Mega Trends and Emerging Mobility Business Models in the Fleet Market

“Mega Trends and Emerging MobilityBusiness Models in the Fleet Market” Fleet Europe 2011, Madrid

Agenda1) Mega-Trends - Urbanisation Trends and Implications2) From Green to ‘Smart’ – Connected City3) Global Urban Mobility Trends and Business Models4) Mobility Impact on Fleet Market5) Smart Mobility Management

Three Main Trends in Urbanisation: Development of MegaCities, Mega Regions and Mega Corridors MEGA CITY MEGA REGIONS MEGA CORRIDORS City With A Minimum Cities Combining With The Corridors Connecting Population Of 10 Suburbs To Form Regions. Two Major Cities or Mega Million (Population over 15 Million) Regions EXAMPLE: Greater EXAMPLE: Johannesburg EXAMPLE: Hong Kong- London and Pretoria (forming Shenzhen-Guangzhou in “Jo-Toria”) China (Population 120 Million)

Megacity - Structure and Key TrendsUrbanization leading to rapid expansion of city borders intoneighboring suburbs resulting in the formation of Megacities Evolution of Megacities: Structure and Key Trends, (World), 1950 to 2025 1950s Urbanisation 2020s: Megacity Core City/ Downtown Core City/ Downtown Suburbs Suburbs 2000 Suburb-anisation Daughter cities Core City/ Source: Frost & Sullivan Downtown Suburbs Ring roads and underground rails connecting all towns with the core city Multi Utilization Residential Commercial Buildings Houses Downtown Condominiums Concept

Cost to the Environment: Road Transport has the Highest CO2 of allTransport Modes – Be it Freight or Passenger Movement CO2 Emission by Transport Mode Global Co2 Emissions By Industry Sectors Industry 15% Land Use Truck 60 g/tkm Other Fuel Change Com bustion 12%Freight 9% Frieght Rail 23 g/tkm Vessel 20 g/tkm Agriculture 14% Air 205g/pkm Electricity & Heat 25% WastePassenger 3% Source: Frost & Sullivan, World Resources Institute Bus 160 g/pkm Others 8% Car 140 g/km Transportation 14% Light Rail/Metro 85.5 g/pkm Inter-City Rail 65 g/pkm Air 12% Road High Speed 2.2 g/pkm 71% Rail 7% Source: Alstom Transport, EcoTransIT, carbonneutralcalculator g/pkm – grams per passenger kilometer Ship & g/tkm- grams per ton kinometer Others 10%

Top 10 Megacities – Regional Transportation PoliciesCongestion, low emission zones and road user charging initiatives in theemerging economies will have a major impact on car mobility Delhi Mumbai Beijing Shanghai Moscow Seoul New York London Tokyo Bus Rapid 2011 2011 Transit Lanes Metro/Subway 2011 Congestion Planned Planned 2012 2012 Future Planned Future Charging Parking Cuts Road use 1 Week 1 week 1 Week Yes Future Charging/Ban Day Ban Day Ban Day Ban* EV/Hybrid Incentives Bicycle Lanes CAFÉ Euro 3 Euro 4 25% Emission 27.5mpg. Euro 4 Euro 4 Euro 4 Euro 4 Euro 4 by Euro 4 Euro 5 by reduction Standard 34.1 mpg 2012 2011 by 2015 by 2016 Not Existing currently * Voluntary no road usage Source: Frost & Sullivan planned incentive

Top 20 Megacities – Car Ownership Trend in DevelopedWorld Shows a Flat/Slight Decline Population Per capita Cars per 1000 - Cars per 1000 (Million) 2025 (USD) 2009 – 2025 Tokyo 38.5 46,494 353 340 New York 25.9 67,591 230 220 London 14.4 57,746 400 340 Mexico City 21.0 33,795 209 270 Shanghai 21.0 32,952 32 122 São Paulo 21.5 28,001 150 335 Buenos Aires 13.8 43,581 190 350 Mumbai 26.4 21,224 24 72 Beijing 20.0 25,000 35 155 Delhi 22.5 21,335 117 250 Moscow 14.5 42,759 307 475

