Honda Odyssey

State of the Industry

And Key Introductions at 2017 NAIAS

Stephanie Brinley, Senior Analyst

Detroit Athletic Center Detroit, MI

January 17th, 2017

• Automotive Sales Environment for Near Term

• Autonomy and Mobility: Implications

• NAIAS 2017

• Automotive Sales Environment for Near Term

• Autonomy and Mobility: Implications

• NAIAS 2017

Market peaks in mid-2017 – weaker buying conditions, 20 2017 slower job creation, rising oil prices start next cycle. 17.5m 18 Some return to ‘cars’ likely next decade.

Millions 16

14 LT – peaks in 2018, weaker housing, higher fuel & 12 regulations force decline Pre-Crash 10 40 year trend: +140k annually 8

6 Car – sales flatten - rises with as affordability declines 4

Sales Vol Car Light Truck Linear (Sales Vol)

Share45% of Sales, 2016 vs 2022 • Share of Utility Vehicles 40% continues to increase 35% • Share of Pickup Trucks is 30% steady and stable 25% • Utility Vehicle and Cars 20% make up more than 75% 15% of the market 10% • Pickups, Sports Cars, 5% MPVs and Vans make up

0% remaining 25% CUV Car Pickup

90.0% • Sales of premium and 80.0% exotic price and brand

70.0% vehicles continue to

60.0% gain share

50.0% • Gain is supported by increased number of 40.0% offerings, particularly 30.0% utility vehicles 88.2% 85.6% 20.0% • Mainstream brands see 10.0% 13.2% pricing increase on 0.3% 1.3% 11.5% 0.0% higher technology, Exotic Premium Standard safety features

Market Share, Top 12 Automakers, 2016-2020 CY 2016 CY 2017 CY 2018 CY 2019 CY 2020 General Motors 16.8% 16.7% 16.4% 16.2% 15.8% Ford 15.0% 14.7% 14.4% 14.2% 14.4% Toyota 13.9% 14.1% 13.9% 13.5% 13.6% FCA 13.2% 12.3% 11.9% 12.1% 12.0% Honda 9.4% 9.6% 9.6% 9.5% 9.3% Nissan 8.9% 8.5% 8.5% 8.7% 8.5% Hyundai 8.1% 8.3% 8.7% 8.7% 8.8% Volkswagen 3.3% 3.9% 4.2% 4.3% 4.4% Subaru 3.4% 3.4% 3.5% 3.6% 3.5% Daimler 2.2% 2.3% 2.3% 2.2% 2.3% BMW 2.1% 2.2% 2.2% 2.3% 2.4% Mazda 1.8% 2.0% 1.9% 1.9% 2.0% Source: IHS Markit © 2017 IHS

General50% Motors Toyota50% Motor Sales Ford40% Motor Company 35% 40% 40% 45% 44% 30% 40% 38% 34% 33% 37% 33% 31% 30% 30% 35% 25% 31% 31% 20% 25% 22% 21% 20% 20% 15% 21% 10% 10% 10% 13% 11% 5% 0% 0% 0% CUV Pickup Car Car CUV Pickup CUV Pickup Car

Fiat60% Chrysler Automobiles American50% Honda Nissan60% North America

50% 46% 46% 50% 49% 49% 40% 50% 41% 42% 40% 40% 47% 30% 39% 42% 30% 30% 20% 20% 25% 20% 21% 10% 13% 10% 10% 10% 1% 3% 7% 7% 0% 0% 0% % of CY 2016 % of CY 2020 Car CUV Pickup Car CUV Pickup

Hyundai/Kia70% Volkswagen70% AG Subaru80% 60% 60% 70% 60% 74% 75% 65% 60% 50% 58% 50% 49% 50% 40% 40% 39% 40% 30% 30% 30% 33% 31% 30% 20% 20% 20% 25% 25% 10% 10% 10% 0% 0% 0% % of CY 2016 % of CY 2020 % of CY 2016 % of CY 2020 % of CY 2016 % of CY 2020

Daimler50% AG BMW60% Mazda60% North America

50% 50% 40% 50% 42% 42% 43% 48% 49% 39% 40% 48% 40% 44% 30% 43% 30% 39% 30% 20% 41% 20% 20%

10% 10% 10%

0% 0% 0% % of CY 2016 % of CY 2020 % of CY 2016 % of CY 2020 % of CY 2016 % of CY 2020

• Automotive Sales Environment for Near Term

• Autonomy and Mobility: Implications

• NAIAS 2017

• Why autonomy? What do the levels of autonomy mean?

• When will autonomous vehicles really arrive?

