 2013 2016 Fiat Stilo (Bravo replaced) Lower Medium 2001 2010 Fiat Ulysse MPV 2002 2010 Jeep B-SUV (Trailduster?) SUV 2013 2018 C SUV (replaces Compass & Jeep SUV 2013 2020 Patriot) Jeep Compass SUV 2006 2012 Jeep Grand Cherokee SUV 2010 2016 Jeep Grand Wagoneer SUV 2013 2019 Jeep Liberty/Cherokee SUV 2007 2013 Liberty/Cherokee repl. Jeep SUV 2013 2020 (Renegade?) Jeep Patriot SUV 2006 2012 Jeep Wrangler & Wrangler Unlimited SUV 2006 2016 Wrangler & Wrangler Unlimited Jeep SUV 2016 2025 replacements Lancia CUV (Agrippa?) Crossover 2013 2020 Lancia Delta (4dr Beta in 2012?) Lower Medium 2008 2013 Lancia Flavia convertible Convertible 2012 2013 Lancia Flavia sedan / convertible Upper Medium 2013 2019 Lancia Grand Voyager MPV 2011 2014 Lancia Musa (not directly replaced) Compact MPV 2004 2012 Lancia Phedra MPV 2002 2010 Lancia Thema Executive 2011 2016

Passenger Car OEM Quarterly Data Book Q2-2012 Section 1: Company updates 19

Lancia Ypsilon City 2003 2011 Lancia Ypsilon replacement City 2011 2018 GranCabrio/GranTurismo Maserati Sports 2009 2015 convertible Maserati GranTurismo Sports 2007 2014 Maserati Kubang SUV 2013 2021 Maserati Quattroporte Sports 2004 2012 Maserati sub-Quattroporte sedan(s) Executive 2013 2020 Ram 100 (Dakota replacement) Pick-up 2013 2019 Ram 1500 Pick-up 2008 2014 Ram 2500 HD & 3500 HD Pick-up 2009 2015 Ram Dakota Pick-up 2004 2011 Compact MPV (van confirmed, Ram Doblo 2012 2018 passenger version possible)

 In H1-2012 new registrations of Fiat cars in the 30 EU plus EFTA states fell by 16.5% to 456,200 units, mainly due to the weak Italian market which fell by 19.7%. The only bright spots for Fiat were a 41.4% rise in Jeep sales to 15,200 units and a 1% increase in Lancia sales to 56,100 units. Alfa Romeo sales dropped by 31.1% to 54,100 units and Fiat-brand sales were 17.5% lower at 327,600 units.  The company has confirmed plans to introduce a crossover variant of the 500, to be called the 500X. It will be based on the same platform as the 500L, derived from the Punto and reportedly be built at the Mirafiori plant in Turin, alongside a new crossover model from Jeep. Sales of the model will begin in the US, Europe and other markets in late 2013 or early 2014.  In May Indian vehicle manufacturer Premier (formerly Premier Automobiles) signed a three-year agreement with Fiat India Automobiles for the supply of Fiat's 1.3-litre multi-jet diesel engine for installation in Premier's compact SUV, the Rio. Initially, Fiat will supply 28,000 engines to Premier during the three-year contract. Depending on demand for the Rio, this volume may increase further. This engine will be produced by Fiat at its manufacturing facility in Ranjangaon, in Maharashtra. Premier's plant at Chinchwad, Pune in the same state is around 60km away. This proximity is expected to enable daily just-in-time deliveries.  In May Fiat and Fiat Industries announced the suspension of activities in Iran in response to the trade sanctions imposed on the country by Europe and the US due to Iran‟s nuclear programme. The company said that sales by Fiat‟s subsidiaries in Iran during the past few years “were totally immaterial in a quantitative and qualitative sense and any concerned products were sold for commercial and civilian use only.”  Fiat has confirmed that it is taking over responsibility for distribution of its vehicles in India. Currently Tata handles distribution of Fiat models through joint Tata-Fiat dealerships. The change is part of a revision of the joint venture Fiat operates with Tata. Fiat has expressed its disappointment at slower than expected sales in the country since the launch of the venture in 2006 and will now set up a special company to manage its commercial and distribution activities in India, basing the new network on the 178 existing Fiat-franchised Tata dealers across the country. PRODUCTION

 In June GAC Fiat Automobiles, the 50:50 joint venture between Fiat and GAC in China, held a ceremony at its new plant in Changsha, to celebrate completion of the new facility and the rollout of the Fiat Viaggio, the first Fiat model produced in China. The new 4-door, 5-passenger Viaggio is based on the CUSW (Compact US Wide) architecture - the most advanced within the Fiat Group - which is also the basis of the new Dodge Dart.  The new plant will have an initial annual capacity of 140,000 vehicles and 220,000 engines in phase I and an annual capacity of 250-300,000 vehicles in phase 2. It incorporates Fiat's World Class Manufacturing (WCM) methodology, which Fiat began developing, implementing and refining in 2005 with the purpose of reducing waste, increasing productivity and restoring dignity to employees. The methodology has been adopted at all Fiat and Chrysler plants worldwide. The joint venture between Fiat and Guangzhou Automobile Company was founded in March 2010 with investment totalling Yuan 5bn (US$791m).

Passenger Car OEM Quarterly Data Book Q2-2012 Section 1: Company updates 20

 The continuing weakness of the European market may lead Fiat to close a second Italian plant, following the closure of Termini Imerese in Sicily in 2011. The company has already had to suspend production of some models temporarily to avoid excess inventory. Closure may be avoided if excess European capacity can be viably utilised to supply the North American market but such viability will only be achievable if the workforce agrees to more flexibility. This probably brings us to the reason that a possible closure has been publicly discussed - the workforce at Cassino has not yet agreed to the flexible working conditions which workers at other Fiat plants have agreed to.

Passenger Car OEM Quarterly Data Book Q2-2012 Section 1: Company updates 21

Ford Motor Company

FINANCIAL NEWS Jan-Jun 2012 Q2-2012 pre-tax operating profit was US$1.8bn, a decrease of US$1bn from Q2-2011. Ford has now posted a pre- tax operating profit for 12 consecutive quarters. Net profit was US$1bn, a decrease of US$1.4bn from Q2-2011, reflecting lower operating results except for Ford North America and higher tax expense.

Figure 8: Ford results

Ford Unit H1-12 Q2-12 Yr to Dec 11 9Mo-11 H1-11 Q1-11

Group data Data % ch. Data % ch. Data % ch. Data % ch. Data % ch. Revenue $ mils 65,745 (4.2) 33,300 (6.3) 136,300 5.7 101,688 5.3 68,641 3.0 Pre-tax profit $ mils 3,633 (32.5) 1,595 (38.8) 8,681 21.4 7,228 5 5,382 8.0 Net profit $ mils 2,436 (50.8) 1,040 (56.6) 20,213 208.1 6,598 4 4,949 5.7 Employees 000's 166 0.0 166 0.0 166 1.2 166 1.8 166 (6.7)

Unit wholesales 000's 2,805 (4.0) 1,447 (4.7) 5,695 3.1 4,268 3.2 2,922 2.1 Ford N. America 000's 1,370 1.4 719 (2.3) 2,686 11.3 1,993 10.8 1,351 12.0 Ford S. America 000's 237 (4.8) 119 (11.9) 506 3.5 382 10.1 249 7.8 Ford Europe 000's 731 (14.4) 359 (14.9) 1,602 1.8 1,211 3.0 854 2.2 Ford Asia Pacific 000's 467 (0.2) 250 10.6 901 7.5 682 13.1 468 17.6 PAG 000's 0 0 0 0 0 Per unit Revenue $ 23,439 (0.2) 23,013 (1.6) 23,933 2.5 23,826 2.1 23,491 0.9 Pre-tax profit $ 1,295 (29.7) 1,102 (36) 1,524 17.8 1,694 1.9 1,842 5.8 Net profit $ 868 (48.7) 719 (54) 3,549 198.8 1,546 0.3 1,694 3.5 Per employee Revenue $ 396,054 (4.2) 200,602 (6.3) 821,084 4.4 612,578 3.4 413,500 10.5 Pre-tax profit $ 21,886 (32.5) 9,608 (38.8) 52,295 20.0 43,542 3.3 32,422 15.8 Net profit $ 14,675 (50.8) 6,265 (56.6) 121,765 204.4 39,747 1.7 29,813 13.3 Sales units 16.9 (4.0) 8.7 (4.7) 34.3 1.9 25.7 1.4 17.6 9.5 Return on revenue Pre-tax profit % 5.5 (2.3) 4.8 (2.5) 6.4 0.8 7.1 (0.0) 7.8 0.4 Net profit % 3.7 (3.5) 3.1 (3.6) 14.8 9.7 6.5 (0.1) 7.2 0.2 Revenue by division Ford N. America $ mils 38,299 2.4 19,700 1.3 75,000 16.5 55,330 17.1 37,403 20.5 Ford S. America $ mils 4,682 (10.8) 2,300 (21.5) 11,000 11.1 8,229 16.3 5,250 13.3 Ford Europe $ mils 14,369 (18.8) 7,100 (21.1) 33,800 14.6 25,492 19.0 17,705 16.5 Ford Asia Pacific $ mils 4,575 10.1 2,300 9.6 8,400 13.5 6,506 24.4 4,156 23.0 PAG $ mils 0 - 0 - 0 - 0 - 0 - Automotive total $ mils 61,925 (4.0) 31,400 (6.2) 128,200 7.5 95,557 7.3 64,514 5.0 Financial services $ mils 3,820 (7.4) 1,900 (7.4) 8,100 (16.5) 6,131 (18.0) 4,127 (20.3) Other $ mils 0 0 0 0 PBT by division Ford N. America $ mils 4,143 10.4 2,010 5.3 6,191 14.5 5,302 12.6 3,752 20.2 Ford S. America $ mils 59 (87.6) 5 (98.1) 861 (14.8) 753 3.3 477 (2.3) Ford Europe $ mils (553) (217.9) (404) (329.5) (27) (114.8) 163 (18.9) 469 18.1 Ford Asia Pacific $ mils (161) (573.5) (66) (6,700.0) (92) (148.7) (9) (105.5) 34 (74.8) PAG/Other $ mils (524) (20.4) (163) (683) - (894) - (658) (450.0) Automotive total $ mils 2,964 (27.2) 1,382 (31.0) 6,250 50.7 5,315 (2.6) 4,074 (5.9) Financial services $ mils 903 (31.0) 447 (25.7) 2,431 (19.0) 1,913 (22.0) 1,308 (22.6) Other $ mils 0 #DIV/0! 0 #DIV/0! 0 - 0 (100.0) 0 (100.0)

Notes: (1) Q1 is Jan-Mar, Q2 is Apr-Jun, Q3 is Jul-Sep, Q4 is Oct-Dec (2) % ch is change versus corresponding year-ago data

(3) Full-year data from annual report may not reconcile to quarterly data due to restatements. (4) Per Unit & Per Employee data include non-automotive op's

Passenger Car OEM Quarterly Data Book Q2-2012 Section 1: Company updates 22

The automotive division reported a drop in pre-tax profit to US$1.38bn from US$2.28bn in Q2-2011. The operating margin fell by 2.1pts to 4.9%. The decline reflected lower results at Ford Europe, Ford South America, and Ford Asia Pacific Africa as detailed below.

For the second consecutive quarter, North American pre-tax profit exceeded US$2bn, and the operating margin exceeded 10%. The increase reflected higher net pricing, improved contribution costs, and other factors, offset partly by higher structural costs for growth, and unfavourable volume and mix including an adverse change in US dealer stocks.

In Europe Ford reported a pre-tax loss of US$(404)m compared with a year-ago profit of US$176m. This brought the first-half loss to US$(553)m. The adverse factors were principally the weak market, a lower share and high spending on incentives.

The result for South America came in at little better than breakeven, at US$5m compared with US$267m in Q2- 2011. The decline reflected lower volume, higher costs, and adverse exchange rate movements.

In the Asia Pacific Africa region the markets were strong compared with a year ago, but higher costs associated with new products and investments resulted in a loss of US$(66)m compared with a Q2-2011 profit of US$1m.

Other Automotive reported a loss of US$(163)m for Q2-2011, compared with a year-earlier loss of US$(76)m. The loss mainly reflects net interest expense and an unfavourable fair market value adjustment, primarily from the company‟s investment in Mazda.

Ford Credit reported pre-tax profit of US$438m, down by US$166m from the Q2-2011 figure, mainly due to fewer lease terminations and a lower financing margin.

Outlook Ford began the year saying it expected Automotive pre-tax operating profit to improve. It has now recognised it is likely to be about equal or lower, mostly due to the further weakening of the European market but also to the weaker outlook for South America. The expected loss in Europe has been increased to US$(1)bn from a previous range of US$(500-600)m.

Automotive structural costs are expected to increase by less than US$2bn to support higher volumes, new product launches and global growth plans. Although the company expects an increase in commodity costs, the increase is not expected to be material.

Corporate news  In July Ford went public with its criticism of the European commission's proposed negotiations with Japan over a free trade agreement. The company issued the following statement: "It is troubling that the European Commission – in the midst of a serious economic crisis – would propose launching negotiations with Japan over a free trade agreement before the Japanese remove important non-tariff barriers against the European auto industry, especially given that the EU automotive sector has a significant trade deficit with Japan which a free trade agreement is not expected to reverse. Ford fully believes in free and fair trade, but it needs to be truly fair. This requires the removal of established tariff and non-tariff barriers, the prevention of new non-tariff barriers, an absence of currency manipulation, and reciprocal import-export liberalisation by trading nations. At a time when vehicle sales in Europe are their lowest point in nearly two decades, a one-sided trade agreement that brings a wave of imports into the market without a corresponding outflow of exports could further damage the European economy and imperil the close to 12 million jobs supported by the automotive sector in Europe."  At the end of May Ford and Automotive Components Holdings announced definitive agreements with Ventra Sandusky for the sale of ACH‟s business in automotive headlamps and taillights and the ACH plant in Sandusky, Ohio. Ventra Sandusky also will run the ACH automotive lighting service parts operation in Bellevue, Ohio.

Passenger Car OEM Quarterly Data Book Q2-2012 Section 1: Company updates 23

 According to a report in Automotive News Ford is entering contract talks with the Canadian Auto Workers union with the intention of closing a US$15 an hour labour cost gap compared with what the company pays its US workers. Ford employs 7,400 employees at five plants in Canada and pays US$79 an hour for wages and benefits to its hourly workers compared with US$64 an hour in the US.

SALES & MODEL PLANS Figure 9: Ford model plans Lifecycle Lifecycle Brand Model Segment Start End Ford B-CUV Crossover 2013 2020 Ford B-MAX Compact MPV 2011 2017 Ford C-MAX Compact MPV 2003 2010 Ford C-MAX & Grand C-MAX Compact MPV 2010 2017 Ford Crown Victoria (fleet order only) Upper Medium 1991 2011 Ford EcoSport Crossover 2012 2019 Ford Edge Crossover 2006 2013/14 Ford Escape & Escape Hybrid Crossover 2000 2012 Ford Escape replacement (Kuga-based) Crossover 2012 2018 Ford Everest/Endeavour SUV 2003 2012 Ford Expedition & Expedition EL SUV 2006 2012 Ford Explorer SUV 2002 2010 Ford Explorer SUV 2010 2018 Ford Explorer Sport Trac Pick-up 2006 2010 Ford F-150 Pick-up 2003 2013 Ford F-250, F-350, F-450 & F-550 Super Duty Pick-up 2007 2014 Ford Falcon Upper Medium 2008 2014 Ford Falcon Ute Pick-up 2008 2015 Ford Fiesta hatchbacks Small 2001 2010 Ford Fiesta sedan Small 2004 2010 Ford Fiesta sedan & hatchbacks Small 2008 2015 Ford Fiesta Trail Crossover 2005 2010 Ford Figo Small 2010 2017 Ford Flex Crossover 2008 2015 Ford Focus Lower Medium 2010 2017 Focus/Focus Europa (Europe, Mexico, Africa, Asia- Ford Lower Medium 2004 2010 Pacific) Ford Focus (North America) Lower Medium 2007 2010 Ford Focus BEV (electric) Lower Medium 2011 2017 Ford Focus Coupé-Cabriolet Coupé-Cabriolet 2006 2011 Ford Fusion & Fusion Hybrid (sedan for North America) Upper Medium 2005 2012 Ford Fusion / Mondeo Upper Medium 2012 2019 Ford Fusion (small hatchback for Europe & India) Small 2002 2010 Ford Galaxy MPV 2006 2013 Ford i-Max Compact MPV 2007 2010 Ford Ikon Small 1999 2011 Ford Ka (Americas) City 2007 2016 Ford Ka (Europe) City 2008 2015 Ford Kuga Crossover 2008 2015 Ford Mondeo/Mondeo-Zhisheng Upper Medium 2007 2014 Ford Mustang Coupé-Cabriolet 2004 2014 Ford new Mustang Coupé-Cabriolet 2013 2020 Ford Ranger (Americas) Pick-up 1992 2011 Ford Ranger (Europe & Asia-Pacific) Pick-up 2006 2011

Passenger Car OEM Quarterly Data Book Q2-2012 Section 1: Company updates 24

Ford S-MAX/Mai Ke Si MPV 2006 2013 Ford Taurus Upper Medium 2009 2013 Ford Territory SUV 2011 2016 Ford Yihu (Escape for China) Crossover 2003 2011 Lincoln Mark LT (Mexico only) Pick-up 2009 2012 Lincoln MKC Crossover 2012 2019 Lincoln MKR Crossover 2011 2017 Lincoln MKS Executive 2008 2015 Lincoln MKT Crossover 2009 2015 Lincoln MKX Crossover 2006 2013 Lincoln MKZ Executive 2005 2012 Lincoln MKZ replacement Executive 2013 2020 Lincoln Town Car (fleet order only) Executive 1997 2010 Mercury Grand Marquis (fleet order only) Upper Medium 1994 2010 Mercury Mariner & Mariner Hybrid Crossover 2004 2010 Mercury Milan & Milan Hybrid Upper Medium 2005 2010 Mercury Mountaineer SUV 2000 2010

 Ford's first half wholesales fell by 4% to 2.805m units. In NAFTA there was a 1.4% rise to 1.37 million units; in S. America there was a 4.8% decline to 237,000 units; in Europe there was a 14.4% drop to 731,000 units and in Asia Pacific, Africa wholesales were virtually unchanged at 467,000 units.

 Over the first half Ford's US market share dropped to 15.4% from 16.7% in H1-2011. In South America its share dipped by 0.1pts to 9.4% and in Europe it fell by 0.3pts to 8.1%. In Asia Pacifica, Africa there was also a 0.3pts fall to 2.4%.  Gunnar Herrmann, the new head of quality for Ford in Europe takes over at the beginning of September. He says he wants the company to become the industry's quality leader. Ford has Toyota's Prius in its sights with the new C-Max Hybrid which will offer projected class-leading fuel economy of 47mpg city (US), beating the Prius v by 3mpg, with a US$1,300-lower base price and 50hp more power. Ford offers C-Max Hybrid buyers an expected payback period of two years for the hybrid technology premium compared with other small crossovers - about half of the four-year period Ford research shows could trigger more mainstream hybrid sales. The C-Max Hybrid will have a launch base price of US$25,995, including destination and delivery, which is US$1,300 lower than Toyota Prius v. The C-Max Hybrid is being produced at Ford's Wayne, Michigan Assembly Plant alongside the Focus, Focus Electric and Focus ST. The C-Max Hybrid is one of five electrified vehicles Ford plans to produce in North America in 2012. The others include the Focus Electric, of which production began late 2011; the C-Max Energi plug-in hybrid due this autumn, offering “better overall range than any plug-in hybrid”; a 47mpg Fusion Hybrid this autumn and a Fusion Energi plug-in hybrid which will begin production by the end of 2012, “aiming to be the most fuel-efficient midsize car in the world.”

PRODUCTION  Ford built 1,450,000 cars and trucks in Q2-2012, down 49,000 vehicles from Q2-2011 as rises in North America and Asia Pacific, Africa were more than offset by declines in Europe and South America.  In Q3-2012 the company plans to build 690,000 cars and trucks in NAFTA, an increase of 34,000 from a year earlier. European output is forecast to be down by 31,000 units at 320,000 units, South American output is expected to be 1,000 units higher at 120,000 units and production in Asia Pacific Africa is expected to be up by 65,000 units at 275,000 units.  The continuing downturn in most European markets and the consequently escalating losses for Ford are causing it to consider closing a European assembly plant. Like several other European manufacturers Ford has had to cut production back during 2012.