Urbanisation and Mega Trends that will Shape Tomorrow’s Mobility and Transportation Needs Mega Cities & Mega Vehicle Ownership Regions (Over 50 cities /Sharing Trends (Over 5 by 2025 <10 millions million members of carsharing in inhabitants) Europe by 2016) Integrated TechnologyMobility (smooth Developments inter-modality – (Integration - mobilemetro, bus, vehicle payment, cloud sharing, etc.) computing, security) New Economic Developments (BRIC Smart City (40 smart and Next BRICcities with state of the hard Infrastructure mobility & connectivity) developments) Standardisation & Harmonisation (inter- operability across systems)

Over 40 Global Cities to be SMART Cities in 2020 - More than 50% ofsmart cities of 2025 will be from Europe and North AmericaChina and India to see over 50 New “Sustainable” Cities Evolution of Megacities: Key Smart Cities (Global), 2009 - 2025 Amsterdam London Boulder Tianjin GIFT San Francisco Göteborg Stockholm Reykjavik Oslo Hammarby Sjöstad Songdo Montreal Clonburris Copenhagen Vancouver St Davids Seattle Toronto Freiburg Portland Paris Dongtan Treasure Island Barcelona Changsha Destiny Coyote Springs Meixi Lake Babcock Ranch Khajuraho Arcosanti Pune Singapore City Bogota Kochi Waitakere, N.Z. Curitiba Cape Town Masdar Moreland, Australia Legend Cities built from scratch Existing eco cities Existing eco megacities Source: Frost & Sullivan

Case Study – Amsterdam Smart City: A creative economy working towards deploying smarter technologies to achieve a 40% reduction of CO2 emissions from 1990 levels Speed 30 Limits ***** Solar powered Parking display CutsCentral Business/retail Garbage outlets inside Restrictedcollection Collection On & city ParkingDepot outsidecity off the trip Deliver goods via Electric commercial vehicles Cheaper Parking Bi-cycle Path E - Mobility

Future Mobility Concepts: The Concept of a Dynamic Transport Solution IntegratingDifferent Modes Under a Single Entity to Make Personal Transportation Easy and Simple Multimodality paving way to Mobility Integrators - One-Stop Shop Mobility Solutions Provider One- Telecom Operators Intercity Intercity Train Online Mobility Transport Service Providers: OperatorsTRAVEL DISTANCE Long Distance Rail Bus Suburbs Short Distance Car Sharing Intercity Bus Private Cars Technology Mobility Integrator City Solutions Carsharing Bikes Provider Public Solution Developers Micro-mobility Transportation Payment Gateway App Developers Destination TRAVEL DISTANCE Mobility Integrators (MI) to offer various types of mobility solutions to complement commuters inter-modality and multi-modality travel split.

Mode of Transport – Public TransportPublic bus is the most used mode of transport, but Undergroundridership has been increasing • Greater London has one of the worlds most extensive and complex public transport systems with: • Over 700 bus routes. • 21,500 licensed taxis. • Of the 28 million journeys undertaken in the city each day, 41% are by public transport. • Nearly all visitors to London will use public transport at some point during their stay. • Every weekday over 6,800 scheduled buses carry around 6 millions passengers.

Mode of Transport – Private Transport42% of households in Greater London did not own car in 2008/09.Increased from 39% in 1995/07 (km/h)

