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             China Auto Show 2010 Recap – What the Displays Tell You

             May 6, 20...
Consumer Auto Show 2010 Recap – What the Displays Tell You
                William Russo
                May 6, 2010



Ne...
Consumer Auto Show 2010 Recap – What the Displays Tell You
                William Russo
                May 6, 2010


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Consumer Auto Show 2010 Recap – What the Displays Tell You
                William Russo
                May 6, 2010


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Consumer Auto Show 2010 Recap – What the Displays Tell You
                William Russo
                May 6, 2010


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Consumer Auto Show 2010 Recap – What the Displays Tell You
                William Russo
                May 6, 2010


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Consumer Auto Show 2010 Recap – What the Displays Tell You
                William Russo
                May 6, 2010


   ...
Consumer Auto Show 2010 Recap – What the Displays Tell You
                William Russo
                May 6, 2010


   ...
Consumer Auto Show 2010 Recap – What the Displays Tell You
                William Russo
                May 6, 2010


Bil...
Consumer Auto Show 2010 Recap – What the Displays Tell You
                William Russo
                May 6, 2010


   ...
Consumer Auto Show 2010 Recap – What the Displays Tell You
                William Russo
                May 6, 2010



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China Auto Show 2010 Recap – What the Displays Tell You

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Recap of key findings from Auto China 2010 in Beijing

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China Auto Show 2010 Recap – What the Displays Tell You