Passenger Car OEM Quarterly Data Book Q2-2012 Section 1: Company updates 25

In June Ford opened the revamped plant at Louisville, Kentucky, and launched production of its all-new Escape at the plant. Investment of US$600m was required to convert Louisville from producing body-on-frame SUVs to produce small utility vehicles. It has already added 1,800 jobs at the plant, and is adding 1,300 additional workers to a third shift, which is scheduled to start in autumn. With this, the total number of hourly workers at the facility will reach 4,200 people. The upgraded plant is capable of producing up to six different vehicles at the same time, making it Ford's most flexible in the US. The upgrade included the installation of new tooling and improved equipment in the final assembly area and body shop. This includes more than 1,000 robots and 20 miles of conveyors. The new Escape produced at this plant is the first of a new line of compact SUVs to be built off of Ford's global C-car platform. The same vehicle will be produced and sold in Europe and China as the Kuga.  Ford's manufacturing operations in Australia have announced plans to cut up to 440 jobs, or about 15% of the current workforce of around 3,000, and to reduce production by almost 30%, reflecting falling sales of the company's Falcon model. Production is to be cut from 209 vehicles per day to 148 vehicles per day from November 2012 in response to a change in customer preferences, which has resulted in an overall decline in sales of large vehicles in the Australian market.  In India Ford has announced the completion of expansion work at its engine plant near Chennai, 14 months after the project began. The expansion boosts the facility‟s capacity by 36% to 340,000upa and brought 200 new jobs to the plant.  In June Ford‟s new flexible Rayong plant in Thailand officially began operations with the launch of the new Ford Focus. Ford invested US$450m in the new Thai plant, its second in the country. Rayong is Ford‟s fifth plant globally to build the new Focus, joining plants in Chongqing, China; Saarlouis, Germany; St Petersburg, Russia, and Wayne, Michigan. The Thai-built focus will be sold cross the ASEAN region, Australia, New Zealand and South Africa. Sales of the model begin in Thailand in August.  Also in June the company announced the planned closure of its Santa Anna plant in the Philippines in December. The plant builds the Ford Escape. After the closure Ford will continue to supply vehicles for the Philippine market from its facilities elsewhere in the region, particularly Thailand.  Despite this closure the company is considering opening a plant in Indonesia, a market where car demand is slightly lower than in Thailand but is expected to grow larger soon.

Passenger Car OEM Quarterly Data Book Q2-2012 Section 1: Company updates 26

Fuji Heavy Industries (Subaru)

FINANCIAL NEWS Year to March 2012 The effects of the Great East Japan earthquake and tsunami, as well as the floods in Thailand have distorted all the Japanese OEM results for 2011/12 to some extent though the strength of the yen is a longer term concern.

In FHI‟s case revenue for the year was just 4% lower as sales fell by 2.6% to 640,000 units. The full-year performance was helped by a strong fourth-quarter which saw revenue grow by 20% as sales rose by 23%.

Figure 10: FHI results

Fuji Heavy Unit Yr to Mar 12 Q4-11/12 9Mo-11/12 H1-11/12 Yr to Mar 11 Q4-10/11

Group data Data % ch. Data % ch. Data % ch. Data % ch. Data % ch. Revenue ¥ bn 1,517.1 (4.0) 487.7 20.1 1,029.4 (12.4) 655.0 (18.5) 1,580.6 10.6 Operating profit ¥ bn 44.0 (47.8) 16.1 51.2 27.9 (62.1) 18.8 (67.3) 84.1 207.6 Pre-tax profit ¥ bn 52.9 (16.3) 5.8 - 47.0 (34.9) 40.2 (27.8) 63.2 Net profit ¥ bn 38.5 (23.6) 1.7 - 36.8 (37.1) 32.8 (27) 50.3 Employees 000's 27.66 0.0 27.66 0.0 27.74 0.0 27.74 0.0 27.66 (0.3)

Unit sales 000's 640.0 (2.6) 208.0 23.1 432.0 (11.5) 265.9 (19.7) 657.0 16.7 Domestic 000's 172.0 8.9 58.0 45.0 114.0 (3.4) 72.6 (18.0) 158.0 (7.6) Overseas 000's 468.0 (6.2) 150.0 16.3 318.0 (14.1) 193.3 (20.4) 499.0 27.3 Per unit Revenue ¥ mils 2.37 (1.5) 2.34 (2.4) 2.38 (1.0) 2.46 1.5 2.41 (5.2) Operating profit ¥ mils 0.07 (46.4) 0.08 23 0.06 (57) 0.07 (59) 0.13 163.6 Pre-tax profit ¥ mils 0.08 (14.1) 0.03 (152) 0.11 (26) 0.15 (10) 0.10 Net profit ¥ mils 0.06 (21.6) 0.01 (117) 0.09 (29) 0.12 (8) 0.08 Per employee Revenue ¥ mils 54.84 (4.0) 17.63 20.1 37.11 (12.4) 23.61 (18.5) 57.13 10.9 Operating profit ¥ mils 1.59 (47.8) 0.58 51 1.00 (62) 0.68 (67) 3.04 208.4 Pre-tax profit ¥ mils 1.91 (16.3) 0.21 (164) 1.70 (35) 1.45 (28) 2.29 Net profit ¥ mils 1.39 (23.6) 0.06 (121) 1.33 (37) 1.18 (27) 1.82 Sales units 23.1 (2.6) 7.5 23.1 15.6 (11.5) 9.6 (19.7) 23.7 17.0 Return on revenue Operating profit % 2.9 (2.4) 3.3 0.7 2.7 (3.5) 2.9 (4.3) 5.3 3.4 Pre-tax profit % 3.5 (0.5) 1.2 3.4 4.6 (1.6) 6.1 (0.8) 4.0 4.0 Net profit % 2.5 (0.6) 0.3 2.3 3.6 (1.4) 5.0 (0.5) 3.2 4.3 Revenue by division Automobile ¥ bn 1,392.0 (4.3) 449.7 22.7 942.3 (13.4) 595.6 (19.9) 1,454.7 12.2 Aerospace ¥ bn 80.3 (3.1) 25.1 (12.0) 55.1 1.6 37.4 0.0 82.8 (11.2) Industrial ¥ bn 33.7 12.1 8.5 18.4 25.2 10.0 17.4 5.8 30.1 25.5 Other ¥ bn 27.4 (4.6) 9.3 19.8 18.1 (13.6) 12.0 (16.9) 28.7 (3.7) Intra-company ¥ bn (16.3) 3.2 (5.0) 20.0 (11.3) (2.8) (7.4) (2.8) (15.8) 4.8 Op. profit by division Automobile ¥ bn 39.4 (51.0) 14.2 66.7 25.2 (64.9) 17.1 (69.3) 80.4 270.2 Aerospace ¥ bn 2.9 27.7 1.3 (47.8) 1.5 - 1.0 92.0 2.3 (53.1) Industrial ¥ bn 0.5 - 0.0 (128.8) 0.5 310.8 0.3 171.7 (0.1) (97.9) Other ¥ bn 1.0 (29.7) 0.3 (192.6) 0.7 (60.3) 0.4 (70.2) 1.5 (42.9) Intra-company ¥ bn 0.2 92.6 0.2 241.0 (0.1) - 0.1 (1,383.3) 0.1 (88.4)

Notes: (1) Q1 is Apr-Jun, Q2 is Jul-Sep, Q3 is Oct-Dec, Q4 is Jan-Mar (2) % ch is change versus year-ago data (3) Full-year data taken from annual report may not reconcile to quarterly data due to restatements. (4) Per Unit & Per Employee data include non-automotive op's

Passenger Car OEM Quarterly Data Book Q2-2012 Section 1: Company updates 27

Full year operating profit dropped by 47.8% to ¥44bn. The net decline of ¥40.1bn reflects:

 ¥(42)bn – adverse exchange rates;  ¥(5.2)bn - higher R&D expense;  ¥8.0bn – lower selling expenses;  ¥1.2bn - improved sales mix;  ¥(2.2)bn – other.

Net profit of ¥38.5bn was 23.6% lower, a smaller decline than at the operating level due to a non-recurring gain of ¥26.1bn from the sale of a building.

Outlook Although the company anticipates tough trading conditions in 2012/13 it expects sales of its Subaru vehicles to rise 12.7% to an all-time high of 721,000 units due to healthy sales of the new Impreza as well as sales growth in passenger vehicles (i.e. not minicars) in Japan and overseas markets with new product launches.

This increase is expected to underpin a 22.6% rise in consolidated revenue to ¥1,860bn which in combination with cost-reductions is expected to boost operating income by 52.4% to ¥67.0bn. Although a significant rise in percentage terms ¥67bn will only represent a margin of 3.6% which is not only weak by the standards of FHI's peers but also in comparison with the company's own margins in many previous years.

The projections for 2012/13 are based on assumed foreign exchange rates of ¥80 per US dollar and ¥105 per Euro. At the time of writing these assumptions were close to market rates.

Corporate news In May FHI announced the progress of its five-year management plan, Motion-V, for the five years ending March 31, 2016. The company noted that since the plan was first developed, there have been business environment changes such as a better-than-expected sales growth in major markets, centred on North America, a delay in establishing local production in China and the stronger yen exchange rate in world markets. Therefore it has included additional measures in response to those changes, as follows:

1. Revision of sales & marketing strategies

 sales plan in the US market was revised upward to 380,000 units in FY2016.  in the revised plan for sales expansion in China market, FHI will make a shift from local production scheme to car export scheme.

2. Revised scheme of global production system

 it seems difficult to establish local production in China during the period of this mid-term plan.  FHI will enhance production capacity of its existing manufacturing bases in Japan and the US.  FHI will start consideration of its production expansion in North America towards the future.

3. Further steps in an overhaul of cost structures

The global sales target for FY2016 has been lowered by 50,000 units to 850,000 units but the operating profit target of ¥120bn and margin of 6% has not been altered.

SALES & MODEL PLANS Figure 11: FHI model plans Lifecycle Lifecycle Brand Model Segment Start End Subaru Alcyone Coupe/Convertible 2012 2019 Subaru BRZ Sports 2012 2019 Subaru Dex replacement Small 2010 2015

Passenger Car OEM Quarterly Data Book Q2-2012 Section 1: Company updates 28

Subaru Exiga replacement Compact MPV 2015 2022 Subaru Forester replacement Crossover 2016 2024 Subaru Impreza replacement Lower Medium 2014 2021 Legacy/Liberty & Outback Subaru Upper Medium 2015 2021 replacement Subaru Legacy/Liberty Hybrid Upper Medium 2011 2015 Subaru Lucra replacement Kei 2016 2021 Subaru Pleo replacement Kei 2011 2016

 During the first six months of calendar 2012 domestic sales of Subaru passenger cars increased by 27.6% to 94,700 units. Although a healthy-sounding increase Subaru substantially under-performed the overall market which rose by 56.6%, the year-ago figures of course being depressed due to the earthquake/tsunami. The company's exports over the first six months were 52% higher at 190,449 units.  In the US Subaru is outperforming the market with a 24% rise in sales to 164,300 units over the first six months of 2012, increasing its share from 2.08% to 2.26%. The increase is mainly attributable to the new Impreza, sales of which rose by 121% to 46,700 units, but the Legacy also outperformed with a 14% rise to 24,300 units.

PRODUCTION  Production in the first half of calendar 2012 rose by 52% to 377,745 units. Domestic output was 63% higher at 279,481 units and overseas output was 27% higher at 98,264 units. The plan for the year to March 2013 is for a 20% boost to 768,000 units.  FHI plans to increase domestic production to 78% of global output in 2012/13 compared with 73% in 2011/12. This contrasts with other Japanese OEMs which are increasing production outside Japan in response to the strong yen. However, FHI's overseas volumes in most regions are so small that it would be difficult to make the investment case for a new assembly plant. Even in the US where Subaru operates a plant in Indiana (formerly a joint venture with Isuzu) it is producing Toyotas as well, to help make the plant viable.  The one country where Subaru volumes could support local production is China, but FHI's plans for a joint venture with Chery, using Chery's plant at Dalian, have been blocked by the Chinese government. The proposed venture fell foul of Chinese regulations limiting the number of ventures by foreign companies. Toyota already has two ventures in China and has a 16% stake in FHI, therefore the Chinese consider FHI to be part of Toyota and did not approve the new project.

Passenger Car OEM Quarterly Data Book Q2-2012 Section 1: Company updates 29

General Motors

FINANCIAL NEWS Jan-Mar 2012 GM‟s reported first-quarter profits came in ahead of consensus expectations but, like Ford, declined from year-ago levels with much of the decline attributable to Europe. However, the reported results included non-recurring gains of US$1.5bn in Q1-2011 and non-recurring charges of US$0.6bn in Q1-2012 so on a recurring basis the company claims a 10% increase in Ebit to US$2.2bn.

Figure 12: GM results

New GM New GM New GM New GM New GM New GM New GM Unit Q1-12 Yr to Dec 2011 9Mo-11 H1-11 Q1-11 Yr to Dec 2010

Group data Data % ch. Data % ch. Data % ch. Data % ch. Data % ch. Revenue $ mils 37,759 4.3 150,276 10.8 112,286 13.8 75,567 16.9 36,194 15.0 Pre-tax profit $ mils 1,143 (18.6) 5,985 4.3 5,820 23.5 3,998 39.6 1,404 7.8 Net profit $ mils 1,350 (60.4) 9,287 42.8 8,540 69.7 6,448 129.6 3,411 185.2 Employees 000's 207 1.0 207 2.5 210 0.5 208 0.0 205 0.0

Unit sales 000's 2,278 2.7 9,026 7.6 6,790 9.2 4,545 9.4 2,218 11.0 GMNA 000's 703 2.8 2,924 11.4 2,213 14.0 1,468 14.6 684 21.3 GME 000's 398 (8.3) 1,735 4.3 1,324 7.2 917 8.4 434 7.4 GMLAAM 000's ------GMAP 000's ------GMSA 000's 249 1,065 3.9 799 - 522 248 GMIO 000's 928 8.9 3,302 7.5 2,454 (19.3) 1,638 (19.3) 852 (17.4) Per unit Revenue $ 16,576 1.6 16,649 3.0 16,537 4.2 16,626 6.9 16,318 3.6 Pre-tax profit $ 502 (20.7) 663 (3.1) 857 13.1 880 27.6 633 (2.8) Net profit $ 593 (61.5) 1,029 32.7 1,258 55.4 1,419 110.0 1,538 157.0 Per employee Revenue $ 182,411 3.3 725,971 8.2 534,695 13.2 363,303 16.9 176,556 15.0 Pre-tax profit $ 5,522 (19.4) 28,913 1.8 27,714 23.0 19,221 39.6 6,849 7.8 Net profit $ 6,522 (60.8) 44,865 39.4 40,667 68.9 31,000 129.6 16,639 185.2 Sales units 11.0 1.7 43.6 5.0 32.3 8.7 21.9 9.4 10.8 11.0 Return on revenue Pre-tax profit % 3.0 (0.9) 4.0 (0.2) 5.2 0.4 5.3 0.9 3.9 (0.3) Net profit % 3.6 (5.8) 6.2 1.4 7.6 2.5 8.5 4.2 9.4 5.6 Revenue by division GMNA $ mils 24,176 9.3 90,233 8.7 67,122 10.0 45,238 14.4 22,110 14.6 GME $ mils 5,513 (19.8) 26,757 11.1 20,480 19.3 14,329 24.5 6,870 25.8 GMLAAM $ mils ------GMAP $ mils ------GMIO $ mils 6,060 11.7 24,761 15.3 18,337 (27.7) 12,043 (27.7) 5,427 (32.6) GMSA $ mils 3,939 1.1 16,877 9.7 12,677 8,259 3,896 Automotive Intra-Co $ mils (2,360) - (9,759) 12.8 (7,346) - (4,927) - (2,404) - Automotive total $ mils 37,328 - 148,869 10.0 111,270 - 74,942 - 35,899 - Financial services $ mils 431 - 1,410 401.8 1,016 - 625 - 295 - Other $ mils 0 - (3) - 0 - 0 - 0 - PBT by division Ebit by division Ebit by division Ebit by division Ebit by division Ebit by division GMNA $ mils 1,691 (41.6) 7,194 26.5 7,342 48.8 5,147 83.2 2,898 137.9 GME $ mils (846) (747) (580) - (288) (390) GMLAAM $ mils - - - - GMAP $ mils - - - - GMIO $ mils 507 5.6 1,897 (16.1) 1,418 (42.9) 1,053 (42.7) 480 (58.8) GMSA $ mils 83 (7.8) (122) (114.9) 103 - 147 90 Automotive Intra-Co $ mils (85) - (540) (727.9) (163) - (163) - 0 - Automotive total $ mils 1,350 (56.1) 7,682 11.3 8,120 30.5 5,896 47.0 3,078 61.4 Financial services $ mils 181 - 622 382.2 452 - 274 - 130 - Other $ mils (388) - 861 92.6 118 - 317 - 317 -

Notes: (1) Q1 is Jan-Mar, Q2 is Apr-Jun, Q3 is Jul-Sep, Q4 is Oct-Dec (2) % ch is change versus corresponding year-ago data (3) Full-year data is taken from annual report. It may not reconcile to quarterly data due to restatements. (4) Per Unit & Per Employee data include non-automotive op's.

Passenger Car OEM Quarterly Data Book Q2-2012 Section 1: Company updates 30

Group revenue grew by 4.3% to US$37.7bn as sales rose by 2.7% to 2.28m units. Revenue was 9.3% higher in NAFTA, 11.7% higher in international operations, 1.1% higher in South America and 19.8% lower in Europe.

On a recurring basis Ebit was US$2.2bn, up from US$2.0bn in Q1-2011. By region the recurring results were as follows:

 GM North America reported Ebit of US$1.7bn, an improvement of US$0.4bn compared with Q1-2011;  GM Europe reported a loss of US$(0.3)bn compared with break-even;  GM International Operations reported Ebit of US$0.5bn, down US$0.1bn;  GM South America reported and unchanged Ebit of US$0.1bn.

Outlook The company expects its North American results in Q2- and Q3-2012 to be comparable to the first quarter due to the planned downtime at factories that produce full-size trucks.

Corporate news  GM Europe is in continuing discussions as to how to get the operation onto a sustainably profitable footing. During June the company announced it was negotiating with the union, IG Metall, and its works councils over:  the future of Bochum assembly plant, which is targeted for closure at the end of the current Zafira's lifecycle in 2015;  no compulsory redundancies before 2016;

 delaying the introduction of the 2012 wage increase;  a plan to fully utilise all remaining European plants on a three-shift basis.  In addition to these negotiations, at the end of June the Opel supervisory board voted in favour of a mid-term business plan which included substantial product investments. The key elements of the plan are:  Significant investments in the Opel/Vauxhall product portfolio between 2012 and 2016, including 23 new models, 13 new powertrains (including three all-new engine families) and more vehicles with green propulsion, like the Ampera. New products will include models in segments where Opel is currently not present, such as the small Mokka SUV, the lifestyle mini Adam and a premium cabrio.  A new product offensive, combined with new sales strategies, which is expected to lead to market share growth. Any growth in market share is intended to complement Opel‟s plan to return to profitability through greater operational efficiency and cost reduction.  Developing a new, clear brand strategy that is geared toward both traditional and attainable potential customers and that leads to a more defined brand perception.  Clearly defined plans aimed at reducing material, development and production costs. Opel will more effectively leverage the global GM organization. Opel also sees great synergies stemming from the recently formed alliance between GM and PSA Peugeot Citroën.  A co-ordinated and clearly defined export strategy in the GM family focusing on important growth markets. This includes plans for rapid market share growth in markets such as Russia and Turkey, a strategy to go from 5,000 to 20,000 annual Opel sales in China in the coming years, and entering further markets such as Australia in the fourth quarter of this year.  Although PSA is mentioned in the plan it does not appear to be a central part of it. There has been speculation about the possibility of GM and PSA sharing production in Europe but any such co-operation looks some way off.  The mention of “A co-ordinated and clearly defined export strategy in the GM family" is interesting because as this publication has discussed previously, this is an area of conflict within GM which does not seem to have a clear strategy in respect of the roles it expects Chevrolet and Opel to play in emerging markets.

 In July GM announced that Karl-Friedrich Stracke, GM Europe President, was stepping down from his position. His temporary replacement is Steve Girsky, previously Chairman of the Opel Supervisory Board, who will serve as acting head of GM‟s European operations as the company searches for a replacement.

Passenger Car OEM Quarterly Data Book Q2-2012 Section 1: Company updates 31

 The first tangible result of the GM-PSA alliance is a long-term, exclusive agreement to transfer the majority of GM‟s logistics business in Europe to Gefco, the wholly-owned subsidiary of PSA. The agreement will affect the majority of the Opel/Vauxhall, Chevrolet and Cadillac logistics activities in Europe (including Russia) and includes services such as material and component deliveries to manufacturing plants, delivery of finished vehicles to dealerships and the transport of aftersales spare parts to distribution centres. The new agreement will take effect in 2013.  The European Bank for Reconstruction and Development (EBRD) has indicated it is ready to sell its 16.78% stake in the GM-AvtoVAZ joint venture in Russia. Reuters quotes Richard Wallis, EBRD's spokesman in Moscow as saying: "We have been in the joint venture since 2001, it's an extremely long time for the EBRD to stay. Other projects could benefit from the money that had been invested." The joint venture, in which AvtoVAZ and GM each hold a 41.61% stake, was established in 2001 at AvtoVAZ's main production plant in Togliatti to produce the Chevrolet Niva model. According to the EBRD, it provided €153m (US$191.8m) in financing at the start of the project.

