This document provides a summary of the automotive market in the UK and Europe in early 2012. It discusses the growth of premium brands over volume brands in the UK market in 2011. It also notes the slowing Chinese automotive market and economic challenges facing the European market. The summary analyzes trends in dealer consolidation and profitability.

1. Automotive Messenger
April 2012
The blaze of new products at the
Geneva auto show makes it easy to
forget the uncertain context in which
they’re being launched.
The last 12 months saw momentous digit growth in 2012 with government
events and increasing change in the constraints removed. Only one
automotive industry, ranging from the Western brand of consequence –
Japanese earthquake’s effect on the Volvo – is under Chinese ownership,
global supply chain to VW overtaking so this is all good news for Europe’s
Toyota in global sales and edging premium brands.
towards market leader GM, helped by Interestingly, the same trend towards
strong growth in China. premium brands and products which
The phenomenal acceleration of the China is experiencing is also happening
car market in China slowed dramatically in Europe, especially the UK. Not as
in 2011 but the market remains the quickly of course, as the market is far
focus of the global industry. Growth more mature, but the effect is marked
slumped from 30% in 2010 to only and could have significant consequences
5% in 2011, but the government was for the OEMs. At the same time
taking deliberate measures to avoid an the value brands are becoming real
economic bubble and relieve congestion alternatives to the major volume Daniel Taylor
which is threatening to strangle the brands, making life doubly difficult for Head of Automotive Advisory
major cities. And although some established volume players which are T +44 (0)118 983 9601
M +44 (0)7976 225 265
Chinese OEMs are seeing volumes fall, being squeezed from above and below.
the global OEMs and JV brands are Although the European market was
Contents
selling everything they land at the docks down only 1.7% in 2011, this disguised
or build locally. declines in certain core markets (UK 03 Market Review
China has an increasing hunger for 4.4%, France 2.1% (but incentive
05 Transactions, consolidation
premium vehicles – it has shifted from supported), Italy 10.8% and Spain
wanting mobility to wanting brands. 17.7%) - and the outlook for Europe in and profitability
That trend is increasing and will drive 2012 is contraction. The Euro Zone debt 07 Performance Commentary
the Chinese car market back to double- crisis means that markets are more risk-

2. Automotive Messenger
continued from page 1
averse, and governments will be less able 9% and remaining over 7% in 2014.
to support their national automotive However, the think tank says that if the
sectors as austerity measures take Euro Zone debt crisis is resolved then
priority. The Euro Zone’s economy is the UK economy will grow by 2.3%
forecast by the IMF to contract 0.5% in 2013.
in 2012. Rising unemployment and low With the UK automotive retail sector
consumer confidence will add to the having recently experienced the first
mix and the Western European market wave on insolvencies since 2009, the
is now forecast to fall by 5% over the battle will be for dealers to apply the
year. Even Germany is looking at a right focus across the business - new,
likely 2% decline in volumes. January’s used and aftersales - and look closely
figures bear this out, with Western at the cost base - to ensure that they
Europe falling by 8.7%. remain competitive.
This is refocusing manufacturer
attention on the structural market issues
and the inherent overcapacity in Europe
- but again there is no clear view on how
this will be resolved. GM and Peugeot
are targeting $2 billion in savings from
their alliance plan, but it is hard to see
how profitability issues can be
properly resolved without substantial
plant rationalisation.
In the UK, the weakening private
retail demand indicates how fragile the
market is, but January saw a stabilising,
with growth of 0.03%, although
the SMMT actually revised its full-
year forecast down, to 1.92m units.
Forecasters say that recovery may begin
in 2013, but economic commentators
expect another period of recession first.
The ICAEW/Grant Thornton business
monitor, published in February, points
to the reining in of capital investments
necessary to create growth, while the
National Institute of Economic and
Social Research has said that lack of
consumer spending will push the UK
into recession in the first half of the
year, with unemployment rising to
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3. Automotive Messenger
UK 2011 market review
After a weak start to the year, the 2011 UK car market ‘value brands’ such as Kia, Skoda and
Hyundai. Hyundai-Kia cumulative
finished only 4.4% down on 2010 with a total of 1.94m 2011 registrations would make them
units registered. Given the economic conditions, the the fifth biggest-seller in the UK, just a
lack of consumer confidence, and the fact that the few hundred units behind BMW. Both
Hyundai and Kia are also currently
first part of the year was always going to struggle in introducing new models to either extend
comparison with the scrappage incentive-aided 2010 their range or replace uncompetitive
market, the industry can feel some satisfaction. In fact models with attractive new ones, at
keen prices and supported by market-
the second half of 2011 was only 1.1% down on 2010.
leading warranties. Skoda has also seen
impressive growth this year, up 9.27%,
using the scale and synergies of its VW
Fleet share grows more focused on the Germans, with Group parentage to offer what are
The market was predictably supported Audi expanding its range relentlessly, essentially semi-premium products at
significantly by fleet and business reflected in 14% growth in 2011, value-brand prices.
registrations, with the retail sector in Mercedes-Benz up 9.2% and BMW The effect is that the market has
marked decline. The overall strength of exploiting its position as an established been compressed. Whereas there have
fleet and business was partly attributable fleet player to help its run-out campaign traditionally been three tiers – premium,
to the fact that in 2011 many businesses for the 3-Series and the introduction of volume and value – the market is
finally renewed fleets after a prolonged the latest 5-Series. increasingly becoming characterised by
period of contract extensions, but it is BMW remained the most successful the premium and value elements, with
nevertheless generally expected that of the German brands but Audi is volume squeezed in the middle. Nissan’s
2012 will see the gap between corporate closing in and in fifth place in terms of success may be attributed to the fact that
and private business widen further. total sales. In fact there is now daylight it adopted a new strategy several years
Fleet and business registrations between the top five and the rest, led ago, offering crossovers and leftfield
accounted for 57.6% of the market in by Nissan. styling rather than me-too products for
2011 compared with 52.8% the previous the traditional and saturated B, C, and
year, with inevitable consequences for Volume brands under pressure D core volume segments.