• What does mobility have to do with it?

Safety Societal Cost Efficiency Consumer

35,092 killed in 6.3M $277B in economic $160B in US congestion Connectivity crashes in the US in costs costs 2015, 1.9% of GDP Convenience 94% driver fault 3.1B gallons of fuel $871B in quality-of- burned in US due to Sustainability 1.24M road deaths life costs congestion worldwide 5.8% of GDP Mobility in 2010, half are 6.9B hours wasted sitting vulnerable road users in traffic Choice

Source: NHTSA, WHO Lower Cost Source: IRTAD, various Source: Texas A&M estimates, 2010 Transportation Institute & INRIX, 2014

Full Automation L5 IHS Driverless car

High Automation L4 IHS Self-driving car

L3 Conditional Automation

L2 Partial Automation Steering and Braking Increasing Automation

L1 Driver Assistance Steering or Braking

L0 No Automation

Based on Society of Automotive Engineers levels of automation (SAE J3016)

Note: IHS Markit Autonomous Vehicle forecasts use different structure but similar nomenclature. SOURCE: IHS Automotive © 2017 IHS Markit. All Rights Reserved. Autonomous Driving Service Language defined – Real-world examples of SAE Levels Autonomous = Level 4 and Level 5

Full Automation Fully autonomous driverless fleets L5 Full autonomy | Driverless car Mobility service business model

High Automation Fully autonomous autopilots L4 Full autonomy | Self-driving car Drivers disengage in more situations

Conditional Automation Advanced autopilots L3 Drivers intermittently re-engage

L2 Partial Automation Autopilot Traffic jam assist

Adaptive cruise control L1 Driver Assistance Lane keep assist Autonomous parking Collision warning L0 No Automation Lane departure warning Blind spot information

2010 2015 2020 2025 2030

Based on Society of Automotive Engineers levels of automation (SAE J3016) Note: IHS Markit Autonomous Vehicle forecasts use different structure than SAE despite similar nomenclature. SOURCE: IHS Automotive © 2017 IHS Markit. All Rights Reserved. Autonomous Driving Service Autonomy and Mobility: Implications

• Why Autonomy? What do the Levels of Autonomy Mean?

• When will autonomous vehicles really arrive?

• What does mobility have to do with it?

Details or timeline unclear L

4 Limited drive via remote driver control

“Autonomous by 2020” L announcements 3

L 2

Wide variety of systems bordering L2 Many incremental and evolutionary steps within Level 2 LEVEL OF 2014 2015 2016 2017 2018 2019 2020 AUTOMATION 2021 IHS Level 4: Fully autonomous with driver controls © 2017 IHS Markit. All Rights Reserved. IHS Level 5: Fully autonomous without driver controls New capabilities are needed to enable autonomy Automakers & suppliers gaining expertise via acquisition, partnership, internal development Sensing

Computing Cloud Connectivity

User Driver Artificial Maps Experience Software Intelligence Service Business Model

Auto Expertise Tech Expertise

• How quickly will Auto Technology and Manufacturing converge?

> Tech companies have software and tech expertise, massive resources, agility and no fear of failure

> Auto companies understand complex auto industry requirements, product lifecycles and support, vehicle dynamics, and control traditional sales channels and incumbent markets

> Which companies in which sector will expand and perfect their skillsets faster?

> What becomes the biggest asset? Is it still manufacturing and footprint, or is it technology and innovation?

Auto companies develop/acquire new Tech companies find willing Auto + talent at a Tech sector pace + manufacturing partners who may not have Auto maintains leverage while own Tech skills + partnering with Tech to make and Tech leverages new automated + manufacture new vehicles manufacturing to produce cars

2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 North America W. Europe Japan / Korea China

2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 North America W. Europe Japan / Korea China

0% 0 – 1% 1 – 10% > 10% > 50% (Sales rate relative to base sales forecast)

Over-regulation and stubborn views stifle + Favorable regulations enabling innovation - innovation + Consumer interest & acceptance - Distrust, unwillingness to buy

Technology •Easiest challenge to ‘solve’ but still takes time •Artificial intelligence, computing, sensors get better and cheaper Regulation •Developing regulatory framework in the US •Adapting Vienna Convention in Europe and abroad Insurance •New paradigm of product liability, not personal liability •Adapting the insurance model to dynamic usage, multiple users Public Acceptance •Value proposition brings mobility to more people at lower cost •Trust in autopilot today a likely sign of wider acceptance over time Bad Press •Early crashes and fatalities could delay acceptance •Will consumers accept fatalities attributed to a robot?

• Why Autonomy? What do the Levels of Autonomy Mean?

