Corporate Mobility 2020 International Fleet Meeting Geneva 2015

Corporate Mobility 2020 International Fleet Meeting Geneva 2015 Prof. Dr. Stefan Reindl Sascha Kahl Carsten Lieber Fleet Survey 2015 Geneva March, 2015

Business Mobility 2020 Agenda 1. Global View: Market Structures 2. Trends Affecting Mobility and Fleets 3. Selection of Vehicles and Brands 4. Fleet Management Challenges 5. Fleet Management 2020

New Registrations in Different Market Areas Passenger cars [m.] North America +32.7% 9.1 Western Europe -6.7% 13.0 12.1 Eastern Europe +31.9% 4.6 3.5 13.8 China +33.5% 18.4 Japan / South Korea +8.5% 6.8 2010 2014 2010 2014* 2010 2014* India +19.4% 2.8 2.4 13.76 18.37 5.5 6.0 2010 2014* Global 2010 2014* +28.5% 84.1 Central- / South America +18.1% 55.4 65.5 4.1 +20.2% 4.9 ROW +18.1% 1.6 1.9 2010 2014* 2010 2014* 2010 2014* 2020* Seite 3 Sources: OICA 2015 VDA 2015 *Some 2014 Data estimated by Institut für Automobilwirtschaft (IFA)

Overview: Global Fleet Market New registrations in fleets: Passenger cars & light vehicles 2.0 2.5 47% 48% 2.9 3.0 43% 36% 1.9 2.5 88% 86% 53% 52% 57% 64% 12% 14% 2010 2014 5.6 7.6 2010 2014 55.4 New registrations [m.] 2010 2014 4.2 4.7 Private sales 79% 84% Commercial/Business sales 2.3 1.8 13.8 18.4 97% 97% Global 55.4 65.5 84.1 81% 80% 76% 21% 16% 2010 2014 2.6 2.5 43% 36% 1.0 0.9 57% 55% 43% 45% 2010 2014 64% 58% 36% 42% 2010 2014 2.0 1.4 69% 65% 31% 35% 2010 2014 2.4 2.6 88% 86% 12% 14% 2010 2014 92% 90% 8% 10% 2010 2014 3% 3% 2010 2014 19% 20% 24% 2010 2014 2020 24% 27% 2010 2014 2.3 m. 2.9 m. 4.5 m. Relevant Fleet Market Seite 4 Sources: Automotive Fleet 2015 I KBA 2015 I Roland Berger 2014 I SMMT 2015 I Statista 2015

Selected Drivers for Change in Mobility Trends lead to new attitudes regarding mobility by car Urbanisation Smart Cities Overcharged Infrastructure Multimodal Mobility Concepts Optimization of Infrastructure and telematics systems and services Intelligent and connected vehicles, means of transport and people Environmental & Climate Problems Craving for Flexibility Craving for Connectivity New information and communication systems to connect different modes of transport Changing Demographics Gap between the rich and poor Altering Lifestyles Networking of manufacturers, suppliers, mobility providers etc. Creating and establishing new mobility services and new business models Advanced Car Technologies Internationalization & Globalization Shrinking Real Earnings New drive concepts for cars (BEV, Fuel Cell, Hybrid) Seite 6 Source: Institut für Automobilwirtschaft (IFA)

Car Ownership Car Ownership in Selected Market Areas Most propends prefer car ownership The Question: Your available budget and your everyday needs are given. What do you prefer? own a car for yourself something else Something else means: lease a car for yourself rent a car wherever you need it use a car of a car sharing organization Seite 7 Source: Continental Mobility Study 2015 Figures in percent n = 400 per country, old and young contrast groups

Relevant Fleet Management Drivers Institutional players and determinants Company related players and determinants Company Stakeholder User Chooser Total cost of ownership (TCO) Financial situation Corporate policy Tax burden, tax implications, inflation Unrestricted labor mobility and vehicle access Shareholder interests and values Financial solvency General business risks Cost efficiency Personality, personal identity and image Motivation and aspiration Services to ensure unrestricted mobility Mobility effectiveness External players and determinants Environment Government Fleet Management Companies Car Manufacturers Fuel alternatives Emission standards Vehicle selection (Remarketing) Market specific volume and vehicle demand Driver s preferance, attitude and ethos Inflation Transport policy and regulations Fiscal policy and road pricing Strategy in transport safety Environmental policy and regulations Contract volume and sales Residual value management Services and client support Competitiveness Distribution and service network Fleet model and service range Attractiveness of financial and fleet services Competitiveness in fleet management Seite 8 Sources: Cooke, P. N. C. 2010 modified by Institut für Automobilwirtschaft (IFA) 2015

