Otomotiv Sektörünün Gelecek Dönem Yolculuğu

Istanbul, 2021 May

Istanbul office Esentepe Mahallesi Harman Sokak No: 7 – 9 Nida Kule Levent, 24. Kat 34394 Şişli İstanbul,Turkey Tel. +90 21 240137 50 [email protected] www.simon-kucher.com Your experts at Simon-Kucher & Partners Africa Cairo Americas Atlanta, Boston, Chicago, Houston, Mexico City, New York, Cem Balıkçıoğlu Antoine Weill Partner Partner San Francisco, Santiago de Chile, São Paulo, Silicon Valley, Toronto Tel. +90 21 240137 50 Tel. +49 69 905010 610 [email protected] [email protected] Asia-Pacific/the Middle East www.simon-kucher.com www.simon-kucher.com Beijing, Dubai, Hong Kong, Shanghai, Singapore, Sydney, Tokyo Europe Amsterdam, Barcelona, Bonn, Brussels, Cologne, Copenhagen, Frankfurt, Geneva, Hamburg, Istanbul, London, Luxembourg, Matthias Riemer Madrid, Milan, Munich, Oslo, Paris, Senior Director Stockholm, Vienna, Warsaw, Zurich Tel. +49 221 36794 320 [email protected] www.simon-kucher.com

Istanbul office Esentepe Mahallesi  Worldwide leading revenue management expertise in automotive sector Harman Sokak No: 7 – 9 Nida Kule Levent, 24. Kat  More than 50 years experience in consulting 34394 Şişli İstanbul,Turkey Tel. +90 21 240137 50  More than 200 projects in the area of pricing and monetization www.simon-kucher.com What we do at Simon-Kucher

TopLine Power®: Simon-Kucher is all about commercial excellence.

Our mission is to boost our clients' revenues and profits. To achieve this, we optimize their pricing, sales, marketing, and strategy.

Simon-Kucher stands for TopLine Power® Since 1985, we have focused on the four growth levers of commercial excellence: pricing, sales, marketing, and strategy. Because of our steady focus, we have more experience in monetization than any other strategy consulting firm.

Source: Simon-Kucher & Partners Simon-Kucher & Partners | Otomotiv Sektörünün Gelecek Dönem Yolculuğu | Nisan 2021 3 Simon-Kucher & Partners at a glance

#1 for TopLine improvement Clients across all industries1, solid footprint in the motor-vehicle industry

Industries Automotive OES Automotive OEM Energy Industrials Digital leaders Financial Times Marketing Manager Automotive and machinery Bosch BMW EnbW ABB Adobe Marketing, Marketing & Sales Consumer and retail Brembo Daimler Enel General Electric Ebay Brand, Pricing Financial services Bridgestone Great Wall Motors Eon Infineon LinkedIn 2018 2021 Industrial goods/services Continental Kia GDF Suez Intel Microsoft Logistics, business services Here Porsche Ionity Kone OpenTable Capital Forbes Pharma and life sciences Mahle Renault Primagaz Kuka PayPal Marketing, Marketing, Brand, Software and media Michelin Toyota Techem Palfinger SAP Sales, Pricing Pricing, Sales Telecommunications Valeo Volvo SHV Energy Schneider Electric Skype Utilities and chemicals Webasto… Volkswagen … Vattenfall… Siemens… Uber… 2016, 2018 (conducted every two years) 2016, 2018 (conducted every two years)

Global footprint Portfolio of TopLine consulting services1

Global locations: TopLine strategy Sales optimization 41 offices in 26 countries, . Market entry strategy . Value selling >1,400 employees . Business model and GTM . Channel strategy . Growth strategy . Online sales management . Market due diligence… . Ecosystem & partner selection…

Revenue model engineering Relationship marketing . Revenue mgt. program . Customer journey design . Offer architecture . CLTV optimization programs Number of . Price model redesign . Customer engagement strategy projects per year >1,300 . Product pricing… . Loyalty programs…

1985 1990 1995 2000 2005 2010 2015 2020 2025

Source: Simon-Kucher & Partners; 1 Selection Simon-Kucher & Partners | Otomotiv Sektörünün Gelecek Dönem Yolculuğu | Nisan 2021 4 Check out these publications written by our experts

Crisis Barometer: How Automotive Suppliers Are Dealing With the Ongoing Crisis

Like many other sectors, the automotive industry has been significantly affected by COVID-19. How do suppliers view the current situation? Which levers are they currently using to manage the crisis? And which mid- and long-term measures are the most promising? Our crisis barometer provides answers. Read more ▹ You can access all of our publications for the automotive industry by clicking here! You can also subscribe for the automotive insights newsletter by clicking here!

Automotive Breakfast Club:

The Automotive Breakfast club is a monthly webcast series held by Simon-Kucher’s automotive experts with extensive experience. The series focus on topics ranging from Revenue & Price Modelling to B2B Selling, covering all types of vehicles from the backbones of the industry to its frontiers of innovation.

Collaborating with experts from similar industries and important markets, the Automotive Breakfast Club has you covered for all your company may need.

Next event will be held on May 7th, 2021. Read more ▹

You can also subscribe for the Automotive Breakfast Club by clicking here!

Source: Simon-Kucher & Partners Simon-Kucher & Partners | Otomotiv Sektörünün Gelecek Dönem Yolculuğu | Nisan 2021 5 Details about the study In November and December 2020, we surveyed 1,000+ consumers in the automotive sector about their preferences

Gender Segment type Body type 25% B 25% Female Male Sedan 64% C 51% HB SUV D 13% 36% 31% E 8% 44%

Age Fuel type Purchase condition

56-65 7% Gasoline 45%

46-55 21% Diesel 46%

36-45 40% Electric 1% 52% 48% New car 31-35 20% Hybrid 1% Second-hand car

20-30 13% Fuel gas 7%

Source: Simon-Kucher & Partners Automotive Research Survey Nov. – Dec. 2020, Q2-Age, Q65-Gender, Q68-City, Q12-Segment/Body Type Simon-Kucher & Partners | Otomotiv Sektörünün Gelecek Dönem Yolculuğu | Nisan 2021 6 Table of contents

Future of the Market . How the market will evolve in terms of volume, body type and car segment? . What are the main purchasing criteria, how do they differ? 9 – 28 . What is next for right pricing and trim line strategy?

Future of the Products . How will the interest into EV’s will evolve? . What are the important factors that will determine its penetration? 29 – 43 . What will be the new revenue streams with the evolving technologies?

Future of Omnichannel and Customer Engagement . How should the customer experience needs to be evolved? . How the expectation for online sales develops? 44 – 60 . What are the next steps for increasing customer satisfaction and brand loyalty?

