While slowing BRIC markets is impacting global MD-HD low-cost truck market and it is also losing market share to "value trucks", rising demand from Next 11 countries, Africa, Latin America, and also chances of growth emerging from Europe and North America is pointing towards 1.3 Million unit sales globally in 2022. This brief summary of our recent study on this topic shows how this market will evolve over the next 5-7 years.

1. Executive Outlook of Global Medium-Heavy Duty Low-cost
Truck Market
By 2022 Medium-Heavy Low Cost Truck Sales to Reach 1.3 Million Units
NE05-18
June 2015
CONCISE SUMMARY OF
FULL STUDY

2. 2NE05-18
Contents
Section
Slide
Number
Executive Summary 4
Low Cost Truck Manufacturing: Strategies and Challenges 14
Global Market Analysis 20
Global OEMs Product Strategy 29
Africa 34
China 41
India 48
North America 55
South America 62
Western Europe 69
Key Conclusions, Future Outlook and Predictions 76
Appendix 81

3. 3NE05-18 3NE05-18
Executive Summary

4. 4NE05-18
Key Research Takeaways
Source: Frost and Sullivan
Medium-Heavy Duty Low-cost Truck Market, 2014–2022
Global* Low-cost truck market will grow at CAGR 2.1% to over 1.26 million units by 2022
Driven by increasing demand in South America, Africa, North America, Western Europe, and Next 11 countries
counteracting stable and declining demand in India and China respectively.
Increasing demand for low-cost trucks in North America and Western Europe largely due to economic conditions
Prolonged economic slowdown and structural changes to freight movement patterns changing truck purchase patters. Low-
cost truck sales to experience 2014-2022 CAGR of 5.4% and 15.8% in North America and Western Europe.
Strength of western OEMs in South America and Africa will diminish gradually in the next 6-8 years
The two regions have experienced some initial penetration of low-cost trucks from Chinese and Indian OEMs in the past 2-3
years. This is expected to further grow through increasing proliferation of low-cost brands which will almost double and triple
in South America and Africa respectively by 2022.
*Only includes India, China, Africa, South America, North America and Western Europe
Rise in value truck demand in China and India to take market share away from low-cost trucks
Rising economic influence in China and India is changing product preferences among fleets in China and India. This coupled
with increasing presence of western OEMs is accelerating demand and sales of value trucks. This is taking a section of
demand for low-cost trucks towards value trucks.
A common focal price range across global OEMs by 2022,due to converging interests
Price gaps between American, European, Japanese, Chinese and Indian OEMs will continue shrinking over 2014-2022
period. Chinese and Indian OEMs will focus on higher end trucks, whereas, American, European and Japanese OEMs will
focus more on value and upper-end low cost trucks.

5. 5NE05-18
Global Low-cost Truck Market and Price Boundaries
Low-cost Truck Market: Global Average Price of Low-Cost MDTs and HDTs, 2014
• Definition of low-cost truck varies by region.
• In markets such as North America, Western Europe and South America a low-cost truck
can be defined as: “A truck that is priced 15-25% lower than an average priced truck
within the same commercial vehicle category in the given region”.
• In markets such as China, India and Africa a low-cost truck can be defined as: “A truck
that is perceived as an entry level truck in corresponding markets and is priced at
the lowest price bandwidth in each segment (i.e. medium and heavy-duty trucks)”.
Definition
Source: Frost and Sullivan
120,000
100,000
80,000
60,000
40,000
20,000
120,000
100,000
80,000
60,000
40,000
20,000
Low-cost MDT
Low-cost HDT
Price($)
Price($)
MDT HDT
India
China
Africa
South America
North America
Western Europe
India
China
Africa
South America
There are currently no low-cost trucks in the HDT segment in North America and Western Europe, by the same definition
as exists for developing markets

6. 6NE05-18
Market Overview – Classification
MDT (Medium Duty Trucks):- 6 ton - 16 ton
HDT (Heavy Duty Trucks):- >= 16 ton
Weight Segments
Regions Covered Africa North America
China South America
India Western Europe
Source: Frost and Sullivan
Price Segments • Price segments are classified according to various regions based on the local
market conditions.
• Markets such as India, China and Africa clearly have a segment between low
and premium segments, where the price, specifications and features fall right
between the two. This segment here is defined as the ‘value segment’.
• In markets such as South America, North America, and Western Europe the
trucks are classified into only low and premium, as there is no intermediate
space to be classified as value.
• Another distinction to be made is that these segmentations are region specific
and may overlap. For example: Trucks in the value segment in China and India
may be similar to those in the low-cost segment in Western Europe and North
America.

