Tan Suan PhonManaging DirectorInchcape China

Market Overview

Population 1.34bn

Language Mandarin

Currency Chinese yuan(renminbi RMB) (¥)

Capital City Beijing

GDP US€5.9 trillion

Since the introduction of market-based economic reforms in 1978, China has become the world's fastest growing major economy

Source: IMF

Commercial Overview

2005-2010 2010-2015

GDP growth (CAGR) 21.1% 11.2%Population (CAGR) 0.5% 0.5%Unemployment rate ~4.0% ~4.0%Inflation ~6.0% ~6.0%

Fast growingeconomy

China is the major contributor to the recovery of world economy. Now the second largest economy in the world

Strong trade surplus but aiming at more domestic oriented

China is stimulating domestic demand to make the economy more domestic consumption-oriented instead of export-driven

Consistently medium low unemployment

Unemployment is at government acceptable level

Strong manufacturing base

Largest manufacturing base in the world, 20% of world output

Largest population base

China is still the world’s largest country by population

Source: IMF

Automotive Overview

Largest population base in the world

1.34 bn

Low level of car penetration

<50 vehicles per 1,000 population which is below 10% of the average for more developed countries50% of the world average

High investment in road infrastructure

308bn RMB is planned for highway construction in just the rural area in 2011 and 700bn RMB in city area

Fast growth of Passenger Car Market

Growth 2009: 51.1% (Global Insight)Growth 2010: 31.3% (Global Insight)

China’s economy continues to grow

Source: IMF

000’ US dollars

GDP per capita 2008 - 2015

China’s economy continues to grow

Tier 1: above $60bn

Tier 2: $30bn

Tier 3a: $15bn income driven

Tier 4: $10bn

Tier 5: below $7bn

Tier 3b: $14-28bn population driven

…and expected to be even larger in 2020Above $1,000bnBetween $500bn - $1,000bnBetween $100bn - $500bnBelow $100bn

China GDP in 2020 by provinces (projected): a union of second-tier developed and top-tier developing countries

20102015

10.4M11.6M 11%

20102015 4.2M 27.8%

3.3M

20102015 2.7M 55.4%

1.9M

20102015 3.6M 15.7%

3.1M

20102015 25.1M 47.4%

17.0M

20102015 4.9M 79.2%

2.7M

20102015 4.8M 4%

4.9M

Source: Global Insight

China Car Market – Big and Growing

Global Total Industry Volume2009 vs. 2015

Total Industry Volume 2008 - 2015

Source: Global Insight

Million vehicles

China Passenger Car Market by segment

Source: Global Insight (PC and LCV)

Luxury Premium Volume

Volume

CAGR (2010-15)

18%

4.8%

8.4%

000’ vehicles

Luxury demand driven by wealth creation

Distribution of millionaires in China in 2010

1 million USD millionaires

USA 413

CHINA 115

Russia 101

Others 581

Total 1,210

# of Billionaires in 2010

No. 2 USD billionaires in the world

China: Luxury Car Market

Source: Global Insight

China will be the 2nd largest luxury Passenger Car market in the world from 2013

000’ vehicles

Car Parc 2008 - 2015

Source: JD Power/IMF

Millions vehicles

Car Parc Units '000 44,321 51,199 58,735 66,934 75,794 85,306

Population millions 1,341 1,348 1,355 1,362 1,368 1,375Cars/'000 Population 33 38 43 49 55 62

35,496

1,33526

Inchcape China Strategy

3 Steps to build scale in the premium end of the market

China’s large size means scale needs to be focused on a regional basis

2007 2011 2016 2020>>>2010 2016

Step 1 Step 2 Step 3

Establish local presence, recruit strong management team and prove retail economics

Scale up presence in targeted regional markets with our preferred OEM brand partners

Accelerate expansion

3 sites 20 sites

Retail Centres Step 1

Retail Centres

Retail Centres

Retail Centres

Our top 5 Priorities

Growing market share

Growing aftersales

Controlling working capital

Improving margin

Selective capitalexpenditure

Operational focus on our top 5 priorities to deliver our Customer 1st strategy

Leverage OEM new product launches and programs

Leverage car shows and customer lifestyle events to drive quality traffic

Raise the bar on Customer Service Standards

Drive referrals from existing customers and aftersales customers

Data mining of existing customers service records

Build partnerships with Insurance to drive B&P business

Raise the bar on Customer Service Standards

Leverage Vehicle Health Check

TrafficTraffic

Leads/TrafficLeads/Traffic

Test drives/TrafficTest drives/Traffic

Order/ TrafficOrder/ Traffic

EnquiriesEnquiries

Booking/EnquiryBooking/Enquiry

Intakes/EnquiryIntakes/Enquiry

Growing market

share

Growing aftersales

Operational focus on our top 5 priorities to deliver our Customer 1st strategy

Weekly price setting and tracking by model Improve penetration of accessories, F&I Weekly tracking of margins for aftersales Control utilities, consumables costs

Inventory cover to maintain at lower than 1.5 monthsMaximize usage of Supplier Finance with minimum interest chargeNegotiate better payment terms with miscellaneous suppliers

No major investments planned in existing sites Focus on preferred brands and cities

Selective capitalexpenditure

Controlling working capital

Improving margin

We are now executing Step 2 of our China Strategy

2016 Vision

To operate 20 premium 4S sites

Scale up China presence in targeted provincial markets

with our preferred OEM brand partners

China: an attractive opportunity for Inchcape

800

600

400

200

0

50,00010,000 40,00020,000 30,0000

GDP per Capita (US$)

Veh

icle

den

sity

per

1,0

00 a

dults

Russia

BrazilChina

India

USA

Italy

UKFrance

Germany

Japan

Source: JD Power, IMF

Inchcape China

China’s economy will continue to grow from strength to strength

Low car penetration ensures that the automotive industry has significant growth potential

Increasing affluence will drive the luxury car market segment to grow even faster

Inchcape China is well positioned and ready to take advantage of this attractive opportunity:

Tested the retail unit economics,

Built a local organisation,

Localised our operating processes

We are confident that building a portfolio of scale retail businesses, with our core brand partners in the fast growing premium segment is the right expansion strategy for Inchcape China