dealer profitability. In contrast all the mature volume Moreover value brands are moving
brands showed a significant fall: Ford up-market. This is exposing a gap
Premium brands gain at expense and Vauxhall were both down by at the budget end of the market - an
of volume around 5%, but much bigger declines opportunity perhaps for the Chinese
Dealers with German-brand franchises were suffered by other mature volume brands: Geely announced in December
were also at an advantage, with all players - Peugeot were down 13%, that it is recruiting 30-40 dealers to
except Porsche and Smart posting Renault by 28%, and Fiat over 21%. launch late this year with a family-sized
growth and, collectively, German- Premium brands are rapidly car priced from around £10,000. Its 2010
owned makes taking almost one third gaining on the volume players and takeover of Volvo gives the company
of the total market. The increasing fighting for market share, and at the credibility which may enable it to
success of the premium brands is same time volume players are facing become the first Chinese brand to crack
perhaps understandably becoming even upward pressure from the so called a major Western market.
Automotive Messenger March 2012 3

4. Automotive Messenger
Dealer numbers of 2011, which is a clear indication plans - discounted deals which retain the
The trends highlighted above again that national sales companies (NSCs) consumer but cost the dealer margin;
lead to a question mark over the and other financial stakeholders are and also direct competitive pressure
sustainability of the current dealer looking hard at the rationale for on- from independents which are driving
business model, in particular the going support. prices down.
number of outlets operated. Networks There has been some positive activity: Weak economic growth means that
built over a number years by the volume Marshall Motor Group has acquired motor retail trading conditions will not
brands were intended to service a much F Cross and Sons, a 120-employee only continue to be difficult but will
larger overall market and market share business with VW and Kia franchises, in all probability worsen during 2012.
than is currently the case. Improving while Pendragon’s contract hire division Retail car sales fell by 14.2% in 2011,
profitability in dealer networks would has secured a funding facility of up to the economy as a whole contracted
imply increasing throughput per dealer, £20m from Barclays, £90m-turnover by 0.2% in the final quarter, and
but this has not been the case, with group Gordon Lamb has announced low consumer confidence is being
average new sales per outlet falling from that it is refinancing with the same exacerbated by the ongoing instability
460 in 2002 to 420 in 2011. institution to fund growth, and the in the Euro Zone.
What this hides is the dramatic £300m Ridgeway Group has announced The Society of Motor Manufacturers
improvement in throughput for the that it is in talks to acquire the £100m and Traders is forecasting a relatively
premium brands, and the substantial Wood BMW/Mini group. stable market (1.92 million against
decline for the volume brands - a Trading conditions though are 1.94 million in 2011) but no realistic
reflection of their relative changes in clearly becoming more challenging possibility of growth until 2013.
sales without proactive intervention to with most dealers reporting declines Other observers are more pessimistic,
re-size dealer networks accordingly. in profitability in 2011 compared to with many forecasting a fall in 2012
Renault is the first to grasp the mettle 2010. Manufacturer composite data also to between 1.8m and 1.84m units as
on this: seeing registrations per outlet bear this out, with most manufacturers unemployment continues to rise. In
halve from nearly 700 in 2002 to around reporting reductions in average return our view the market will remain above
350 in 2011, it is now taking action to on sales across their networks. This 1.9 million as manufacturer supply
significantly reduce dealer network size translates to a higher number of dealers push will ensure this is the case even if
in line with current volume and market incurring losses, evidence that the the true market is arguably below this
share. It will be interesting to see the water line is rising and cash pressure is level. The first two months of 2012
extent to which other volume brands increasing for some operators. have shown a broadly flat market,
will follow suit to try and underpin long The decline in retail sales discussed down marginally by 0.8% on 2011.
term dealer profitability. above is part of the problem, but there Retail sales have increased, somewhat
is also increasing pressure on other against expectations, but the true test
Current market dynamics traditionally more resilient profit will be whether this is sustained into the
The latter part of 2011 and start of 2012 streams, in particular aftersales, which peak March sales month which should
has seen the first significant failures is impacting overhead absorption then provide a better indicator of both
of motor retail businesses since 2009, levels. The downward pressure on consumer sentiment and enable a
with Loders, Southgate Group, Waters aftersales profitability includes increased more informed outlook for the rest
Autoplanet and Trinity Motors all consumer thrift (deferring servicing and of the year.
going into administration. Insolvencies only getting the bare minimum carried
increased by 120% between Q3 and Q4 out); the increased incidence of service
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5. Automotive Messenger
Transactions, consolidation and
profitability - some observations
Transactions in 2011 (therefore minimising goodwill thinking that industry consolidation
Transactional activity continued at a payments) with lots of potential for is finally happening. However when
relatively sedate pace in 2011, but there profit improvement. Will that bring you examine the degree of growth, it
were a number of deals of note. Among greater rewards long term? is in the segment just outside the top
the Top 100 dealer groups by turnover, Total turnover for the AM100 up 50, quartile 3, ranking from 51 to 75
the major transaction last year was the to the end of 2010 showed a strong that the greatest percentage increase
acquisition of the £300 million Wayside recovery, adding nearly £4bn to the has taken place, followed by quartile 4,
group by the £1 billion Jardines recession affected 2009 result. However, those ranked from 76 to 100.