Structure and Characteristics of Fleets e. g. Chinese fleet sectors und decision criteria Holding Period Regional Coverage Government Taxi Companies Police Leasing Companies Insurance Companies < 5 years 4-8 years 3-5 years 3-5 years 5-6 years Capital: Group purchasing for all central authorities Other cities: local purchasing All cities: Each city does ist own purchasing Capital: Group purchase for Ministry of Public Secrurity Other cities: local purchasing Big cities: Central purchasing at headquarters such as in Beijing and Shanghai Big cities: Central purchasing at headquarters such as in Beijing, Shanghai and Shenzen Decisionmaking Process Decision Criteria Central ministries: Central purchsing through public tenders Local governments contuct public tenders, but each department manages own transactions Brand fit of official profile After-sales service centers and discounts Price (needs to be within certain range) Local taxi mgmt. bureau determines a shortlist of taxi models and brands Taxi companies or indivdual taxi drivers determine their prefered model based on shortlist Price Fuel efficiency Maintenance cost Quality/reliability National or local Ministries of Public Secrurity carry out group purchasing through public tenders Quality Price Companies purchase centrally through tenders Price Aftersales service network coverage Brand recognition Companies purchase centrally through tenders Price Brand After-sales network coverage Seite 9 Source: Roland Berger 2014

Fleet Management: Selection of Right Vehicles Preferred types of vehicles in specific market areas Small cars Mid-sized cars Large cars SUV Seite 11 Source: Continental Mobility Study 2015

Preferred Brands & Vehicles in Different Market Areas (1) TOP 5 CARS in selected markets VW 21.6% Ford 13.2% Renault 19.7% Fiat 20.7% VW 9.0% Mercedes 9.0% Vauxhall 10.9% Peugeot 17.0% VW 8.1% Seat 7.9% Audi 8.5% VW 8.7% Citroen 12.9% Ford 6.7% Opel 7.8% BMW 7.8% Audi 6.4% VW 7.8% Renault 6.0% Renault 7.6% Opel 7.2% BMW 6.0% Dacia 5.7% Opel 5.6% Peugeot 7.3% VW Golf 255'044 Ford Fiesta 131'254 Renault Clio 105'182 Fiat Panda 104'352 Seat Leon 27'714 VW Passat 72'153 Ford Focus 85'140 Peugeot 208 83'965 Fiat Punto 57'144 Seat Ibiza 27'572 VW Polo 68'103 Vauxhall Corsa 81'783 Renaul Captur 62'985 Fiat 500L 51'256 VW Polo 23'810 Audi A3 65'199 Volkswagen Golf 73'880 Peugeot 308 60'842 Lancia Ypsilon 51'143 Opel Corsa 23'374 VW Tiguan 61'497 Vauxhall Astra 59'689 Citroen C3 59'627 Fiat 500 43'593 VW Golf 21'859 Seite 12 Sources: Auto Motor und Sport 2015 I Car sales statistics 2015 I Statista 2014

Preferred Brands & Vehicles in Different Market Areas (2) TOP 5 CARS in selected markets Ford 14.4% Fiat 20.0% Volkswagen 13.8% Toyota 27.1% Lada 15.5% Chevrolet 12.3% GM 18.9% Wuling 7.1% Honda 15.3% Kia 7.9% Toyota 12.1% VW 18.6% Hyundai 5.7% Suzuki 14.2% Renault 7.8% Honda 8.3% Ford 9.0% Changan 4.9% Daihatsu 12.7% Hyundai 7.2% Nissan 7.7% Hyundai 7.6% Toyota 4.9% Nissan 12.0% Nissan 6.5% Ford F-Series 750'000 Fiat Novo Palio 183'741 Ford Focus 403'600 Toyota Aqua 233'209 Lada Granta 152'810 Chevrolet Silverado 530'000 VW Gol 183'356 Volkswagen Lavida 374'100 Honda Fit 202'838 Hyundai Solaris 114'644 Dodge Ram 440'000 Fiat Strada 153'130 Buick Excelle 296'200 Toyota Prius 183'614 Kia Rio 93'648 Toyota Camry 429'000 Chevrolet Onix 150'829 Chevrolet Sail 276'300 Toyota Corolla 114'331 Renault Duster 76'138 Honda Accord 388'000 Fiat Novo Uno 121'241 Volkswagen Sagitar 271'200 Toyota Voxy 109'174 Lada Kalina 65'609 Seite 13 Sources: Auto Motor und Sport 2015 I Car sales statistics 2015 I Statista 2014

ICE Powertrain Alternatives General determinants with high complexity in interdependency Climate policy Penalty Taxation Use restrictions Public authorities Energy policy Real income Economic growth Energy prices esp. oil price Energy ressources CO2-Limits Incentives to buy Research promotion Development traffic infrastructure Economic structure Energy infrastructure Security of supply Alternativ fuel Politics Economy & Energy Society & Mobility Industry & technology Demographic chance Usage behavior User requirements Relative TCO Potential suppliers Conv. technology (ICE) Market strategy Ecology chance User acceptance Social acceptance Settlement structure esp. urbanization Value and preference structure Attractiveness mode of transport OEM concentration cooperation Memory technology Suitability for daily use Relative costs Removal Source: Institut für Automobilwirtschaft, Survey: Otto-, Diesel-, Elektromotor wer macht das Rennen? The competition between old and new technologies are determined by a field of different political, economic and technical factors and variables. The slide displays an overview of the relevant variables as well the possible interactions. Overall, 36 scenario variables can be derived, in conjunction with their future development on calculations, but also through experience-based, qualitative estimates in the scenarios. High complexity and large uncertainties in estimating future developments of relevant variables limit the forecasting. Seite 14