• When will autonomous vehicles really arrive?

• What does Mobility have to do with it?

• Automaker sub-brands become the home for • Investments galore in car-sharing, ride-hailing new technologies and ride-sharing

> BMW i > The obvious: Uber, Lyft, Didi, Ola, Grab

> Mercedes-Benz EQ > GM Maven

> VW Moia & ID Concept Vehicle > Daimler car2go

• ACES is a popular combination > BMW ReachNow

> Autonomous > VW Moia, Gett, PayByPhone

> Connected > Geely / Volvo Lynk & Co.

> Electric • BMW and Daimler reportedly merge car-sharing

> Shared > Even if untrue, there is interest in unification in order to survive hyper-competitive mobility alternatives

Past Present Future

Taxi Taxi Autonomous For-Hire For-Hire on-demand Ride-hailing mobility Rental Rental service Car sharing

Owner/ Owner/ Owner/ Driver Driver Driver

Indicative cost comparison: Personal Vehicle Ownership vs Ride-Hailing $35,000 Ride-Hail $30,000 $25,000 US City US Ride Pool $20,000 Avg Avg

$15,000 Autonomous Cost per Year Cost $10,000 Ride Pool $5,000 Private Car $0

miles per year

• Automotive Sales Environment for Near Term

• Autonomy and Mobility: Implications

• NAIAS 2017

• Key Launches

• Key Concepts

• Other Notables

Chevrolet Traverse • Migrating to CHI platform alongside Acadia, Enclave, XT5, and XT6, and future Blazer • Vehicle Production: Lansing Delta Twp., Michigan (105k UPA) • 2” longer wheelbase, 3rd row seating, 362lbs lighter • 2.0L turbo I-4 (255hp), 3.6L V-6 (305hp), w/ 9-Speed auto • Carplay/Android Auto, 4G LTE Wi-Fi, MyLink

GMC Terrain • Vehicle Production: SLP, Mexico (110k UPA) • 400 lbs lighter than first gen Terrain • Shift-by-Wire introduced, creating more console space • Optional 1.6L turbodiesel (236-lb-ft) with 6-speed automatic • Std:1.5L turbo (170 hp), Opt. 2.0L turbo (252) 9-speed auto • Std: Carplay/Android Auto, 4GLTE Wi-Fi, and myGMC app

Honda Odyssey • Platform: 2SL/2SF (475k UPA), utilizes HSS, aluminum, magnesium to reduce Odyssey weight by 100lbs • Vehicle production: Lincoln, Alabama • Active grille shutter, improved aerodynamics • Segment-leading seating flexibility • Technology focused on family interaction • New 10 speed Honda auto

Toyota Camry • Vehicle Production: Georgetown, Kentucky • Emphasis on Hybrid model differentiation, interior and exterior design improvements • Improved driving dynamics, suspension, visibility • Lower ride height – increase interior room • I-4 and 3.5L V-6 powertrains

Kia Stinger GT • Vehicle Production: Sohari, South Korea • Major styling shift to create room vs. Hyundai • Extensive use of Aluminum and high-strength steel • Powertrain: Longitudinally mounted 2.0L turbo (252 hp), and twin turbo 3.3L V-6 (365 hp), 8-Speed Automatic • Fastback bodystyle a departure

Volkswagen Tiguan • Vehicle Production: Puebla, Mexico • 11” longer than outgoing Tiguan to house 3rd row seating • 3rd row seating standard on FWD models, optional on AWD • New customizable digital cockpit display allows drivers to choose data and Navigation configurations • Better fills a gap below Atlas

© 2017 IHS Markit. All Rights Reserved. Key Launches BMW 5-Series • Production locations: Dingolfing, Germany & Graz, Austria • Substantial mass reduction versus prior offering (200lbs) • Length: 194.3 in. (+0.9*) Width: 73.5 in. (+0.3*) Height: 58.2 in. (+0.6*) Wheelbase: 117.1 in. (+0.2*) • Technology from the recently launched 7-Series takes residence, eg gesture control

Lexus LS • Production location: Tahara, Atsumi, JPN • Length: 206.1 in. (+6.1*) Width: 74.8 in. (+1.0*) Height: 57.1 in. (-1.0*) Wheelbase: 123 in. (+6.1*) • Optional Denso-supplied 24” color head-up display available. • Innovative safety package – pedestrian avoidance • No V8, twin-turbo V6 with 10 speed auto

• Key Launches

• Key Concepts

• Other Notables

Chrysler Portal • Designed by Millenials, 270-mile EV range • FCA’s first real foray into autonomous or EV concept • Autonomous technology developed with suppliers • Well thought out vehicle interaction, tech for sharing content and personalization settings in the car • Facial and voice recognition, exterior lighting conveys autonomous mode

Volkswagen I.D. Buzz • Fully-electric range up to 270 miles on the Modular Electric Drive (MEB) platform. • Supports Volkswagen’s I.D. Pilot autonomous driving suite. – Turns yellow when in autonomous mode • Electric all-wheel drive standard. • Longer than the T4 Bus, longer than the LWB T4. • Steering wheel retracts in autonomous mode.