business. A further significant move it will be interesting to see how 2011 Perhaps even more interesting is
in the top 20 groups was Benfield’s compares when these results are that much of this growth has taken
acquisition of Colebrook & Burgess collated this spring, as most groups place organically, or with selective
(£125 million), taking their turnover have downgraded expectations for the acquisitions to build on existing
over £500 million. Coincidentally, second half of the year, with new car territory or brand. A recent example
or perhaps just an indication of the sales, and therefore volumes, being would be the acquisition by Jacksons
attractiveness of the brand, both deals particularly challenging. of the neighbouring Mercedes-Benz
involved Audi. market area run by Tony Purslow
Benfield moved up five places in A trend towards consolidation? which will create a group which would
the Top 100 to 15th. The acquisition Taking the longer view, the 2010 currently rank round about number 80
adds four sites in their heartland with recovery sees volume up over half since in the AM100.
a new, albeit related, brand partner, the beginning of the decade with the It is also of note that these two
a classic example of continuing a greatest amount of absolute growth in segments (Quartiles 3 and 4) contribute
strategy of geographic and brand the top 20. Since this is where the more most of the higher performing groups
“grouping” focus. apparently newsworthy acquisitions by return on sales (RoS) and return on
Arnold Clark continues to grow take place, it is easy to be seduced into capital (RoCE).
both by acquisition, adding sites from
Greenhous and John Martin and
organically adding Chrysler and Jeep
to existing Fiat locations. Arnold Clark
also continues an impressive run of
inclusion in the top twenty by return
on sales percentage, albeit lower down
than usual after a challenging year.
Vertu continues to add operations in
all parts of the country, from Glasgow
to Bristol, adding to the continuing
challenge of building on the old Bristol
Street businesses. Vertu have not
“bought big”, but added in ones and
twos – in direct contrast to the headline
deals noted above - and tending to
focus on under-performing businesses
Automotive Messenger March 2012 5

6. Automotive Messenger
2010 saw some further recovery in fixed assets in use – deteriorates. This should be synergies between the new
profitability, for those in the middle could indicate too much investment and used markets - after all, it is the
order, however the AM100 as a whole in areas which are less important to existence of a highly developed vehicle
saw no change on the average for 2009. customers, and potentially too little change mechanism that bolsters the new
Only four groups saw a better than investment in customer retention and car market. Countries where the used
3% RoS compared with 6 in 2009. It person to person areas. An issue to car market is less well developed, see
is likely that 2011 will see a drop in consider as trading remains difficult but proportionately fewer new cars sold.
overall return on sales - manufacturer manufacturer investment requirements However, franchised dealers seem to
composite reports are in the main are back on the agenda and continue find these synergies elusive. Camden
showing a decline in profitability to grow. Ventures do not even appear to look
on average. for them. Its investment in the used
This standstill is of concern, but Profit opportunities car sector – Car Shops – appears to be
not unexpected, given the context There are examples across the industry successful almost because it is a stand-
of more uncertain times and the of an effort to reduce the dependence alone investment, rather than gaining
expectation that such uncertainty on new cars and increase customer from being one investment amongst
will continue. It does present an retention. Pendragon have been a collection of franchised businesses.
interesting question in terms of the concentrating on lower priced used cars For the franchised dealers, identifying
extent to which dealers are willing and service customers, and have made a truly winning formula in this area
to continually invest in supporting much recently of their investment in would appear to be some way off.
the brand. As the scale of the 2008 the old Quicks brand for their used
recession became clear, carmakers began car supermarket initiative. Lookers
to take a more reasonable approach has continued to expand their parts
to the requirement to invest in brand business by growth and by acquisition
statements. The average fixed assets and profits from car retailing have been
employed in each site, having risen significantly bolstered as a result.
sharply since the middle of the decade, Most of the larger groups have at
plateaued between 2009 and 2010. The least some sort of used car specialism
question remains as to how much of the – for example Arnold Clark with
investment requirement relates to the Arnolds Motorstores; Lookers with
value customers place on it, and how Lookers Trade Centres; Vertu with
much on the aspirations of Motor Nation. Their experience has
the carmaker. been mixed. While specialists can get it
Profitability improved post- very right - making double the return
recession. But some of this is on sales of most franchised dealers -
attributable to a reduction in the cost of the franchised sector seems to find it
money rather than an improvement in more difficult. Nevertheless since the
the relationship with customers. Return challenge is to retain, or access, more
on sales – a post interest measure – customers, relying only on new car sales
improves. Profit before interest remains to do that must be a limiting strategy in
stable. But the return on fixed assets – challenging times.