SALES & MODEL PLANS Figure 13: GM model plans Lifecycle Lifecycle Brand Model Segment Start End Baojun Baojun 630 Lower Medium 2011 2018 Baojun TBA TBA TBA TBA Buick Enclave Crossover 2007 2012 Buick Encore Crossover 2013 2020 Buick Excelle sedan & wagon Lower Medium 2003 2010 Buick Excelle XT/GT Lower Medium 2009 2015 Buick GL8 MPV 2010 2016 Buick LaCrosse Upper Medium 2009 2016 Buick Lucerne Upper Medium 2005 2011 Buick Park Avenue Upper Medium 2008 2014 Buick Regal Upper Medium 2008 2016 Buick Verano Lower Medium 2011 2017 Cadillac ATS Lower Medium 2012 2018 Cadillac CTS Executive 2007 2013 Cadillac DTS Executive 2005 2011 Cadillac Escalade SUV 2005 2012 Cadillac SRX Crossover 2009 2016 Cadillac SLS Executive 2006 2013 Cadillac STS Executive 2004 2012 Cadillac XLS (SLS replacement) Executive 2013 2018 Cadillac XTS (DTS & STS replacement) Executive 2012 2018 Chevrolet Agile Small 2009 2018 Chevrolet Astra Lower Medium 2007 2010 Chevrolet Avalanche SUV 2006 2012

Chevrolet Aveo / Lova / Sonic Small 2003 2011

Chevrolet (new generation) Aveo Small 2011 2018 Chevrolet Camaro Coupe/Convertible 2008 2017 Chevrolet Caprice (Holden built) Executive 2006 2013

Chevrolet Captiva Crossover 2006 2012

Chevrolet Chevy C2 Small 2000 2010 Chevrolet Classic/Celta/Prisma Small 2000 2013 Chevrolet Cobalt Lower Medium 2004 2010 Chevrolet Colorado Pick-up 2003 2011

Passenger Car OEM Quarterly Data Book Q2-2012 Section 1: Company updates 32

Chevrolet Corsa (S America) Small 2000 2010

Chevrolet Corvette Sports 2004 2012

Chevrolet Cruze / Lacetti Lower Medium 2008 2016

Chevrolet Epica / Tosca (repl. by Malibu) Upper Medium 2006 2011

Chevrolet Equinox SUV 2009 2014 Chevrolet Express/Savana Full size van 2003 2012 Chevrolet GPiX Crossover 2010 2017 Chevrolet HHR Lower Medium 2005 2011 Chevrolet Impala Upper Medium 2005 2013

Chevrolet Lacetti / Optra Lower Medium 2004 2010

Chevrolet Malibu Upper Medium 2003 2011

Chevrolet Meriva Compact MPV 2004 2011 Chevrolet New Sail Small 2010 2017 Chevrolet Niva SUV 2003 2011 Chevrolet Omega Upper Medium 2007 2014 Chevrolet Optra Lower Medium 2003 2010 Chevrolet Orlando Compact MPV 2010 2017 Chevrolet Silverado 1500 Pick-up 2006 2014 Chevrolet Silverado 2500 & 3500 Pick-up 2007 2015 Chevrolet Spark (1st gen) City 2003 2013 Chevrolet Spark/Beat (2nd gen) City 2009 2017 Chevrolet SRV Lower Medium 2006 2010 Chevrolet Suburban SUV 2006 2012 Chevrolet Tahoe SUV 2005 2012 Chevrolet Traverse Crossover 2008 2015 Chevrolet Vectra Lower Medium 2005 2011 Chevrolet Viva Lower Medium 2004 2010 Chevrolet Volt Lower Medium 2010 2017 Chevrolet Zafira Compact MPV 2005 2011 GMC Acadia Crossover 2006 2014 GMC Canyon Pick-up 2003 2011 GMC Granite Crossover 2012 2019 GMC Savana Full size van 2003 2012 GMC Sierra 1500 Pick-up 2006 2014 GMC Sierra 2500 & 3500 Pick-up 2007 2015 GMC Terrain Crossover 2007 2012 GMC Yukon SUV 2005 2012 Holden Barina Small 2005 2012 Holden Barina Spark City 2010 2015 Holden Captiva Crossover 2006 2012 Holden Commodore & SportWagon Upper Medium 2006 2013 Holden Cruze Lower Medium 2009 2015 Holden Epica Upper Medium 2007 2011 Holden Statesman & Caprice Executive 2006 2013 Holden Volt Lower Medium 2011 2017 Opel/Vauxhall Agila Small 2007 2014 Opel/Vauxhall Allegra City 2013 2020 Opel/Vauxhall Ampera Lower Medium 2011 2018 Opel/Vauxhall Antara Crossover 2006 2013

Passenger Car OEM Quarterly Data Book Q2-2012 Section 1: Company updates 33

Opel/Vauxhall Astra Lower Medium 2009 2016 Opel/Vauxhall Corsa Small 2006 2012 Opel/Vauxhall Mokka Compact SUV 2012 2018 Opel/Vauxhall Insignia Upper Medium 2008 2015 Insignia Insignia coupe Upper Medium 2013 2020 Opel/Vauxhall Meriva Compact MPV 2010 2017 Opel/Vauxhall Zafira Compact MPV 2005 2011 Vauxhall VXR8 Executive 2007 2014 Wuling TBC (rebodied Buick Excelle) Lower Medium 2010 2017 Wuling Sunshine, Hongtu & Rongguang Compact MPV 2002 2012

 GM's US sales rose by 4.3% to 1,315,713 units in H1-2012. In China GM‟s sales rose 11.3% to a record 1,417,047 units. In the 30 EU and EFTA markets new registrations of GM brands fell by 10.7% in the first half reflecting a 14.9% drop for Opel/Vauxhall and a 14.2% rise for Chevrolet (see above comment regarding the confused strategy for Opel and Chevrolet).  In July Opel released pictures of its new city car, the Opel Adam, prior to its debut at the Paris show in September. The Adam will be offered alongside the Suzuki-built Agila city car, at least initially, when it goes on sale in 2013. GM would like to develop variants of the base model, similar to the range extension achieved by Mini, if demand looks sufficient.  By the end of 2012, GM will have all-new or freshened cars and crossovers in segments that represent 60% of the US light vehicle market. By the end of 2013, 70% of GM‟s North American portfolio will be new or freshened vehicles compared with 2011. Chevrolet will have launched new vehicles like the Sonic, Spark and Impala. Buick and Cadillac will enter new segments with the launches of the Verano and Encore (Buick) and XTS and ATS (Cadillac).

PRODUCTION  In July GM announced "a realignment of its manufacturing organization to optimize the company‟s global manufacturing footprint and to drive greater efficiencies and cost savings." Tim Lee has become vice president, Global Manufacturing. He retains his position as president, GM International Operations, overseeing regional markets which account for 40% of GM‟s global sales volume and include China, Russia and South Korea. The move is said to underscore the reality of GM‟s manufacturing footprint. GM and its partners currently build vehicles in 30 countries for more than 100 global markets. 70% of GM products are built outside the US.  The new Adam will be built at the Eisenach in Germany. The plant may cease production of the Corsa at the end of its current lifecycle.  In June the company announced plans to add a third shift at its Arlington Assembly plant, generating an estimated 800 jobs for the plant that makes the Chevrolet Tahoe and Suburban, GMC Yukon and Cadillac Escalade. The shift is expected to start in Q1-2013. Arlington Assembly currently employs 2,500 hourly and salaried employees and operates two production shifts. In 2011, the plant produced nearly 270,000 vehicles.  Also in June the company held a ground-breaking ceremony for the expansion of its St Petersburg plant in Russia. The facility, known as GM Auto, opened in 2008. The project will more than double capacity at the facility from 98,000upa to 230,000upa by 2015. When expansion work is complete, the plant's workforce will have increased from 2,500 to 4,000 people. The plant will focus on production of Chevrolet and Opel models for the Russian market. The St Petersburg expansion is part of a wide-ranging US$1bn investment that GM will make in the country over the next five years. Part of this investment will also be used to boost output at the GM-AvtoVAZ joint venture in Togliatti.  Shanghai GM has started construction of its latest vehicle production plant. The joint venture‟s newest plant is being built in the Jiangxia district of Wuhan. Once up and running it will build small and medium-sized passenger cars, SUVs and „new energy‟ vehicles. The partners are investing Yuan 7bn (US$1.1bn) in this new plant, which will include facilities for stamping, body-building, painting and general assembly. Operations are scheduled to begin in 2014 with a capacity of 300,000upa.

Passenger Car OEM Quarterly Data Book Q2-2012 Section 1: Company updates 34

Honda Motor Company

FINANCIAL NEWS Year to March 2012 Honda was one of the worst affected of the Japanese OEMs by the natural disasters in 2011. Consequently it reported one of the sharpest falls in operating profit for 2011/12 with a 59% drop compared with a fall of 24% at Toyota and a small increase at Nissan. However, it should be remembered that as the most profitable of these three players in 2010/11, Honda had further to fall.

Group revenue fell by 11% to ¥7,948bn as automobile revenue dropped by ¥703bn (minus 10.3%) due to a 10.7% fall in sales to 3.14m units and adverse exchange rates. At constant exchange rates the decline would have been 6.2%. An increase of ¥159bn (+12.3%) in the motorcycle division's contribution provided a partial offset.

Figure 14: Honda results

Passenger Car OEM Quarterly Data Book Q2-2012 Section 1: Company updates 35

Operating profit fell by 59.4% to ¥231.4bn and the margin dropped by 3.5pts to 2.9%. The decline was mainly attributable to the revenue decline and higher fixed costs due to lower capacity utilisation, but unfavourable currency effects comprised about 30% of the adverse cost factors.

The automobile division reported a loss of ¥(77.2)bn but at a group level this was more than offset by continuing profits in the financial services business (¥170bn) and the motorcycle division (¥143bn).

In Japan there was a group operating loss of ¥(109.8)bn compared with a ¥66.1bn profit a year earlier. In NAFTA profit fell by 25.8% to ¥223.2bn. In Europe Honda reported an operating loss of ¥(12.1)bn compared with a year- earlier loss of ¥(14)bn. In non-Japan Asia there was a 49% fall in profit to ¥76.8bn and in other regions there was an 18.1% decrease to ¥56.9bn.

By the fourth quarter of the year the company was recovering strongly. Fourth quarter sales were 14.9% higher, revenue was up by 8.7% and operating profit was 142% higher as the margin improved to 4.7%.

Outlook Honda spent much of 2011/12 being unable to issue a forecast as it struggled to cope with the disruption caused by the Japanese and Thai natural disasters. The contrast with its current optimism is stark: the company is expecting a substantial recovery in 2012/13 with a 38.4% rise in automobile sales to a record 4.3 million units (see 'Sales & Model Plans' below).

Revenue is expected to rise by 30% to ¥10,300bn, operating income by 168% to ¥620bn (6% margin) and net profit by 122% to ¥470bn.

SALES & MODEL PLANS Figure 15: Honda model plans Lifecycle Lifecycle Brand Model Segment Start End Lower Acura CSX replacement 2011 2017 Medium Acura MDX replacement Crossover 2012 2018 Acura RDX replacement SUV 2012 2018 Acura RL replacement Executive 2011 2017 Upper Acura TL replacement 2013 2019 Medium Upper Acura TSX sedan & wagon replacements 2013 2019 Medium Acura ZDX replacement Crossover 2017 2024 Upper Honda Accord replacement 2012 2017 Medium Honda Accord Crosstour replacement Crossover 2016 2022 Compact Honda Airwave replacement 2010 2015 MPV Honda City/Fengfan replacement Small 2015 2022 Lower Honda Civic coupe replacement 2011 2016 Medium Lower Honda Civic hatchback replacement 2011 2016 Medium Lower Honda Civic hybrid replacement 2011 2016 Medium Lower Honda Civic sedan replacement 2011 2016 Medium Honda CR-V replacement Crossover 2011 2017 Lower Honda CR-Z replacement 2016 2021 Medium Honda Crossroad replacement Crossover 2012 2019 Honda Element replacement Crossover 2010 2016 Honda Elysion replacement MPV 2010 2016 Upper Honda FCX Clarity replacement (fuel cell) 2015 2021 Medium Honda Fit/Jazz replacement Small 2013 2019

Passenger Car OEM Quarterly Data Book Q2-2012 Section 1: Company updates 36

Fit Hybrid replacement/Jazz Hybrid Honda Small 2013 2019 replacement Compact Honda Freed replacement 2014 2020 MPV Compact Honda Hobio replacement 2010 2021 MPV Lower Honda Insight replacement 2014 2019 Medium Upper Honda Inspire replacement 2012 2017 Medium Honda Legend replacement Executive 2011 2017 Honda Life replacement Kei 2013 2018 Honda Odyssey replacement (Asia) MPV 2013 2018 Honda Odyssey (North America) MPV 2010 2016 Honda Pilot replacement SUV 2014 2020 Honda Ridgeline replacement Pick-up 2011 2017 Upper Honda Spirior replacement 2013 2018 Medium Honda Step WGN & Spada replacements MPV 2014 2019 Compact Honda Stream replacement 2011 2017 MPV Honda Tif/Logo (Hyundai i10 rival) Small 2011 2018 Compact Honda Vamos replacement 2010 2021 MPV Honda Zest & Zest Spark replacements Kei 2011 2016

 Honda's domestic sales rose by 79.4% in the first half of calendar 2012 to 430,914 units, with conventional passenger cars rising by 53.2%, broadly in line with the market, and mini-vehicle sales up by 151% to 161,680 units, about 12% of which were vans.  In the US Honda marginally outperformed in the first half with a rise in sales of 15.4% compared with 14.8% in the overall market. In the 30 EU and EFTA states the company under-performed with a drop in new car registrations of 10.8% compared with a fall of 6.3% in the overall market.  On July 6th Honda launched sales of the N Box+ in Japan. This is the second model of the new mini-vehicle N Series.  The 38% increase in unit sales projected for 2012/13 reflects increases in all regions as follows:  Japan: +20.7% to 710,000 units;  North America: +31.5% to 1.74 million units;  Europe: +45.5% to 230,000 units;  Asia: +56.5% to 1.31 million units;  RoW: +53.4% to 310,000 units.

Some of these targets are looking more of a stretch after the fiscal first quarter.

According to a report in Japan's Nikkei, Honda's third-generation Fit which launches in 2013 will include a crossover in its range. The small SUV would be targeted at a growing sector.

PRODUCTION  Honda's worldwide production rose by 66% to 2.16 million units in the first half of calendar 2012. Domestic output was 120% higher at 587,217 units and overseas output was 52% higher at 1.57 million units.  In July Honda Malaysia, a Honda automobile production and sales joint venture in Malaysia, held a ground- breaking ceremony to mark the start of construction of its second automobile production line at the existing auto plant in Malacca. The new line is scheduled to begin operation before the end of 2013. It will produce mostly small-sized vehicles such as Jazz/Fit and hybrid vehicles. Capacity of the new line is planned at 50,000upa, doubling Honda Malaysia's overall capacity.

Passenger Car OEM Quarterly Data Book Q2-2012 Section 1: Company updates 37

 On July 10, Dongfeng Honda Automobile commemorated the start of production at its new second plant in Wuhan, Hubei Province. Initial capacity of the second plant is 100,000upa, but plans already exist to expand to 120,000upa in 2013 and 240,000upa in future.  Following the mid-March announcement by P.T. Honda Prospect Motor (in which Honda has a 51% stake) of plans to build a new 120,000upa plant, work began in June. It will be located on the site of the existing HPM plant in the Karawang Industrial Park in a suburb of Jakarta. Combined with the current capacity of 60,000upa, HPM‟s total capacity will be 180,000upa. The new plant is scheduled to become operational in 2014. HPM is planning to produce small-sized vehicles such as the Brio developed for Asian markets. HPM will begin importing Brio from Thailand before the end of 2012, and then begin local production of an Indonesian version of the model at the existing plant before the end of 2013. HPM is planning to transfer production of Brio to the new plant when it becomes operational in 2014. In the US Honda is to boost capacity at its Greensburg, Indiana plant by 50,000upa, a 25% increase. Production of the Civic Hybrid will start there in early 2013. Investment of US$40m will be required and 300 extra jobs will be created. The Civic Hybrid is currently made in Japan, but Greensburg will become the sole world source. The move is another example of the Japanese producers switching production out of their domestic market in response to the strong yen. Greensburg opened in October 2008 to produce Civic sedans. It also produces natural gas-powered Civic models and began assembling the Acura ILX and ILX Hybrid earlier in 2012. In autumn 2012 the company will also increase capacity at its Lincoln, Alabama plant, from 300,000upa to 340,000upa. Together these two developments will increase Honda's North American auto production capacity to 1.72 million upa. The 200,000upa plant in Mexico, due to open in 2014 (see AQR Q1-2012) will boost that figure still further. Not all the capacity is to support the NAFTA market. The company plans to export about 100,000 vehicles from NAFTA in 2012 and this figure will grow in subsequent years.

Passenger Car OEM Quarterly Data Book Q2-2012 Section 1: Company updates 38

Hyundai Motor Company

FINANCIAL NEWS Jan-Jun 2012 HMC reported a 19.5% increase in first-half net profit, boosted by increased overseas sales and a weaker currency versus the dollar.

Group revenue rose by 9.9% and operating profit rose by 21% to Won 4,7853bn and the margin rose by 1.0ptsto 11.4%. As well as a richer sales mix HMC is benefiting from higher prices for its models as perceptions of brand quality improve.

Figure 16: Hyundai Motor results

Hyundai Motor Unit H1-2012 Q2-12 Yr to Dec 11 H1-2011 Q2-11 Q1-11

Group data % ch. % ch. % ch. % ch. % ch. Revenue W bn 42,105 9.9 21,940 9.2 77,798 16.1 38,325 20.2 20,092 19.1 Operating profit W bn 4,785 21.0 2,502 17.7 8,075 36.4 3,954 31.6 2,126 21.6 Pre-tax profit W bn 6,293 15.5 3,145 5.4 10,447 39.4 5,449 45.0 2,984 37.6 Net profit W bn 4,998 19.5 2,547 10.4 8,105 35.1 4,184 41.3 2,307 37.2 Employees 000's 56.0 0.0 56.0 0.0 56.0 0.0 56.0 (0.0) 56.0 (0.0)

Unit sales 000's 2,134 8.1 1,115 5.2 4,099 10.8 1,974 12.5 1,060 14.7 Domestic 000's 328 (4.7) 173 (2.3) 682 3.6 344 7.5 177 16.4 Nafta 000's 357 10.5 193 7.2 646 20.1 323 26.2 180 25.0 China 000's 365 4.3 184 1.7 757 6.5 350 17.8 181 9.0 Europe 000's 233 15.3 123 18.3 403 11.3 202 5.2 104 9.5 Other 000's 851 12.7 442 5.7 1,611 12.5 755 9.6 418 13.9 Per unit Revenue W mils 19.73 1.6 19.68 3.8 18.98 4.9 19.41 6.8 18.95 3.8 Operating profit W mils 2.24 11.9 2.24 11.9 1.97 23.2 2.00 17.0 2.01 6.0 Pre-tax profit W mils 2.95 6.8 2.82 0.2 2.55 25.9 2.76 28.8 2.82 20.0 Net profit W mils 2.34 10.5 2.28 4.9 1.98 21.9 2.12 25.5 2.18 19.6 Per employee Revenue W mils 752.1 9.9 391.9 9.2 1,389.3 16.1 684.6 20.2 358.9 19.1 Operating profit W mils 85.5 21.0 44.7 17.7 144.2 36.4 70.6 31.7 38.0 21.7 Pre-tax profit W mils 112.4 15.5 56.2 5.4 186.6 39.4 97.3 45.0 53.3 37.7 Net profit W mils 89.3 19.5 45.5 10.4 144.7 35.1 74.7 41.3 41.2 37.3 Sales units 38.1 8.1 19.9 5.2 73.2 10.8 35.3 12.6 18.9 14.8 Return on revenue Operating profit % 11.4 1.0 11.4 0.8 10.4 1.5 10.3 0.9 10.6 0.2 Pre-tax profit % 14.9 0.7 14.3 (0.5) 13.4 2.2 14.2 2.4 14.9 2.0 Net profit % 11.9 1.0 11.6 0.1 10.4 1.5 10.9 1.6 11.5 1.5 Revenue by division Automotive W bn 36,323 10.4 19,074 9.9 67,128 17.2 32,897 22.2 17,356 Finance W bn 4,041 5.2 1,959 (0.5) 7,288 11.8 3,842 18.3 1,969 Other W bn 1,741 9.8 907 18.3 3,382 6.6 1,586 (8.1) 767 Operating profit by division Automotive W bn 4,323 34.4 2,187 27.8 6,814 46.4 3,217 34.7 1,711 Finance W bn 637 (19.8) 267 (43.1) 1,208 9.3 794 43.8 469 Other W bn (174) 49 53 (66.9) (57) (189.1) (53)

Notes: (1) Q1 is Jan-Mar, Q2 is Apr-Jun, Q3 is Jul-Sep, Q4 is Oct-Dec (2) % ch is change versus corresponding year-ago data

(3) Full-yr data taken from ann. report. It may not reconcile to quarterly data due to restatements. (4) Per Unit & Per Employee data include non-automotive op's

Passenger Car OEM Quarterly Data Book Q2-2012 Section 1: Company updates 39

Outlook

For 2012 the company is planning a 5.7% rise in unit sales to 4.29 million units.

Corporate news  In mid-July HMC workers in South Korea staged a partial strike as wage negotiations failed to reach a successful conclusion. The eight-hour stoppage cost Hyundai an estimated 4,300 vehicles in lost production. Although a relatively minor disruption this was a significant event in that it was the first strike in four years and more action is threatened. The more settled labour relations situation has been one of the notable features of HMC's growth in recent years so the renewed disruption is disappointing.