Residual Value as a Core Challenge e. g. Germany with different sales structures: Private vs. commercial registrations 0 100'000 200'000 300'000 400'000 500'000 600'000 700'000 800'000 900'000 0% 5% 10% 15% 20% 25% 30% 35% MINI MNI SMALL SMALL COMPACT COMPACT MEDIUM MEDIUM UPPER MIDDLE-SIZED UPPER MIDDLE-SIZED EXECUTIVE SUVs SPORTS CARS CROSS-COUNTRY SPORTS CAR MINI-VANS LARGE-VANS CROSS COUNTRY/ SUV VANS (TOTAL) UTILITIES UTILITIES CARAVAN OTHERS hold proberty Used Cars Registrations commercial registrations private registrations Seite 15 Sources: KBA 2014 I Statista 2014

Core Challenges for Corporate Mobility Present and today s requirements: Flexibilty & connectivity Present Future Other Suppliers OEMs Leasing Companies Flexible Working Arrangement Integrated Solution Providers Public Transport Corporate Mobility Fleet Mgmt. Providers Software Platform Providers Travel Agencies Mobility Services Customisation Mobility Integration Platforms Mobility Allowance (not Car Allowance) Seite 17 Source: Frost & Sullivan 2014

Case Study: BMW Manufacturer changing their strategies: Mobility Provider Smart Parking Ride Sharing Taxi Hailing Urban Logistics Integrated Mobility Car Sharing Seite 18 Source: Institut für Automobilwirtschaft (IFA) Frost & Sullivan 2014

State of the Art: Provider Services and functions on example Services Product Portfolio Driver Services Funding Solutions Fleet Management Services Advanced Mobility Solutions Full Service Products Customer Mobility Requirements Contract hire Finance lease Sale and lease back Contract purchase Commercial vehicle funding Structured employee car Ownership Employee car schemes Salary sacrifice Maintenance and repair Tyre management Insurance Roadside assistance Safety/ Eco driver training Fleet administration Rental services Fuel management Accident management Online services Costumer service LCV consulting Mileage capture and audit Alpha Risk (Risk management) Tax management Fine management CO2 compensation AlphaCity (Car sharing) AlphaElectric (Electric mobility) AlphaGuide (Smart app) JustPark Strategic mobility consultant Seite 19 Source: Alphabet 2014

Mobility Needs and Requirements Connected means of transport Current Services Integrated Booking Real-time Information of Integrated Means of Transport Alternativ Routing Cross & Upsellingproducts (Hotel, Suggage Service ) Social Travelling Rental Car Taxi Local public transportation Bicycle Car Sharing Car Flight Long-distance transport Coach + partners + partners Seite 20 Source: Frost & Sullivan 2014

Fleet Professionalization Market-specific approach Readiness High Develop/ Push Defend Assess attractiveness Future Emerging Markets BRIC (China) Triad Markets Derive market strategy Low Build Catch up Adapt processes, toolkits Low Market Maturity High Seite 22 Source: Roland Berger 2014 revised and updated by Institut für Automobilwirtschaft (IFA) 2015

Changing Mobility Requirements New challenges for corporate mobility 1. Fleets 3. Services - Increasing demand for flexible car using concepts to reduce investment-, fixed- and operating cost - Decreasing significance of the car as a status symbol for companies Main trends and focuses on these aspects: - Downsizing - Customizability - Total cost of mobility - Product innovation - Environmental and political correctness Corporate Mobility 2020 - Corporate mobility with more importance than company fleets - Rising demand for services, which combine mobility and value added benefits, e. g. media integration, connectivity etc. 2. Products 4. Mobility - Global growth in demand for mobility - less available funds of companies for mobility or shifted budget priorities - Increasing demand for flexible mobility solutions Seite 23 Sources: Arthur D. Little: Zukunft der Mobilität 2009 revised and updated by Institut für Automobilwirtschaft (IFA)

State of the Art: Provider Network Services and functions Specialized Fleet Management Companies Independent Automotive Fleet and Leasing Companies (Non Captives) OEM-specific Fleet Management Companies (Captives) Mobility Management Fleet Management Full Service Leasing / Contract Live Financial Services Fleet Structure Configuration Fleet dimensioning Vehicle configuration Funding Fleet Configuration Techniqual service Type of fuel Legal investigation Vehicle replacement Data collection and analysis Fleet Disposition Special configuration of line networks Determination of vehicle usage rules Tourplaning (assignment driver, vehicle, route) Design of an information and communication architecture Mobility Services Travel management Carsharing Mobility budget Mobility Provider Network Seite 24 Source: Institut für Automobilwirtschaft (IFA)

Corporate Mobility 2020 International Fleet Meeting Geneva 2015 Prof. Dr. Stefan Reindl Sascha Kahl Carsten Lieber Fleet Survey 2015 Geneva March, 2015