pre-interest profit as a percentage of the It seems logical to think that there
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7. Automotive Messenger
Performance commentary
UK New cars registrations
Feb 2012 YTD Feb 2011 YTD Regs. Δ FY2011 FY2010 Regs. Δ FY2009 Regs. Δ FY2008 Regs. Δ
Share Share 2010/ Share Share 2011/ Share 2010/ Share 2009/
Brand Units % Units % 2009 Units % Units % 2010 Units % 2009 Units % 2008
Ford 29,018 15.2% 27,199 14.1% 6.7% 265,894 13.7% 280,364 13.8% (5.2)% 316,369 15.9% (11.4)% 322,514 15.1% (1.9)%
Vauxhall 19,212 10.1% 25,123 13.1% (23.5)% 234,710 12.1% 247,265 12.2% (5.1)% 237,840 11.9% 4.0% 298,912 14.0% (20.4)%
Volkswagen 19,117 10.0% 18,610 9.7% 2.7% 179,290 9.2% 174,655 8.6% 2.7% 161,137 8.1% 8.4% 179,189 8.4% (10.1)%
Audi 12,546 6.6% 12,085 6.3% 3.8% 113,797 5.9% 99,828 4.9% 14.0% 91,172 4.6% 9.5% 100,845 4.7% (9.6)%
BMW 9,497 5.0% 12,303 6.4% (22.8)% 116,642 6.0% 109,418 5.4% 6.6% 98,683 4.9% 10.9% 113,132 5.3% (12.8)%
Peugeot 10,442 5.5% 9,894 5.1% 5.5% 94,989 4.9% 109,324 5.4% (13.1)% 102,574 5.1% 6.6% 118,701 5.6% (13.6)%
Nissan 9,495 5.0% 8,055 4.2% 17.9% 96,269 5.0% 89,681 4.4% 7.3% 77,924 3.9% 15.1% 66,336 3.1% 17.5%
Mercedes-Benz 9,242 4.8% 7,856 4.1% 17.6% 81,873 4.2% 74,977 3.7% 9.2% 72,281 3.6% 3.7% 74,883 3.5% (3.5)%
Toyota 7,728 4.1% 7,513 3.9% 2.9% 73,589 3.8% 87,396 4.3% (15.8)% 102,612 5.1% (14.8)% 105,717 5.0% (2.9)%
Citroen 6,590 3.5% 7,625 4.0% (13.6)% 68,464 3.5% 73,317 3.6% (6.6)% 72,450 3.6% 1.2% 81,237 3.8% (10.8)%
Renault 4,217 2.2% 5,674 3.0% (25.7)% 68,449 3.5% 95,608 4.7% (28.4)% 63,174 3.2% 51.3% 89,570 4.2% (29.5)%
Hyundai 6,046 3.2% 6,006 3.1% 0.7% 62,900 3.2% 61,752 3.0% 1.9% 56,726 2.8% 8.9% 28,036 1.3% 102.3%
Kia 6,033 3.2% 4,663 2.4% 29.4% 53,615 2.8% 56,114 2.8% (4.5)% 50,637 2.5% 10.8% 31,324 1.5% 61.7%
Honda 4,613 2.4% 6,006 3.1% (23.2)% 50,577 2.6% 63,652 3.1% (20.5)% 74,819 3.8% (14.9)% 83,805 3.9% (10.7)%
MINI 2,855 1.5% 2,787 1.4% 2.4% 50,138 2.6% 43,894 2.2% 14.2% 39,866 2.0% 10.1% 40,736 1.9% (2.1)%
Skoda 5,371 2.8% 4,751 2.5% 13.0% 45,061 2.3% 41,240 2.0% 9.3% 37,253 1.9% 10.7% 37,100 1.7% 0.4%
Fiat 4,329 2.3% 3,831 2.0% 13.0% 41,612 2.1% 53,093 2.6% (21.6)% 60,337 3.0% (12.0)% 55,325 2.6% 9.1%
Land Rover 4,320 2.3% 3,181 1.7% 35.8% 37,637 1.9% 37,272 1.8% 1.0% 29,185 1.5% 27.7% 32,567 1.5% (10.4)%
Mazda 2,839 1.5% 3,471 1.8% (18.2)% 31,219 1.6% 45,449 2.2% (31.3)% 47,934 2.4% (5.2)% 49,858 2.3% (3.9)%
Volvo 3,238 1.7% 2,856 1.5% 13.4% 32,657 1.7% 37,435 1.8% (12.8)% 34,857 1.7% 7.4% 33,358 1.6% 4.5%
Other 13,973 7.3% 12,746 6.6% 9.6% 141,871 7.3% 148,880 7.3% (4.7)% 166,931 8.4% (10.8)% 188,650 8.8% (11.5)%
Total 190,721 100.0% 192,235 (0.8)% 1,941,253 2,030,614 (4.4)% 1,994,761 1.8% 2,131,795 (6.4)%
Excl. scrappage 190,721 192,235 (0.8)% 1,941,253 1,921,907 1.0% 1,811,074 6.1% 2,131,795 (15.0)%
Source: SMMT
UK Registrations 2011 • Alternative-fuel vehicles grew • Ford’s Fiesta was the best-selling
• Full-year volumes were 1.941m, by 11.3% but, with just 25,000 car, followed by the Focus and the
down 4.4% on 2010 which benefited registrations, they still represent only Vauxhall Corsa
from the Scrappage Incentive scheme 1.3% of the market • However, premium, sub-premium
until the end of Q1 • Average CO2 emissions fell to a and crossover models in the form
• Last year saw the third annual fall in record low of 138.1g/km, 23.7% of the VW Golf and Polo, BMW
the last four years, and represented better than in 2000 3-Series, Nissan Qashqai and MINI
a decline in volumes of around • Ford remained the market-leading now account half of the top 10,
25% since the last annual increase, brand, ahead of Vauxhall and demonstrating an ongoing shift from
in 2007, when the market exceeded VW. However, Ford and Vauxhall traditional market demands
2.4m units; it had hit record highs of both fell by over 5%, whilst VW
more than 2.5m in the early 2000s grew and BMW (4th), Audi (5th) UK Registrations 2012