To reach sustainable growth in these challenging conditions, OEMs cannot essentially turn to their conventional tool kit. They need to asses and review their strategic priorities, reprioritize their investments and develop new skills to execute these strategic objectives.

Source: Simon-Kucher & Partners Simon-Kucher & Partners | Otomotiv Sektörünün Gelecek Dönem Yolculuğu | Nisan 2021 7 Table of contents

Source: Simon-Kucher & Partners Simon-Kucher & Partners | Otomotiv Sektörünün Gelecek Dönem Yolculuğu | Nisan 2021 8 Future of the Market In 2021, there will be a significant bias towards C segment; meanwhile E segment will keep its sales…

Only New Car Sales They WILL have a… B C D E Overall ranking for future consideration* B e.g. Opel Corsa, Volkswagen Polo, #1 C Segment Cars Renault Clio, Nissan Micra, Citroen C3, 68% 32% ~0% ~0% Toyota Yaris, Honda Jazz #2 D Segment Cars N: 120 #3 B Segment Cars C e.g. Seat Leon, Volkswagen Golf, #4 E Segment Cars have a… have Volkswagen Jetta, Peugeot 308, 6% 85% 10% ~0% Renault Megane, Hyundai i30 N: 293 * Future consideration is calculated by using 2020 realized mix of car body type D e.g. BMW 3 Serisi, Volkswagen Passat, Audi A4, Mercedes C Sınıfı, Ford 7% 35% 55% 4% Mondeo, Volvo S60, Citroen C5 Since a portion of D and E N: 78 drivers are considering switching to the C segment,

E it is crucial to provide C- ConsumersNOW e.g. Mercedes E Serisi, BMW 5 Serisi, segment models that will Jaguar XF, Volvo S80, Saab 9-5, ~0% 11% 13% 76% meet their expectations. Audi A6 N: 60

* Percentages may not total 100 in each row due to rounding. Source: Simon-Kucher & Partners; Automotive Research Survey Nov. – Dec. 2020, Q12-Current Segment, Q20t: Bir sonraki otomobil alımınızda aşağıdaki araç segmentlerinden hangilerini almayı düşünürsünüz?; ODD, Ocak-Kasım 2020, segment distribution ; *Rows might not add up to 100% due to the exclusion of the other body types. Simon-Kucher & Partners | Otomotiv Sektörünün Gelecek Dönem Yolculuğu | Nisan 2021 9 Future of the Market …C-Segment cars can reach to 65% of total market, while E will keep its niche market

Only New Car Sales Turkish Automotive Market Sales Mix by Car Segment

100% 3.0% 3.1% 2.7% 2.3% 2.5% 2.4% 2.4% 2.3% 11% 90% 11% 9% 10% 15% 14% 13% 11% 80%

70%

60% 50% 52% 63% 57% 62% 64% 65% 65% 50%

40%

30%

20% 32% 30% 26% 10% 24% 24% 23% 22% 21%

0% 2016 2017 2018 2019 2020 2021 2022 2023

B C D E Forecast

Source: Simon-Kucher & Partners; Automotive Research Survey Nov. – Dec. 2020, Q12-Current Segment, Q20t: Bir sonraki otomobil alımınızda aşağıdaki araç segmentlerinden hangilerini almayı düşünürsünüz?; ODD, Ocak-Kasım 2020, 2019, 2018, 2017, 2016, segment distribution 2021 and 2022 forecasts have been calculated using the trend of historical data. Due to the fact that other segment types are not included, the percentages may not add up to a 100. Simon-Kucher & Partners | Otomotiv Sektörünün Gelecek Dönem Yolculuğu | Nisan 2021 10 Future of the Market Consumers tend to preserve their current car’s body type for future considerations…

Only New Car Sales

They WILL have a…

Overall ranking for future consideration* Sedan Hatchback SUV #1 Sedan

Sedan #2 SUV 72% 10% 19% N=239

#3 Hatchback have a… have

* Future consideration is calculated by using 2020 Hatchback realized mix of car body type 27% 54% 19% N=137

. Overall, Sedan owners are the most loyal to their car. SUV 20% 11% 70% . 46% of hatchback drivers ConsumersNOW N=189 will be able to change their cars

* Percentages may not total 100 in each row due to rounding. Source: Simon-Kucher & Partners Automotive Research Survey Nov. – Dec. 2020, Q20: Bir sonraki otomobil alımınızda seçtiğiniz markaların hangi modellerini almayı düşünürsünüz?; ODD, Ocak-Kasım 2020, body type distribution *Rows might not add up to 100% due to the exclusion of the other body types. Simon-Kucher & Partners | Otomotiv Sektörünün Gelecek Dönem Yolculuğu | Nisan 2021 11 Future of the Market …SUV segment will continue to grow, with a lower gear, Sedan will keep its dominance

Only New Car Sales Turkish Automotive Market Sales Mix by Car Body Type

100%

90% 17% 18% 22% 25% 30% 32% 80% 34% 37%

70% 31% 28% 22% 21% 60% 23% 23% 23% 50% 22%

40%

30% 48% 49% 51% 50% 20% 44% 43% 42% 41%

10%

0% 2016 2017 2018 2019 2020 2021 2022 2023

Sedan HB SUV Forecast

Source: Simon-Kucher & Partners; Automotive Research Survey Nov. – Dec. 2020, Q12-Current Segment, Q20t: Bir sonraki otomobil alımınızda aşağıdaki araç segmentlerinden hangilerini almayı düşünürsünüz?; ODD, Ocak-Kasım 2020, 2019, 2018, 2017, 2016, segment distribution 2021 and 2022 forecasts have been calculated using the trend of historical data and the 2023 forecast has been calculated by incorporating the results of the SKP survey and consumer preferences. Simon-Kucher & Partners | Otomotiv Sektörünün Gelecek Dönem Yolculuğu | Nisan 2021 12 Future of the Market

Body – Segment Matrix shows the most loyal car owners

Who is SATISFIED with their car? Who is NOT?

