1© GfK 2016

Spare Parts Market Overview

2© GfK 2016

Age

nd

aIntroduction To GfK

GfK Methodology

Spare Parts Market In UAE And KSA

Tire And Engine Oil Market Trends

Germany Spare Parts Market

Iran Market Overview

3© GfK 2016

GfK Introduction

4© GfK 2016

GfK 80 Years of Innovation Have Made us a Leading Global Market Research Group

ExperienceFounded in 1925 as “Institute of Monitoring of German Goods”

EmployeesMore than 13,000full-time staff

OwnershipTotal autonomy: Majority owned by GfKAssociationGlobal performance: quoted company on the German stock exchange since 1999

Global Reach115 subsidiariesin more than 100 countries

GfK. Growth from Knowledge. Trusted for quality. For 80 years.

13.000 passionate experts

We are the trusted source of relevant market and consumer information

Thought leader in the industries we serve

We deliver globally vital insights into local markets – in 100 countries

…enable our clients to create winning

strategies to enrich consumer‘s lives.

5© GfK 2016

Asia Americas Africa

...via our global automotive expert network of over 350 professionals located in key automotive markets....

AustraliaChinaSouth KoreaIndia Japan

ArgentinaBrazilCanadaChileColombia

Sub-Saharan Africa (main office in South Africa)Egypt and Morocco

RussiaSaudi ArabiaUnited Arab Emirates& ME region

MexicoUSAVenezuela

EuropeAustriaBelgiumBulgariaCzech Republic

FranceGermanyItalyRomaniaSpain

SwitzerlandTurkeyUKGreeceHungary

PolandPortugalSwedenSlovakiaUkraine

6© GfK 2016

GfK Middle East & Africa Regional Scope

7© GfK 2016

GfK…Growth From Knowledge…. Trusted For Quality... For 80 Years....

13.000 passionate experts

We are the trusted source of relevant

market and consumer

information

Thought leader in the

industries we serve

We deliver globally vital insights into local

markets –in 100 countries …enable our clients to

create winningstrategies

to enrich consumer‘s lives

8© GfK 2016

Aftermarket Products Audited

Tyres

Batteries

Engine MotorOil

Oil Filters

Spark Plugs

Brake Pads

Horns

Wipers

AFTERMARKET

9© GfK 2016

GfK Methodology

10© GfK 2016

GfK Retail Audit Approach:

Providing actionable insight on key drivers ofin the market sales, own businessperformance, partners and competitorsdevelopment. Achieved through thecollection of live sales data from leadingretailers and through a dedicated field forceworking with manual store audit, sales arecollected, handled and coding with a full setof features at individual SKU level enablingsegmentation and analysis of the market on afeature by feature basis.

GfK Retail Audit ApproachGfK Retail Audit – Insights and Support

11© GfK 2016

Enumeration Understanding Extrapolation Census Listings

Enumerate outlets which are under the Census Study

Understand the structure of retail in terms of:

Product and Brand distribution

Type and size of Outlets

Establish an accurate basis for panel selection and data extrapolation

Maintain an excel based file with outlet information

GfK Conducted Face To Face Interviews Across The Country To Understand The Retail Landscape

12© GfK 2016

How our Census Forms Look

13© GfK 2016

Spare Parts Market In UAE And KSA

14© GfK 2016

Population Close To 10 Million (4.1 Mio in 2006) Net migration rate at 21%, the highest in the world

