Russia‘s growth and opportunities

Matt Donnelly

President & CEO

Rolf Group – the most profitable automotive business in Russia

Automotive News Europe Congress

Prague, 26 June 2007

RussiaWhy are we all here?

Can

ada

Spai

n

Mex

ico

Italy Bra

zil

Fran

ce

Brit

ain

Ger

man

y

Japa

n

Indi

a

USA C

hina

Sout

h K

orea

Rus

sia

0

5

10

15

20

25

30

Why we're all here : Forecasted Russian Economic Development (PPP 2020 per World Bank)

0

500

1 000

1 500

2 000

2 500

3 000

3 500

4 000

2003 2004 2005 2006E 2007F 2008F 2009F 2010F

Germany France Russia Great Britain Spain Italy Belgium

Source: ACEA (European Automobile Manufacturers Association), DATAMONITOR, PwC estimates.

Why we're all here : Russia to Become #2 New Car Market in Europe

432587

766920

1 1401 330

1 4941 677

1 892

2 9774 072

5 3386 442

8 026

9 40510 622

11 979

13 583

0

500

1 000

1 500

2 000

2 500

3 000

3 500

4 000

2003 2004 2005 2006E 2007F 2008F 2009F 2010F 2011F0

2 000

4 000

6 000

8 000

10 000

12 000

14 000

16 000

Nominal GDP, USDbn [left axis] GDP per capita, USD [right axis]Source: Rosstat, IMF, BMI (2006).

Why we're all here : Unrivalled Market Growth and Consumer Spending

Russia:

RolfWhat‘s so good about us?

- Biggest importer/distributor and the single largest retailer of foreign branded cars retail

- Only Rated Russian automotive business (2007 BB-/Ba3, S&P/Moody's)

- Leading provider of vehicle and spare parts logistics

- Top 10 generator of consumer credits

- First company offering certified second hand sales with service contracts in the Russian market

- Profitable in all aspects of its business

- Continuing to invest in the car business and very optimistic

About Rolf Group

Success of Rolf Group Built on 5 Principles

1. Knowing our customers and suppliers. Setting out to consistently exceed their expectations

2. Having a strong portfolio of manufacturer brands and demonstrating that Rolf adds value to their businesses

3. Continuing to innovate and work using global best-practice benchmarks

4. Building our dealerships where people want to go and investing in sales and servicing skills

5. Hiring the best talent possible and focussing on training

Our Brands, Our Values

Car MarketNational peculiarities

100%

20.7%

3.2%

5.9%

6.6%

6.8%

7.2%

7.5%

9.5%

10.0%

11.0%

11.5%

Market share

66,717Daewoo

59,993Kia

72,484Renault

32,290

Total units sold

Mazda

68,845Mitsubishi

Chevrolet 111,458

209,151Others

95,689Toyota

75,529Nissan

115,985Ford

100,685 (imports: 44,899)Hyundai

1,008,826Total

Brand (rank by sales in 2006)2006

Source: Kommersant, European Business Association, Rolf.

100%

20.7%

3.2%

5.9%

6.6%

6.8%

7.2%

7.5%

9.5%

10.0%

11.0%

11.5%

Market share

66,717Daewoo

59,993Kia

72,484Renault

32,290

Total units sold

Mazda

68,845Mitsubishi

Chevrolet 111,458

209,151Others

95,689Toyota

75,529Nissan

115,985Ford

100,685 (imports: 44,899)Hyundai

1,008,826Total

Brand (rank by sales in 2006)2006

Source: Kommersant, European Business Association, Rolf.

98% of Rolf Retail Sales in Top 10 Import Brands

Some Foreign Brands Need to Catch Up

Only Build What You Can Sell

Small

Lower medium

Upper medium

Large

Small SUVMedium SUV

Large SUV

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2003 2004 2005 2006 2007 2008 2009 2010

Pickup trucks

Minibus, cargo van & light truck

Car-derived van

Large SUV

Medium SUV

Small SUV

Large minivan

Medium minivan

Small minivan

Exotics

Premium coupe & roadster

Coupe & roadster

Upper premium

Medium premium

Large

Lower premium

Upper medium

Entry premium

Lower medium

Sub premium

Small

Minicar

49% in 2006

7% in 2006

Retail assets, different to what you might be used to.

ConclusionNearly there...

Conclusion

No other market offers such a strong business case for foreign car manufacturers

Foreign brands own the future - Russian brands will lose out

Market success most of all depends on the quality and experience of the staff and partners

Very few firms/professionals truly understand market dynamics

Ignore local challenges at your peril

спасибоИ счастливо