7. 7NE05-18
Price Range of Medium-Heavy Duty Trucks by Region Developed markets such as
North America and Western Europe offer wider entry points to Indian and Chinese OEMs(in the $20,000 to
$35,000 price range in the MDT segment) forcing local OEMs to develop competing products
Regional Truck Price Analysis, MDT and HDT, 2014
MDT HDT
0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
80,000
90,000
100,000
0
20,000
40,000
60,000
80,000
100,000
120,000
140,000
Price($)
Price($)
India China Africa South
America
North
America
Western
Europe
India China Africa South
America
Source: Frost and Sullivan
Premium segment
Value segment
Low-cost segment
• North America and Europe currently feature very few players, both local and Japanese, in the low-cost segment
price range.
• In Africa and South America the low-cost segment price range consists of only limited products mainly from Chinese
and Indian OEMs.
• The low-cost segment price range in India and China is filled with local competitors and offers growth opportunity
only in the Premium and value segment price range.

8. 8NE05-18
Regional Low-Cost Truck Market Sales and Market Share Forecast
Shrinking share of low-cost trucks in China and India till 2022 will result in downward pressure on global low-
cost truck growth
Low-cost Trucks Unit Sales and % share in the overall market, Global, MDT and HDT, 2014-2022
Source: Frost and Sullivan
India
China
Africa
South America
North America*
(MDT)
Western
Europe* (MDT)
171,000
Units (2014)
315,000
Units (2022)
89%
% Share (2014)
63%
% Share (2022)
CAGR
7.9%
756,100
Units (2014)
674,000
Units (2022)
71%
% Share (2014)
46%
% Share (2022)
CAGR
-1.4%
21,600
Units (2014)
60,000
Units (2022)
23%
% Share (2014)
39%
% Share (2022)
CAGR
13.6%
81,800
Units (2014)
150,000
Units (2022)
37%
% Share (2014)
48%
% Share (2022)
CAGR
8.0%
33,450
Units (2014)
50,800
Units (2022)
15%
% Share (2014)
19%
% Share (2022)
CAGR
5.4%
3,300
Units (2014)
10,600
Units (2022)
5%
% Share (2014)
14%
% Share (2022)
CAGR
15.8%
*Numbers only for MDT, as proliferation of low-cost trucks in the HDT segment not expected till 2022

9. 9NE05-18
Global Low-cost Truck Market
84% of the low-cost truck market is currently represented by Chinese market (with 60% of the market share)
and India (with 24% of the market share)
Source: Frost and Sullivan
22%
20%
16%
14%
7%
6%
4%
3%
3%
3% 2%
OEMs Market Share, Low-cost Truck Market, Global*
MDT-HDT, 2014
Dongfeng
FAW
Sinotruck
Tata
Ashok Leyland
Daimler**
Ford
Isuzu
Eicher
MAN/VW
Shaanxi
2014
Premium
Value
Low
2022
Premium
Value
Low
13%
45%
41%
37%
22%
41%
Low-cost segment size and OEM Market Share, Global*, MDT and HDT, 2014-2022
*Only includes India, China, Africa, South America, North America and Western Europe
**includes Mercedes-Benz, Freightliner (FCC) and Mitsubishi Fuso
~2,357,000 ~3,390,000
• The global low-cost truck segment will decline in terms of percentage share in the overall market by 2022. However, in
terms of unit sales this segment will grow by 18%.
• Value segment will more than double in the next 8 years, largely driven by demand from China and India.