Upgraders to higher segment (HB or Sedan) Reading example: Current Sedan-E users is prefers Sedan-E in their future consideration +14.5pp more Sedan-C 14% compared to Sedan segment preference average Sedan-B HB-C 14% Sedan-D 13%

+14.5pp Upgraders to higher segment (Regardless of body type) HB-C 19% SUV-B SUV-C +11.9pp 17% Sedan-C 13%

HB-C 28% HB-B Sedan-C 14% SUV-C 8% +6.7pp Main SUV potential Sedan-E 22% Sedan-D SUV-C 13% SUV-E 9%

Unhappy HB-C 21% SUV-D SUV-C 19% Sedan – E HB – C SUV – C Sedan-D 17%

Source: Simon-Kucher & Partners Automotive Research Survey Nov. – Dec. 2020, Q20-Future Body Type/Segment: Bir sonraki otomobil alımınızda seçtiğiniz markaların hangi modellerini almayı düşünürsünüz?, *Other segments and body types are excluded from analysis. Simon-Kucher & Partners | Otomotiv Sektörünün Gelecek Dönem Yolculuğu | Nisan 2021 13 Future of the Market SKP has modeled three possible scenarios for the future of the automotive sector, bearing in mind the growth effect of auto loan and Exchange rates

Number of new Passenger Car (PC) registrations (sales) in Turkey (in ‘000) 1,200.0

Steep increase in FX rates (e.g. USD/TRY) 1,000.0 and hikes in the interest rate resulted in a sharp downturn in new PC sales 866.7

800.0 746.4 741.9 654.9 655.7 661.3 602.2 610.1 565.8 585.8 600.0 526.2 485.6 585.9 386.7 504.5 400.0 Forecast parameters 376.0

200.0 New PC sales rebounded as a result of deferred demand from previous years and lowered auto loan rates

0.0 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021F 2022F 2023F 2024F 2025F

Historic Conservative Forecast Baseline Forecast Optimistic Forecast

Drivers for new passenger car sales/ registrations are primarily GDP PC=Passenger Car Source: Simon-Kucher & Partners, Turkstat, IMF, World Bank, Bloomberg, CBRT per capita, average auto loan rate and FX rate (e.g. USD/TRY) Simon-Kucher & Partners | Otomotiv Sektörünün Gelecek Dönem Yolculuğu | Nisan 2021 14 Future of the Market SKP has modeled three possible scenarios for the future of the automotive sector, bearing in mind the growth effect of auto loan and Exchange rates

Number of new Passenger Car (PC) registrations (sales) in Turkey (in ‘000) 1,200.0

Steep increase in FX rates (e.g. USD/TRY) 1,000.0 and hikes in the interest rate resulted in a sharp downturn in new PC sales

757.3 800.0 746.4 741.9 725.3 693.3 654.9 655.7 661.3 602.2 610.1 565.8 585.8 600.0 526.2 485.6

386.7 400.0 Forecast parameters

200.0 New PC sales rebounded as a result of deferred demand from previous years and lowered auto loan rates

0.0 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021F 2022F 2023F 2024F 2025F

Historic Conservative Forecast Baseline Forecast Optimistic Forecast Realistic

Drivers for new passenger car sales/ registrations are primarily GDP PC=Passenger Car Source: Simon-Kucher & Partners, Turkstat, IMF, World Bank, Bloomberg, CBRT per capita, average auto loan rate and FX rate (e.g. USD/TRY) Simon-Kucher & Partners | Otomotiv Sektörünün Gelecek Dönem Yolculuğu | Nisan 2021 15 Future of the Market Consumer decide on 7 different purchasing criteria, 3 of them are the most

important in overall view

very important very not very important very not

Brand Security Initial price Driving Total annual After sales Environmental performance costs service factors (CO2 emission levels)

Source: Simon-Kucher & Partners Automotive Research Survey Nov. – Dec. 2020, Q30: Bugün bir otomobil alacak olsanız nasıl veya nereden satın almayı tercih ederdiniz?, Q31: Bugün bir otomobil alacak olsanız, "CEVAP Q26" alacağınızı söylediniz. Otomobil satın alırken aşağıdaki kriterlerden hangileri sizin için önemlidir? Simon-Kucher & Partners | Otomotiv Sektörünün Gelecek Dönem Yolculuğu | Nisan 2021 16 Future of the Market Brand segment through price PERCEPTION reveals 5 main brand segments and 2 subgroups below ‘Premium’

Consumer Price Perception of Brands N = 1014

Sorted by expensive % Sorted by cheap%

Luxury Premium Near Premium Value for Money Mass 2% 4% 3% 3% 3% 4% 3% 5% 7% 5% 7% 11% 12% 14% 12% 13% 14% 18% 17% 21% 16% 20% 26% 28% 28% 32% 34% 34% 36% 33% 29% 37% 38% 40% 41% 35% 39% 43% 49% 49% 50% 34% 44% 55% 58% 58% 65% 37% 35% 25% 32% 49% 33% 84% 81% 53% 76% 73% 38% 46% 39% 72% 45% 53% 50% 45% 64% 37% 44% 63% 62% 31% 29% 58% 35% 32% 50% 50% 45% 31% 25% 30% 37% 32% 28% 24% 29% 23% 18% 16% 14% 14% 18% 15% 12% 10% 10% 11% 12% 12% 9% 10% 8% 11% 8%

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 Brand # ... A significant jump can be seen Based on consumers' within the «Premium» group jumps in price perception, it is possible to identify five segments of OEMs. Too expensive that the car cannot be purchased Expensive but can be purchased The price of the car is at a purchasable level

Source: Simon-Kucher & Partners; Automotive Research Survey Nov. – Dec. 2020, Q17: Araba modelinden bağımsız olarak lütfen aşağıdaki markaların sizin gözünüzdeki fiyat imajını belirtiniz; Simon-Kucher & Partners | Otomotiv Sektörünün Gelecek Dönem Yolculuğu | Nisan 2021 17 Future of the Market SUV drivers expect a better brand image than others and security becomes a significantly less important criteria, due to the nature of an SUV car

Overall HB Sedan SUV

very important very not very important very not

Driving Total annual After sales Environmental Brand Security Initial price performance costs service factors (CO2 emission levels)

Source: Simon-Kucher & Partners Automotive Research Survey Nov. – Dec. 2020, Q30: Bugün bir otomobil alacak olsanız nasıl veya nereden satın almayı tercih ederdiniz?, Q31: Bugün bir otomobil alacak olsanız, "CEVAP Q26" alacağınızı söylediniz. Otomobil satın alırken aşağıdaki kriterlerden hangileri sizin için önemlidir? Simon-Kucher & Partners | Otomotiv Sektörünün Gelecek Dönem Yolculuğu | Nisan 2021 18 Future of the Market The young generation (20 – 30) gives less importance to security but more on total annual costs, after-sales service and environmental factors

Overall 20 - 30 31 - 35 36 - 45 46+

very important very not very important very not

Driving Total annual After sales Environmental Brand Security Initial price performance costs service factors (CO2 emission levels)

Source: Simon-Kucher & Partners Automotive Research Survey Nov. – Dec. 2020, Q30: Bugün bir otomobil alacak olsanız nasıl veya nereden satın almayı tercih ederdiniz?, Q31: Bugün bir otomobil alacak olsanız, "CEVAP Q26" alacağınızı söylediniz. Otomobil satın alırken aşağıdaki kriterlerden hangileri sizin için önemlidir? Simon-Kucher & Partners | Otomotiv Sektörünün Gelecek Dönem Yolculuğu | Nisan 2021 19 Future of the Market Mass drivers look for a cheaper and safer alternatives within its car segment