SALES & MODEL PLANS Figure 17: Hyundai-Kia model plans Lifecycle Lifecycle Brand Model Segment Start End Dianyue TBA (Cerato-based) Lower Medium 2013 TBA Accent (4th gen) Solaris/Verna/Grand Hyundai Lower Medium 2010 2015 Avega/i25 Hyundai Azera / Grandeur / i55 Upper Medium 2011 2017 Hyundai Elantra/Avante Lower Medium 2010 2016 Hyundai Elantra/Avante coupe Coupe 2012 2018 Hyundai Eon City 2011 2019 Hyundai Equus / Centennial Executive 2009 2015 Hyundai Genesis Coupe / Rohens Coupe Executive 2008 2014 Hyundai Genesis sedan / Rohens Executive 2007 2013 Hyundai Getz/New Click Small 2002 2011 Hyundai i10 City 2007 2013 Hyundai i15 Small 2012 2018 Hyundai i20 Small 2008 2014 Hyundai i30 Lower Medium 2011 2016 Hyundai i40 Upper Medium 2011 2017 Hyundai ix20 Small MPV 2010 2016 Hyundai ix25 Small SUV 2013 2019 Hyundai ix35/Tucson/Tucson iX SUV 2009 2015 2010 Hyundai LaVita/Matrix Compact MPV 2001 Term. Hyundai Santa Fe / ix45 SUV 2007 2012 Hyundai Sonata / i45 Upper Medium 2009 2014 Hyundai TQ/H-1/Grand Starex/Satellite/iMax/i800 MPV 2007 2015 Hyundai Veloster Coupe 2011 2018 2012 Hyundai Veracruz / ix55 SUV 2006 Term. Kia Carens/Rondo Compact MPV 2006 2012 2012 Kia Carnival / Sedona MPV 2005 Term. Kia Cee'd, Pro-cee'd, eco-cee'd, excee'd Lower Medium 2012 2019 Kia Forte/Cerato/Fu-Rui-Di / Koup/Shuma/K3 Lower Medium 2008 2013 Grand VQ-R (LWB Carnival for China Kia MPV 2012 2018 only) Kia K5/Optima Upper Medium 2010 2015 Kia K7/Cadenza Upper Medium 2009 2014 Kia K9 Executive 2012 2018 Kia K9 coupe? Coupe 2014 TBA 2011 Kia Mohave/Borrego SUV 2007 Term. Kia Morning/Picanto City 2011 2017

Passenger Car OEM Quarterly Data Book Q2-2012 Section 1: Company updates 40

Kia Pride/Rio/K2 Small 2011 2018 Kia Ray Mini MPV 2011 TBA Kia Sorento SUV 2009 2015 Kia Soul/Xiu Er Crossover 2008 2014 Kia Sportage (3rd gen) SUV 2010 2017 Kia Venga Compact MPV 2009 2015 Shouwang BHCD-1 (Concept name) Lower Medium 2014 TBA

 In H1-2012 HMC's worldwide sales increased by 11.6% to 2.18 million units as a 15.1% rise in overseas sales to 1.85 million units was partly offset by a 4.7% fall in domestic sales to 328,000 units.  In July HMC cut its forecast for global industry volumes in 2012 due to the worse-than-expected economic situation in Europe and China. It now expects 77.1 million units to be sold globally, down by about 0.5 million units from its April forecast.  The number of models offered by Hyundai-Kia is to reach 40 in 2013, from just 28 in 2002 and 32 in 2009. The number of platforms will be reduced to 6 by 2013 compared with 22 in 2002 and 18 in 2009.  One of the newest models, the all-new Hyundai Eon launched in India in autumn 2011, has been providing real competition for the Maruti Alto. It has become HMC's best-seller in the country, selling more than 52,000 units in H1-2012 and taking sixth position in the market, followed by the Hyundai i10 in seventh.

PRODUCTION

 Hyundai and Kia have established several greenfield assembly plants over the past decade, in Europe, India, China and USA. That phase of expansion is coming to an end, once the plants currently being constructed are completed:  Hyundai‟s new plant in Brazil and its third plant in China are due to start production this year (see below);  Construction of Kia‟s third plant in China has started in 2012 and production is scheduled to get underway in 2014.  Over the next few years the companies are not expected to build more new plants but to expand the existing production network to meet additional demand. For example during 2012 Hyundai is moving to three-shift production at its Alabama plant. The new shift will start in September and is expected to produce 20,000 units by the end of the year.  HMC's third manufacturing plant in Beijing commenced pilot production in July. The plant has started with facelifted versions of Hyundai's Avante sedan. The plant will initially produce the Avante HD, dubbed the Yue Dong in China, and the Avante MD, or Lang Dong. Both these versions will be longer than the original Avante model.

Passenger Car OEM Quarterly Data Book Q2-2012 Section 1: Company updates 41

Mazda Motor Corporation

FINANCIAL NEWS Year to March 2012 Mazda returned to profit in its fiscal fourth quarter, but that was about the only good news the company could point to as it reported a net loss of ¥(107.7)bn, its fourth successive annual net loss and its worst result since 2001. The results were of course affected by the earthquake and tsunami but Mazda's problems are more structural and it is not bouncing back from the natural disasters at the same rate as its peers.

Full-year operating income fell by ¥62.5bn. The net decline reflected:

 ¥(36.3)bn volume and mix;  ¥(37.6)bn exchange rate changes;  ¥(2.7)bn increased marketing expense;  ¥5.6bn cost reductions;  ¥8.5bn other.

Figure 18: Mazda results

Mazda Unit Yr to Mar 12 Q4-11/12 9Mo-11/12 H1-11/12 Yr to Mar 11 Q4-10/11

Group data Data % ch. Data % ch. Data % ch. Data % ch. Data % ch. Revenue ¥ bn 2,033.1 (12.6) 614.8 1.2 1,418.3 (17.4) 959.2 (17.1) 2,325.7 7.5 Operating profit ¥ bn (38.7) (262.4) 15.6 46.8 (54.3) (510.2) (21.6) (277.7) 23.8 152.0 Pre-tax profit ¥ bn (55.3) (443.6) 11.3 - (66.5) (454.9) (45.0) (365.5) 16.1 Net profit ¥ bn (107.7) - 5.1 - (112.8) - (39.9) (823.0) (60.0) Employees 000's 38.12 0.0 38.12 0.0 38.12 (2.7) 38.12 (2.7) 38.12 (4.4)

Unit sales 000's 1,016.4 (7.6) 315.3 8.5 701.2 (13.4) 469.7 (14.6) 1,100.1 14.2 Japan 000's 226.2 9.7 71.4 38.3 154.8 0.2 108.6 (13.2) 206.2 (5.8) Nafta 000's 361.9 (1.4) 117.5 31.5 244.4 (12.0) 152.5 (15.9) 367.2 20.9 Europe 000's 170.8 (17.7) 60.1 (1.7) 110.6 (24.4) 74.0 (17.8) 207.6 (8.7) Other 000's 257.5 (19.3) 66.2 (25.1) 191.3 (17.1) 134.5 (12.4) 319.2 49.6 Per unit Revenue ¥ mils 2.00 (5.4) 1.95 (6.8) 2.02 (4.7) 2.04 (3.0) 2.11 (5.9) Operating profit ¥ mils (0.04) (275.8) 0.05 35.3 (0.08) (573.6) (0.05) (308.1) 0.02 120.7 Pre-tax profit ¥ mils (0.05) (471.9) 0.04 - (0.09) (509.8) (0.10) (410.9) 0.01 Net profit ¥ mils (0.11) - 0.02 - (0.16) - (0.08) (946.7) (0.05) Per employee Revenue ¥ mils 53.34 (12.6) 16.13 1.2 37.21 (15.1) 25.16 (14.8) 61.01 12.4 Operating profit ¥ mils (1.02) (262.4) 0.41 46.8 (1.42) (521.7) (0.57) (282.7) 0.63 163.5 Pre-tax profit ¥ mils (1.45) - 0.30 - (1.75) (464.9) (1.18) (372.9) 0.42 Net profit ¥ mils (2.83) - 0.13 - (2.96) - (1.05) (843.3) (1.58) Sales units 26.7 (7.6) 8.3 8.5 18.4 (11.0) 12.3 (12.2) 28.9 19.4 Return on revenue Operating profit % (1.9) (2.9) 2.5 0.8 (3.8) (4.6) (2.3) (3.3) 1.0 0.6 Pre-tax profit % (2.7) (3.4) 1.8 2.3 (4.7) (5.8) (4.7) (6.2) 0.7 1.0 Net profit % (5.3) (2.7) 0.8 11.2 (8.0) (8.1) (4.2) (4.6) (2.6) (2.3) Revenue by region Japan ¥ bn 1,745.0 (12.7) 476.2 0.8 1,268.8 (16.9) 835.1 (17.0) 1,999.5 7.1 Nafta ¥ bn 571.6 (9.4) 186.6 24.6 385.1 (20.0) 241.9 (24.1) 631.0 10.3 Europe ¥ bn 360.4 (17.7) 123.8 (3.5) 236.6 (23.7) 163.1 (16.0) 438.2 (10.3) Other ¥ bn 294.2 (5.2) 86.3 (13.2) 207.9 (1.4) 144.5 0.6 310.4 37.8 Intra-company ¥ bn (938.2) (10.9) (258.2) 6.7 (680.0) (16.2) (425.5) (15.8) (1053.4) 6.5 Op. profit by region Japan ¥ bn (18.4) (156.6) 23.7 45.5 (42.1) (359.3) (17.5) (273.1) 32.6 5.7 Nafta ¥ bn (40.3) 26.9 (7.2) (40.3) (33.1) - (22.3) (31.7) 64.4 Europe ¥ bn 5.6 (28.8) (1.2) (137.9) 6.9 47.2 6.4 120.7 7.9 125.4 Other ¥ bn 10.1 (21.4) 2.7 (22.0) 7.3 (21.2) 5.8 (12.5) 12.8 138.4 Intra-company ¥ bn 4.3 86.8 (2.5) 538.5 6.7 - 6.0 14.5 2.3 (121.0)

Notes: (1) Q1 is Apr-Jun, Q2 is Jul-Sep, Q3 is Oct-Dec, Q4 is Jan-Mar (2) % ch is change versus corresponding year-ago data (3) Full-year data taken from annual report may not reconcile to quarterly data due to restatements. (4) Per Unit & Per Employee data include non-automotive op's

Passenger Car OEM Quarterly Data Book Q2-2012 Section 1: Company updates 42

By geographic area the results were as follows:

 Japan - external revenue of ¥824.4bn, and operating loss of ¥(18.4)bn;  NAFTA - external revenue of ¥568.3bn, operating loss of ¥(40.3)bn;  Europe - external revenue of ¥347.3bn, operating profit of ¥5.6bn;  Other - external revenue of ¥293.0bn, operating profit of ¥10.1bn.

Outlook For the year to March 2013 the company is expecting revenue to increase by 8.2% to ¥2,200bn, reflecting a 7.5% rise in unit sales. An operating profit of ¥30bn is forecast, a margin of just 1.4% and Mazda expects to do little better than break even at the net level.

Corporate news  In July the company announced the sale of some of its shares in its consolidated subsidiary Toyo Advanced Technologies Co. (Japan's leading manufacturer of internal grinding machines) Mazda plans to post extraordinary profit of approximately ¥18.9bn in its consolidated results for the year ending March 2013.  In May Fiat and Mazda signed a non-binding Memorandum of Understanding for the development and manufacturing of a new roadster for the Mazda and Alfa Romeo marques based on Mazda‟s next-generation MX-5 rear-wheel-drive architecture. Although Fiat has denied it is looking to take a stake in Mazda, a deepening of this new relationship is not impossible - Fiat's CEO, Sergio Marchionne, has acknowledged that Fiat is looking for an Asian partner following the announcement of the alliance between PSA and GM. At the Geneva Show in March, Mr. Marchionne commented: “We talk continuously with Suzuki; we talk with Mazda; we talk with everyone.”  Mazda and Bermaz Motor have agreed to begin talks regarding the establishment this year of a joint venture production and sales company in Malaysia. Mazda began local assembly of the Mazda3 last year and with the new joint venture project, plans to begin local assembly of the Mazda CX-5 early in 2013. Mazda plans to produce 3,000 CX-5s per year in Malaysia.

SALES & MODEL PLANS Figure 19: Mazda model plans Lifecycle Lifecycle Brand Model Segment Start End Mazda AZ Wagon K 2005 2013 Mazda Carol K 2004 2010 Mazda Spiano K 2007 2012 Mazda Mazda 1 A 2009 2015 Mazda Demio / Mazda2 B 2007 2011 Mazda Axela / Mazda3 C 2009 2013 Mazda Mazda4 / MPV Compact MPV 2005 2011 Mazda Atenza / Mazda6 D 2007 2012 Mazda MX-5 Sports 2005 2011 Mazda RX-8 Sports 2003 2010 Mazda CX-5 Sport Wagon 2011 - Mazda CX-7 Sport Wagon 2006 2010 Mazda Tribute SUV 2006 2012

Mazda Premacy / Mazda5 Compact MPV 2005 2011

Mazda Biante MPV 2008 2013 Mazda CX-9 MPV 2006 2013 Mazda B-Series Pickup 1999 -

 Mazda‟s domestic sales in the first half of calendar 2012 rose by 35% to 119,521 units. Although a significant increase Mazda substantially under-performed the overall market which rose by 53.6%.

Passenger Car OEM Quarterly Data Book Q2-2012 Section 1: Company updates 43

 In the 30 EU and EFTA states Mazda also under-performed, its new car registrations falling by 12.3% compared to a 6.3% drop in the overall market. In the US Mazda saw an 18% rise, outperforming the 15% rise in the overall market.  Mazda will hold the world premiere of the all-new Mazda6/Atenza at the 2012 Moscow Motor Show in September 2012, a sign of the importance it attaches to the Russian market.  In June Mazda launched the Flairwagon in Japan. Though the micro-mini tall wagon is all-new to Mazda, it is a rebadged Suzuki Palette.  At the end of July the Nikkei reported that Mazda had dropped plans to exports cars from its new Mexican plant (start-up in 2013) to Brazil. The report follows the recent accord reached between Mexico and Brazil under which Mexico has agreed to limit its automotive exports to Brazil to an average of about US$1.55 billion over the next three years. The report concerning Mazda has not been confirmed and sounds at best an incomplete rendering of a complex situation. Given that Mazda's new plant is not due to start production until 2013 the company would be faced with about two years of restricted or zero exports to Brazil. If Brazil tries to restrict imports beyond the three year accord then it would surely face tit-for-tat restrictions on its own exports by Mexico and its NAFTA partners and/or action by the WTO.

PRODUCTION  Mazda's global production rose by 10.2% in H1-2012 to 603,760 units. Domestic output was 17.6% higher at 419,746 units and overseas output was 3.8% lower at 184,014 units.  The company is to increase production capacity for its new crossover, the CX-5, from 200,000upa to 240,000upa. The increase will be achieved by expanding production from Ujina Plant No.2 to also include Ujina Plant No.1. Since sales began in February, Mazda reports it has received orders surpassing its initial estimations and upgraded its annual global sales target from 160,000 to 190,000 units for the year to March 2013.  In July Mazda announced it will double production capacity at its engine plant in Hiroshima from 400,000upa to 800,000upa in October 2012. The plant produces Skyactiv-D diesel engines and Skyactiv-G gasoline engines.

Passenger Car OEM Quarterly Data Book Q2-2012 Section 1: Company updates 44

Mitsubishi Motors Corporation

FINANCIAL NEWS Year to March 2012 Fiscal year 2011 was the first year of MMC‟s 'Jump 2013' mid-term business plan (see AQR Q1-2011), and it is to the company's credit that despite the natural disasters of 2011 and slower pace of growth in many markets, it has made no changes to the financial targets.

In the year to March 2012 revenue dipped by 1.2%, due to a drop in wholesale volumes and the strong yen. Operating profit rose more by 58.1% to ¥63.7bn. The net increase of ¥23.4bn reflected:

 ¥27.2bn cost reductions;  ¥16.8bn volume & mix;  ¥0.5bn lower selling expense;

 ¥(10.5)bn exchange rates;

 ¥(10.6)bn other.

Figure 20: Mitsubishi Motor results

Mitsubishi Motors Unit Yr to Mar 12 Q4-11/12 9Mo-11/12 H1-11/12 Yr to Mar 11 Q4-10/11

Group data Data % ch. Data % ch. Data % ch. Data % ch. Data % ch. Revenue ¥ bn 1,807.3 (1.2) 514.2 (0.7) 1,293.1 (1.4) 907.5 4.9 1,828.5 26.5 Operating profit ¥ bn 63.7 58.1 25.2 (10.1) 38.5 213.9 34.2 453.4 40.3 189.3 Pre-tax profit ¥ bn 41.6 36.8 14.8 (30.8) 26.9 - 22.3 522.5 30.4 162.5 Net profit ¥ bn 23.9 53.2 10.3 (42.3) 13.6 - 10.6 15.6 228.3 Employees 000's 30.71 33.8 30.71 0.0 31.37 0.0 31.37 0.0 30.71 33.8

Unit sales 000's 1,001 1.4 246 14.4 755 (2.2) 519 (1.5) 987 2.8 Japan 000's 152 (7.3) 49 8.9 103 (13.4) 72 (19.1) 164 (4.1) Nafta 000's 106 12.8 24 (14.3) 82 24.2 61 41.9 94 6.8 Europe 000's 218 0.0 44 (26.7) 174 10.1 117 19.4 218 29.0 Other 000's 525 2.7 129 57.3 396 (7.7) 269 (9.4) 511 (3.9) Per unit Revenue ¥ mils 1.81 (2.5) 2.09 (13.2) 1.71 0.9 1.75 6.6 1.85 23.0 Operating profit ¥ mils 0.06 55.9 0.10 (21.5) 0.05 221.0 0.07 462.0 0.04 181.4 Pre-tax profit ¥ mils 0.04 34.9 0.06 (39.5) 0.04 - 0.04 532.1 0.03 155.3 Net profit ¥ mils 0.02 51.0 0.04 (49.6) 0.02 - 0.02 0.02 219.3 Per employee Revenue ¥ mils 58.85 (1.2) 16.74 (0.7) 41.22 (1.4) 28.93 4.9 59.54 29.2 Operating profit ¥ mils 2.07 58.1 0.82 (10.1) 1.23 213.9 1.09 453.4 1.31 195.5 Pre-tax profit ¥ mils 1.36 36.8 0.48 (30.8) 0.86 - 0.71 522.5 0.99 168.1 Net profit ¥ mils 0.78 53.2 0.34 (42.3) 0.43 - 0.34 0.51 235.3 Sales units 32.6 1.4 8.0 14.4 24.1 (2.2) 16.5 (1.5) 32.1 5.0 Return on revenue Operating profit % 3.5 1.3 4.9 (0.5) 3.0 2.0 3.8 3.1 2.2 1.2 Pre-tax profit % 2.3 0.6 2.9 (1.2) 2.1 1.4 2.5 2.0 1.7 0.9 Net profit % 1.3 0.5 2.0 (1.4) 1.1 1.2 1.2 1.7 0.9 0.5 Revenue by division Automotive ¥ bn 1,797.0 (1.2) 511.7 (0.6) 1,285.4 (1.3) 902.2 5.0 1,817.9 26.7 Financial services ¥ bn 10.4 (3.3) 2.6 (1.8) 7.8 (3.8) 5.3 (3.9) 10.8 (1.1) Intra-company ¥ bn (0.1) - (0.1) (0.1) - 0.0 - (0.2) - Op. profit by division Automotive ¥ bn 60.3 59.6 24.6 (10.0) 35.8 - 32.0 542.4 37.8 229.1 Financial services ¥ bn 3.5 30.5 0.7 (3.3) 2.8 42.5 2.2 60.3 2.7 9.6 Intra-company ¥ bn (0.1) (0.1) 405.6 (0.1) - 0.0 - (0.2)

Notes: (1) Q1 is Apr-Jun, Q2 is Jul-Sep, Q3 is Oct-Dec, Q4 is Jan-Mar (2) % ch is change versus corresponding year-ago data (3) Full-yr data from ann.report may not reconcile to quarterly data due to restatements. (4) Per Unit & Per Employee data include non-automotive op's

Passenger Car OEM Quarterly Data Book Q2-2012 Section 1: Company updates 45

Although the substantial increase in profit was from a low base, the operating margin of 3.5% was reasonably healthy in comparison with most of MMC's peers. In the fourth quarter alone the margin was 4.9%.

Outlook

For the year to March 2012 MMC is anticipating a 9% increase in sales to 1.088 million units and a similar increase in revenue to ¥1,980bn. Operating profit is forecast to rise by 10% to ¥70bn.

Corporate news  In July 2012 Mitsubishi announced the sale of the NedCar plant to VDL for €1, on condition that the 1,500 employees there do not lose their jobs. VDL is reported to be in discussion with BMW about producing Mini models at the plant.