10. 10NE05-18
Expected Low-cost Truck Platforms
More new low-cost platforms are expected from Chinese, Indian and Japanese OEMs through to 2022
HDT
MDT
2010 2022
271611
16
11
Il series
AsiaMotorWorks
Daimler BharathBenz
IVECO LCT HDT
MAN/VW trucks
Hyundai HDTDongFeng DFL
DongFeng Duo
IVECO’s Chinese
Platform Based MD
Daimler BharathBenz
2014
Fuso FG LCTISUZU FTR
Volvo-DongFeng
LCT HDT
Ashok Leyland
Source: Frost and Sullivan
Low-cost Truck Market: Vehicle Model Timeline (World), 2010-2022
2018
FAW LCT HDT
MAN/VW LCT HDT
Isuzu LCT MDT
Tata LCT MDT
Tata LCT HDT
Ford LCT MDT
Volvo-Eicher LCT HDT
Sinotruck LCT HDT
Hyundai LCT MDT
Iveco LCT HDTAshok Leyland LCT HDT
• Chinese and Indian OEMs will dominate the low-cost segment in the next 6-8 years through various platforms and brands
• Hyundai is likely to enter North America and Europe within the next 2 years trucks that will be positioned at lower-cost
product options in these markets.
• Western OEMs such as MAN and Iveco will consider low-cost product baselines for South American and African markets
by 2018-2020.
Fuso LCT MDT
UD LCT HDT
Hino LCT MDT

11. 11NE05-18
Global Low-cost MD-HD Truck Outlook
Low-cost truck market will experience reversal in performance in the emerging and developed economies
between 2014 and 2022
2014 2022
Market • Low-cost truck markets achieved maturity and
stability in China and India respectively.
• It is still in its early stages in South America and
Africa.
• Almost non-existent in Western Europe and North
America.
• Market growth to be driven largely by Africa,
Next 11, and South America in terms of both
growth rate and volume.
• China and India, despite substantial low-cost
truck demand, will effectively gravitate towards
value and premium segments.
Product • Low-cost trucks in emerging markets feature small
displacement engines, sub-optimal reliability,
durability, and quality and basic safety features and
construction principles
• Low-cost trucks will evolve in terms of quality
and safety features, due to strengthening
regulations across the globe blurring distinction
lines that exist between the low-cost and value
segments
OEMs • There is a clear distinction among OEMs present in
the low and the premium segments, with very few
premium segment OEMs featuring low-cost
offerings and vice-versa.
• More premium segment OEMs form Europe and
America will feature in low-cost truck space
either through joint-ventures or through
distinctive brands
Suppliers • Suppliers for these trucks are almost always local
• Western suppliers are slowly breaking into this
market
• Western tier-1 suppliers will provide pivotal
support to both TRIAD and emerging market
OEMs in this space
Customers • Perception of low-cost trucks as cheap and
unreliable still exists among most customers in the
developed world.
• Affordability barriers associated with value and
premium trucks have driven low-cost market
• Customers expectations from these trucks will
change as customers will be more open to
shorter useful life of such trucks in exchange of
lower upfront cost, especially in TRIAD and
BRIC markets
Low-cost Truck Outlook, Global, MDT-HDT, 2014-2022
Source: Frost and Sullivan

12. 12NE05-18
The Last Word—5 Big Predictions
2
China and India’s current domination in the global low-cost truck market will diminish
from current combined market share of 87% to 79% by 2022.
3
16 new low-cost truck platforms in MD and HD truck segments to be introduced in key
global markets over 2015-2022 period.
1
Global low-cost truck market will grow at a CAGR of 2.1% reaching 1.26 million units
by 2022.
4
Western OEMs will be pushed to introduce low-cost MD trucks in $50-60 thousand
retail price range, while MD and HD low-cost truck prices in Asian markets will
increase to $30-45 thousand range.
5
Japanese OEMs will be seriously challenged from the bottom of their price bandwidth
by Chinese, Korean and Indian OEMs and from top by European and American
OEMs compelling them to develop lower cost versions of their value trucks.
Source: Frost and Sullivan

13. 13NE05-18
Market Engineering Methodology
One of Frost and Sullivan’s core
deliverables is its Market Engineering
studies. They are based on our
proprietary Market Engineering
Methodology. This approach, developed
across 50 years of experience assessing
global markets, applies engineering rigor
to the often nebulous art of market
forecasting and interpretation.
A detailed description of the methodology
can be found here.