• The 2011 market was heavily and Mercedes-Benz all recorded • Registrations have been fl at in 2012
supported by the fleet and business significant growth to date, up 0.03% in January and
sectors, which took a 57.6% share, • Of the mainstream volume brands down 2.5% in February
up from 52.8% in 2010; private only Nissan performed well, up • However, February accounts for
registrations were down 14.1% 7.4%, with Peugeot, Renault, only 3% of the annual market, ahead
• Diesel-engined cars accounted for Toyota, Honda and Fiat suffering of the plate change in March, which
more than half of all registrations for double-digit falls will provide the first real indicator
the first time, up 4.8%, helped by • The non-premium brands are under for the year
the market’s reliance on corporate increasing pressure from value
business; petrol vehicles fell brands, with Hyundai and Skoda
by 12.8% both up
Automotive Messenger March 2012 7

8. Automotive Messenger
Global Sales and Registrations
Sales by country
Feb 2012 Feb 2011 Var (%) Var (%) Var (%) Var (%) Var (%)
YTD YTD 2012/2011 FY2011 FY2010 2011/2010 FY2009 2010/2009 FY2008 2009/2008 FY2007 2008/2007
Germany 434,513 435,482 (0.2)% 3,173,634 2,916,260 8.8% 3,807,175 (23.4)% 3,090,040 23.2% 3,148,163 (1.8)%
France 310,056 389,921 (20.5)% 2,204,229 2,251,669 (2.1)% 2,268,671 (0.7)% 2,050,282 10.7% 2,064,543 (0.7)%
United Kingdom 190,721 192,235 (0.8)% 1,941,253 2,030,846 (4.4)% 1,994,999 1.8% 2,131,794 (6.4)% 2,404,007 (11.3)%
Italy 268,240 326,265 (17.8)% 1,748,143 1,960,282 (10.8)% 2,158,010 (9.2)% 2,160,131 (0.1)% 2,493,106 (13.4)%
Spain 119,695 119,755 (0.1)% 808,059 982,015 (17.7)% 952,772 3.1% 1,161,176 (17.9)% 1,614,835 (28.1)%
Belgium 88,448 106,371 (16.8)% 572,211 547,347 4.5% 476,563 14.9% 536,276 (11.1)% 524,795 2.2%
Netherlands 114,547 123,802 (7.5)% 556,123 483,619 15.0% 387,699 24.7% 499,983 (22.5)% 505,538 (1.1)%
Austria 50,831 51,996 (2.2)% 356,145 328,563 8.4% 319,403 2.9% 293,697 8.8% 298,182 (1.5)%
Switzerland 46,641 42,746 9.1% 318,958 294,239 8.4% 264,771 11.1% 287,803 (8.0)% 284,688 1.1%
Sweden 39,421 40,237 (2.0)% 304,984 289,684 5.3% 213,408 35.7% 253,982 (16.0)% 306,799 (17.2)%
EU10 (Central/ 122,965 109,289 12.5% 760,706 803,707 (5.4)% 858,831 (6.4)% 1,180,173 (27.2)% 1,209,793 (2.4)%
Eastern Europe)
Europe (EU27 + 1,927,113 2,091,110 (7.8)% 13,573,550 13,785,698 (1.5)% 14,488,871 (4.9)% 14,738,234 (1.7)% 16,003,436 (7.9)%
EFTA)
USA (incl' LCV) 2,062,728 1,813,461 10.3% 12,778,885 11,590,340 10.3% 10,432,577 11.1% 13,246,951 (21.2)% 16,153,913 (18.0)%
Japan (January) 358,686 259,079 (16.3)% 3,524,788 4,212,280 (16.3)% 3,923,741 7.4% 4,227,643 (7.2)% 4,400,299 (3.9)%
Brasil (incl. LCV) 517,790 519,026 3.4% 3,633,248 3,515,064 3.4% 3,141,240 11.9% 2,193,277 43.2% 1,975,518 11.0%
China (incl. LCV) 2,954,300 3,141,536 (6.0)% 18,505,100 18,061,900 2.5% 13,645,010 32.4% 9,380,000 45.5% 8,690,000 7.9%
Global (estimate) na na na 75,000,000 72,200,000 3.9% 59,250,000 13.2% 65,000,000 (8.8)% 68,000,000 (4.4)%
Source: ACEA, Automotive News, IHS, JAMA, ANFAVEO
EU (EU27 + EFTA) sales by brand (passenger cars)
Feb 2012 YTD Feb 2011 YTD Regs. Δ FY2011 FY2010 Regs. Δ FY2009 Regs. Δ FY2008 Regs. Δ
Share Share 2011/ Share Share 2011/ Share 2009/ Share 2008/
Units % Units % 2010 Units % Units % 2010 Units % 2010 Units % 2009
Volkswagen 248,306 12.9% 249,576 11.9% (0.5)% 1,684,150 12.4% 1,541,279 11.2% 9.3% 1,649,309 11.4% (6.6)% 1,572,132 10.7% 4.9%
Ford 151,516 7.9% 159,718 7.6% (5.1)% 1,077,759 7.9% 1,109,588 8.0% (2.9)% 1,297,001 9.0% (14.4)% 1,232,535 8.4% 5.2%
Renault 132,295 6.9% 183,735 8.8% (28.0)% 1,044,920 7.7% 1,147,486 8.3% (8.9)% 1,097,647 7.6% 4.5% 1,102,813 7.5% (0.5)%
Opel/Vauxhall 116,248 6.0% 145,067 6.9% (19.9)% 989,261 7.3% 1,006,832 7.3% (1.7)% 1,064,305 7.3% (5.4)% 1,154,063 7.8% (7.8)%
Peugeot 128,580 6.7% 156,646 7.5% (17.9)% 911,703 6.7% 1,005,916 7.3% (9.4)% 994,544 6.9% 1.1% 1,006,467 6.8% (1.2)%