2.9%

82 years77 yearsDependency Ratio 20%

South-Asian 58%

UAE Arab-13%

Westerner 12%

Other Asian-17%

HDI Rank 40

1.05

Inflation growth 4.3%

4.3%402 billion current prices

Current Account Balance $46 billion

GDP Index 135

15© GfK 2016

620

148

469

120205

648

61

Spare Part Handlers

Spare Part Handlers In UAE- 2771

Filters Handlers-

2155

Spark Plugs

Handlers-1357

Brake Pads

Handlers-1343

Fuel Pump

Handlers-1133

Engine Belts-1179

2771 Spare Parts Handlers In UAE; Total Outlet Universe- 4089 Outlets

16© GfK 2016

479

150

481

108

158

542

39

ABU DHABI

AJMAN

DUBAI

FUJAIRAH

RAS AL KHAIMAH

SHARJAH

UMM AL QUAIN

Starter Batteries

Battery Handers In UAE

Car Batteries Handlers-

1840

Truck Batteries Handlers-

477

Coach Batteries Handlers-

140

Caravan/ Motor Home

Batteries Handlers-

32

Agricultural

Batteries Handlers-

26

1957 Battery Handlers In UAE; Total Outlet Universe- 4089 Outlets

17© GfK 2016

826

205

667

171301

790

72ABU

DHABIAJMAN DUBAI FUJAIRAH RAS AL

KHAIMAHSHARJAH UMM AL

QUAIN

Oil Handlers in UAE 772

198

632

161281

752

70164

57 116 56 69207

9

Handlers by Oil Type

Car / Mixed Fleet Truck

3032 Engine Oil Vehicle Handlers In UAE; Total Outlet Universe- 4089 Outlets

18© GfK 2016

403 66358 80 106 253 26

740 204583 138 237 837 58

ABU DHABI AJMAN DUBAI FUJAIRAH RAS AL KHAIMAH SHARJAH UMM AL QUAIN

Organization Types in UAE

Chain Independent

3137 Independent Outlets; 932 Independent Outlets In UAE

19© GfK 2016

Text Box Headline

Pirated goods are preferred by buyers as they are offered at heavily discounted prices

Illegal operators able to beat local agents and distributors as they survive on low profit margins and high volumes with extensive distribution

Import tariffs and other additional expenses not passed on to their customers in order to maintain their low prices

Second-hand spare parts are sourced from damaged cars sold by insurance companies at throwaway prices and the rest coming from police auctions

Outlets Are Capable Of Providing

Nearly 90% Of Such Parts On

Demand

Some Second-Hand Spare Parts Outlets In Sharjah Reportedly Selling Parts Of Even 2011

Models At Less Than Half The Price

Of Genuine Parts

UAE – Leading Supplier of Pirated and Second Hand Parts

20© GfK 2016Source: International Monetary Fund

KSA – World’ Largest Oil ExporterKSA boasts of the 19th highest GDP in the world

31.5 Billion

46% Dependency Ratio

2%M/F Ratio 1.37

67% - KSA National

15% - South Asian National

10% - Other Arab National

8% - African National

Source: United Nations Development Program

772 Billion GDP

4%

Inflation Rate 3.26%

44% National Savings

21© GfK 2016

In 2015, UAE’s automotive trade value reached USD 22.6bn, up 22% compared to 2014, according to International Trade Centre (ITC)70% of imported parts re-exported to other MENA countries

22© GfK 2016

43 36238173

75 6 84

401

845

7227

123

431

1731

85146203

700

29210756

1866

14 90 9129158

8 80 77

Aftermarket Universe across 30 cities

KSA- 8440 Outlets Audited Across Saudi Arabia

23© GfK 2016

Total Spare Parts

Handlers-5991

Spark Plug

Handlers-3010

Brake Pads

Handlers-2900

Filers Handlers-

5678

Engine Belt

Handlers-2630

Fuel Pumps

Handlers-2690

Water Pumps

Handlers-2795

Front Grill Handlers-

2302

Total 5991 Spare Part Handlers In KSA

24© GfK 2016

1 37 56

691

6 20 113

441

18 27 71

529

9

98 103

7

819

66 47519

1119

56 41 216

815

66

Organization Types in KSA

Chain Independent

5596 Independent Outlets; 2844 Chain Outlets In KSA

25© GfK 2016

1 76 96 19

1179

75 46

551

1317

43 37

287

1192

56

Engine Oil Handlers

Total Engine Oil Vehicle Handlers are 4917

26© GfK 2016

5 9 13

338

19

147

680

1495

174 85

19

1103

73 39

540

1219

38 32

284

1152

56

Oil Type Handlers

Truck Car Mixed Fleet

KSA- Car Engine Oil Handlers are 4772; Truck Engine Oil Handlers are 1379

27© GfK 2016

Some Market Trends…

28© GfK 2016

CAR TIRESUnited Arab Emirates Sales Ths.Un.