SALES & MODEL PLANS Figure 21: Mitsubishi Motor model plans Lifecycle Lifecycle Brand Model Segment Start End Mitsubishi Colt Small 2002 2012 Mitsubishi Mirage (Colt replacement) Small 2012 2019 Mitsubishi Colt Plus (no replacement expected) Mini-MPV 2004 2011 Mitsubishi Delica D:2 Mini-MPV 2011 2017 Mitsubishi Delica D:3 Mini-MPV 2011 2017 Mitsubishi Delica D:5 MPV 2007 2012 Mitsubishi Eclipse (Term. Aug' 11) Coupe/Convertible 2006 2011 Mitsubishi eK Wagon & eK Sport City 2006 2012 Mitsubishi Endeavor (Term. Aug' 11) SUV 2004 2011 Mitsubishi Galant/Grunder (no relacement expected) Upper Medium 2003 2012 Mitsubishi i/iCar (no replacement expected) City 2008 2012 Mitsubishi i-MIEV City 2009 2014 Mitsubishi Lancer/Galant Fortis (7th gen) Lower Medium 2007 2013 Mitsubishi Maven MPV 2005 2012 Mitsubishi Outlander SUV 2005 2012 Mitsubishi Pajero Mini (no replacement expected) SUV 1998 2012 Pajero Sport/ Challenger /Nativa/Montero Sport/Pajero Mitsubishi SUV 2008 2016 Dakar Mitsubishi Pajero/Montero/Shogun SUV 2006 2013 Mitsubishi RVR/Outlander Sport/ASX Crossover 2010 2017 Mitsubishi Savrin (no replacement expected) Mini-MPV 2001 2012 Mitsubishi Signo (no replacement expected) Lower Medium 2004 2012 Mitsubishi Triton/Strada/L200 Pick-up 2005 2013 Mitsubishi Toppo City 2008 2015 Mitsubishi Town Box Mini-MPV 1999 2012 Mitsubishi Zinger MPV 2005 2013

 In 2011/12 MMC sold just over one million units worldwide. Sales in Japan dipped by 7.3% to 152,000 units but overseas sales rose by 3.1% to 849,000 units.  In October MMC will launch the Delica D:3, a new compact minivan, and the Delica Van, a new light commercial vehicle in the Japanese market. Both models are supplied to MMC by Nissan.

PRODUCTION  Global production was 1.6% lower in H1-2012 at 538,454 units. Output in Japan at 277,647 units was 8.9% down, overseas production was 7.6% higher at 260,807 units.

Passenger Car OEM Quarterly Data Book Q2-2012 Section 1: Company updates 46

 In mid-July MMC started production of the Outlander Sport (ASX or RVR in some markets) compact crossover at its US plant in Normal, Illinois. A commemorative line-off ceremony was held at the plant. Until recently, the Illinois plant produced models designed specifically for the North American market, such as the Galant, Eclipse, Eclipse Spyder, and the Endeavor. However, the Outlander Sport will also be exported to Russia, Central and South America, and the Middle East. Planned capacity at Normal is about 50,000upa and MMC is considering expanding it to 70,000upa in future.  At the start of July PCMA Rus, the PSA/MMC joint venture assembly plant at Kaluga in Russia held an opening ceremony marking the start of full-scale production. Production of the first model, the Peugeot 408, started in July. This will be followed by MMC's Outlander to be produced from November 2012. Later the range of models to be assembled at the plant will be extended with Citroen cars.

Passenger Car OEM Quarterly Data Book Q2-2012 Section 1: Company updates 47

Nissan Motor Company

FINANCIAL NEWS Apr-Jun 2012 Nissan's first-quarter results were weaker than expected as operating profit fell by 19.7% due to the strong yen and a high level of marketing spend.

Group revenue was 2.6% higher at ¥2,136bn as sales rose by 11.4% to 1.04 million units but the operating margin dropped by 1.6pts to 5.6%.

Figure 22: Nissan results

Nissan Unit Q1-12/13 Yr to Mar 12 H1-11/12 Q1-11/12 Yr to Mar 11 Q4-10/11

Group data Data % ch. Data % ch. Data % ch. Data % ch. Data % ch. Revenue ¥ bn 2,136.4 2.6 9,409.0 7.2 4,367.4 1.1 2,082.0 1.6 8,773.1 16.7 Operating profit ¥ bn 120.7 (19.7) 545.8 1.6 309.7 (7.5) 150.4 (10.4) 537.5 72.5 Pre-tax profit ¥ bn 111.2 (15.1) 529.3 10.2 276.7 (12.3) 131.0 - 480.1 239.0 Net profit ¥ bn 72.3 (15.0) 341.4 7.0 183.4 (12.0) 85.0 - 319.2 653.1 Employees 000's 155.1 0.0 155.1 0.0 155.1 0.6 155.1 0.3 155.1 2.4

Unit sales 000's 1,039.9 11.4 4,455.8 14.6 2,012.0 8.2 933.8 6.9 3,888.1 23.1 Japan 000's 136.8 18.6 639.1 11.4 277.4 (13.6) 115.4 (11.0) 573.5 (4.3) US 000's ------Nafta 000's 324.4 14.8 1,435.7 12.3 634.4 8.2 282.7 0.2 1,278.3 20.6 Europe 000's 168.4 (8.6) 762.2 13.5 361.2 23.2 184.3 24.4 671.5 30.4 China 000's 196.5 5.3 760.2 372.5 13.0 186.7 19.0 652.8 Other 000's 213.7 29.8 858.6 20.6 366.4 11.7 164.7 4.9 711.9 (27.7) Per unit Revenue ¥ mils 2.05 (7.9) 2.11 (6.4) 2.17 (6.6) 2.23 (5.0) 2.26 (5.2) Operating profit ¥ mils 0.12 (27.9) 0.12 (11.4) 0.15 (14.6) 0.16 (16.2) 0.14 40.1 Pre-tax profit ¥ mils 0.11 - 0.12 (3.8) 0.14 (19.0) 0.14 - 0.12 175.5 Net profit ¥ mils 0.07 - 0.08 (6.7) 0.09 (18.7) 0.09 - 0.08 511.9 Per employee Revenue ¥ mils 13.77 2.6 60.66 7.2 28.16 0.5 13.42 1.3 56.56 14.0 Operating profit ¥ mils 0.78 (19.7) 3.52 1.6 2.00 (8.1) 0.97 (10.7) 3.47 68.4 Pre-tax profit ¥ mils 0.72 - 3.41 10.2 1.78 (12.8) 0.84 - 3.10 231.0 Net profit ¥ mils 0.47 - 2.20 7.0 1.18 (12.5) 0.55 - 2.06 635.3 Sales units 6.7 11.4 28.7 14.6 13.0 7.6 6.0 6.6 25.1 20.2 Return on revenue Operating profit % 5.6 (1.6) 5.8 (0.3) 7.1 (0.7) 7.2 (1.0) 6.1 2.0 Pre-tax profit % 5.2 (1.1) 5.6 0.2 6.3 (1.0) 6.3 (1.4) 5.5 3.6 Net profit % 3.4 (0.7) 3.6 (0.0) 4.2 (0.6) 4.1 (1.1) 3.6 3.1 Revenue by division Automotive ¥ bn 2,027.1 2.9 8,988.8 8.0 4,153.5 1.9 1,970.7 2.4 8,320.4 18.9 Financial services ¥ bn 128.1 4.1 490.6 (2.5) 241.8 (6.2) 123.1 (7.4) 503.3 (9.9) Intra-company ¥ bn (18.9) 59.3 (70.3) 38.8 (27.9) 89.1 (11.9) 65.7 (50.6) 40.5 Op. profit by division Automotive ¥ bn 82.4 - 391.7 (7.9) 226.1 (19.2) 110.3 - 425.5 88.2 Financial services ¥ bn 34.8 (2.5) 140.1 39.6 76.0 46.4 35.7 36.3 100.4 29.5 Intra-company ¥ bn 3.5 (19.9) 14.0 20.9 7.6 150.0 4.4 280.3 11.6 44.2

Notes: (1) Q1 is Apr-Jun, Q2 is Jul-Sep, Q3 is Oct-Dec, Q4 is Jan-Mar (2) % ch is change versus corresponding year-ago data (3) Full-year data taken from annual report may not reconcile to quarterly data due to restatements. (4) Per Unit & Per Employee data include non-automotive op's

Passenger Car OEM Quarterly Data Book Q2-2012 Section 1: Company updates 48

The net fall in operating profit of ¥29.7bn reflects:  ¥54bn - purchase cost reductions;  ¥53.4bn - volume & mix;  ¥(76.4)bn - higher selling expense;  ¥(25.7)bn - exchange rates;  ¥(18.8)bn - R&D costs;  ¥(18.6)bn - raw material & energy costs;  ¥2.4bn - other.

The company was profitable in all its major regions, as follows:

 Japan: ¥35.8bn (year-ago ¥14.2bn);  NAFTA: ¥31.2bn (¥72bn);  Europe: ¥5bn (¥9.2bn);  Asia: ¥47.2bn (¥47.6bn);  Other markets: ¥2.4bn (¥4.9bn).

Outlook Despite the first-quarter setback Nissan has stuck to its full-year forecasts. For the year to March 2013 it expects a 9.5% revenue increase to ¥10,300bn on the back of a 10.4% rise in unit sales, outperforming the anticipated growth of 5.3% in global demand. Operating profit is projected to rise by 28.2% to ¥700bn, a margin of 6.8%. Net profit is projected to rise by 17.2% to ¥400bn.

Corporate news  At the end of June Daimler and Nissan signed a Memorandum of Understanding involving the Fuso Canter and the Nissan Atlas range. The arrangement provides for the Fuso Canter light-duty truck (5 tonnes GVW) to be supplied to Nissan. In return, Nissan will make the Atlas F24 light-duty truck (below 5 tonnes GVW) available to Fuso, which will consequently expand the Fuso product range in the future.

SALES & MODEL PLANS Figure 23: Nissan model plans Lifecycle Lifecycle Brand Model Segment Start End Lower Infiniti Compact Sedan (sub-G Series) 2012 2018 Medium Lower Infiniti EV (based on Leaf) 2013 2018 Medium Infiniti EX (Skyline Crossover) Crossover 2007 2015 Infiniti FX Crossover 2008 2013 Infiniti G Coupe (Nissan Skyline Coupe) & G Convertible Executive 2007 2013 Infiniti G Sedan (Nissan Skyline) Executive 2006 2012 Infiniti M Sedan (Nissan Fuga) Executive 2010 2016 Infiniti M Hybrid or M35 Hybrid Executive 2011 2016 Infiniti QX (Nissan Patrol/Safari) Crossover 2010 2017 Infiniti JX crossover (IFV Infiniti Family Vehicle) Crossover 2012 2018 Lower Nissan Almera Classic/Sunny 2006 2010 Medium Upper Nissan Altima sedan & hybrid, Altima coupe 2006 2012 Medium Nissan Armada (prev. Pathfinder Armada) SUV 2004 2013 Lower Nissan Bluebird Sylphy (Xuanyi in China) 2005 2012 Medium Upper Nissan Cedric (taxi) 1999 2011 Medium Nissan Cima Repl. by Fuga Executive 2001 2010 Nissan Clipper Rio (MMC Townbox) Kei 2007 2011 Nissan Cube City 2008 2015

Passenger Car OEM Quarterly Data Book Q2-2012 Section 1: Company updates 49

Nissan D22 Pick-up 1998 2010 Nissan Elgrand MPV 2010 2017 Nissan Fairlady Z/370Z Sports 2008 2015 Nissan Frontier Navara/Navara Pick-up 2004 2012 Nissan Fuga (Infiniti M) Executive 2009 2014 Nissan Fuga hybrid (Infiniti M) Executive 2010 2015 Compact Nissan Grand Livina/Livina Geniss 2006 2013 MPV Nissan GT-R (R35) Sports 2007 2014 Nissan Juke Crossover 2010 2017 Nissan Kix (MMC Pajero Mini) Kei 2008 2012 Nissan Lafesta MPV 2011 2017 Lower Nissan Leaf 2010 2017 Medium Lower Nissan Logan Aprio 2007 2014 Medium Nissan March/Micra/Versa Small 2010 2017 Upper Nissan Maxima 2008 2013 Medium Nissan Moco Kei 2011 2016 Nissan Murano Crossover 2007 2012 Compact Nissan Note 2004 2012 MPV Nissan NV200/NV200 Vanette MPV 2009 2016 Nissan Otti Kei 2006 2012 Nissan Paladin SUV 2010 2017 Nissan Pathfinder SUV 2004 2012 Nissan Patrol/Safari SUV 2009 2015 Nissan Pivo 3 City 2015 2023 Nissan Pixo City 2009 2016 Nissan Platina Small 2002 2012 Nissan President (now discontinued but also sold as Infiniti Q) Executive 2003 2010 Nissan Qashqai/Dualis/Xiaoke Crossover 2006 2012 Nissan Quest MPV 2010 2017 Nissan Rogue Crossover 2007 2013 Nissan Roox Kei 2009 2014 Lower Nissan Sentra (North America) 2006 2012 Medium Lower Nissan Sentra (Taiwan) 2001 2010 Medium Nissan Serena / Yumsun MPV 2010 2016 Upper Nissan Skyline (also Infiniti G Sedan) 2006 2012 Medium Upper Nissan Skyline Coupe (also Infiniti G Coupe) 2007 2013 Medium Nissan Skyline Crossover (Infiniti EX) Crossover 2009 2015 Lower Nissan Sunny 2010 2017 Medium Upper Nissan Teana (Maxima in Australia) 2008 2014 Medium Lower Nissan Tiida/Versa/Latio 2011 2018 Medium Nissan Titan Pick-up 2003 2013 Lower Nissan Tsuru 1991 2013 Medium Nissan Universal Design Taxi (and electric variant) MPV 2010 2017 Nissan US$2,500 car for India Small 2013 2021 Lower Nissan Wingroad 2005 2012 Medium Nissan X-Trail SUV 2007 2014

Passenger Car OEM Quarterly Data Book Q2-2012 Section 1: Company updates 50

Term. Nissan Xterra SUV 2004 2012/13 Lower Venucia D50 2011 2018 Medium Lower Venucia EV 2014 2021 Medium Upper Venucia Teana-based? 2012 2019 Medium Venucia Other 2013 2020

 During the first six months of calendar 2012 Nissan's worldwide sales rose 16.7% to 2,625,410 units, a company record. Including mini-vehicles, Nissan sold 366,569 units in Japan, up 31.1% year-on-year. Sales outside Japan increased 14.6% to a record 2,258,841. Sales increased in the US, Europe, China and other regions. In China, sales increased 14% to a record 678,007. Sales in other regions increased 25.4% to 470,967 units, mainly due to increased demand in Brazil, Thailand and India.  For the year to March 2013 a 10.4% rise in retail sales is forecast with rises of:

 5.3% to 0.69 million units in Japan;  8.3% to 1.52 million units in NAFTA;  1.0% to 0.72 million units in Europe;  8.3% to 1.35 million units in China;

 29.6% to 1.07 million units in RoW.  In September Venucia, the new brand from Dongfeng Nissan in China will launch its second vehicle, the R50. The new sports hatchback was developed by Dongfeng Nissan especially for the Chinese market and will be built at the new Zhengzhou plant. It follows the Venucia D50, which was launched towards the end of April.  The all-new NV350 Caravan was launched in Japan in mid-June and Nissan announced that orders in the first month reached 6,106 units, more than three times greater than targeted. First launched in 1973, the Caravan has been used both as a commercial vehicle but also for hobbies or leisure.  In mid-July the new Nissan Note was unveiled. It goes on sales in Japan this autumn. Since its launch in 2005, Nissan has sold 940,000 units of the current Note. The Japanese-market Note will be produced at Nissan Motor Kyushu, the European model will go on sale in 2013 and be produced at Nissan's Sunderland plant in the UK.

PRODUCTION  Nissan's global production during January-June increased 19.0% to a record 2,553,224 units. Domestic production increased 28.7% to 578,439 units. The year-on-year comparison is distorted by the impact of the earthquake in Japan last year. Production outside Japan increased 16.5% to a record 1,974,785 units. Production increased in the US, Mexico, UK, Spain and China. In China, production increased 16.3% to a record 673,055 units. Production in other regions, mainly India, Indonesia, South Africa and Thailand saw an overall increase of 19.5% year-on-year to 283,269 units.  In June Nissan's joint venture in China announced it will build an all-new manufacturing facility in Dalian, Liaoning Province, China with an investment of up to Yuan 5bn (USD US$800m). The Dalian plant, scheduled to begin manufacturing Nissan-branded passenger vehicles, will have an initial capacity of 150,000upa by 2014, and will expand up to 300,000upa.  The Renault-Nissan Alliance will invest US$160m in Korea to meet anticipated demand for the next-generation Nissan Rogue and to accelerate growth of Renault Samsung Motors. Production of the Nissan Rogue crossover in Busan, Korea, will begin in 2014, with capacity of about 80,000upa.  In July Nissan laid the first stone of its new manufacturing complex in Aguascalientes, Mexico, following the January announcement a US$2bn investment to expand capacity. The new complex will be located to the south of Aguascalientes, near the airport, and will be 2.5-times larger than the existing plant. During Phase 1, it will produce 175,000 compact vehicles per year (B-platform). To achieve this goal, Nissan will create 3,000 direct jobs and generate approximately 9,000 indirect jobs. Furthermore, the complex will include a supplier park and a quality proving ground.

Passenger Car OEM Quarterly Data Book Q2-2012 Section 1: Company updates 51

PSA Peugeot Citroën

FINANCIAL NEWS Jan-Jun 2012 Following its losses in the second half of 2011 PSA's performance deteriorated in H1-2012 as group revenue dropped by 5.1% and automotive revenue fell by 10.5% due to the weak European and South American markets. The company reported a recurring operating profit of €4m but non recurring expenses caused a reported operating loss of €(416)m. The biggest non-recurring expense item of €612m was mainly connected with losses in respect of inventory in Iran (see below).

Figure 24: PSA results

PSA Unit H1-12 Q2-12 Yr to Dec 11 H1-11 Q2-11 Q1-11

Group data Data % ch. Data % ch. Data % ch. Data % ch. Data % ch. Revenue € mils 29,553 (5.1) 15,264 (2.9) 59,912 6.9 31,135 9.7 15,721 9.1 Operating profit (5) € mils 4 - - 1,315 (26.8) 1,157 - - Pre-tax profit € mils (680) - - 564 (56.8) 995 - - Net profit € mils (745) - - 784 (37.6) 904 - - Employees 000's 201.7 0.0 201.7 209.0 5.5 201.7 0.0 201.7

Unit sales 000's 1,619.0 (13.0) 828.9 (11.7) 3,549.4 (1.5) 1,859.9 0.2 938.5 (0.3) Peugeot 000's 955.0 (12.4) 482.10 (12.6) 2,113.7 (1.3) 1,090.8 (0.2) 551.59 (2.4) Citroen 000's 664.0 (13.7) 346.80 (10.4) 1,435.7 (1.7) 769.1 0.8 386.87 2.7 Per unit Revenue € 18,254 9.0 18,415 9.9 16,879 8.5 16,741 9.4 16,752 9.5 Operating profit (5) € 2 (99.6) - 370 (25.7) 622 1.5 - Pre-tax profit € (420) (178.5) - 159 (56.2) 535 20.0 - Net profit € (460) (194.7) - 221 (36.7) 486 22.4 - Per employee Revenue € 146,520 (5) 75,677 286,634 1 154,363 10 77,942 Operating profit (5) € 20 (100) - 6,291 (31) 5,736 2 - Pre-tax profit € (3,371) (168) - 2,698 (59) 4,933 20 - Net profit € (3,694) (182) - 3,751 (41) 4,482 23 - Sales units 8 (13.0) - 17 (6.6) 9 0.2 - Return on revenue Operating profit (5) % 0.0 (4) - 2.2 (1) 3.7 (0) - Pre-tax profit % (2.3) (5.5) - 0.9 (1.4) 3.2 0.3 - Net profit % (2.5) (5.4) - 1.3 (0.9) 2.9 0.3 - Revenue by division Automobile € mils 20,203 (10.5) - 42,710 3.2 22,585 6.7 - Faurecia € mils 8,765 7.5 - 16,190 17.4 8,150 19.4 - Gefco € mils 1,881 (6.7) - 3,782 12.9 2,017 17.5 - Finance € mils 979 3.9 - 1,902 2.7 942 2.5 - Other & intra-group € mils (2,275) (11.1) - (4,672) 7.6 (2,559) 14.2 - Op. profit by division Automobile € mils (662) (263) - (92) - 405 (23) - Faurecia € mils 303 (10.9) - 651 42.8 340 56.7 - Gefco € mils 63 (55.9) - 223 12.6 143 17.2 - Finance € mils 271 (1.1) - 532 4.9 274 1.9 - Other & intra-group € mils 29 - - 1 - (5) - -

Notes: (1) Q1 Jan-Mar, Q2 Apr-Jun, Q3 Jul-Sep, Q4 Oct-Dec (2) % ch vs yr-ago data.

(3) Full-yr data from annual report may not reconcile to quarterly data due to restatements.

(4) Per Unit & Per Employee data include non-automotive op's (5) Operating profit excludes restructuring costs.

Passenger Car OEM Quarterly Data Book Q2-2012 Section 1: Company updates 52

The automotive division made a recurring operating loss of €(662)m and a reported loss of €(1,278)m. Outlook PSA now expects the European market to fall by 8% in 2012, having earlier anticipated a 5% fall. It forecasts growth of 7% in China, 2% in Latin America and 9% in Russia. The company is focusing on keeping costs and debt under control and is planning asset disposals of about €1.5bn.

