INDUSTRY LANDSCAPE

STEVE STURM

MARKET SALES REVIEW Q1 2014

15.3 15.7

0.0

2.0

4.0

6.0

8.0

10.0

12.0

14.0

16.0

18.0

Q1 2013 Q1 2014

SAAR Performance Million, Q1 2013 vs. 2014

+2.6%

2.2%

3.8%

1.9% 1.7%

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

Domestic Japanese Korean European

SAAR Performance % Change, Q1 2013 vs. 2014

MARKET SALES REVIEW March 2014

15.3 16.1

0.0

2.0

4.0

6.0

8.0

10.0

12.0

14.0

16.0

18.0

Mar-13 Mar-14

SAAR Performance Million, March 2013 vs. 2014

+5.2% 10.1% 9.5%

7.7%

10.8%

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

Domestic Japanese Korean European

SAAR Performance % Change, March 2013 vs. 2014

BRAND PERFORMANCE

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46% 38%

33% 23%

16% 16%

13% 13% 13% 13% 13%

10% 7% 7%

5% 4%

1% 1%

-2% -2%

-3% -4%

-6% -6%

-8% -10%

JeepLincolnJaguarSubaru

JeepLexusInfinitiBuick

NissanBMWBuickAcura

MercedesLand Rover

DodgeAudi

MazdaGMC

ChevroletToyota

FordHondaVolvo

CadillacChrysler

VW

Sales, % Change Q1 2013 vs. 2014

On a Roll

Middle of the Road

Struggling

Subaru

Lexus Infiniti

Nissan

Acura

Mazda

Toyota

Honda

INDUSTRY FORECAST 2nd Quarter and 2014

Vehicle Prices

$29,300 +$700 from 2013

Vehicle Incentives

$2,773 +7.9% vs. February

Vehicle Production

4M vehicles built in NA in Q1 +3% from 2013

63 days supply in dealer

stock +3 days over normal

Average Age of U.S. Car

and Truck in Operation

11.4 years 9.6 years in 2002

2014 Market Forecast

16.1M – today 16.2 – beginning of 2014

2014 North American

Production

16.5M +3% from 2013

MARKET SHARE WAR

• Core Brands & Core Models:

– Compact and mid-size cars

– Full size pick-ups

– Cross-overs

– Luxury entry

THE NEXT QUARTER AND BEYOND

Tier 1

• Ongoing Sales Events – May, June, Aug, Sept, Dec

Tier 2

• Heightened focus

Tier 3

• Dealers will increase spending with strong market and continued strong factory incentives

• Fuel prices – Any major upward

price movement will shift focus

from truck to car (hybrids)

• Interest rates – Any major

upward movement could

weaken sales if Auto companies

don’t maintain incentive levels

Increased targeted marketing spend:

• Tier 1: More focus on digital vs. TV/Print

• Tier 2: Expanded digital presence

NEW PRODUCTS WILL RULE FACTORS TO WATCH

THE NEXT QUARTER AND BEYOND

16.1M SALES FORECAST IN 2014

Source: IHS, October 2013

41 NEW PRODUCT LAUNCHES SCHEDULED

IN 2014

Source: IHS, April 2013

9

2014 NEW PRODUCTS – 30 1st Half 2nd Half

• TLX redesign

• Fit redesign, Fit crossover debut

• Genesis re-engineer • Sonata re-engineer

• Q70 Hybrid debut • Q60 coupe debut, Q70 freshen

• Sedona redesign, Soul EV (or early 2015)

• RC 350 debut, NX 200t debut

• CX-5 re-engineer • Mazda2 redesign, Mazda6 re-engineer (or early 2015)

• Outlander Sport re-engineer, Outlander plug-in hybrid debut

• Versa, Maxima, Murano, Frontier, Xterra, Altima freshen

• WRX/STI redesign • Impreza freshen, Outback, Legacy redesign

• Highlander redesign • Camry freshen , Tacoma redesign

Source: Automotive News

TWO KEY PRODUCT TRENDS

By 2020, 90% of cars will be connected

to the internet (up from 10% today)

One of the fastest growing segments,

posting a CYTD gain of 25% vs. last year

HIGH TECH FEATURES ALTERNATIVE FUELS

Source: Automotive News, November 2013; The Connected Car Industry 2013 report (Telefonica)

11

These fullsize pickup and SUV

buyers generate the largest profit

of any vehicle type

Hit hard by the recession, this

segment is recovering and

expected to account for 13% of

sales in 2014

Capturing this demo is key to

success for auto brands

because of its sheer size (80+

Million)

ALPHA MALES LUXURY BUYERS MILLENIALS

THREE KEY TARGET AUDIENCES

12

CONSUMERS GAIN CONTROL

Brand loyalty varies by

age, but is generally

declining. Loyalty is

lowest among buyers < 30

years old.

LESS BRAND LOYALTY

The internet, now the #1 most

influential source for

researching new car

purchases, gives consumers

faster and better access to

information

GREATER TRANSPARENCY Product proliferation

means more choice,

higher quality, and better

value for consumers

MORE CHOICE

Source: ORC International, March 2012; AOL Research

13

AD SPENDING SHIFTS & INCREASES

$14.8 Billion in 2012

• Tier 1 = $8.8 Billion

• Tier 2/3 = $6.0 Billion

Fastest growth rate of all industries

Will increase to nearly $15.5 Billion in 2014

Across all tiers, the shift to digital continues

at the expense of more traditional mediums

with mobile and video leading the way

AUTOS RANKS #2 IN

AD SPENDING DIGITAL CAPTURES MORE

AD SPENDING DOLLARS

Source: The US Automotive Industry, eMarketer (June 2013)

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Q & A 15