Citroen 114,046 5.9% 130,526 6.2% (12.6)% 770,726 5.7% 838,147 6.1% (8.0)% 869,685 6.0% (3.6)% 856,522 5.8% 1.5%
Fiat 95,482 5.0% 116,862 5.6% (18.3)% 682,140 5.0% 825,376 6.0% (17.4)% 1,017,310 7.0% (18.9)% 958,991 6.5% 6.1%
Audi 96,496 5.0% 94,421 4.5% 2.2% 680,262 5.0% 623,536 4.5% 9.1% 612,783 4.2% 1.8% 663,305 4.5% (7.6)%
BMW 83,534 4.3% 88,200 4.2% (5.3)% 641,737 4.7% 609,196 4.4% 5.3% 572,285 3.9% 6.4% 676,829 4.6% (15.4)%
Mercedes 83,126 4.3% 77,527 3.7% 7.2% 591,750 4.4% 586,146 4.3% 1.0% 588,510 4.1% (0.4)% 685,566 4.7% (14.2)%
Toyota 80,273 4.2% 92,874 4.4% (13.6)% 527,206 3.9% 582,457 4.2% (9.5)% 710,374 4.9% (18.0)% 783,188 5.3% (9.3)%
Skoda 78,384 4.1% 73,968 3.5% 6.0% 494,760 3.6% 468,034 3.4% 5.7% 483,597 3.3% (3.2)% 462,178 3.1% 4.6%
Nissan 67,466 3.5% 69,684 3.3% (3.2)% 458,033 3.4% 402,654 2.9% 13.8% 368,373 2.5% 9.3% 336,922 2.3% 9.3%
Hyundai 64,439 3.3% 57,825 2.8% 11.4% 398,129 2.9% 358,284 2.6% 11.1% 345,896 2.4% 3.6% 271,296 1.8% 27.5%
Seat 38,364 2.0% 44,479 2.1% (13.7)% 305,730 2.3% 301,931 2.2% 1.3% 316,856 2.2% (4.7)% 335,984 2.3% (5.7)%
Kia 44,712 2.3% 34,144 1.6% 31.0% 293,960 2.2% 262,627 1.9% 11.9% 257,573 1.8% 2.0% 234,370 1.6% 9.9%
Volvo 37,607 2.0% 39,148 1.9% (3.9)% 254,732 1.9% 230,307 1.7% 10.6% 206,050 1.4% 11.8% 223,239 1.5% (7.7)%
Dacia 36,803 1.9% 39,148 1.9% (6.0)% 252,058 1.9% 262,777 1.9% (4.1)% 235,465 1.6% 11.6% 183,460 1.2% 28.3%
Suzuki 23,746 1.2% 30,487 1.5% (22.1)% 177,996 1.3% 195,458 1.4% (8.9)% 249,772 1.7% (21.7)% 249,269 1.7% 0.2%
Honda 16,872 0.9% 23,542 1.1% (28.3)% 149,684 1.1% 187,408 1.4% (20.1)% 244,751 1.7% (23.4)% 265,010 1.8% (7.6)%
Mazda 17,682 0.9% 23,304 1.1% (24.1)% 137,447 1.0% 182,684 1.3% (24.8)% 210,641 1.5% (13.3)% 244,111 1.7% (13.7)%
Other 171,136 8.9% 1,057,575 50.6% (83.8)% 1,049,407 7.7% 1,057,575 7.7% (0.8)% 1,096,144 7.6% (3.5)% 1,239,984 8.4% (11.6)%
Total 1,927,113 2,091,110 (7.8)% 13,573,550 13,785,698 (1.5)% 14,488,871 (4.9)% 14,738,234 (1.7)%
Source: ACEA
8

9. Automotive Messenger
US sales by brand (passenger cars and light trucks)
Feb 2012 YTD Feb 2011 YTD Regs. Δ FY2011 FY2010 Regs. Δ FY2008 Regs. Δ FY2008 Regs. Δ
Share Share 2012/ Share Share 2011/ Share 2010/ Share 2008/
Units % Units % 2011 Units % Units % 2010 Units % 2009 Units % 2009
Ford division 302,905 14.7% 271,459 15.0% 11.6% 2,057,210 15.1% 1,752,511 15.1% 21.6% 1,440,653 13.8% 21.6% 1,680,321 12.7% (14.3)%
Chevrolet 275,061 13.3% 268,308 14.8% 2.5% 1,775,802 13.5% 1,563,881 13.5% 16.8% 1,338,612 12.8% 16.8% 1,790,519 13.5% (25.2)%
Toyota Division 246,538 12.0% 223,809 12.3% 10.2% 1,396,837 12.8% 1,488,588 12.8% (0.5)% 1,496,211 14.3% (0.5)% 1,843,667 13.9% (18.8)%
Honda Division 173,527 8.4% 155,571 8.6% 11.5% 1,023,986 9.5% 1,096,874 9.5% 5.0% 1,045,061 10.0% 5.0% 1,284,106 9.7% (18.6)%
Nissan Division 170,009 8.2% 147,668 8.1% 15.1% 944,073 6.9% 805,159 6.9% 16.9% 689,014 6.6% 16.9% 838,361 6.3% (17.8)%
Hyundai division 93,845 4.5% 80,747 4.5% 16.2% 645,691 4.6% 538,228 4.6% 23.7% 435,066 4.2% 23.7% 401,742 3.0% 8.3%
Kia 80,555 3.9% 60,595 3.3% 32.9% 485,492 3.1% 356,269 3.1% 18.7% 300,063 2.9% 18.7% 273,397 2.1% 9.8%
Dodge 74,146 3.6% 57,875 3.2% 28.1% 451,040 3.3% 383,675 3.3% (26.6)% 522,686 5.0% (26.6)% 784,113 5.9% (33.3)%
Jeep 69,022 3.3% 51,698 2.9% 33.5% 419,349 2.5% 291,138 2.5% 25.7% 231,701 2.2% 25.7% 333,901 2.5% (30.6)%
Volkswagen division 57,786 2.8% 39,862 2.2% 45.0% 324,402 2.2% 256,830 2.2% 20.3% 213,453 2.0% 20.3% 223,127 1.7% (4.3)%
GMC 57,547 2.8% 60,192 3.3% (4.4)% 397,973 2.9% 333,204 2.9% 31.7% 253,053 2.4% 31.7% 361,739 2.7% (30.0)%
Mazda 49,647 2.4% 33,654 1.9% 47.5% 250,426 2.0% 229,566 2.0% 10.5% 207,767 2.0% 10.5% 263,949 2.0% (21.3)%
Subaru 48,181 2.3% 40,541 2.2% 18.8% 266,989 2.3% 263,820 2.3% 21.8% 216,652 2.1% 21.8% 187,699 1.4% 15.4%
Chrysler Division 44,612 2.2% 22,333 1.2% 99.8% 221,346 1.7% 197,446 1.7% 11.5% 177,015 1.7% 11.5% 335,108 2.5% (47.2)%
Ram 41,752 2.0% 33,314 1.8% 25.3% 257,610 na 212,952 na na na na na na na na