As a Result of Urbanisation in Future, There Will be Shift from CitiesDesigned around Cars to Cars Designed around [Mega] Cities: OEMs toDevelop New Vehicles and Platforms NISSAN • ‘City Cars’ – In sync with the city Pixo, Note and Cube • Compact Vehicle: less than 4,000mm x 1,675mm Though newer cars are • Low emissions: 1-litre engine, EV in future becoming city-centric, • Tight turning circle of 4.5m consumers are not relieved • Power assisted steering for easy maneuvering in city traffic off hassles of purchase, • Parking system, Start Stop system, Nissan Connect, foldable rear seats, maintenance, parking, customizable setting congestion, insurance and inspection BMW • Megacity Vehicle – be launched in 2013. • Electro-mobility – ZEV (Li-ion battery with 35 kWh capacity ) • Electric drive - Electric motor for quicker acceleration and zip drive. • Lighter drive –CFRP passenger cell, Aluminum chassis. Mega Cities need not just a car, but a TATA flexible, hassle-free • City Car in EU and NA mobility solution that is • Compact Vehicle : 3099mm x 1,495mm eco-friendly. • Low emissions; sub 1 litre engine (624cc), EV in future. • Turning radius: 4m. • Low vehicle weight: 600 kg (1,300lb) Logos are only for descriptive purpose. Source: Frost & Sullivan

Urbanization Impact on Vehicle Technology PlanningOpportunity for OEMs to Develop Technologies for Customers’ Unmet Needs Vehicle length of CO2 less than 80 less than 3500mm gm/km vehicles Mega City Cars Limited boot space Voice recognition and more head and technology leg room Start Stop System for Panoramic roofs frequent stop in traffic Lightweight Customised and construction personalised comfort functions Low speed collision avoidance for enhanced Autonomous parking assist safety and pedestrian protection Simple and easy to use HMI 3G/Wi-Fi Connectivity - V2V and V2X communication Ergonomically designed comfortable seats for long commuting hours Facebook on wheels, Internet in cars Turning radius <4.3m to drive in congested streets Navigation systems with route guidance and traffic information Smart vehicle access Source: Frost & Sullivan

Citroen Multicity: Mobility integration service from Citroen Automotivewhich can boost its brand value across global consumer Citroen Mobility Solution : Multicity 2010 Multicity Features •A webportal to help people plan travel by integrating •Mobility for everyone & all purpose (business & Private). various modes of transportaion. •Custom-tailored journey depending on budget and •Provide wide range of mobility products and services schedule of traveller. tailored to urban need. Pricing Services Offered & Value A car rent starts from €22 per day. Travel Proposition Services Newly launched battery powered C-Zero is available at €35 for half a day to €140 for a weekend. Online Access for Vacation All plan Current Points of Sale Application Weekend Services Launched March 2011 Vehicle Website Visitors Till July : Accessorie Contract 600,000 s Services Purchases till July : 6,000 Call Car Application Expected to be launched in key EU cities depending on the response in France Source: Frost & Sullivan

Case Study - Mu by Peugeot (Mobility Integration by OEM)Integrated Mobility On-demand Solutions Under One Roof Evolution of Megacities: Case Study – Mu by Peugeot (Global), 2009 Generate Working Concept income from the stock of vehicles Travel Driving sitting at Services dealerships Pay subscription charges Behaviour Create an account to use and Rewards this scheme to get charging units Earn mobility (reward) Hire services or products Weekend by points that can be used for based on balance in Services Peugeot select services charging units Personal Transport Solutions Current Points of Sale Decrease spending Vehicle by using the same Brest Accessories infrastructure and Rennes staff Service Nantes Paris Hiring Units Units Lyon LondonPartnering with travel agencies, Micro-mobility solutions such Bristoldriving schools amongst others. as bicycles and scooters.Booking services on train, Rental cars and vans.airplane travel and hotels. Vehicle accessories such as Expected to be expanded in key EU citiesDiscounts, prizes and member roof-boxes, cycle racks and in 2010-2011advantages. child seats. Source: Frost & Sullivan

Car Sharing : 5.5m Members & c.100,000 Fleet Vehicles in EU by 2016 with Germany, UK and Switzerland the 3 biggest markets in Europe Market for Car-Sharing: Key Car Sharing Companies and Membership by Country (Europe), 2009Car Sharing Vehicle Parc Car Sharing Members in 2009 77,254 > 80,000 13,287 15,000 – 80,000 2009 2016 <15,000 462,500 members in 2009 Others 4.9% France 2.4% Austria 3% Italy 3.2% Sweden 3.4% Netherlands 5.6% Switzerland 19.8% UK 22.0% Germany 35.7%