Corporate news  In response to its deteriorating performance PSA has announced the planned closure of a French plant and job cuts in France (see under 'Production'). The closure is part of a plan called 'Rebound 2015' which aims to save €1.5bn by 2015 and lead to breakeven in operational free cash flow by end 2014. The plan is additional to cost reduction and cash management measures announced at the beginning of 2012 which will continue. It includes:  €600m from "reorganising the French production base and dimensioning the structural costs of the Group" i.e. principally the Aulnay closure and job cuts;  €550m reduction in capital expenditure;  €350m from the alliance with GM, half the savings are to come from purchasing synergies and the other half from action plans to reduce design and production unit costs. The company stated that: "These measures will contribute to restore the Automotive Division‟s performance, by increasing capacity utilisation in Europe and reducing the cost base in Europe, ahead of the full effects of the Alliance with General Motors. They will be supported by the continuing upscaling of the brands and by the drive towards increased globalization, with newly installed production capacities."  In July Toyota and PSA announced an agreement for PSA to supply Toyota with LCVs for sale in Europe under the Toyota brand. Initially, starting in Q2-2013, PSA Citroën will supply medium vans derived from the Expert/Jumpy. A second phase will see the two firms collaborating on next generation vehicles which are to be produced by PSA. The collaboration is expected to last beyond 2020.  Towards the end of July Fiat and PSA reached agreement for Fiat's shareholding in the SevelNord joint venture to be transferred to PSA on or before December 31, 2012 at a nominal value. SevelNord will continue to produce LCVs for the two groups until Euro6 emissions standards come into effect at the end of 2016.  In July PSA and BMW confirmed the planned break-up of BMW Peugeot Citroën Electrification, the joint venture with PSA for the development, production and purchasing of hybrid and electric powertrain components, which was officially launched only in October 2011. Both events are a consequence of the alliance between PSA and GM.

SALES & MODEL PLANS Figure 25: PSA model plans Lifecycle Lifecycle Brand Model Segment Start End Citroën AirCross Crossover 2010 2017 Citroën Berlingo Multispace replacement MPV 2016 2025 Citroën C1 replacement City 2011 2017 Citroën C2 replacement Small 2013 2021 Citroën C3 Picasso replacement Compact MPV 2016 2023 Citroën C3 replacement Small 2016 2023 Citroën C4 hatchback Lower Medium 2010 2016 C4 Picasso/Grand Picasso Citroën Compact MPV/MPV 2012 2018 replacement Citroën C4 sedan replacement Lower Medium 2011 2017 Citroën C5 replacement Upper Medium 2015 2022 Citroën C8 replacement MPV 2011 2020 Citroën C-Cactus (Dacia/Renault Logan rival) Small 2011 2019 Citroën C-Crosser replacement SUV 2013 2020 Citroën C-Zero (EV) City 2010 2015 Citroën DS3 & DS3 hybrid Small 2015 2021

Passenger Car OEM Quarterly Data Book Q2-2012 Section 1: Company updates 53

Citroën DS3 hybrid Small 2013 2015 Citroën DS4 Lower Medium 2011 2018 Citroën DS5 Crossover 2011 2018 Citroën DS9 HYbrid4 (C6 replacement) Executive 2015 2022 Citroën Nemo Combi replacement Compact MPV 2015 2023 Citroën restyled Mitsubishi ASX Crossover 2012 2017 Citroën Revolte (EV) Small 2013 2020 Peugeot 108 City 2011 2017 Peugeot 207 Brasil replacement Small 2013 2018 Peugeot 208 & 208 HYbrid2 Small 2012 2018 Peugeot 3008 HYbrid4 Crossover 2011 2016 Peugeot 3008 HYbrid4 Plug-In Crossover 2012 2016 Peugeot 3008 replacement Crossover 2016 2023 Peugeot 308 replacement Lower Medium 2014 2021 Peugeot 4008 SUV 2013 2020 Peugeot 408 Lower Medium 2010 2016 Peugeot 5008 replacement Compact MPV 2015 2021 Peugeot 508 Upper Medium 2010 2016 Peugeot 808 MPV 2011 2020 Peugeot BB1 City 2013 2020 Peugeot Bipper Tepee replacement Compact MPV 2015 2023 Peugeot Dacia/Renault Logan rival Small 2011 2019 Peugeot Hoggar Pick-up 2010 2017 Peugeot iOn (EV) City 2010 2015 Peugeot Partner Tepee replacement Compact MPV 2016 2024 Peugeot RCZ (and RCZ HYbrid4) Coupe 2010 2017 Peugeot restyled Mitsubishi ASX Crossover 2012 2017

 First-half sales were 13% lower at 1,619,000 units. The decline in sales of CBU (completely built-up-units) was 10.6% to 1,476,000 units, as sales fell by:  15.2% in Europe to 980,000 units;

 20.8% in Latin America to 122,000 units. These declines were partly offset by gains in Russia, China and RoW. However, the total sales figure was brought lower by the drop in sales of CKD units. CKD sales (nearly all Peugeot brand) have more than doubled since 2007 reaching 458,000 in 2011 (2010: 477,000). In 2011 these sales represented 13% of all sales. In recent times most of the CKD shipments have been to Iran, but sanctions have led to their suspension during 2012 and this resulted in a 31% drop in CKD sales over the first-half of the year to 143,000 units.

 As well as a desire to reduce its dependence on the European market, PSA has long held the ambition to develop a presence in the premium sector, securing the higher unit profits associated with premium models. In the past this has involved PSA (and the same comment applies to Renault) trying to take on the German premium producers at their own game and produce competitors to the 5-Series, E-Class etc. These attempts repeatedly failed, models such as Peugeot's 607 and Renault's Vel Satis sold in low volumes and made no headway against the German premium producers. PSA now sums up its approach in the following way: “The Group‟s strategy aims to increase the value of the Peugeot and Citroen brands by accentuating the move upmarket. In 2011, this led to a further increase in the proportion of premium vehicle sales, to 18% of the total versus 13% in 2010. ”

Passenger Car OEM Quarterly Data Book Q2-2012 Section 1: Company updates 54

The company has somewhat redefined “premium” and is not trying to take on the Germans head-on but is simply moving a proportion of sales on to higher price models with the Citroen DS range and Peugeot models such as the 207CC, 308CC, RCZ and 3008. The proportion of its sales defined as premium increased to 18% in 2011. Whether or not this new strategy should truly be termed 'premium' can be debated. Other mass-market OEMs also have models and derivatives on which unit profits are higher. However, the key point is that these premium models are achieving higher average prices (see below), high levels of conquest sales and improved residual values. The company has attracted some criticism for pursuing a premium strategy at a time when demand is subdued in many markets and many consumers are thought to be more interested in economy than luxury. In our view such criticisms are misguided for two reasons:  There is demonstrably still an appetite for luxury and premium models in all the major markets, as sales of the traditional premium brands attest.  PSA is not neglecting the budget sector. Later this year it will launch the Peugeot 301 and Citroen C-Elysee models.

The 301/C-Elysee have been developed to adapt to all conditions of use, and extremes (hot countries, cold countries, poor roads). There is great emphasis on space and value for money. The new models are expected to become one of the company‟s best-sellers. The new models are very much a response to the success of the Renault/Dacia Logan which was launched in 2004 and has sold over two million units. The 301 first goes on sale in November 2012 in Turkey then progressively: Central and Eastern Europe, Russia, Ukraine, Greece, Maghreb, Middle East, Gulf and African States, plus Latin America.

PRODUCTION  PSA's global output of cars and LCVs fell by 18.5% in H1-2012, to 1,605,000 units.  During the first half, capacity utilisation in PSA's European plants averaged 76% and for its small-car plants the figure was even lower. This was the background to the announcement in mid-July of the planned closure of the Aulnay assembly plant and the down-sizing of Rennes as well as job cuts at other plants throughout France and at PSA's headquarters. Further cuts cannot be ruled out and the Mangualde plant in Portugal (where the Berlingo/Partner reach the end of their current lifecycle in 2015) looks vulnerable.  Outside western Europe, the company is continuing with its expansion plans in China, Brazil and Russia, but the planned new assembly plant in India (where the ground-breaking ceremony was held at the end of November 2011) has been put on hold. It seems the possibility of PSA models being produced at one of GM's two Indian assembly plants is at least being considered but there have been some contradictory comments by PSA and GM officials in India on the subject.  At the start of July PCMA Rus, the PSA/MMC joint venture assembly plant at Kaluga in Russia held an opening ceremony marking the start of full-scale production. Production of the first model, the Peugeot 408, started in July. This will be followed by MMC's Outlander to be produced from November 2012. Later the range of models to be assembled at the plant will be extended with Citroen cars.

Passenger Car OEM Quarterly Data Book Q2-2012 Section 1: Company updates 55

Renault Automobile

FINANCIAL NEWS Jan-Jun 2012 Like PSA, Renault suffered a decline in its first-half results but unlike PSA it remained profitable at the operating and net levels.

Group revenue dropped by 0.8% as a 1.4% drop in automotive revenue was partly offset by an increase in the finance division's contribution. The automotive division's recurring operating profit dropped to €87m from €221m in H1-2011.

Figure 26: Renault results

Renault Unit H1-12 Q2-12 Yr to Dec 11 H1-11 Q2-11 Q1-11

Group data Data % ch. Data % ch. Data % ch. Data % ch. Data % ch. Revenue € mils 20,935 (0.8) 11,400 6.8 42,628 9.4 21,101 7.3 10,670 0.7 Operating profit (5) € mils 482 (23.5) - 1,091 (0.7) 630 (19.2) - Pre-tax profit € mils 1,022 (18.1) - 2,647 (25.4) 1,248 24.4 - Net profit € mils 786 (37.3) - 2,139 (38.7) 1,253 52.2 - Employees 000's 124.3 0.0 124.3 0.0 128.3 3.2 124.3 0.0 124.3 0.0

Unit sales 000's 1,328.4 (3.3) 689.9 1.2 2,722.1 3.6 1,374.4 1.9 681.8 (1.8) Renault 000's 1,113.9 (2.4) 576.1 1.9 2,260.7 6.8 1,141.0 5.8 565.3 2.4 Samsung 000's 33.2 (41.2) 15.1 (42.3) 118.1 (27.0) 56.5 (35.6) 26.2 (42.0) Dacia 000's 181.3 2.5 98.7 9.4 343.2 (1.8) 176.9 (2.9) 90.2 (6.6) Per unit Revenue € 15,759 2.6 16,523 5.6 15,660 5.6 15,353 5.3 15,651 2.5 Operating profit (5) € 363 (20.8) - 401 (4.2) 458 (20.7) - Pre-tax profit € 769 (15.3) - 972 (28.0) 908 22.1 - Net profit € 592 (35.1) - 786 (40.8) 912 49.4 - Per employee Revenue € 168,414 (0.8) 91,708 6.8 332,170 5.9 169,749 7.3 85,836 0.7 Operating profit (5) € 3,877 (23.5) - 8,501 (3.8) 5,068 (19.2) - Pre-tax profit € 8,222 (18.1) - 20,626 (27.7) 10,040 24.4 - Net profit € 6,323 (37.3) - 16,668 (40.6) 10,080 52.2 - Sales units 10.7 (3.3) 5.6 1.2 21.2 0.3 11.1 1.9 5.5 (1.8) Return on revenue Operating profit (5) % 2.3 (0.7) - 2.6 (0.3) 3.0 (1.0) - Pre-tax profit % 4.9 (1.0) - 6.2 (2.9) 5.9 0.8 - Net profit % 3.8 (2.2) - 5.0 (3.9) 5.9 1.8 - Revenue by division Automobile € mils 19,863 (1.4) 10,850 6.6 40,679 9.4 20,143 7.3 10,178 0.4 Finance/Other € mils 1,072 11.9 550 11.8 1,949 8.3 958 7.6 492 7.0 Op. profit by division Automobile € mils 87 (61) - 328 (17) 221 (46) - Finance/Other € mils 395 (3) - 763 9 409 11 -

Notes: (1) Q1 is Jan-Mar, Q2 is Apr-Jun, Q3 is Jul-Sep, Q4 is Oct-Dec (2) % ch is change versus year-ago data (3) Full-year data is taken from annual report. It may not reconcile to quarterly data due to restatements. (4) Per Unit & Per Employee data include non-automotive op's (5) Operating profit excludes restructuring costs.

Passenger Car OEM Quarterly Data Book Q2-2012 Section 1: Company updates 56

The decline reflected:

 €(211)m - product mix, price and product enhancements;  €(176)m - volume decline;  €197m - cost reductions including a €72m increase in raw materials);  €59m - reduction in general expenses.

Group pre-tax profit dropped by 18.4% to €1,022m, helped by a €564m contribution from Nissan (H1-2011: €441m). Due to a higher tax charge, net profit fell more sharply, down 37.2% to €786m.

Outlook

The company has understandably given cautious view of its prospects for the rest of 2012, saying that so long as European demand doesn't deteriorate further, it remains in line to achieve its target of positive free cash flow in its automotive operations.

Corporate news Renault, LG Chem and the CEA (French Alternative Energies and Atomic Energy Commission) are preparing to sign a three-way agreement in September concerning next-generation battery production. In 2010, Renault and the CEA initiated a strategic partnership in the areas of clean vehicles and mobility for all. As part of this partnership, they signed several research agreements including a strategic co-operation contract for new battery technologies.

The joint Renault/CEA laboratory “advanced batteries”, set up as part of this agreement, has been tasked with developing new technology for lithium-ion batteries in the medium term. The studies conducted by the laboratory since 2010, have now reached a sufficient stage of maturity to plan life-sized tests with a manufacturer. Consequently a three-way agreement between Renault, CEA and LG Chem is currently being finalised and should be signed in September. This agreement complements the studies currently under way between Renault and the CEA, which have a broader reach, and will concern only the development of next-generation batteries. These batteries will deliver higher performance in terms of durability, and fast-charging capacity. LG Chem, which is recognised as a leading global player in electric batteries, will provide its technological expertise in this field, acquired over a period of over 15 years. To date, LG Chem has filed more than 6,000 patents.

SALES & MODEL PLANS Figure 27: Renault model plans Lifecycle Lifecycle Brand Model Segment Start End Renault Clio Small 2006 2012 Renault Fluence Lower Medium 2009 2014 Renault Fluence Z.E. Lower Medium 2011 2016 Renault Kangoo be bop Compact MPV 2015 2022 Renault Koleos Crossover 2015 2022 Renault L90 (Logan) Small 2009 2015 Renault Laguna Upper Medium 2012 2018 Renault Latitude (Samsung SM5) Upper Medium 2010 2015 Renault Mégane Lower Medium 2013 2021 Renault Modus & Grand Modus Compact MPV 2011 2018 Renault Nissan Juke rival Crossover 2012 2019 Ondelios (Espace & Grand Espace Renault Crossover 2015 2021 replacement) Renault Scala Lower Medium 2010 2013 Renault Scénic & Grand Scénic Compact MPV 2015 2021 Renault Symbol/Thalia Small 2008 2015 Renault Tondar90 (Dacia Logan) Small 2007 2015 Renault Trafic Génération/Passenger MPV 2013 2021 Renault Twingo City 2007 2013

Passenger Car OEM Quarterly Data Book Q2-2012 Section 1: Company updates 57

Renault Twingo Z.E. City 2013 2019 Renault Twizy Z.E. City 2011 2018 Renault US$2,500 car for India City 2012 2020 Coupé- Renault Wind 2016 2022 Convertible Renault Zoé Z.E. (EV) Small 2012 2019 Samsung New SM3 Lower Medium 2009 2016 Samsung New SM3 Z.E. Lower Medium 2011 2016 Samsung QM5 Crossover 2015 2023 Samsung SM1 (Hyundai Veloster rival) Coupé 2011 2017 Samsung SM3 CE (Classic Edition) Lower Medium 2002 2013 Samsung SM5 (Renault Latitude) Upper Medium 2009 2014 Samsung SM7 Upper Medium 2010 2016

 Renault's worldwide sales dropped by 3.3% in H1-2012 to 1,328,000 units. The decline was wholly attributable to the European market where sales fell by 14.8% to 708,095 units. Sales were higher in the Americas, Asia- Pacific, Euromed-Africa and Eurasia.  Renault is forecasting 5% growth in the global market in 2012. Offsetting the 6-7% decline in Europe are anticipated rises of 13% in Eurasia, 10% in Asia-Pacific, 5% in the Americas and 4% in Euromed-Africa.  Renault's 2012 launches include the Twizy and Zoe EVs, a facelifted Twingo and Clio IV, the Pulse and a B- segment sedan in India, the Dacia Lodgy, Dokker and a new Sandero. The fourth-generation Clio was unveiled in July, some 11.5 million sales after the launch of the original model in 1990. The fourth-generation Clio will be manufactured in Flins (France) and Bursa (Turkey) on a new version of the Renault-Nissan Alliance‟s common B platform.  Renault China is ready to start phase two of its current development strategy for the local market, a phase that will last three years, Beijing News has reported. The first phase of the plan ran from 2009 to 2011. In the second phase, the company plans to improve the quality of its customer service and expand the scope of its sales network. The report claims that in this phase Renault will introduce new promotional offers aimed at attracting new customers. These offers will include zero interest financing and discounts for returning buyers. In this phase, the company also intends to cut sales costs, thereby boosting its overall profitability. By the end of the year, the company plans to have 115 dealerships operating in China, with its sales networks reaching third- and fourth-tier cities.

PRODUCTION  First-half production dropped by 11% to 1,293,484 units.

 The Renault-Nissan Alliance will invest US$160m in Korea to meet anticipated demand for the next-generation Nissan Rogue and to accelerate growth of Renault Samsung Motors. Production of the Nissan Rogue crossover in Busan, Korea, will begin in 2014, with capacity of about 80,000upa.  Despite the Flins plants starting production of the fourth-generation Clio soon (see above), Renault has confirmed that it plans to cut 300 jobs at the plant over the next two years. It intends the job reductions to be achieved through early retirement and voluntary departures without any compulsory redundancies. As well the soon-to-be-replaced current generation Clio, Flins is preparing for production of the model's successor as well as the Zoe electric car, due to be launched later this year.  Renault's Chief Operating Officer, Carlos Tavares, has indicated that the company is targeting a lower breakeven point at 2.4 million upa, down from 2.6 million upa currently. Speaking at the Automotive News Europe Congress event in Monte Carlo, Tavares was quoted as saying: "Reducing the breakeven point of the company is a must ... we want to protect ourselves from volatility. That means in our mind being able to absorb a (vehicle sales drop) of 20%."

Passenger Car OEM Quarterly Data Book Q2-2012 Section 1: Company updates 58

Suzuki Motor Corporation

FINANCIAL NEWS Year to March 2012 Suzuki reported a 19.3% rise in net profit for 2011/12 fiscal year, as growth in its operating margin helped offset higher non-recurring losses.

Operating profit was 11.6% higher at ¥119.3bn but revenue dropped by 3.7% so the operating margin grew by 0.6pts to 4.7%. The net increase of ¥12.4bn reflects:

 ¥43.3bn lower expenses;  ¥35.3bn lower depreciation;  ¥22.6bn cost reductions;  ¥(54.2)bn change in sales & model mix;  ¥(28.9)bn exchange rates;  ¥(5.7)bn increased R&D.

