J.D. Power Asia Pacific Reports: Chinese Domestic Auto Brands Gain Ground in Designing Appealing Cars

Beijing Hyundai and Shanghai General Motors Each Receive Two Model-Level Awards; Land Rover Ranks Highest among Nameplates

SHANGHAI: 29 November 2013 — When it comes to the appeal of new vehicles, Chinese domestic auto brands have narrowed the gap with international brands to its slimmest level since 2003, according to the J.D. Power Asia Pacific 2013 China Automotive Performance, Execution and Layout (APEAL) StudySM released today.

Now in its 11th year, the study examines how gratifying a new vehicle is to own and drive, based on owner evaluations during the first two to six months of ownership. The study examines 82 attributes across 10 vehicle performance categories: vehicle exterior; vehicle interior; storage and space; audio/ entertainment/ navigation; seats; HVAC; driving dynamics; engine/ transmission; visibility and driving safety; and fuel economy.

The overall APEAL score among Chinese domestic brands averages 772 points (on a 1,000-point scale), compared with 816 among international brands. The 44-point gap between domestic and international brands is the smallest in the history of the study and down from a 58-point gap in 2012.

Collectively, Korean brands achieve the highest average APEAL score by country of origin, with an average score of 838 points. European brands average 823 points, followed by U.S. (805) and Japanese (800) brands. Chinese brands average 32 points below industry average, an improvement from 2012 when they were 41 points below industry average.

The overall new-vehicle APEAL score in 2013 averages 804 points in 2013, decreasing by 18 points from 2012. This significant drop in vehicle APEAL is attributed to consumers in China having becoming more discerning, particularly because they have an ever-increasing range of new vehicles from which to choose.

“With more than 500 passenger vehicle models in the market1, it has become more difficult to woo Chinese consumers,” said Dr. Mei Songlin, vice president and managing director of J.D. Power China. “Our data shows that new-vehicle shoppers consider 2.62 brands, on average, before making their purchase decision, compared with 2.48 in 2012. Such comparisons have resulted in customers becoming more critical when rating their experience with their vehicle.”

The significant year-over-year price decline in the auto industry has also negatively impacted owner satisfaction with their vehicle, according to the 2013 study.

“If an owner sees the price of their newly purchased vehicle declining dramatically, their appreciation of the vehicle’s appeal is negatively affected,” said Dr. Mei. “Of the 12 segments included in the study, nine have experienced a decline in vehicle prices during the nine-month study period.”

1 LMC Automotive forecasts a total of 524 passenger vehicle models with a sales volume of 100 units and above. Import cars are included. (Page 1 of 3)

The study finds that new-vehicle performance has a strong impact on customer loyalty and advocacy. The more satisfied owners are with the performance of their vehicle, the more likely they are to recommend it to others and repurchase from the same brand in the future. Among owners whose vehicle achieved an APEAL score of 861 or higher, 31 percent say they “definitely will” repurchase a vehicle from the same manufacturer again, and 54 percent say they “definitely will” recommend their model to family and friends. In comparison, repurchase and recommendation intentions drop to 6 percent and 15 percent, respectively, among owners whose vehicle achieved an APEAL score of lower than 749.

“Key areas of focus for automakers in the Chinese market are smell of interior, fuel economy and seat materials,” said Tony Zhou, automotive research director at J.D. Power China. “In particular, improving smell of interior may improve customer satisfaction, as it is an area that receives low ratings from vehicle owners.”

Luxury brands earn the six highest-ranked positions among the 65 brands examined in the study. Land Rover ranks highest among nameplates, with a score of 857, followed by Audi and Mercedes-Benz (in a tie) with 848 each. Volvo (847) ranks fourth and Cadillac (845) fifth.

Two Chinese domestic brands—Luxgen and Zhonghua—rank above industry average.

Beijing Hyundai and Shanghai General Motors each receive two model-level awards: Beijing Hyundai for the Langdong Elantra (midsize) and ix35 (SUV) and Shanghai General Motors for the Chevrolet Sail (premium compact segment) and Buick New GL8 (MPV).

The Dongfeng Yueda (Kia K2) ranks highest in the entry midsize segment. Chinese domestic models Wuling Hongguang (mini van) and Baojun Lechi (compact) rank highest in their respective segments.

Other models ranking highest in their segments are the Audi Q5 (luxury SUV); Volkswagen Magotan (upper premium midsize); and Mercedes-Benz S-Class (luxury).

In total, 10 segments are eligible for awards in 20132. The highest-ranked models by segment are: • Compact segment: Baojun Lechi • Premium compact segment: Chevrolet Sail • Entry midsize segment: Kia K2 • Midsize segment: Hyundai Langdong Elantra • Upper premium midsize segment: Volkswagen Magotan • Luxury segment: Mercedes-Benz S-Class • Luxury SUV segment: Audi Q5 • SUV segment: Hyundai ix35 • MPV segment: Buick New GL8 • Mini van segment: Wuling Hongguang

The 2013 China Automotive Performance, Execution and Layout (APEAL) Study is based on evaluations from 20,926 owners who purchased a new passenger vehicle between October 2012 and June 2013.

The study examines 12 vehicle segments, which include 213 passenger vehicle models and 65 brands. The study was fielded from April to August 2013 in 46 major cities across China.

(Page 2 of 3)

2 Among the 12 segments examined in this year’s study, 10 are award-eligible. Eligibility requires a minimum of four models with sufficient samples, and at least one model performing above the segment average.