Fleet Managers (Europe): Total Market For ElectricVehicle Potential (Demand Side Analysis) Total Potential Fleet Vehicles Suitable for EV, 2010 - 2015 (Segment Small & Basic PV and CDV, Countries UK, France and Germany) Scenario 1 - €200 Per Month Range: 200 KmElectric Vehicle Sales (Thousands) Recharge: 2 Hours Scenario 2 - €300 Per Month Range: 150 Km Recharge: 4 Hours Scenario 3 - €400 Per Month Range: 100 Km Recharge: 6 Hours Scenario 2: Fleet Vehicles Suitable for EV Split by Sector, Scenario 3: Fleet Vehicles Suitable for EV Split by Sector, 2015 2015 Source: Frost & Sullivan

Fleet Operators’ Willingness to Purchase EVs Survey of 73 Fleet Managers : When purchasing your current fleet did you consider an Electric Vehicle? No Building and Postal and Maintenance Courier 66% Business Utility and Delivery Taxi and Telecom Services Government Private Hire Yes 34%Based on interview of 73 fleet manager in Europe having passenger vehicle in their fleetSource : Frost & Sullivan study on “Electric Vehicles: European Voice of the ConsumerStudy-Fleet Managers and Drivers”

Impact of Mobility and Mega Trends on European Fleet Market:Fleet market will adopt the changes in the domain of urban mobility through applicationof multimodal transport solution Trends Implication Impact on Leasing Industry • City expansion with 60% world population expected Share and multimodalUrbanisation to live in cities by 2025. transportation e.g. car-sharing • Three main concepts : megacities, mega regions & new membership models. and mega corridors. • Concept to shift from “GREEN” to “SMART”. Small and Micro cars are Mega Cities • Energy efficiency and zero emissions as the basic slowly gaining momentum premise of SMART initiatives. in fleet market. E-Mobility is encouraging new investment with new Application of Electric E mobility business models offering innovative and customized Vehicle in fleet set of infrastructure and technology solutions to improve total cost of vehicle ownership. New age Next Generation Business models will redefine Engine Downsizing and vehicle future business propositions and influence Telematics application are technology future technology and product development . technology trends Integrating public Integration of public and private transportation Multi modal and private mode of travel e.g. system in order to create an optimized solution fortransportation bus & rail access the commuters in Europe. with App store application. Source: Frost & Sullivan

Fleet Impact on Mobility – Summary Impact on Urbanization - More than 60% of the Personal Mobility population will live in cities by 2025 Multimodal Mobility Fleet Market to grow <4% CAGR to 2020 but E - Mobility Fleet Mix will Radically Change Small and Micro Mobility New integrated urban mobility models will emerge Shared Mobility including OEM based car sharing (Car Sharing/Pooling) Regulation pressures Last Mile Connectivity on CO2 will continue for the foreseeable future New Technology in Cars New vehicles will (e.g. Internet Radio) have new “Urban” technologies IT Mobility Platforms

The Future of Mobility is for ‘Green’, ‘Integrated’ and‘Interoperable’ Transport Infrastructure - SMART Connectivity Real-Time Information Vehicle Services Management Systems Smart Ticketing/AFC: V2V & V2X Apps Store Services Vehicle Sharing IT Infrastructure Electric VehiclesCommercial Vehicle Telematics Source: ETSI Congestion Source: ETSI Charging

Thank You

Contact Details Frost & Sullivan Edward Gibbs 4, Grosvenor Gardens Growth Consulting Director EMEA, London SW1W 0DH Automotive & Transportation United Kingdom Direct: +44 (0) 1865 3986 29 Email : edward.gibbs@frost.com www.frost.com

Mega Trends and Emerging Mobility Business Models in the Fleet Market

by Frost & Sullivan on Dec 08, 2011

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