Figure 28: Suzuki results

Suzuki Unit Yr to Mar 12 Q4-11/12 9Mo-11/12 H1-10/11 Yr to Mar 11 Q4-10/11

Group data Data Data % ch. Data % ch. Data % ch. Data Revenue ¥ bn 2,512.2 (3.7) 714.2 5.0 1,798.0 (6.7) 1,226.2 (7.0) 2,608.2 5.6 Operating profit ¥ bn 119.3 11.6 31.6 118.3 87.7 (5.1) 64.7 (5.9) 106.9 34.7 Pre-tax profit ¥ bn 116.8 (1.2) 28.0 117.1 88.7 (15.7) 58.7 (20.4) 118.2 27.8 Net profit ¥ bn 53.9 19.3 13.3 417.3 40.6 (4.7) 32.0 5.3 45.2 56.2 Employees 000's 52.7 0.0 52.7 0.0 52.7 0.5 52.4 0.0 52.7 2.9

Unit sales 000's 2,560.0 (3.1) 763.0 8.1 1,797.0 (7.2) 1,205.0 (4.0) 2,643.0 12.4 Japan 000's 596.0 1.4 195.0 28.3 401.0 (8.0) 261.0 (15.0) 588.0 (5.5) Other 000's 1,964.0 (4.4) 568.0 2.5 1,396.0 (7.0) 944.0 (0.4) 2,055.0 18.9 Per unit Revenue ¥ mils 0.98 (0.6) 0.94 (2.9) 1.00 0.5 1.02 (3.2) 0.99 (6.0) Operating profit ¥ mils 0.05 15.2 0.04 102.0 0.05 2.3 0.05 (2.0) 0.04 19.8 Pre-tax profit ¥ mils 0.05 2.0 0.04 100.9 0.05 (9.1) 0.05 (17.1) 0.04 13.7 Net profit ¥ mils 0.02 23.2 0.02 378.7 0.02 2.8 0.03 9.6 0.02 39.0 Per employee Revenue ¥ mils 47.64 (3.7) 13.54 5.0 34.10 (7.2) 23.40 (7.0) 49.46 2.7 Operating profit ¥ mils 2.26 11.6 0.60 118.3 1.66 (5.6) 1.24 (5.9) 2.03 31.0 Pre-tax profit ¥ mils 2.21 (1.2) 0.53 117.1 1.68 (16.2) 1.12 (20.4) 2.24 24.2 Net profit ¥ mils 1.02 19.3 0.25 417.3 0.77 (5.2) 0.61 5.3 0.86 51.9 Sales units 48.5 (3.1) - 34.1 (7.7) 23.0 (4.0) 50.1 9.3 Return on revenue Operating profit % 4.7 0.6 4.4 2.3 4.9 0.1 5.3 0.1 4.1 0.9 Pre-tax profit % 4.6 0.1 3.9 2.0 4.9 (0.5) 4.8 (0.8) 4.5 0.8 Net profit % 2.1 0.4 1.9 1.5 2.3 0.0 2.6 0.3 1.7 0.6 Revenue by division Automobile ¥ bn 2,209.0 (4.9) 634.8 3.2 1,574.2 (7.8) 1,062.0 (9.1) 2,323.0 6.4 Motorcycle ¥ bn 254.8 (1.1) 66.0 (7.6) 188.8 1.4 137.7 4.9 257.7 (2.0) Other ¥ bn 48.5 76.2 13.5 (325.6) 35.0 4.6 26.5 38.7 27.5 24.0 Op. profit by division Automobile ¥ bn 114.6 5.6 28.8 103.5 85.8 (9.1) 60.3 (11.9) 108.5 19.8 Motorcycle ¥ bn (2.4) (77.5) 0.4 (110.0) (2.8) (60.2) 0.7 (117.9) (10.8) (48.6) Other ¥ bn 7.2 (22.3) 2.5 (39.9) 4.7 (8.1) 3.7 (18.7) 9.2 (6.1)

Notes: (1) Q1 is Apr-Jun, Q2 is Jul-Sep, Q3 is Oct-Dec, Q4 is Jan-Mar (2) % ch is change versus corresponding year-ago data (3) Full-yr data taken from ann. report may not reconcile to quarterly data due to restatements. (4) Per Unit & Per Employee data include non-automotive op's

Passenger Car OEM Quarterly Data Book Q2-2012 Section 1: Company updates 59

In the automobile division the operating margin was higher than the group figure, at 5.2%, 0.4pts above the 2010/11 result.

Outlook Suzuki is less upbeat on the prospects for 2012/13 than several of its peers. It anticipates a 3.5% rise in revenue and an increase of just 0.6% in operating profit to ¥120bn, a margin of 4.7%.

The company anticipates the margin decline will occur due to adverse exchange rates and other expense increases including higher R&D spending.

Corporate news  In June Mazda launched the Flairwagon in Japan. The micro-mini tall wagon is a rebadged Suzuki Palette, supplied by Suzuki which also supplies the model to Nissan which badges it as the Roox.  Suzuki has expressed confidence that it will be successful in terminating its relationship with VW as legal arbitration gets under way.

SALES & MODEL PLANS Figure 29: Suzuki model plans Lifecycle Lifecycle Brand Model Segment Start End Maruti Suzuki (5th gen) Alto/Alto K-10 Small 2000 2013 Maruti Suzuki (seventh generation) A-star Small 2008 2015 Maruti Suzuki Eeco Mini-MPV 2010 2022 Maruti Suzuki Estilo City 2007 2020 Maruti Suzuki Gypsy SUV 1985 2013 Maruti Suzuki Gypsy replacement SUV 2013 2024 Maruti Suzuki Kizashi Upper Medium 2011 2017 Maruti Suzuki Kizashi replacement Upper Medium 2017 2024 Maruti Suzuki M800 (no direct replacement expected) City 1984 2016 Maruti Suzuki Omni (no direct replacement expected) Micro-MPV 1994 2016 Maruti Suzuki R111 Mini-MPV 2011 2020 Maruti Suzuki Ritz City 2009 2015 Maruti Suzuki Ritz replacement (twin of the Suzuki Splash) City 2015 2022 Maruti Suzuki Swift & Dzire Small 2005 2011 Maruti Suzuki Swift replacement/Dzire replacement Small 2011 2016 Maruti Suzuki SX4 Sedan Small 2007 2014 Maruti Suzuki SX4 Sedan replacement Small 2014 2021 Maruti Suzuki Wagon R City 2010 2020 Suzuki (seventh gen) Swift Small 2015 2020 Suzuki (sixth gen) Swift Small 2010 2015 Suzuki Alto Lapin Kei 2008 2014 Suzuki Alto Lapin replacement Kei 2014 2020 Suzuki APV Arena Mini-MPV 2004 2012 Suzuki APV Arena replacement Mini-MPV 2012 2020 Suzuki Equator (no replacement expected) Pick-up 2008 2011 Suzuki Escudo replacement SUV 2014 2021 Suzuki Escudo/Grand Vitara/Vitara SUV 2005 2014 Suzuki Friend & Landy (China) Mini-MPV 2006 2013 Suzuki Friend & Landy replacements (China) Mini-MPV 2013 2020 Suzuki Jimny & Jimny Sierra Kei & SUV 1998 2011 Jimny replacement & Jimny Sierra Suzuki Kei & SUV 2011 2024 replacement

Passenger Car OEM Quarterly Data Book Q2-2012 Section 1: Company updates 60

Suzuki Kizashi Upper Medium 2009 2016 Suzuki Kizashi Hybrid Upper Medium 2012 2016 Suzuki Kizashi replacement Upper Medium 2016 2023 Suzuki Landy Mini-MPV 2010 2016 Suzuki Landy replacement Mini-MPV 2016 2022 Suzuki MR-Wagon Kei 2010 2014 Suzuki MR-Wagon replacement Kei 2014 2018 Suzuki Northstar e+ City 2001 2013 Suzuki Northstar e+ replacement (China) City 2013 2020 Suzuki Palette & Palette SW Kei 2008 2013 Suzuki Palette replacement Kei 2013 2018 Suzuki Solio City 2011 2016 Suzuki Solio replacement City 2016 2021 Suzuki Splash City 2007 2014 Suzuki Splash replacement City 2014 2021 Suzuki Swift plug-in hybrid Small 2011 2012 Suzuki Swift+ (Canada only, no direct replacement) Small 2003 2011 Suzuki SX4 replacement/Tianyu SX4 replacement Small 2012 2017 Suzuki SX4/Tianyu SX4 Small 2005 2012 Suzuki Wagon R & Stingray replacements Kei 2013 2018 Suzuki Wagon R & Wagon R Stingray Kei 2008 2013

 During the first six months of 2012 Suzuki's domestic sales (cars and CVs) rose by 38.4% to 367,052 units, under-performing the 53.6% rise in the overall market.  As discussed in the previous edition of this report, Suzuki's sales in the US remain weak and the rumours about the company's possible withdrawal from the market are flourishing. In H1-2012 Suzuki's sales in the US dropped by 3% to just 13,000 units, under-performing the 15% increase in the overall market. It seems clear that doing nothing is not an option - Suzuki needs either to quit the market or make a major investment in renewing its position.

PRODUCTION  In India Maruti Suzuki India has signed an agreement to purchase about 700 acres of land for its new plant in Gujarat state, western India. The new plant in Gujarat will join the two existing plants in Gurgaon and Manesar, both located in Haryana. The Manesar plant is also strengthening its production capacity. The third assembly line (Manesar C line) is scheduled to start its operation in mid 2013 with capacity of 250,000upa. With this line in operation, the total capacity of Maruti Suzuki would be 900,000upa in Gurgaon and 850,000upa in Manesar, a total of 1.75m upa. Maruti Suzuki plans to start the construction of the new plant in Gujarat after the Manesar C line officially starts its operation. The plant in Gujarat is planned to start its operation from between 2015 and 2016. The initial capacity of the plant is planned at 250,000upa with the total investment amount of approximately ¥60bn (40bn rupees). With this plant in operation, total capacity of Maruti Suzuki would be 2 million upa.  The Indian operations have been in the headlines for different reasons during July. Production at Manesar was stopped after a riot by workers that killed a senior manager and seriously injured scores of others. Maruti Suzuki has said it will not restart production at the plant until completion of an investigation into the incident. The Indian authorities have already arrested around 100 people for murder and arson but say they want to investigate the entire 3,000-strong labour force. Around two dozen senior managers are still hospitalised, mostly with broken arms and legs. Apart from the immediate shock at the death and injuries, the incident has raised fears about the future of the plant and concern about the wider message it sends to potential investors in India. In 2011, the Manesar plant lost about 64 work days in three separate rounds of strikes and lockouts. The unrest led to lost production of around 65,000 cars.

Passenger Car OEM Quarterly Data Book Q2-2012 Section 1: Company updates 61

Toyota Group

FINANCIAL NEWS Year to March 2012 Toyota finished the 2011/12 fiscal year with a strong increase in profits but its full-year figures were dragged down by the adverse combination of natural disasters, strong yen, and, in the US particularly, tougher competition.

The company reported a 24% drop in full-year consolidated operating profit of ¥355.6bn on revenue which was 2.2% lower at ¥18,584bn. The operating margin dropped by 0.6pts to 1.9% - a substantial fall for a company which achieved margins in the 7.7-9.6% range over the seven years to March 2008.

The net decrease in operating profit of ¥112.7bn reflects:  ¥(250)bn - exchange rates;  ¥150bn - marketing activities;  ¥150bn - cost reductions;  ¥(162.6)bn - other.

Figure 30: Toyota results

Toyota Unit Yr to Mar 12 Q4-11/12 9Mo-11/12 H1-11/12 Yr to Mar 11 Q4-10/11

Group data Data % ch. Data % ch. Data % ch. Data % ch. Data % ch. Revenue ¥ bn 18,583.7 (2.2) 5,702.5 22.8 12,881.1 (10.2) 8,015.9 (17.2) 18,993.7 0.2 Operating profit ¥ bn 355.6 (24.1) 238.5 417.5 117.1 (72.3) (32.6) (110.1) 468.3 217.4 Pre-tax profit ¥ bn 432.9 (23.2) 235.7 467.2 197.2 (62.2) (1.4) (100.4) 563.3 93.3 Net profit ¥ bn 283.6 (30.5) 121.0 376.4 162.4 (57.6) 81.5 (71.8) 408.2 67.1 Employees 000's 317.7 0.0 317.7 0.0 317.7 0.0 322.8 1.5 317.7 (0.9)

Unit sales 000's 7,352 0.6 2,357 31.6 4,995 (9.5) 3,026 (18.5) 7,308 1.0 Japan 000's 2,071 8.2 713.4 67.9 1,357 (8.8) 797 (26.6) 1,913 (11.5) Nafta 000's 1,872 (7.8) 603.9 25.0 1,269 (18.1) 689 (33.8) 2,032 (3.1) Europe 000's 798 0.3 218.9 (0.5) 579 0.6 361 (1.9) 796 (7.3) Asia 000's 1,327 5.8 433.7 25.7 893 (1.8) 614 6.8 1,254 28.1 Other 000's 1,284 (2.2) 387.3 21.8 897 (9.9) 565 (12.5) 1,313 15.2 Per unit Revenue ¥ mils 2.53 (2.7) 2.42 (6.7) 2.58 (0.9) 2.65 1.7 2.60 (0.7) Operating profit ¥ mils 0.05 (24.5) 0.10 293.2 0.02 (69.4) (0.01) (112.4) 0.06 214.4 Pre-tax profit ¥ mils 0.06 (23.6) 0.10 331.0 0.04 (58.3) (0.00) (100.4) 0.08 91.4 Net profit ¥ mils 0.04 (30.9) 0.05 262.0 0.03 (53.1) 0.03 (65.4) 0.06 65.5 Per employee Revenue ¥ mils 58.49 (2.2) 17.95 22.8 40.54 (10.2) 24.83 (18.4) 59.78 1.1 Operating profit ¥ mils 1.12 (24.1) 0.75 417.5 0.37 (72.3) (0.10) (109.9) 1.47 220.3 Pre-tax profit ¥ mils 1.36 (23.2) 0.74 467.2 0.62 (62.2) (0.00) (100.4) 1.77 95.0 Net profit ¥ mils 0.89 (30.5) 0.38 376.4 0.51 (57.6) 0.25 (72.2) 1.28 68.7 Sales units 23.1 0.6 7.4 31.6 15.7 (9.5) 9.4 (19.8) 23.0 1.9 Return on revenue Operating profit % 1.9 (0.6) 4.2 3.2 0.9 (2.0) (0.4) (3.7) 2.5 1.7 Pre-tax profit % 2.3 (0.6) 4.1 3.2 1.5 (2.1) (0.0) (4.1) 3.0 1.4 Net profit % 1.5 (0.6) 2.1 1.6 1.3 (1.4) 1.0 (2.0) 2.1 0.9 Revenue by division Automotive ¥ bn 16,994.5 (2.0) 5,279.1 25.1 11,715.4 (10.7) 7,244.0 (18.3) 17,337.2 0.8 Finance ¥ bn 1,100.3 (7.7) 272.0 (6.5) 828.3 (8.1) 556.8 (7.8) 1,192.3 (4.3) Other & intra-co. ¥ bn 488.8 5.3 151.5 14.1 337.3 1.8 215.1 1.9 464.2 (8.6) Op. profit by division Automotive ¥ bn 21.7 - 174.5 - (152.8) (249.5) (210.0) (261.9) 86.0 - Finance ¥ bn 306.4 (14.5) 51.9 (10.6) 254.5 - 171.0 (6.9) 358.2 45.1 Other & intra-co. ¥ bn 27.5 - 12.1 - 15.4 - 6.4 - 24.1 -

Notes: (1) Q1 is Apr-Jun, Q2 is Jul-Sep, Q3 is Oct-Dec, Q4 is Jan-Mar (2) % ch is change versus corresponding year-ago data (3) Full-year data taken from annual report may not reconcile to quarterly data due to restatements. (4) Per Unit & Per Employee data include non-automotive op's

Figure 31:

Passenger Car OEM Quarterly Data Book Q2-2012 Section 1: Company updates 62

The profit contribution from the finance division exceeded that of the automotive division for seven successive quarters, only in the final quarter of the fiscal year did automotive earnings move ahead. In more typical times automotive earnings are 10-20 times higher than finance. Over the full year the finance division contributed ¥306.4bn to group operating profit compared with ¥21.6bn automotive earnings. The automotive division's operating margin was just 0.12%.

On a regional basis there was an operating loss in Japan of ¥(207)bn (year-ago loss: ¥(362.4)bn). In NAFTA profit was 45% lower at ¥186.4bn; in Asia (excluding Japan) the profit was 18% lower at ¥256.7bn, in Europe there was a 35% rise to ¥17.7bn and in the rest of the world profit was 32% lower at ¥108.8bn.

Outlook Coming from such a low base it is not surprising that Toyota is forecasting one of the strongest rebounds among the Japanese OEMs. The company' anticipates net profit in the year to March 2013 will more than double to ¥760bn.

Revenue is expected to grow by 18.4% as vehicle sales rise a similar amount to 8.7 million units. The operating margin is forecast at a relatively modest 4.5%, leading to a 2.8-times increase to ¥1,000bn. As indicated, this impressive sounding increase does need to be put in context with a reminder that Toyota was earning over ¥2,200bn in operating profit five years ago. However, it should also be remembered that five years ago the yen/US$ rate was around ¥122 compared with an average rate of around ¥83 in 2011.

Corporate news  In June 2012, BMW and Toyota two signed a Memorandum of Understanding aimed at long-term strategic collaboration in four fields: joint development of a fuel cell system, joint development of architecture and components for a future sports vehicle, collaboration on powertrain electrification and joint research and development on lightweight technologies. This followed agreements between the two companies in November 2011 for BMW to supply Toyota with diesel engines in Europe from 2014; and in March 2012 for collaborative research in the field of next-generation lithium-ion battery cells.

The MoU is consistent with the original agreement in 2011 which included the commitment to identify and discuss other possible collaborative projects.

 In July Toyota and PSA announced an agreement for PSA to supply Toyota with LCVs for sale in Europe under the Toyota brand. Initially, starting in Q2-2013, PSA Citroën will supply medium vans derived from the Expert/Jumpy. A second phase will see the two firms collaborating on next generation vehicles which are to be produced by PSA. The collaboration is expected to last beyond 2020. SALES & model plans Figure 32: Toyota model plans Lifecycle Lifecycle Brand Model Segment Start End Daihatsu Altis (Camry based) Upper Medium 2011 2016 Daihatsu Atrai Wagon Kei 2005 2012 Be Go (near-identical to Toyota Rush) / Terios / Daihatsu Kei / SUV 2006 2015 Terios Kid Daihatsu Boon / Sirion (near-identical to Toyota Passo) Small 2010 2014 Boon Luminas (near-identical to Toyota Passo Daihatsu Compact MPV 2010 2011 Sette) Daihatsu Coo / Materia (Toyota bB) Small 2006 2013 Daihatsu Copen Coupe/Convertible 2002 2013 Cuore (European markets version of Japan's Daihatsu City 2007 2011 Mira) Daihatsu Esse Kei 2005 2012 Daihatsu Luxio Compact MPV 2009 2015 Daihatsu Mira Kei 2006 2011? Daihatsu Mira Cocoa Kei 2009 2014 Daihatsu Move & Move Custom Kei 2006 2010 Daihatsu Move Conte Kei 2008 2013

Passenger Car OEM Quarterly Data Book Q2-2012 Section 1: Company updates 63

Daihatsu Tanto Exe & Tanto Exe Custom Kei 2009 2016 Daihatsu Terios (1st generation) SUV 1997 2010 Xenia / D-01 / Sen Ya (Chinese build ended in Daihatsu Compact MPV 2004 2013 2010) Lexus CT 200h Lower Medium 2010 2017 Lexus ES Upper Medium 2006 2012 Lexus ES replacement & ES Hybrid Upper Medium 2012 2017 Lexus GS & GS Hybrid Executive 2005 2012 Lexus GX SUV 2009 2016 Lexus HS 250h Upper Medium 2009 2015 Lexus IS (sedan) Upper Medium 2005 2012 Lexus IS-C Coupe/Convertible 2009 2013 Lexus LFA Coupe/Convertible 2010 2012 Lexus LS & LS Hybrid Executive 2006 2012 Lexus LX SUV 2007 2014 Lexus RX (RX 350 only) Crossover 2009 2015 Lexus RX Hybrid (RX 450h) Crossover 2009 2015 Lexus SC Coupe/Convertible 2001 2010 Scion FR-S (FT-86) Coupe/Convertible 2013 2020 Scion iQ City 2010 2016 Scion FR-S Sports 2012 2019 Scion tC Sports Coupe Coupe/Convertible 2010 2016 xB (virtually identical to Toyota Corolla Rumion Scion Small 2007 2013 & Rukus) xD (virtually identical to Toyota ist / Urban Scion Small 2007 2012 Cruiser) Allion (also Premio: rebadged and sold by Toyota Upper Medium 2007 2013 different dealer networks in Japan) Toyota Alphard MPV 2008 2014 Toyota Aurion Upper Medium 2006 2012 Toyota Auris/Corolla/Corolla Altis/Ka Luo La Lower Medium 2006 2012 Toyota Auris HSD (Hybrid) Lower Medium 2010 2012 Toyota Avalon Upper Medium 2004 2012 Toyota Avanza (Daihatsu Xenia) Compact MPV 2004 2012 Toyota Avensis Upper Medium 2008 2012 Toyota Aygo City 2005 2012 bB (virtually identical to Daihatsu Coo / Toyota Small 2005 2013 Materia) Toyota Blade Lower Medium 2006 2012 Toyota Camry Upper Medium 2011 2016 Toyota Camry Hybrid Upper Medium 2011 2016 Toyota Century Executive 1997 2011 Toyota Corolla (see Toyota Auris) Corolla sedan and Fielder wagon (eighth Toyota Lower Medium 2004 2011 generation) Toyota Corolla Rumion / Rukus (identical to Scion xB) Small 2007 2012 Toyota Crown & Crown Comfort Upper Medium 1995 2011? (13th gen) Crown: Crown Royal / Crown Toyota Executive 2008 2013 Athlete / Crown Hybrid Toyota Crown Majesta (Japan) / Crown (China) Executive 2005 2014 Toyota Estima / Previa / Tarago MPV 2005 2011 Toyota Estima Hybrid MPV 2005 2011 Toyota Etios Small 2010 2018 Toyota FJ Cruiser SUV 2006 2013 Toyota Fortuner / Hilux SW4 SUV 2004 2013 Toyota 86 (GT 86) Coupe/Convertible 2012 2019