Overall Premium Near premium Value for money Mass

very important very not very important very not

Driving Total annual After sales Environmental Brand Security Initial price performance costs service factors (CO2 emission levels)

Source: Simon-Kucher & Partners Automotive Research Survey Nov. – Dec. 2020, Q30: Bugün bir otomobil alacak olsanız nasıl veya nereden satın almayı tercih ederdiniz?, Q31: Bugün bir otomobil alacak olsanız, "CEVAP Q26" alacağınızı söylediniz. Otomobil satın alırken aşağıdaki kriterlerden hangileri sizin için önemlidir? Simon-Kucher & Partners | Otomotiv Sektörünün Gelecek Dönem Yolculuğu | Nisan 2021 20 Future of the Market Value for money car owners pick the best available brand image that is already within their car segment

Overall Premium Near premium Value for money Mass

very important very not very important very not

Driving Total annual After sales Environmental Brand Security Initial price performance costs service factors (CO2 emission levels)

Source: Simon-Kucher & Partners Automotive Research Survey Nov. – Dec. 2020, Q30: Bugün bir otomobil alacak olsanız nasıl veya nereden satın almayı tercih ederdiniz?, Q31: Bugün bir otomobil alacak olsanız, "CEVAP Q26" alacağınızı söylediniz. Otomobil satın alırken aşağıdaki kriterlerden hangileri sizin için önemlidir? Simon-Kucher & Partners | Otomotiv Sektörünün Gelecek Dönem Yolculuğu | Nisan 2021 21 Future of the Market Service quality and duration play an important role in establishing relationships with customers during the service process

How effective are the following criteria in your decision not to take your vehicle to the authorized service shops?

38%

22% 21% 20%

Authorized service Service quality of the Service time of the Authorized service prices authorized service authorized service availability

Source: Simon-Kucher & Partners Automotive Research Survey Nov. – Dec. 2020 Simon-Kucher & Partners | Otomotiv Sektörünün Gelecek Dönem Yolculuğu | Nisan 2021 22 Future of the Market From premium to mass brand segments, both brand loyalty and customer service satisfaction decrease respectively

Customer Service Satisfaction Score Customer Brand Loyalty Score (100 High Loyalty ) for Brand Segments (7 High Satisfaction – 1 Low Satisfaction)

Brand loyalty and customer 5.6 67% service satisfaction are positively correlated

46% 39% 5.2

5.1

Premium Value for money Mass Premium Value for money Mass

Brand Segments

Source: Simon-Kucher & Partners Automotive Research Survey Nov. – Dec. 2020 Simon-Kucher & Partners | Otomotiv Sektörünün Gelecek Dönem Yolculuğu | Nisan 2021 23 Future of the Market Better performing brands in after-sales service levels have better loyalty levels compared to other brands in their segments

After-Sales Service Satisfaction & Loyalty Score Within their brand segment, brands with better after-sales services have higher loyalty scores.

15% Lower Loyalty Score / Lower Service Level Variation Higher Loyalty Score / Higher Service Level Variation Compared to Brand Segment Compared to Brand Segment Brand 23 Loyalty Score difference 10% Service satisfaction score from the segment’s loyalty difference from the segment’s score satisfaction service level satisfaction 5% Brand 11 Brand 28 Brand 32 Brand 33 0% -12% -10% -8% -6% -4% -2% 0% 2% 4% 6%

Brand 35

Brand 9 -5%

(Variation (Variation within Brand Segment) Sales Service Satisfaction Level Variation ServiceLevel Sales Satisfaction

- -10% Brand 24

After Lower Loyalty Score / Lower Service Level Variation Lower Loyalty Score / Higher Service Level Variation Compared to Brand Segment Compared to Brand Segment -15%

Loyalty Score Variation (Variation within Brand Segment)

Source: Simon-Kucher & Partners Automotive Research Survey Nov. – Dec. 2020 Simon-Kucher & Partners | Otomotiv Sektörünün Gelecek Dönem Yolculuğu | Nisan 2021 24 Future of the Market Price plays the most critical role in the customer’s decision-making mechanism

How effective are the following criteria in your decision not to take your vehicle to the authorized service shops?

100% 38% 90% If an authorized service shop is 10% more expensive, only 80% 52% of people continue to use 70% their services.

60%

50%

40%

30%

20%

X% of consumers would pay consumerswould of X% 10%

0% Authorized service 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% shop prices X% more expensive

Source: Simon-Kucher & Partners Automotive Research Survey Nov. – Dec. 2020 Simon-Kucher & Partners | Otomotiv Sektörünün Gelecek Dönem Yolculuğu | Nisan 2021 25 Future of the Market Understand where you are in the market, your customers and define your trim/pricing strategy accordingly…

Value Map Customer Segmentation Recommended Trim & Package structure

Willingness to pay HUBRIS Safety 20%

High ZONE competitor Infotainment 15% Parking … competitor 10% 5% competitor High Sport 0% Seats

Med- ium

Price Price perception Comfort Steering competitor

competitor Practical Low ATTACK Technical turbos: 48% ZONE Low Comfortable cruisers: 12% Performance Safety Luxury Low Value offering High Safe sailors: 40% Customer segments and key preferences

Source: Simon-Kucher & Partners Simon-Kucher & Partners | Otomotiv Sektörünün Gelecek Dönem Yolculuğu | Nisan 2021 26 Table of contents

Source: Simon-Kucher & Partners Simon-Kucher & Partners | Otomotiv Sektörünün Gelecek Dönem Yolculuğu | Nisan 2021 27 Future of the Products Global electric vehicle sales are already growing at rapid pace, and are expected to grow even faster

Global Benchmark Plug-in electric light vehicle sales worldwide 2015-2020 Size of the global market for electric vehicles in 2019 and 2026 Global plug-in electric light vehicle sales from 2015 to 2020 Revenue in billion U.S. dollars (in million units) Million Billion  In 2020, electric light 3.5 600. 567.2 vehicle sales 3. 500. worldwide broke a 2.5 400. record with 3 million 2. units! 300. 1.5  An even greater 1. 200. 115. growth is expected in 0.5 100. the coming years in 0. 0. terms of revenue and 2015 2016 2017 2018 2019 2020 2019 2026 electric vehicle share.