About J.D. Power Asia Pacific J.D. Power Asia Pacific has offices in Tokyo, Singapore, Beijing, Shanghai and Bangkok that conduct customer satisfaction research and provide consulting services in the automotive, information technology and finance industries. Together, the five offices bring the language of customer satisfaction to consumers and businesses in China, Australia, India, Indonesia, Japan, Malaysia, Philippines, Taiwan, Thailand and Vietnam. Information regarding J.D. Power Asia Pacific and its products can be accessed through the Internet at www.jdpower.com. Media email contact: [email protected]. Please follow J.D. Power at http://e.weibo.com/jdpowerchina.

About J.D. Power J.D. Power is a global marketing information services company providing performance improvement, social media and customer satisfaction insights and solutions. The company’s quality and satisfaction measurements are based on responses from millions of consumers annually. Headquartered in Westlake Village, Calif., J.D. Power has offices in North/South America, Europe and Asia Pacific. For more information on car reviews and ratings, car insurance, health insurance, cell phone ratings, and more, please visit JDPower.com. J.D. Power is a business unit of McGraw Hill Financial.

About McGraw Hill Financial McGraw Hill Financial (NYSE: MHFI) is a leading financial intelligence company providing the global capital and commodity markets with independent benchmarks, credit ratings, portfolio and enterprise risk solutions, and analytics. The Company's iconic brands include: Standard & Poor’s Ratings Services, S&P Capital IQ, S&P Dow Jones Indices, Platts, CRISIL, J.D. Power, and McGraw Hill Construction. The Company has approximately 17,000 employees in 27 countries. Additional information is available at www.mhfi.com.

Media Relations Contacts Ellen Wang; Public Relation Supervisor; J.D. Power Asia Pacific; Shanghai, 200040 China; +86 21 2208 0831; [email protected] John Tews; Director, Media Relations; J.D. Power; Troy, Michigan 48083 USA; 001 248 680 6218; [email protected]

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# # # (Page 3 of 3) Note: Two charts follow.

J.D. Power Asia Pacific 2013 China Automotive Performance, Execution and Layout (APEAL) StudySM

2013 Nameplate2012 Nameplate Level APEAL Ranking Ranking： Industry(Based Average on a 1,000 and-point Above scale) （Based on a 1,000-point scale） Land Rover 857 Audi 848 Mercedes-Benz 848 Volvo 847 Cadillac 845 BMW 841 Lexus 841 Beijing Hyundai 840 Volkswagen 839 Dongfeng Yueda Kia 836 Luxgen 835 Subaru 829 Renault 827 GAC Toyota 822 FAW-Volkswagen 820 Dongfeng Honda 815 Shanghai Volkswagen 813 Skoda 807 FAW-Mazda 806 SGM-Chevrolet 806 Dongfeng Peugeot 805 Zhonghua 805 Industry Average 804

Source: J.D. Power Asia Pacific 2013 China Automotive Performance, Execution and Layout (APEAL) StudySM Charts and graphs extracted from this press release must be accompanied by a statement identifying J.D. Power Asia Pacific as the publisher and the J.D. Power Asia Pacific 2013 China Automotive Performance, Execution and Layout (APEAL) StudySM as the source. Rankings are based on numerical scores and not necessarily on statistical significance. No advertising or other promotional use can be made of the information in this release or J.D. Power Asia Pacific study results without the express prior written consent of J.D. Power Asia Pacific.

J.D. Power Asia Pacific 2013 China Automotive Performance, Execution and Layout (APEAL) StudySM

Top Three Vehicles per Segment in APEAL （Segment Average and Above）

Compact Segment Baojun Lechi 766 Changan Benben Mini 760 Chery QQ 755 Compact Segment Average 755 Premium Compact Segment* Chevrolet Sail 799 Premium Compact Segment Average 789 Entry Midsize Segment Kia K2 833 Hyundai Verna 828 Volkswagen Jetta 804 Entry Midsize Segment Average 802 Midsize Segment Hyundai Langdong Elantra 846 Hyundai Yuedong Elantra 837 Kia K3 837 Midsize Segment Average 801 Upper Premium Midsize Segment Volkswagen Magotan 838 836 Toyota Camry 824 Volkswagen Passat 824 Upper Premium Midsize Segment Average 820 Luxury Segment* Mercedes-Benz S-Class 860 Audi A6L 854 Luxury Segment Average 846 Luxury SUV Segment* Audi Q5 855 Luxury SUV Segment Average 851 SUV Segment

Hyundai ix35 846 841 R 838 Subaru Forester 838 SUV Segment Average 818 MPV Segment* Buick New GL8 828 Buick GL8 819 MPV Segment Average 786 Mini Van Segment* Wuling Hongguang 760 Changan Star 2 757 Mini Van Segment Average 744

Note: There must be at least four models with sufficient sample in any given award segment for an award to be issued. In 2013, there are only two entry luxury models and three lower premium midsize models with sufficient sample, thus no entry luxury or lower premium midsize awards are issued. *No other model in this segment ranks above the segment average.

Source: J.D. Power Asia Pacific 2013 China Automotive Performance, Execution and Layout (APEAL) StudySM

Charts and graphs extracted from this press release must be accompanied by a statement identifying J.D. Power Asia Pacific as the publisher and the J.D. Power Asia Pacific 2013 China Automotive Performance, Execution and Layout (APEAL) StudySM as the source. Rankings are based on numerical scores, and not necessarily on statistical significance. No advertising or other promotional use can be made of the information in this release or J.D. Power Asia Pacific study results without the express prior written consent of J.D. Power Asia Pacific.