Mercedes-Benz 40,140 1.9% 33,449 1.8% 20.0% 261,769 1.9% 225,026 1.9% 18.1% 190,514 1.8% 18.1% 225,005 1.7% (15.3)%
BMW division 37,609 1.8% 32,321 1.8% 16.4% 247,907 1.9% 220,113 1.9% 12.0% 196,502 1.9% 12.0% 249,113 1.9% (21.1)%
Lexus 28,952 1.4% 26,674 1.5% 8.5% 198,552 2.0% 229,329 2.0% 6.2% 215,975 2.1% 6.2% 260,087 2.0% (17.0)%
Buick 24,231 1.2% 29,076 1.6% (16.7)% 177,633 1.3% 155,389 1.3% 51.9% 102,306 1.0% 51.9% 137,197 1.0% (25.4)%
Cadillac 20,429 1.0% 28,349 1.6% (27.9)% 152,389 1.3% 146,925 1.3% 34.7% 109,092 1.0% 34.7% 161,159 1.2% (32.3)%
Other 126,234 6.1% 115,966 6.4% 8.9% 822,409 7.3% 843,417 7.3% (19.8)% 1,051,181 10.1% (19.8)% 1,612,641 12.2% (34.8)%
Total 2,062,728 100.0% 1,813,461 13.7% 12,778,885 11,590,340 11.1% 10,432,577 11.1% 13,246,951 (21.2)%
Source: Automotive News
EU Registrations 2011 • In less than 12 months the • Like the UK however, Nissan is
• Over the full year the Eurpean Netherlands has therefore moved alone is posting growth among
market was down by 1.7%, the from being less than half the size of the remaining mainstream brands,
fourth consecutive annual decline Spain in terms of volume to more and Hyundai and Kia both edged
• Germany was the region’s largest than two-thirds its size into double-digit growth with a
market, accounting for almost 25% • VW was the leading brand, up combined volume equivalent to over
of total volumes, followed by France 9.3% in 2011 and with a 12.4% 10% of the market
and the UK penetration; VW Group had a
• All of the big five markets except dominant 23.2% share and was EU Registrations 2012
Germany were down in 2011, with up by an equally impressive 7.5%, • The market is looking shaky in
Spain dropping 17.7% and Italy with the Audi brand posting larger Europe, with the EU down 7.1%
10.8%, whereas demand in Germany growth (9%) than any other in January; Western Europe was
grew by 8.8% major player down 8.5% and an estimated 11.4%
• While high percentage movements • The market remained extremely in February, combining for a YTD
in some markets can be discounted competitive behind VW: Ford decline of around 9.8%
because of their lack of size, there overtook Renault after the French • France was down by more than 20%
was nonetheless a remarkable spread brand experienced a 8.9% fall, in both months, followed closely by
of performance: Poland fell 31.3% closely followed Opel/Vauxhall and Italy; even Germany is forecast to
from a 2010 volume of 223,000, Peugeot, which also swapped places contract slightly over the year
while the Netherlands (annual 2011 • The shift towards premium is
volume 0.55m) was up 15% less pronounced than in the UK,
with Citroen occupying the next
spot ahead of Fiat and Audi, who
spearheads the premium brands
Automotive Messenger March 2012 9

10. Automotive Messenger
Global Registrations 2011 • GM was the best-selling group, up vehicle market grew by 39% in 2011
China 13.2%, ahead of Ford; Chrysler on the back of a recovering economy
• Growth in vehicle sales in China, staged a strong recovery and was up and pent-up demand after the
which has been driving the global 26.1%, overtaking earthquake-hit dramatic fall in registrations of 2009
market, slowed in 2011 to just 2.5%, Honda for fourth place • Sales in India fell in the second
for a volume of 18.5m; in 2010 the • Single-digit growth is expected in half of the year as the government
market was up 32% 2012 to a total volume of between raised interest rates and fuel prices
• The dramatic trend was largely 13.5 and 14.0m units following increased, but in 2012 the market is
attributable to government efforts 2011’s strong performance forecast to grow by as much as 10%
to dampen inflationary pressures Other countries
by slowing the economy, as well as • Japan suffered an abnormal Global Registrations 2012
targeting the congestion problem in contraction of 16% following the • The USA is experiencing its fastest