Electric car share in IEA’s* Sustainable Development Scenario From 2012 to 2030 13.4%

4.9%

0.0% 0.1% 0.1% 0.2% 0.2% 0.4% 0.6% 0.8%

2012 2013 2014 2015 2016 2017 2018 2019 2025 2030

* IEA: International Energy Agency Source: Simon Kucher & Partners /, https://www.iea.org/data-and-statistics/charts/electric-car-share-in-the-sustainable-development-scenario-2000-2030, https://www.statista.com/statistics/271537/worldwide-revenue-from-electric- vehicles-since-2010/; https://www.reuters.com/business/autos-transportation/global-ev-sales-accelerating-government-help-needed-iea-2021-04-29/ Simon-Kucher & Partners | Otomotiv Sektörünün Gelecek Dönem Yolculuğu | Nisan 2021 28 Future of the Products In Norway: 75% of the vehicles sold in 2020 were EVs and EVs make up 14% of the current cars on the road

Global Benchmark

Electric vehicles sales as a share of new vehicle sales in Highlight selected markets in 2020 March 2021: Share of currently registered vehicles on the road* 4% NorwayNorway 75% 14%

NetherlandsNetherlands 25% 37%

GermanyGermany 14%

FranceFrance 11% 45%

China China 6%

EV (BEV + PHEV) Diesel UnitedUnited StatesStates 2% Petrol Hybrids (plugless) 0% 20% 40% 60% 80%

Source: Simon Kucher & Partners, OFV, Share of Vehicles on the Road; https://ofv.no/ , EV Sales in 2020: https://www.statista.com/chart/17344/electric-vehicle-share/; *: Other fuel types like hydrogen have been excluded from analysis. Simon-Kucher & Partners | Otomotiv Sektörünün Gelecek Dönem Yolculuğu | Nisan 2021 29 Future of the Products More than half of consumers are interested in EVs; and charging related concerns are the most important mind changers

Turkey’s Road to Vehicle Electrification Compared to global benchmarks, Turkey has a long way to go in the adoption of Electric Vehicles, survey results can shed a light on the path Turkey will take by helping understand consumer behavior and expectations.

EV or Hybrid Consideration N=1014 Criteria for considering EV N=668 Expected Range N=668

I am willing to pay more for a more environmentally-friendly Price 0-125 KM 5% vehicle if it has the same standards as my current vehicle 29%

Charging 125-250 KM 24% Infrastructure 16% 250-375 KM Charging 43% 51% Average: 377 KM 34% Duration 14% 375-500 KM 63% Do not 68% Range 13% 34% 500-625 KM 93% 32% Safety 12% 635-750 KM 95%

Performance 9% 750-875 KM 97%

I am willing to have fewer accessories and less equipment Design 875-1000 KM 100% and software if it is more environmentally friendly 7%

Source: Simon-Kucher & Partners; Q44: Aşağıdaki ifadelerden hangisi sizin bu konudaki fikrinizi en iyi yansıtıyor?; Q46: Bir sonraki otomobil satın alımınızda elektrik motorlu bir araç satın almayı düşündüğünüzü varsayalım. Elektrikli bir otomobil satın alırken aşağıdaki kriterler sizin için ne kadar önemlidir? ; q47: Bu aracın menzili sizce kaç kilometre olmalıdır?; q53: Bir sonraki otomobil satın alımınızda elektrik motorlu bir araç satın almayı düşünmediğinizi varsayalım. Elektrikli bir otomobil satın alma kararınızda aşağıdaki kriterler ne kadar etkilidir?; TEHAD Simon-Kucher & Partners | Otomotiv Sektörünün Gelecek Dönem Yolculuğu | Nisan 2021 30 Future of the Products Additionally, there is a strong belief that current EV charging infrastructure is underdeveloped and consumers expect additional chargers on their commute

Where do consumers expect to see EV chargers? Do you think there are enough EV chargers for daily use? 39% How close to home should EV chargers be? 46% 0-2 KM 100% Near Travel 71% work 2-5 KM 81% points Yes 5-10 KM 64% No 52% 10-15 KM 34% Average: 9.2 29% 15-30 KM 20% Near 7% N=1014 home >30KM N=587 *cumulative 58% Do you think there are enough 60% EV chargers for long trips cross- Malls 66% country? Way stations 59% Highways 25% Parking Yes A new legal regulation by the spaces Turkish government imposes No a minimum quota of 5% of 77% 75% the parking spaces to be equipped with charging stations in new parking lots Gas N=292 and 10% in malls. stations N=1014 iStock/DNY59 Source: Simon-Kucher & Partners; q48: Lütfen elektrik motorlu bir araç satın almayı planladığınızı düşünün. Aracınızı şarj edebileceğiniz istasyonların nerelerde olmasını beklersiniz?; q49: Evinize/İş yerinize yakın herhangi bir yerde şarj istasyonu olmasını beklediğinizi belirttiniz. Sizce bu istasyonlar evinize en fazla kaç kilometre mesafede olmalıdır?; q50/51: Mevcut şarj istasyonları altyapısını rutin ihtiyaçlarınız için yeterli buluyor musunuz? Simon-Kucher & Partners | Otomotiv Sektörünün Gelecek Dönem Yolculuğu | Nisan 2021 31 Future of the Products Compared to other countries, China has built up an incredible amount of public Electric Vehicle chargers

Global Benchmark

Public EVSE chargers by country, 2020 Highlight Number of publicly available electric vehicle chargers (EVSE) in 2020, Public electric vehicle charging pole number in China 2015-2020 Total number of electric vehicle charging stations in China ChinaChina from 2015 to 2020 (K Units)

NetherlandsNetherlands 900 807 800

FranceFrance 700

600 516 Germany Germany 500 387 400 United UnitedKingdom Kingdom 300 240 200 149 SwedenNorway 100 58

0 NorwaySweden 2015 2016 2017 2018 2019 2020

0 500000 1000000

Source: Simon Kucher & Partners, https://www.statista.com/statistics/993121/china-public-electric-vehicle-charging-station-number/, https://www.statista.com/statistics/993121/china-public-electric-vehicle-charging-station- number/#:~:text=In%202020%2C%20there%20were%20over,stations%20in%20the%20previous%20year., https://www.eafo.eu/countries/european-union/23640/summary/compare Simon-Kucher & Partners | Otomotiv Sektörünün Gelecek Dönem Yolculuğu | Nisan 2021 32 Future of the Products

The Chinese car makers are riding the waves of electrification

Top 25 car makers by market cap (truncated) Among Top 25…

1 Tesla 837.08 2 Toyota 204.12 Pure EV 3 Volkswagen 104.27 players 4 BYD 99.67 account for

5 NIO 94.02 48% of market cap 11 Great Wall Motor 51.25 9 are Chinese 13 Evergrande 47.71 carmakers, 16 SAIC 41.66 out of which 17 Geely 40.72 4 are pure EV 18 Xpeng 38.51 players 20 Li Auto 29.17

25 Changan 13.29

Source: Yahoo Finance, 27th Jan 2021, Simon-Kucher & Partners Pure EV players Simon-Kucher & Partners | Otomotiv Sektörünün Gelecek Dönem Yolculuğu | Nisan 2021 33 Future of the Products

Chinese brands own the domestic EV market in China

Top 10 EV models by sales volume in China 2020 full year

Make Model Country of origin

Tesla Model 3 137,459 Only two foreign brands Tesla and Wuling Hongguang Mini EV 120,106 BMW made it to GWM Ora R1 46,774 the Top 10 A wake-up call for GAC Aion S 45,626 German carmakers, BYD New Qin EV 41,219 which have been selling over 1/3 of Chery eQ 38,249 their cars in China Li Auto ONE 32,624 Last but not least, Chinese EV players BYD Han EV 28,772 are on their way to Nio ES6 27,945 Europe!