Passenger Car OEM Quarterly Data Book Q2-2012 Section 1: Company updates 64

Toyota Harrier Crossover 2003 2010 Toyota Harrier Hybrid Crossover 2003 2010 Hiace / Hiace Grand Cabin / Ventury / Toyota MPV 2005 2013 Quantum / Sesfikile Toyota Highlander / Kluger Crossover 2007 2012 Toyota Highlander Hybrid / Kruger Hybrid Crossover 2007 2012 Toyota Hilux Pick-up 2004 2013 Toyota Hilux Surf / 4-Runner SUV 2009 2016 Toyota Hilux Vigo SUV 2004 2012 Toyota Hydrogen fuel cell vehicle TBA 2014 / 2015 TBA Toyota Innova / Kijang Innova MPV 2004 2013 Toyota iQ City 2008 2016 Toyota electric iQ City 2012 2016 Toyota Isis Compact MPV 2004 2011 07 (ist) / 09 Toyota ist / Urban Cruiser( Scion xD) Small 2013 (Urb Cruiser) Toyota Land Cruiser / Land Cruiser 200 SUV 2007 2015 Toyota Land Cruiser 70 Series Pick-up 2007 2015 Toyota Land Cruiser Prado/ LC5 SUV 2009 2016 Toyota Mark X (see also Toyota Reiz) Upper Medium 2009 2015 Toyota Mark X ZiO / Venza Crossover 2008 2016 Toyota Matrix / Corolla Matrix) Lower Medium 2008 2013 Mini-vehicles (2 more Daihatsu models to Toyota Kei 2011/12 n/a follow Pixis) Toyota Noah (Voxy) MPV 2007 2013 Toyota Passo (Daihatsu Boon) Small 2010 2014 Toyota Passo Sette (Daihatsu Boon Luminas) Compact MPV 2009 2011 Toyota Pixis (Daihatsu Move Conte) Kei 2011 2013 Toyota Porte City 2004 2011 Toyota Prado Sumo / Merú SUV 2000 2010 Toyota Premio (Allion) Upper Medium 2007 2013 Toyota Prius EX 2nd gen Prius, renamed in Japan Lower Medium 2003 2012 Toyota Prius (third gen) & Prius Plug-in Hybrid Lower Medium 2009 2015 Toyota Prius- C concept Compact 2012 2018 Toyota Priius V / Alpha / + Crossover 2011 2017 Toyota Probox (Succeed) Compact MPV 2002 2010 Toyota Ractis Compact MPV 2010 2015 Toyota Raum Compact MPV 2003 2011 Toyota RAV4 SUV 2005 2012 Reiz (replacement model for China, already Toyota Upper Medium 2010 2015 built in Japan as Toyota Mark X) Toyota Rush (Daihatsu Be Go) SUV 2006 2015 Toyota Sai Lower Medium 2009 2015 Toyota Sequoia SUV 2007 2014 Toyota Sienna MPV 2010 2017 Toyota Sienta Compact MPV 2003 2010 Toyota Sienta (re-introduced) Compact MPV 2011 2017 Toyota Succeed (Probox) Compact MPV 2002 2010 Toyota Tacoma Pick-up 2004 2013 Toyota Tundra Pick-up 2006 2013 Toyota Vanguard SUV 2007 2015 Toyota Vellfire MPV 2008 2014 Toyota Verso Compact MPV 2009 2014 Toyota Vios / Belta / Yaris Belta / Yaris sedan Small 2010 2015

Passenger Car OEM Quarterly Data Book Q2-2012 Section 1: Company updates 65

Toyota Vitz / Yaris Small 2010 2015 Toyota Voxy (also Noah) MPV 2007 2013 Toyota Vitz/Yaris-based hybrid Small 2012 2016 Toyota Wish Compact MPV 2009 2016

 New registrations of Toyota-brand vehicles in Japan rose by 85% to 0.893 million units in H1-2012, substantially outperforming the 53.6% rise in the overall market.  For 2012/13 the company is aiming to sell 8.7 million units, a rise of 18%. Sales in Japan are targeted at 2.2 million units, a 6.2% rise and overseas sales are planned to rise by 23% to 6.5 million units.  In July the company launched the completely redesigned Porte compact minivan, and its new counterpart, the Spade. The pair will be sold across Japan, the Porte through Toyota and Toyopet dealers, and the Spade through Toyota Corolla and Netz dealers. The monthly sales target for each model in Japan is 4,000 units.

 At the end of April Toyota's cumulative sales of its hybrid vehicles exceeded 4 million units since the first models (Coaster Hybrid, followed by the Prius) were launched in 1997. The company currently sells 18 hybrid, passenger vehicle models in approximately 80 countries and regions around the world. This year, hybrid vehicles have accounted for 15% of its global vehicle sales. With the Yaris Hybrid scheduled for launch in Europe soon and the Lexus ES 300h in the US, sales should increase at a faster rate.

PRODUCTION  During H1-2012 Toyota's global production rose by 55.5% to 5.248 million units. Domestic production was 74.3% higher and overseas output was up by 42.8%. The year-ago figures were distorted by the Japanese earthquake.  Toyota Motor Manufacturing Canada will increase production capacity for the Lexus RX 350 SUV and start production of the Lexus RX 450h gasoline-electric hybrid SUV in early 2014. Capacity for the RX 350, produced at TMMC's Cambridge Plant, will rise by 15,000upa to 89,000upa. RX 450h production is to begin with an initial capacity of 15,000upa, bringing total RX annual production capacity at Cambridge to 104,000upa. Combined with the Toyota RAV4 capacity increase at TMMC's Woodstock plant of 50,000upa planned for early 2013, the RX production capacity increase will raise TMMC's total production capacity from 420,000upa currently to 500,000upa by early 2014. Investment associated with the RX capacity increase will be more than US$100m, including investments toward related suppliers, and will create approximately 400 new jobs.  In China Toyota Motor (Changshu) Auto Parts Co. was established on July 23, in the Changshu Southeast Economic Development Zone, Jiangsu Province, China. The transmission-production company is scheduled to start production in September 2014 with a planned, initial capacity of 240,000upa. About US$285m is being invested, with the new company expected to create 850 jobs. TMCAP will primarily produce continuously variable transmissions in preparation for the expected demand increase there for small-engine vehicles.  In May Sichuan FAW Toyota Motor, the vehicle manufacturing joint-venture established by Toyota and China FAW Group, started production of the Corolla sedan at the new West Plant in Changchun. Initial planned Corolla production at West Plant is approximately 100,000upa.

Passenger Car OEM Quarterly Data Book Q2-2012 Section 1: Company updates 66

VW Group

FINANCIAL NEWS Jan-Jun 2012 By the standards of its mass-market European competitors VW reported a very strong set of first-half results, though its rate of earnings slowed in the second quarter.

First-half group revenue was 23% higher as consolidated sales rose by 8.9% and the year-on-year comparison was flattered by the inclusion of Porsche Holding Salzburg and MAN SE (respectively consolidated on March 1, 2011 and November 9, 2011). Revenue was higher in all main divisions with the exception of an 8.5% decline at Scania.

Group operating profit increased by 6.7% to €6.49bn and the margin fell 1.0pts to 6.8%. Audi remained the dominant division, earning 13.2% more at €2.876bn compared with the VW passenger car division which reported a 3.8% increase to €2.21bn. The financial services division was the next largest contributor with a 20% rise to €665m, followed by Scania with a 36% drop to €477m. MAN earned €354m and Skoda's earnings grew by 8.9% to €449m. The CV division reported a 3% rise in profit to €242m. Bentley recovered to a €57m profit from a year-ago €(17)m loss and Seat reduced its loss to €(42)m from €(48)m.

Figure 33: VW results

VW Unit H1-12 Q2-12 Yr to Dec 11 H1-11 Q2-11 Q1-11

Group data Data % ch. Data % ch. Data % ch. Data % ch. Data % ch. Revenue € mils 95,378 22.6 48,052 19.2 159,337 25.6 77,767 25.8 40,297 21.5 Operating profit € mils 6,492 6.7 3,283 3.4 11,271 57.8 6,086 114.2 3,174 59.3 Pre-tax profit € mils 10,057 22.2 5,757 (4.2) 18,926 110.4 8,233 213.6 6,010 212.7 Net profit € mils 8,827 35.9 5,641 17.9 15,799 118.6 6,496 256.1 4,784 254.1 Employees 000's 518.7 19.2 518.7 19.2 502.0 25.7 435.3 15.4 435.3 15.4

Unit sales 000's 4,451.7 8.9 2,294.3 8.3 8,160.2 14.3 4,088.2 13.1 2,119.0 13.4 Europe / Other 000's 2,062.5 2.6 1,067.7 1.5 3,990.3 12.0 2,009.5 7.1 1,051.8 5.4 Asia-Pacific 000's 1,477.3 17.6 751.2 18.4 2,569.8 20.0 1,256.5 19.3 634.7 16.1 Nafta 000's 389.8 22.1 210.7 20.2 666.8 21.4 319.1 21.1 175.2 23.9 S America/S Africa 000's 522.1 3.8 264.7 2.9 933.3 5.1 503.0 19.8 257.3 40.3 Per unit Revenue € 21,425 12.6 20,944 10.1 19,526 9.9 19,023 11.2 19,017 7.2 Operating profit € 1,458 (2.0) 1,431 (4.5) 1,381 38.1 1,489 89.3 1,498 40.4 Pre-tax profit € 2,259 12.2 2,509 (11.5) 2,319 84.1 2,014 177.2 2,836 175.8 Net profit € 1,983 24.8 2,459 8.9 1,936 91.3 1,589 214.8 2,258 212.3 Per employee Revenue € 183,879 2.9 92,639 0.1 317,432 (0.1) 178,652 9.0 92,573 5.3 Operating profit € 12,516 (10.5) 6,329 (13.2) 22,454 25.6 13,981 85.6 7,292 38.0 Pre-tax profit € 19,389 2.5 11,099 - 37,704 67.4 18,913 171.7 13,807 - Net profit € 17,018 14.0 10,875 (1.0) 31,475 74.0 14,923 208.5 10,990 206.8 Sales units 8.6 (8.6) 4.4 (9.1) 16.3 (9.1) 9.4 (2.0) 4.9 (1.8) Return on revenue Operating profit % 6.8 (1.0) 6.8 (13.3) 7.1 1.4 7.8 3.2 7.9 31.1 Pre-tax profit % 10.5 (0.0) 12.0 (19.7) 11.9 4.8 10.6 6.3 14.9 157.3 Net profit % 9.3 0.9 11.7 (1.1) 9.9 4.2 8.4 5.4 11.9 191.4 Revenue by sector Automotive € mils 85,760 23.7 43,129 20.5 142,093 26.0 69,335 26.0 35,783 21.1 Financial Services € mils 9,618 14.1 4,923 9.1 17,244 22.6 8,432 24.0 4,514 25.1 Op. profit by division Automotive € mils 5,761 5.0 2,895 0.6 9,973 61.1 5,486 121.7 2,878 60.6 Financial Services € mils 731 21.8 388 31.1 1,298 36.3 600 63.5 296 47.3 Other € mils 0 - - 0 - 0 - - Notes: (1) Q1 is Jan-Mar, Q2 is Apr-Jun, Q3 is Jul-Sep, Q4 is Oct-Dec (2) % ch is change versus corresponding year-ago data

(3) Full-year data taken from annual report may not reconcile to quarterly data due to restatements. (4) Per Unit & Per Employee data include non-automotive op's

Passenger Car OEM Quarterly Data Book Q2-2012 Section 1: Company updates 67

The net increase in group operating profit of €406m reflected:

 €0.9m - product cost savings;  €0.8m - volume, mix and price;  €0.5m - exchange rates;  €(1.4)m - fixed costs and start-up costs;  €(0.4)m - other.

The group's net profit was boosted by the contributions by its Chinese joint ventures.

Outlook The company forecasts that 2012 revenue will exceed the prior-year figure. This will also be a result of the consolidation of MAN SE as of November 9, 2011.

Its goal for operating profit is to match the 2011 level. According to the company: "Positive effects from our attractive model range and strong market position will be offset in part by increasingly stiff competition in a challenging market environment, especially in certain European countries. Disciplined cost and investment management and the continuous optimization of our processes remain core components of our Strategy 2018."

Corporate news  VW and Porsche Automobil Holding SE (Porsche SE) are set to create an integrated automotive group through the contribution in full of Porsche‟s automotive business to the Volkswagen Group, with effect from August 1, 2012. Porsche SE will receive around €4.46bn and one VW ordinary share as consideration for contributing the 50.1% of Porsche AG not yet owned by Volkswagen.  In June VW increased its share of the voting rights in MAN SE from 73.76% to 75.03%  Also in June the company announced it "is giving extra momentum to its Strategy 2018 with an extensive structural and management realignment". Under the reorganisation a new Board of Management function for China will be set up at Group level. The group delivered some 2.3 million vehicles in the China region in 2011 and reported a pro rata operating profit there of €2.6bn. The CV business has become the second strong pillar for the group in recent years and is now to be represented separately at Board level. The “Commercial Vehicles” division will be led by Leif Östling, currently Scania's CEO.  At the end of May VW and IG Metall successfully concluded pay negotiations. There was to be a 4.3% increase in base pay effective June 1, 2012. In addition it was agreed that VW would increase the number of apprenticeships in Germany by 175 per year over three years. It was also decided to transfer up to 3,000 temporary personnel to permanent employment by mid-2013.

SALES & MODEL PLANS Figure 34: VW model plans Lifecycle Lifecycle Brand Model Segment Start End Audi A1 (3-dr 2010, 5-dr 2011) City 2010 2016 Audi A2 Small 2015 - Audi A3, S3 Sportback Lower Medium 2003 2012 Audi A4 allroad Crossover 2009 2015 Audi A4, A4L, S4 Upper Medium 2007 2014 Audi A5, S5 Coupe/Convertible 2007 2015 Audi A6, A6L, S6 Upper Medium 2004 2011 Audi A6, A6L, S6 Upper Medium 2011 2018 Audi A7, S7 Executive 2010 2017 Audi A8, S8 Executive 2010 2018 Audi A9 (A8-based coupe) Coupe 2014 - Audi Q3 Crossover 2011 2018

Passenger Car OEM Quarterly Data Book Q2-2012 Section 1: Company updates 68

Audi Q5 Crossover 2008 2014 Audi Q5 Hybrid Crossover 2011 2014 Audi Q7 Crossover 2005 2013 Audi R8 Coupe/Convertible 2007 2014 Audi R8 e-tron Coupe/Convertible 2011 2012 Audi TT Coupe/Convertible 2006 2014 Bentley Azure & Brooklands Coupe/Convertible 2006 2012 Bentley Continental Flying Spur Executive 2005 2014 Bentley Continental GT Executive 2003 2011 Bentley Continental GT & GTC Executive 2011 2019 Bentley Continental GTC Executive 2006 2011 Bentley Mulsanne Executive 2009 2017 Bentley SUV SUV 2015 2023 Bugatti 16C Galibier Executive 2013 2021 Bugatti EB 16.4 Veyron Executive 2005 2013 Lamborghini Aventador (replaces Murcielago) Coupe/Convertible 2011 2019 Lamborghini Cabrera (replces Gallardo) Coupe/Convertible 2013 2021 Lamborghini Gallardo Coupe/Convertible 2003 2011 Lamborghini Murciélago Coupe/Convertible 2001 2010 Seat Alhambra MPV 2010 2017 Seat Altea, Altea XL, Freetrack Compact MPV 2004 2013 Seat Exeo Upper Medium 2008 2013 Seat Ibiza Small 2008 2014 Seat León Lower Medium 2005 2012 Seat Mii City 2011 2018 Seat Toledo Lower Medium 2004 2009 Seat New 4-dr sedan - Toledo? Lower Medium 2012 2018 Seat Tribu (twinned with Audi Q3) Crossover 2013 2020 Škoda Citigo City 2011 2018 Škoda Citigo MPV City 2014 - Škoda Fabia Jingrui (built by Shanghai Volkswagen) Small 2007 2015 Škoda Fabia, Fabia Scout Small, Crossover 2007 2014 Haorui (Superb sedan built by Shanghai Škoda Upper Medium 2009 2015 Volkswagen) Octavia Migrui (built by Shanghai Škoda Upper Medium 2007 2012 Volkswagen) Škoda Octavia Tour Upper Medium 1996 2012 Upper Medium, Škoda Octavia/Laura, Octavia Scout 2004 2012 Crossover Škoda Rapid Saloon Lower medium 2011 2018 Škoda Rapid Spaceback Lower medium 2012 2018 Roomster (next generation offered as 2 Compact MPV, Škoda 2006 2014/16 models) Crossover Škoda Superb Upper Medium 2008 2015 Škoda Superb SUV (above Yeti) SUV 2016 - Škoda Yeti (Next generation offered as 2 models) Crossover 2009 2015/16 Volkswagen Amarok Pick-up 2009 2018 Volkswagen Beetle Lower Medium 2011 2019 Volkswagen Caddy People, Caddy Life Compact MPV 2004 2014 Volkswagen California, Caravelle (next gen Microbus) MPV 2004 2014 Volkswagen CC/Passat CC Upper Medium 2008 2014 Volkswagen CrossFox Crossover 2004 2012 Volkswagen CrossPolo Crossover 2010 2016 Term. Volkswagen Eos Coupe/Convertible 2006 2014

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Volkswagen Fox City 2009 2017 Volkswagen Gol & Voyage Small 2008 2015 Volkswagen Golf Lower Medium 2008 2012 Compact MPV, Volkswagen Golf Plus & CrossGolf 2005 2012 Crossover Volkswagen Jetta/Vento Lower Medium 2010 2016 Volkswagen Lavida Lower Medium 2008 2015 Volkswagen Magotan (Mk VI Passat) Upper Medium 2007 2012 Volkswagen New Bora Lower Medium 2008 2015 Volkswagen Passat (Europe) Upper Medium 2005 2013 Volkswagen Passat (North America) Upper Medium 2011 2018 Volkswagen Phaeton Executive 2002 2015 Volkswagen Polo 'Raum' Compact MPV 2013 - Volkswagen Polo (Mk V) Small 2009 2015 Volkswagen Polo wagon Small 2013 - Volkswagen Routan MPV 2008 2014 Term. Volkswagen Santana Upper Medium 1991 2012 Volkswagen Santana Vista Upper Medium 2008 2015 Volkswagen Saveiro, Saveiro Cross Pick-up 2009 2017 Volkswagen Scirocco Coupe 2008 2014 Volkswagen Sharan MPV 2010 2017 Volkswagen Suran/SpaceFox/SportVan Compact MPV 2006 2012 Volkswagen SUV (N. America Passat-based) SUV 2015 - Volkswagen Tiguan SUV 2007 2013 Volkswagen Tiguan long wheelbase SUV 2009 2014 Volkswagen Touareg SUV 2010 2016 Volkswagen Touran/Golf Touran, CrossTouran Compact MPV 2003 2013 Volkswagen Up! City 2011 2019 Volkswagen XL1 (Ultra low emission car) City 2013 2022

 In H1-2012 VW Group sold 4.45 million vehicles, an 8.9% increase, outperforming the 8.5% rise that the company estimate for the overall global market.  Following a 12.3% rise in first-half sales Audi has now set a new 2012 sales target of 1.4 million units, 7.5% up on the 2011 sales total. Peter Schwarzenbauer, Member of the Board of Management for Marketing and Sales at Audi, commented: "The current order intake proves that the first half of the year will exceed our expectations in all regions. We have therefore now set ourselves a new target of 1.4 million deliveries for the year as a whole. Our growth in Europe continues to clearly buck the market trend, with especially stable development in Germany and the United Kingdom. We plan to set new sales records in 2012 in both markets."  In June Skoda showed the new Skoda Rapid which makes its public debut at the Paris show in September/October. The Rapid slots between the Fabia and the Octavia.  In April Shanghai VW presented the New Lavida at Auto China 2012 in Beijing. Launched in June 2008, cumulative sales of the VW Lavida exceeded 700,000 units in January 2012. The New Lavida is similar to the Passat. The sedan version will launch in China in mid-August followed by a hatchback version (not available on the outgoing model) in 2013.  The new Audi A3 goes on sale this summer. It is the first model to be based on VW's MQB platform, which is expected to deliver substantial cost savings in manufacturing while also improving product quality. The A3 hatch will (for the first time) be followed by a sedan version in 2013. The next generation Golf will be the next model based on the MQB platform.

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 Brazil‟s state-controlled Economic and Social Development Bank, BNDES, approved on 9 July the provision up to Real 342m (US$168m) to help finance Volkswagen do Brasil‟s development of a new subcompact model and facelifts of other locally-produced VW cars. The new small car is reported by the Deutsche Presse-Agentur to be planned to achieve a price below that of the Brazil-specific Gol, which in size bridges the gap between the Polo and Golf hatchbacks. The public sector finance is intended to build domestic supply chain capabilities capable of competing with VW‟s suppliers elsewhere - the supplier sector is an area where the Brazilian automotive industry is weak.

PRODUCTION

 Production rose by 11.9% in H1-2012 to 4.68m units, including the non-consolidated Chinese joint ventures. In Q2-2012 alone, production in Germany fell by 1.7% to 581,000 units.  Towards the end of July Shanghai Volkswagen's new plant in Yizheng, eastern China was inaugurated. The 300,000upa has started assembly of the Polo, the second Chinese plant to do so. It is also planned to produce Skoda models at the facility at a later stage. The objective of Volkswagen Group China is to increase annual production capacity to about four million units by 2018.  An unresolved VAT issue with the Maharashtra state government has resulted in VW putting on hold its proposed Rs20bn (US$367m) investment plan in India. The government had earlier refunded VAT paid on all vehicles sold by manufacturers which had plants in Maharashtra. However, this was modified in 2011, with the government saying that it would refund VAT only on vehicles sold within the state. In January 2012, VW announced plans to invest Rs20bn in India by 2013 to raise capacity, launch new models and bolster its research activities. VW's plants are located in Chakan and Aurangabad, in Maharashtra.

Passenger Car OEM Quarterly Data Book Q2-2012