<= 15"16"17"

18"19">= 20"

Jan 15 Feb 15 Mar 15 Apr 15 May 15 Jun 15 Jul 15 Aug 15 Sep 15 Oct 15 Nov 15 Dec 15 Jan 16 Feb 16 Mar 16

0

20

40

60

80

100

120

140

160

180

200

220

240

260

280

Sal

e sTh

s.Un .

19

20

36

58

89

20

21

36

59

93

20

22

39

61

98

23

22

41

64

100

227

24

43

67

103

21

24

42

69

105

21

23

40

64

98

237

25

42

67

98

227

25

42

68

105

227

26

41

65

103

216

24

40

65

98

21

23

37

61

91

22

22

37

64

99

226

22

37

65

100

227

24

38

67

102

229 235245

256265 267

252262 268 265

254239

249 252 259

UAE- Major Contributing Inch Segments Are <=15” and 16”

29© GfK 2016

CAR TIRES Saudi Arabia

LIGHT TRUCK

PASSENGER CAR

4X4

Jan 15 Feb 15 Mar 15 Apr 15 May 15 Jun 15 Jul 15 Aug 15 Sep 15 Oct 15 Nov 15 Dec 15 Jan 16 Feb 16 Mar 16

0

100

200

300

400

500

600

700

800

Sal

e sT

h s.U

n .

118

468

41

122

486

43

120

487

44

119

491

43

126

514

43

131

531

41

130

537

40

132

543

43

130

543

41

117

498

38

116

478

42

116

455

37

111

452

37

109

454

36

121

485

41626 651 651 653684 702 707 717 714

653 636608 599 599

647

KSA- Passenger Car Largest Segment- 485K Units In March 2016

30© GfK 2016

ENGINE OILS VEHICLESUnited Arab EmiratesSales Ths. P/L/K

10W-4020W-50

5W-40

5015W-40

40

5W-30

0W-4010W-60

15W-50

Others

Nov 15 Dec 15 Jan 16 Feb 16 Mar 16

0,0

0,5

1,0

1,5

2,0

2,5

3,0

3,5

4,0

4,5

Sale

sTh

s.P

/L/K

(x1 .

000

)

103

251306

833

384

1.117

1.027

178

286

758

348

1.095

1.120

171

222

737

349

1.001

1.132

185

295

695

391

991

1.135

205

309

742

395

1.136

1.063

4.2353.940

3.742 3.8253.987

Nov 15-Mar 16

2

258

65

BARRELBUCKETBULKCANCONTAINERJUG

UAE Engine Oils- 20W-50 Is The Largest Contributing Viscosity

31© GfK 2016

Germany Spare Parts Market

32© GfK 2016

The automotive value chain focusing on After Sales.

Source: GfK Illustration, adopted from University St. Gallen

Only 37% of the total revenue stems from new car sales. The remaining 63% account for sales in the Automotive Aftermarket business.

Product development Logistics

Manufacturing New Cars

Financial Services

1 2 3 4 5 After Sales

Used Car Sales

6 7Recycling

8

AccessoriesAppearance Products

Lubricants & Tires

Replacement Parts

Service Repairs

1 2 3 4 5 Telematics & Navigation Entertainment

6 7

33© GfK 2016

Expense for maintenance increased by 15% from

1996-2015.

Key Insights: German Spare Parts Market 2015

Ø – Cost per repair

TRENDS

14%3%

Source: DAT 2016

12.30

8.5911.93

8.22

16

1116

MAINTENANCE REPAIR

IN BILLION € 2014 2015

Development of Maintenance and Repair

Expense for repair decreased by 7% from

1996-2015.