Nissan V-Motion 2.0 • Length: 191.3 in. Width: 74.4 in. Height: 54.3 in. Wheelbase: 112.2 in. • Evolution of Nissan’s V-Motion design language; expected to underpin the design of the next Maxima and Altima, indicating Nissan’s intent to remain committed to sedans. • Will support ProPILOT autonomous driving mode, part of Nissan’s Intelligent Mobility Plan.

Infiniti QX50 Concept • Infiniti’s Powerful Elegance design language, introduced on the QX30 • Mid-size CUV, previews new-generation QX50. • Will support ProPILOT autonomous driving mode, part of Nissan’s Intelligent Mobility Plan • New engine technology likely. VC-Turbo, variable compression turbo for diesel efficiency from gas engine

Audi Q8 Concept • Based on MLB D platform – added to slate of large CUVs from Porsche, Audi and VW • Based upon Q7 structure and technology suite – 90% ready • Length: 198 in. (-1.6*) Width: 80.4 in. (+2.9*) 2018-22 Avg. Annual Volume: 29K • New range topper CUV to share technology leadership with A8 • Shown in 2+2 but available in 5 pass version

*difference from current Q7

• Key Launches

• Key Concepts

• Other Notables

Ford F-Series MCE • 7 new front grills, 6 wheel options, updated lights and interior improvements to differentiate trim levels • New Std. 3.3L V-6, and new 3.0L Powerstroke V-6 turbodiesel • All 2018 F-150’s will be equipped with standard Stop/Start and 10 speed auto (designed with GM) • Improved lighting though few interior changes

Volvo V90 • Production location: Torslanda, SWE (US models) Follows the V90 Cross Country – order only • Length: 194.3 in. Width: 74.7 in. Height: 58.1 in. Wheelbase: 115.8 in. • Available in FWD and AWD variations

Nissan Rogue Sport • Segment: Small C-Segment Crossover Utility Vehicle (CUV) • Platform: CMF-C/D averaging 2.7M UPA • Vehicle Production: Kyushu, Japan (90-100k UPA) • Gap filler – above Juke, below Rogue – essentially a Small C • Inspired by Rogue Select success • Nissan still skipping CarPlay/Android Auto

Mercedes E-Series Coupe • Vehicle Production: Bremen, Germany (~50k UPA) • Increased: OAL +4.8”, wheelbase +4.4” • Twin Turbo 3.0L V6 – main US engine • ADAS: Semi-autonomous driver assist, high speed ACC • Will feature a 24” ICD display

• The US auto market is expected to remain healthy through the decade

• Autonomous vehicles and mobility services will change how we consume transportation—but that change may be slower than headlines might suggest

• NAIAS introductions largely favored family transportation—even some key concepts

Stephanie Brinley Senior Analyst, IHS Markit Automotive World Markets Automotive [email protected]

IHS Markit Customer Care: Americas: +1 800 IHS CARE (+1 800 447 2273); [email protected] Europe, Middle East, and Africa: +44 (0) 1344 328 300; [email protected] Asia and the Pacific Rim: +604 291 3600; [email protected]

COPYRIGHT NOTICE AND DISCLAIMER © 2016 IHS. All rights reserved. No portion of this presentation may be reproduced, reused, or otherwise distributed in any form without prior written consent of IHS. Content reproduced or redistributed with IHS permission must display IHS legal notices and attributions of authorship. The information contained herein is from sources considered reliable, but its accuracy and completeness are not warranted, nor are the opinions and analyses which that are based upon it, and to the extent permitted by law, IHS shall not be liable for any errors or omissions or any loss, damage, or expense incurred by reliance on information or any statement contained herein. In particular, please note that no representation or warranty is given as to the achievement or reasonableness of, and no reliance should be placed on, any projections, forecasts, estimates, or assumptions, and, due to various risks and uncertainties, actual events and results may differ materially from forecasts and statements of belief noted herein. This presentation is not to be construed as legal or financial advice, and use of or reliance on any information in this publication is entirely at your own risk. IHS and the IHS logo are trademarks of IHS.