major cities devastating March earthquake; sales selling rate since 2008, with volumes
• In 2012 the Chinese market is of passenger cars are expected to up 16% in February
expected to grow by c.10%,to grow by 21.7% in 2012, although the • China fell by 23.8% in January,
become again a major driver of economy remains weak partly due to the timing of the New
global growth • Brazil became the world’s fourth- Year holiday, which lost five working
US largest vehicle market in 2011, ahead days; February saw the opposite
• US light vehicle registrations hit of Germany effect, with an increase of 26.5%
12.7m, up 10.2% on 2010, reflecting • Sales in Russia will overtake probably reflecting the resulting
the release of pent-up demand after Germany by 2015 according to pent-up demand
two years of stagnation forecasters; the country’s light
Economic snapshot (in GBP, as at 9 March 2012)
Economic snapshot (in GBP, as at 1 October 2011)
Last share price % change in last Market Cap Latest quarterly Previous year Latest Annual Previous year
(£) year (£’million) EBIT quarterly EBIT EBIT annual EBIT
OEMs
Audi AG 503.1 (4.4)% 21,634 2,294 613
BMW AG 58.1 19.4% 34,960 1,311 827 4,381 56
BYD Co. Ltd. 1.9 (35.0)% 1,474 254 397
Daihatsu Motor Co. Ltd. 11.8 20.1% 5,026 223 140 777 275
Daimler AG 38.8 (6.2)% 41,320 1,364 1,054 6,281 6,010
Fiat SpA 3.9 (27.3)% 4,308 656 (303) 2,075 953
Ford Motor Co. 7.9 (13.9)% 29,384 1,169 1,365 7,115 8,297
Geely Automobile Holdings Ltd. 0.3 0.3% 2,043 126 117
Honda Motor Co. Ltd. 23.6 (11.4)% 42,703 442 964 4,279 2,457
Hyundai Motor Co. Ltd. 119.9 14.6% 26,402 1,154 5,107 2,822
Mazda Motor Corp. 1.0 (37.6)% 1,770 (269) 8 179 64
Mitsubishi Corp. 15.1 (14.3)% 24,891 530 527 2,374 1,226
Nissan Motor Co. Ltd. 6.3 (0.2)% 28,689 972 874 4,037 2,105
Peugeot S.A. 10.0 (52.5)% 2,342 1,141 1,539
Porsche Automobil Holding SE 40.4 (1.2)% 6,189 (74) (4,833)
Renault S.A. 34.6 (2.5)% 10,225 946 942
SAIC Motor Corp. Ltd. 1.6 (12.1)% 17,890 560 545 1,840 184
Suzuki Motor Corp. 15.0 0.8% 8,406 189 181 800 533
Toyota Motor Corp. 25.9 (10.0)% 89,185 1,120 760 3,517 996
Volkswagen AG 107.0 16.2% 31,582 2,211 1,488 4,380 (866)
Retailers
Group 1 Automotive Inc. 34.2 33.9% 778 32 25 124 102
H.R. Owen PLC 0.6 (31.8)% 14 2 (2)
Inchcape PLC 3.7 (6.1)% 1,704 226 171
Lookers PLC 0.6 (9.8)% 222 45 43
Pendragon PLC 0.1 (18.7)% 195 80 61
Penske Automotive Group Inc. 15.2 20.9% 1,376 49 40 156 134
Suppliers
Aisin Seiki Co. Ltd. 21.6 (9.2)% 6,358 323 293 1,031 591
Denso Corp. 20.8 (9.6)% 18,397 413 384 1,415 923
GKN PLC 2.1 1.4% 3,286 429 102
Johnson Controls Inc. 20.2 (22.6)% 13,756 288 270 1,230 928
Magna International Inc. 29.4 (6.0)% 6,859 160 198 783 (197)
TRW Automotive Holdings Corp. 28.1 (23.7)% 3,476 181 204 760 770
ThyssenKrupp AG 16.3 (33.1)% 8,383 (81) 137 1,053 706
Source: Factset
10

11. Automotive Messenger
Selected OEMs share price performance
200
Daimler AG
180
Share price (rebased at 100)
Toyota Motor Corp.
160
Fiat SpA
140 Ford Motor Co.
120 Honda Motor Co. Ltd.
100 Nissan Motor Co. Ltd.
Peugeot S.A.
80
Volkswagen AG
60
FTSE 100
40
1/1/2010 3/1/2010 5/1/2010 7/1/2010 9/1/2010 11/1/2010 1/1/2011 3/1/2011 5/1/2011 7/1/2011 9/1/2011 11/1/2011 1/1/2012 3/1/2012
Selected retailers share price performance
180
Pendragon PLC
Share price (rebased at 100)
160
Inchcape PLC
140
120 Lookers PLC
100 H.R. Owen PLC
80 Penske Automotive
Group Inc.
60
FTSE 100
40
1/1/2010 3/1/2010 5/1/2010 7/1/2010 9/1/2010 11/1/2010 1/1/2011 3/1/2011 5/1/2011 7/1/2011 9/1/2011 11/1/2011 1/1/2012 3/1/2012
Selected suppliers share price performance
240
220 Denso Corp.
Share price (rebased at 100)
200
Magna International Inc.
180
160
Johnson Controls Inc.
140
120 GKN PLC
100
80 FTSE 100
60
1/1/2010 3/1/2010 5/1/2010 7/1/2010 9/1/2010 11/1/2010 1/1/2011 3/1/2011 5/1/2011 7/1/2011 9/1/2011 11/1/2011 1/1/2012 3/1/2012
Automotive Messenger March 2012 11

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