Market Shares (in %) of different workshops(2015)

5239

8OEM Workshops

IndependentWorkshopsDo-it-yourself

162,00

34© GfK 2016

Decreasing repair work units in Germany: In 2015 0,52work units were executed in German workshops.Frequency of repair work in Germany according to DAT Study 2016

Source: DAT 2016

0.750.72

0.70

0.62

0.67

0.620.65

0.61

0.55

0.52

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Number of vehicles/year

35© GfK 2016

Spare Parts segmented by channel in Germany.

36© GfK 2016

Some Insights On Iran…

37© GfK 2016

6,500 6,800 7,100 7,500 8,160 9,000 9,900 10,720 11,400 12,300

15,120 16,481

18,458

21,227

24,411

28,561

860 870 910 950 1,020 1,1001,200 1,300 1,340

1,700

0

5,000

10,000

15,000

20,000

25,000

30,000

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Passenger Cars ('000)

Commercial Cars ('000)

Actual Data Forecast

Automotive per capita, as of 2015, is 178

Iran is ranked as 79th in the world, as of 2013, by automotive per capita (164/1000)

38© GfK 2016

Automotive Industry, the 2nd most active industry in Iran, after Oil & GasAccounts for 10% of GDP and 4% of workforce (700,000 people)

Source: "Iran ranks 5th on OICA growth chart". PressTV. Source: "Resources - Iran’s Automotive Industry Overview". Atieh Bahar.

18th Largest Automaker in WorldOne of the Biggest in AsiaLargest in ME

Produces 6 different types of vehicles:1. Passenger Cars (75% of Automotive

Industry in Iran)2. Pick-up Trucks (2nd largest segment in

Automotive Industry in Iran)3. 4WD4. Trucks5. Buses6. Mini-buses

39© GfK 2016

IKCO and SAIPA two main players of passenger car market, among 25 Automakers in Iran

48%

34%

8%

10% IKCO

SAIPA

Others

Import

25 Automakers in Iran Despite being listed in the Stock Exchange, the government still

owns ~40% of IKCO & SAIPA IKCO (units%=47.8%) Leads Passenger Car Market IKCO Leads Commercial Car Markets (units%=60.7%)

– Azhitechs– Bahman Group– Rakhsh Khodro– Kerman Motors– Kish Khodro– Raniran– Traktorsazi– Shahab Khodro– Etc.

Automakers’ Units SharePassenger Car Market

Period: April 2013 – March 2014/ 1393 Persian Year

13%2%

5%9%

12%

18%

41%Hyundai

Kia

Geely

Toyota

BMW

Honda

Others

MG, Mercedes Benz, Renault, Ssangyong, Mitsubishi, Zotye, Great Wall, Lexus, Volvo, VW, Alfa Romeo, Porsche, Maserati, Jaquar, Ferrari

Automakers’ Units ShareImported Passenger Car Market

Period: April 2013 – March 2014/ 1393 Persian YearSource: Statistics Center of IranSource: Iran Customs

40© GfK 2016

ImportLocal production is underlicense of foreign companies,so it heavily depends onthem.

Expect a further boost to the automotive aftermarket!

Source: "PressTV-Iran car imports up by 31%". Retrieved 10 June2015.

Source: http://iran-daily.com/newspaper/page/4737/4/4663/0

The Automotive Aftermarket is all set to benefit from the overall growth of the automotive sector

Tire Manufacturers10 tire manufacturing unitsoperating in Iran.

Automotive Parts IndustryThe Iranian Automotive Parts Industry consists of 1,200companies (15,000 factories)

This industry consists of 2 primary sectors:1. OEM Suppliers, which produce parts for

automakers2. AMPM, which produces replacement parts

As of 2015, 60% of Auto Spare Parts in Iran are imported.

As of 2014, 70% of Tire Domestic Demand is

met

70% 60%

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