BMW 5 Series PHEV 23,433

Source: CPCA, Simon-Kucher & Partners Simon-Kucher & Partners | Otomotiv Sektörünün Gelecek Dönem Yolculuğu | Nisan 2021 34 Future of the Products

EV of the year 2020 in China?

Source: Simon-Kucher & Partners Simon-Kucher & Partners | Otomotiv Sektörünün Gelecek Dönem Yolculuğu | Nisan 2021 35

iStock/flukyfluky Future of the Products

EV of the year 2020 in China!

Hongguang Mini EV Sales development of Hongguang Mini EV vs. Model 3 – 2020H2

Units sold in k on a monthly basis 40 Hongguang Mini EV Model 3 35.4 35 33.1 Hongguang Mini EV

Thousands 30 seized the No. 1 spot 25 in September and 23.8 never looked back 20.6 21.6 20 14.5 15 11.0 11.8 11.3 12.1 9.2 10 7.3 5 The Hong Guang Mini EV is coming to Europe. Nonetheless, given European environmental - regulations, the price is estimated to be higher than in China… JUL AUG SEP OCT NOV DEC

Full-electric, length 2.9m, no-frills, battery 13.9kWh, warranty 8 years, free 24x7 roadside assistance

Source: desk research, Simon-Kucher & Partners Simon-Kucher & Partners | Otomotiv Sektörünün Gelecek Dönem Yolculuğu | Nisan 2021 36 Future of the Products A successful EV market model needs to address new EV-related consideration drivers and resulting in new customer segments

Project Example Customer segments C-Segment EV Segment shares

Brand

. Above average income & budget Range Power 27% EV Enthusiast . …

. Least experienced with EV 27% Risk averse . … Assistance Convenience

. Most educated segment 17% Balanced . …

Charging ... infrastructure . Oldest segment 29% "Classics" . …

Charging speed

Preference for item category

Source: Simon-Kucher & Partners; Note: Values modified for confidentiality reasons Simon-Kucher & Partners | Otomotiv Sektörünün Gelecek Dönem Yolculuğu | Nisan 2021 37 iStock_vadimguzhva Future of the Products

What do the Chinese EV makers do differently in marketing and sales?

MORE THAN DIGITAL PERSONAL VIRAL A CAR

. Everything that can be . Dedicated CONSULTANT . ACTIVE fan communities . “Accessories” redefined digitalized is digitalized instead of SALES REP with user generated . Co-branding appealing to . Seamless multi-platform . Highly personal content and Generation Z without integration approach without being CONSTRUCTIVE alienating the older CRITISM . Location-based service perceived too pushy . Expected greater CLTV offerings . 70%! sales through word- (Customer Lifetime Value) of-mouth

Source: Simon-Kucher & Partners Simon-Kucher & Partners | Otomotiv Sektörünün Gelecek Dönem Yolculuğu | Nisan 2021 38 Future of the Products Next to the core product, car companies should also look into business extensions through new (digital) revenue models…

Legacy EV related Emerging topic Usage related Additional

. Parking services . Micro-mobility (e.g. e-scooter sharing) . In-car delivery services . Credit card . Public charging stations . Power supply (incl. solar) . Wallbox (incl. installation) . Energy storage in car . Short time car rental (based on bi-directional charging) . Car sharing . Merchandising products Physical . Ride sharing (e.g. textiles, wearables, …) . Lifestyle products (e.g. (E-)bikes, …) . Events (e.g. driving experiences, …) . Additional services at destination

. Connected services - Internal . Ride hailing (real-time) apps and updates . Data monetization (e.g. data . Connected services - Remote insight sales) services and diagnostics . (Automatic) Payment services . Connected services - External (e.g. for tolls, fuel/charging, …) device and network integration . Connected services - Maintenance and assistance Maintenance Digital Purchase related related . Fleet services

. New car purchase . Spare parts . In-car advertising/ head-unit

. Used car purchase . Service contracts as marketplace . White label car . Repair services . P2P car sharing . Financing . Mobile on-site repair

. Leasing . (Extended) warranties . Corporate car sharing

. Vehicle subscription . Extended battery warranties

. Battery leasing . Over-the-air updates

. Insurances Source: Simon-Kucher & Partners . Optional equipment

Simon-Kucher & Partners | Otomotiv Sektörünün Gelecek Dönem Yolculuğu | Nisan 2021. Accessories 39 Future of the Products … and consider how chosen price models will influence value extraction across the entire product or service lifecycle

Usage- Typical existing patterns in the market What price model to offer? dependent price Pay per use p . Comes in many different shapes and configurations of the price curve Linear pay per use . Final price is directly related with the usage of the Volume good provided One-time payment Pay per use with base fee p . Usage independent base fee Base-fee and linear pay per . Final price depending on combination of base- use Volume fee and usage

Packages / Bundles . Price for a combination of goods / value that is p provided Incremental . Predefined packages or a calculated price paid packages in retrospective Recurring Volume . Price not directly linked with usage of single units payment within package

Flat rate p . Price not connected to the actual usage of the good Classical Billing based on usage Billing independent of flat rate . Unlimited usage of service Usage- intensity usage intensity Volume or products possible independent price

Source: Simon-Kucher & Partners Simon-Kucher & Partners | Otomotiv Sektörünün Gelecek Dönem Yolculuğu | Nisan 2021 40 Table of contents

Source: Simon-Kucher & Partners Simon-Kucher & Partners | Otomotiv Sektörünün Gelecek Dönem Yolculuğu | Nisan 2021 41 Future of Omnichannel and Customer Engagement

A growing share of the market is expecting an omnichannel experience

. Traditionalists are older (~1 year older) than Early Adopters . Prefers mostly offline research and physical touchpoints and negotiation at the point of sales Heavy Traditionalists 41% . Brand of the vehicle is the most important criteria for purchasing a vehicle, followed by safety

Early Adopters 18% . Prefers EV engine types (+12 pp) . Prefers online channels for pre-purchase research . Less price sensitive (+4 pp in single payments) 41% . More environmental friendly . Premium brand owners are more likely to use online channels (+14pp)

It is becoming increasingly important for distributors to get to know their customers for omnichannel management

Source: Simon-Kucher & Partners Simon-Kucher & Partners | Otomotiv Sektörünün Gelecek Dönem Yolculuğu | Nisan 2021 42 Future of Omnichannel and Customer Engagement The Early Adopters segment pays greater attention to environment, service & TCO, less on more traditional aspects such as brand, price or performance

Current Car’s Brand Segment* Early adopters constitutes 18% of total market, however... Near Value for Luxury Premium Mass Premium Money

• 42% of them are premium car owners 42%

35% • EV preference is 50% higher vs. heavy

29% 28%

Purchase Criteria* 26% traditionalist

20%

17%

13% 1%

17.8 0% Security Early adopters… 18.2

15.7 Brand Future Engine Type Consideration* 18.4 . Give 34% MORE importance to aftersales vs. heavy traditionalist Price 14.3 16.8 . Give 32% MORE importance to Petroleum Diesel EV Hybrid LPG environmental factors vs. heavy traditionalist After Sales 13.7 Service 10.2 . Give 15% LESS importance to price vs. heavy

traditionalist

40% 40%

Environmental 40% 39%

13.6 39%

Factors 10.3

28%

27% 24% Costs 12.6 The omnichannel customer journey has even 11.8

«made its way into habits of heavy traditionalists, 4% 4% while it has been warmly welcomed by Early Performance 12.3 14.3 Adopters » Source: Simon-Kucher & Partners; Automotive Research Survey Results; *: Samples for Purchase Criteria, Brand Segment and Engine Type Consideration have been filtered by those who wish to purchase a new vehicle Simon-Kucher & Partners | Otomotiv Sektörünün Gelecek Dönem Yolculuğu | Nisan 2021 . Early Adopters . Traditionalists 43 Future of Omnichannel and Customer Engagement

A consequence? Traditional car distribution is a model under threat

Too many too small dealers…

European trend. Index 2010 110 < > sales per Car sales: +34%pts -32%pts 308 556 362 437 370 1.028 794 sales outlet 105

100 …not profitable enough…

2013 2014 2015 2016 2017 2018 2019 2020 95 Average Return 0,7% 0,8% 1,5% 1,6% 1,5% 1,4% 1,0% -0,4% on Sales in EU 90

# of main dealer 85 sales outlets …and not addressing market expectations

80 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Year iStock/martin-dm Lengthy inflexible Low price transparency, Poor digital process unpleasant negotiations capabilities

Source: Simon-Kucher & Partners; ICDP ECHD 2020 Simon-Kucher & Partners | Otomotiv Sektörünün Gelecek Dönem Yolculuğu | Nisan 2021 44 Future of Omnichannel and Customer Engagement The ongoing shift of customer expectations has spurred the emergence new distribution models in recent years

Examples . Tesla . Aiways Full online direct sales . Byton New retail formats . Polestar…

Direct (pop-up stores…)

. VW ID family . Daimler Sweden, Austria Agent model . Honda Australia

. Nio China… Distribution structure Distribution Traditional franchise system (still dominant in Europe) . BMW US Indirect Centralized pooling and / . Hyundai or lead forwarder . Toyota UK . Ebay Motors…

Offline Online Sales channel

iStock/nadla

Source: Simon-Kucher & Partners; 1: OEM to end-customer Simon-Kucher & Partners | Otomotiv Sektörünün Gelecek Dönem Yolculuğu | Nisan 2021 45 Future of Omnichannel and Customer Engagement One of those is the agent model, bringing the OEM (or the distributor) much closer to the end-customer

. Contracts directly with customers . Sets prices and issues invoice

Provides Helps Organizes Routes to Makes Orients Sells Hands-over

info configure test drive agent offer Online

VW agent Provides Helps Organizes Routes to Makes Orients Sells Hands-over

info configure test drive agent offer Offline

. Drives sales process (advisory, test drive…) . Hands over car

Source: Simon-Kucher & Partners Simon-Kucher & Partners | Otomotiv Sektörünün Gelecek Dönem Yolculuğu | Nisan 2021 46 Future of Omnichannel and Customer Engagement

Another one is a D2C online set-up from manufacturers

AIWAYS BYTON LYNK&CO POLESTAR TESLA

100% direct online sales Mainly direct online sales 100% direct online sales 100% direct online sales 100% direct online sales

… New entrants New

FIAT MERCEDES PORSCHE RENAULT VOLVO

Multiple online sales pilots 25% online sales in 2025 >10% online sales in 2025 Multiple online sales pilots 100% online sales in 2030

… Established players Established

Source: Simon-Kucher & Partners; ICDP ECHD 2020 Simon-Kucher & Partners | Otomotiv Sektörünün Gelecek Dönem Yolculuğu | Nisan 2021 47 Future of Omnichannel and Customer Engagement This evolution will help the industry focus more on customer engagement, in particular for early stages of the customer journey

Simplified customer journey Post Purchase - Post Purchase - Awareness/Consider Purchase Re-purchase Usage Service

No global program to drive customer engagement Majority of OEM and spur loyalty Loyalty ecosystem with points earned at partners to Porsche be redeemed for charging… Gamification app Boneo: reward system linked to VW Group own car and avatar Reward program for plug-in hybrid vehicles to BMW incentivize electric charging Points through loyalty for free service, roadside Ford assistance, access to events… Status through transactions to get service, insurance, Suzuki accessory discounts.. Parts and service discount depending on vehicle’s Opel

age Established OEMs Parts and service discount, free service check-up Volvo depending on vehicle’s age Point-based reward systems to redeem for service, Nissan parts and accessories

VW, Audi Discount granted for next vehicle purchase

JLR, Peugeot... Discount granted for next vehicle purchase

Sale via referral program: 1,500km free charging and Tesla chance to win a model Y Multi-faceted brand ecosystem to raise awareness Nio and boost consideration Community app for car reservation, news, photo

Newcomers Byton collection…

Type of engagement / incentive Monetary Non-monetary

Source: Simon-Kucher & Partners Simon-Kucher & Partners | Otomotiv Sektörünün Gelecek Dönem Yolculuğu | Nisan 2021 48 Future of Omnichannel and Customer Engagement In order to do so, we believe the following 4-step approach can help better orient the customer journey and leverage new possibilities to connect 2. Link 4. Win

Customer Customer acquisition expansion

1. Funnel 3. Onboard

Source: Simon-Kucher & Partners Simon-Kucher & Partners | Otomotiv Sektörünün Gelecek Dönem Yolculuğu | Nisan 2021 49 Future of Omnichannel and Customer Engagement Customer lifetime value enhancement can be broken down in multiple commercial processes

Funnel Link Onboard Win

Brand & product marketing Customer access strategy Channel ecosystem

Lead management Conversion mechanisms

Engagement strategy facing frontend facing - Promotion excellence Value realization Monetization model

Customer Cross- and up-selling Expansion strategy Loyalty and churn

Pre-sale Early signal model commercial agility Agile innovation lab

Post-sale Satisfaction tracking

commercial centric backend centric

- agility Learning organization

Automation Infrastructure

Customer CRM, data & analytics

Source: Simon-Kucher & Partners Simon-Kucher & Partners | Otomotiv Sektörünün Gelecek Dönem Yolculuğu | Nisan 2021 50 Future of Omnichannel and Customer Engagement Channel ecosystem Holistically define which channels play a role in your marketing activities and how touchpoints are connected

Third-party Self-service Chat/community/ Personalized web page Email portal social media offers Digital channels Social Web Online Mobile app/ Loyalty media page store website program

Funnel Link Onboard Win

External Mail campaign Sales rep Dealer Mail campaign provider Service Physical channels center

Customer Service Dealer recommendation center

Typical pain points

"I don't like spam." "The product portfolio isn't "One of the modules is "I expect a reward if I'm well structured, which extremely delicate." loyal to the brand." makes it hard to decide what's right for me." "Sales rep gives "Prices online are lower "I have to wait ages to get misleading information." than at my local dealer." served."

Source: Simon-Kucher & Partners Simon-Kucher & Partners | Otomotiv Sektörünün Gelecek Dönem Yolculuğu | Nisan 2021 51 Future of Omnichannel and Customer Engagement Lead management Tailor marketing activities and touchpoints to your customers' movement through their personal funnel

+10 (Digital) leads and contacts are scored and +15 selectively targeted -5 . Scoring across a variety of digital metrics +10

(pages visited, time based) lead scoring based)lead - spent in configurator, Lead scoring results in

(AI social media indicators, adjusted marketing activities and touchpoints etc.) enables scoring of lead maturity

Marketing activities are differentiated based on stage in journey . Targeted lead handover and/or marketing CAPTURE SELL UPSELL automation occurs when certain scores are met

Try now Sign up Save 15% Dynamic marketing Dynamic

Source: Simon-Kucher & Partners Simon-Kucher & Partners | Otomotiv Sektörünün Gelecek Dönem Yolculuğu | Nisan 2021 52 Future of Omnichannel and Customer Engagement Engagement strategy Drive brand and product engagement throughout the customer lifecycle with targeted measures

Strategic focus Engagement levers . Gamification and quizzes Awareness . Referral schemes Funnel . Network challenges Promote . … Consideration

. Network challenges Decision Link . Point programs Convert . … Action

. Learning programs Adoption Onboard . Experience platforms Satisfy . … Usage

Services . Member clubs in W Retain and . Panini measures extend

Source: Simon-Kucher & Partners 53 54 Future of Omnichannel and Customer Engagement Cross- and up-selling Use portfolio selling and behavioral economics to upsell customers and cross-sell products and services

Select a vehicle Select protection

Key number or Manufacturer Model Maintenance Safety according to Wear and Manufacture year Mileage Tire checks manufacturer's tear specifications Mileage per year

Contract duration

Add another vehicle

Our price for you Independent price comparison Maintenance €29.99 Wear and tear €25.00 Monthly auto €59.83 Total €54.99 repair costs Discount 10% Savings Total €10.34 monthly rate € 49.49 per month

Source: Simon-Kucher & Partners Simon-Kucher & Partners | Otomotiv Sektörünün Gelecek Dönem Yolculuğu | Nisan 2021 54 COLOURBOX/Valery-Voennyy iStock/masterzphotois Future of Omnichannel and Customer Engagement Loyalty and churn Here in Turkey, two-thirds of people are interested in a loyalty program and are particularly incentivized by annual free services or discounts

Would you be interested in a Which of the following services would raise your interest within the scope of the reasonably priced loyalty program? loyalty program?

Yes N=1014 N=647 69% 68% No 63% 62% 58% 57% 47% 42% 37%

36%

64%

Discount Free Free Temporary Free Loyalty Free tire Discounts 1-week for winter annual car during annual discount storing for brand test drive annual care car repairs wheel club event on new repairs service painting alignment models service adjustment

Source: Simon-Kucher & Partners Automotive Research Survey Nov. – Dec. 2020, Q38: Yeni bir otomobil alırken makul bir ücret karşılığında üye olabileceğiniz bir sadakat programına (satış sonrası avantajlı ek hizmetler sunan marka programları) katılmak ilgiliniz çeker mi?, Q39: Sadakat programı kapsamında aşağıdaki uygulamalardan hangileri ilginizi çeker? Simon-Kucher & Partners | Otomotiv Sektörünün Gelecek Dönem Yolculuğu | Nisan 2021 55 Future of Omnichannel and Customer Engagement Loyalty and churn Example from one of the most valued OEM worldwide (based on market cap): the inspiring Nio brand-access ecosystems

Nio House Nio Life (exclusive clubhouses1 for users and friends) (strategic cooperation outside of the car environment)

Living rooms Forums

Global community of designers

Lab Library

NIO café Joy Camp Food safety management system (ISO9001)

Source: Simon-Kucher & Partners. Nio. Note: 22 Nio houses, as of 2020 all located in China Simon-Kucher & Partners | Otomotiv Sektörünün Gelecek Dönem Yolculuğu | Nisan 2021 56 Future of Omnichannel and Customer Engagement

To summarize…

There are three type of players in the industry:

Those who shape what happens

Those who observe what happens

And those who asked what has just happened

Source: Simon-Kucher & Partners. Nio. Note: 22 Nio houses, as of 2020 all located in China Simon-Kucher & Partners | Otomotiv Sektörünün Gelecek Dönem Yolculuğu | Nisan 2021 57 Thank you! Your experts at Simon-Kucher & Partners Africa Cairo Americas Atlanta, Boston, Chicago, Houston, Mexico City, New York, Cem Balıkçıoğlu Antoine Weill Partner Partner San Francisco, Santiago de Chile, São Paulo, Silicon Valley, Toronto Tel. +90 21 240137 50 Tel. +49 69 905010 610 [email protected] [email protected] Asia-Pacific/the Middle East www.simon-kucher.com www.simon-kucher.com Beijing, Dubai, Hong Kong, Shanghai, Singapore, Sydney, Tokyo Europe Amsterdam, Barcelona, Bonn, Brussels, Cologne, Copenhagen, Frankfurt, Geneva, Hamburg, Istanbul, London, Luxembourg, Matthias Riemer Madrid, Milan, Munich, Oslo, Paris, Senior Director Stockholm, Vienna, Warsaw, Zurich Tel. +49 221 36794 320 [email protected] www.simon-kucher.com