  1. 1. GLG Teleconference Transcript China Auto Show 2010 Recap – What the Displays Tell You May 6, 2010 GLG Council MemberSM: William Russo Host: Nelson Wong, GLG Research Manager, Consumer Goods & Services Host Contact Info: +852 2501 0738 or nwong@glgroup.com GLG Teleconferences provide GLG clients across multiple regions the opportunity to simultaneously engage with GLG Council Members on fast-moving and timely business analysis, in real time. Teleconference subjects are driven by breaking news, as well as other issues and events that require a timely response. GLG Council Members provide clients with interpretation, analysis and insights, while clients participate in a live question-and-answer session. Legal Information: Teleconference Transcripts are for informational purposes only and do not constitute investment advice or a recommendation. Council Members are not employees or agents of GLG, and GLG does not guarantee that any information in this Transcript is accurate, timely or complete. The opinions expressed in this transcript are the Council Member’s and not that of GLG. All GLG Council Members have signed GLG Terms and Conditions which state, among other things, that the Council Member will not reveal confidential information and is permitted to participate in GLG projects. In using this Transcript, you agree to hold Gerson Lehrman Group, Inc., and its employees, officers, directors, agents, affiliates and subsidiaries, harmless and free of all liability that may result from your use of this Transcript.
  2. 2. Consumer Auto Show 2010 Recap – What the Displays Tell You William Russo May 6, 2010 Nelson Wong: Welcome to Gerson Lehrman Group’s teleconference on the China Auto Show 2010 recap, presented by GLG’s Consumer Goods and Services Councils. My name is Nelson, and I will be your host. By way of introduction, Bill Russo is President and Founder of Synergistics, an automotive consulting firm. Mr. Russo has over 25 years of experience in strategy and performance improvement in Fortune 500 environments, with the last five years in the Chinese auto industry. He was the Vice President of Northeast Asia at Chrysler LLC, where he negotiated agreements with partners and obtained required approvals from the Chinese Government to bring six new vehicle programs to the market in a three year period, as well as establish an infrastructure for localization and self-distribution. Mr. Russo is able to assemble new organizations, and mobilize teams to capitalize on market and process improvement opportunities. He’s also knowledgeable about negotiating favorable agreements, building strong relationships with government officials and clients, and leveraging functional synergies. I would like to remind all participants that Bill may have limitations on what he may discuss, and may decline to discuss certain topics that involve confidential matters. With that I will now hand this over to Bill. Bill Russo: Thank you Nelson. I am going to cover a few general areas, let me just lay out what I’m going to touch on. I’m going to go through a very brief overview on the Beijing Motor Show and some of the recent developments and statistics related to what’s going on in the China market to put things in context. In the second part I’m going to go over what my observations were in the area of EcoMobility, because it was the theme of the conference, and it was something that was overwhelmingly in evidence in the show. And then in the third section I’m going to cover other major findings and key trends that I think are observable by the vehicles that were on display by all the manufacturers. So let me start with an overview. This was the 11th China International Automotive Exhibition. It’s held every other year in Beijing, on the other years it’s held in Shanghai. This year’s event attracted automakers To schedule a call with Bill Russo, please contact Nelson Wong at +852 2501 0738 or nwong@glgroup.com. This Teleconference Transcript was powered by Gerson Lehrman Group. Transcripts are for your own use and may not be redistributed, disseminated, published or displayed without the prior written consent of Gerson Lehrman Group. © 2010 Gerson Lehrman Group. All rights reserved. 2
  3. 3. Consumer Auto Show 2010 Recap – What the Displays Tell You William Russo May 6, 2010 from 16 countries, more than 2,100 exhibits among automakers and auto parts enterprises. Basically, I think the testimony here is that China is the global center of gravity for the automotive industry, virtually every player is here. If you go to any other auto show you’ll see, I think, less evidence of the world’s auto industry focused on the market. China, virtually everyone is focused on this market now. There were 990 vehicles on display, of which there were 89 world début cars. These are cars that are going to be sold not just in China, but to be sold in other markets as well, making their introduction in China - 65 concept cars, 95 new energy vehicles. Basically, this international auto show is now the largest in terms of the both the number of show cars, as well as in attendance, which this year topped 800,000. Just some statistics on China to kind of set the context. Everyone knows the story from last year, that China became the largest vehicle market. I think some of the sub-stories inside of that is the growth of their own brand vehicles. In 2009 China’s own brand passenger vehicles sold 4.57 million units, or about 44.3% of the total of passenger vehicle sales. I tend to not put too much weight on that number, that’s the one that the Chinese Association of Automobile Manufacturers likes to tout. The relevant number that I find interesting is the passenger cars. Basically, you have to subtract out some of the utility and crossover vehicles, of which there’s a large number of what China calls minivans, basically the little bread boxes that carry rural people around. If you take that out and just look at passenger car comparisons, own brand car sold 2.2 million units, or about 30% of the total passenger cars sales. This year, unmistakably, there’s definitely an increase. If you look at just the passenger car number, of the total number of vehicles sold in the first quarter of this year, the number now stands at 33%. So there is definitely an unmistakable trend of higher and higher percentage of total sales going to the local brands, and I think a lot of that is attributable to so many new first time buyers coming in and buying cars for the first time. If you look at 2010 passenger vehicle sales the total was 1.73 million units, basically 49% of the total population of cars were sold with Chinese brands. So again a rather remarkable development in terms of the increase in total share of the local market population. We’ll come back to those later in the Q&A if anyone has questions, but let me get to the show. The theme of the show was EcoMobility and green transportation. So basically what that prompts everyone to do is bring the latest and greatest technologies in what China likes to call new energy vehicles. In response to clear signals from the government in China, To schedule a call with Bill Russo, please contact Nelson Wong at +852 2501 0738 or nwong@glgroup.com. This Teleconference Transcript was powered by Gerson Lehrman Group. Transcripts are for your own use and may not be redistributed, disseminated, published or displayed without the prior written consent of Gerson Lehrman Group. © 2010 Gerson Lehrman Group. All rights reserved. 3
  4. 4. Consumer Auto Show 2010 Recap – What the Displays Tell You William Russo May 6, 2010 international vehicle makers got the point. Last year there were a lot of new energy cars on display, but it was mostly dominated by the local companies. This year you saw international vehicle makers bringing their technologies to the China Auto Show. They’re demonstrating their respective vision for alternate propulsion solutions, and what their various technological approaches are. Numerous multinational vehicle manufacturers demonstrated hybrid electric technologies, plug-in hybrid electric vehicles, and battery electric vehicles. Besides their existing hybrid cars, most vehicle manufacturers have also displayed the newest generation of battery. The nomenclature in the market is PHEV, is Plug-in Hybrid Battery Electric Vehicle, BEV, and many announcements were made relative to specific timelines for when these cars would be launched in China. For example, Toyota has announced that they’re going to refresh the Prius plug-in hybrid electric vehicle for introduction to China later this year. Nissan’s Leaf electric vehicle will be imported to China in 2011, and Honda’s CRZ and Insight hybrid cars will come in 2012. So, very concrete announcements made to these types of technologies from the international players. Chinese vehicle makers are aggressively pushing on research and the prototyping of various types of new energy vehicles, but they are more cautiously planning the market launch prior to the release of new policy incentives and readiness for the supporting infrastructure. A lot of local brands have indicated clearly that they’re in the game here, but they’re awaiting the government support, both in terms of subsidies for the development of these technologies, as well as the creation of the infrastructure for the various battery recharging systems, etcetera. But most local brands showed their micro and mild hybrid cars that are planned for the market. They have hesitated to commit any firm dates for electric vehicles. In this regard, BYD, Geely and Chang'an are among the first movers who plan to launch their EVs, mostly A and B segment hatchbacks in the next two years. With regard to new energy vehicle technology readiness, nearly all Chinese vehicle makers are developing some variety of electric vehicle applications, ranging from plug-in hybrid battery electric vehicles, but in view of the high uncertainty for market acceptance and technology readiness, they’re playing a more cautious game with regard to waiting for announcements on the specific incentives. To schedule a call with Bill Russo, please contact Nelson Wong at +852 2501 0738 or nwong@glgroup.com. This Teleconference Transcript was powered by Gerson Lehrman Group. Transcripts are for your own use and may not be redistributed, disseminated, published or displayed without the prior written consent of Gerson Lehrman Group. © 2010 Gerson Lehrman Group. All rights reserved. 4
  5. 5. Consumer Auto Show 2010 Recap – What the Displays Tell You William Russo May 6, 2010 But there are different approaches and different solutions in evidence among the various companies. For example, Dongfeng, FAW, Beijing Auto Group, their focus seems to be on hybrid technology applications very specifically on electric vans and buses, while [INAUDIBLE], and Jiangling are specializing in battery powered electrical SUVs and vans. For the passenger vehicles themselves, BYD and SAIC, are working on plug-in hybrid electric vehicles. I think the most well known is the BYD F3DM. Pure battery electric vehicles are represented by the BYD AE6, the Geely EK1, and the Chang’an Ben Ben mini car. On the technology side, related to the battery themselves, nickel-metal hydride batteries have demonstrated high reliability and cost efficiency; more reliability and cost effective than lithium-ion batteries, so they’re more widely used for Chinese hybrid vehicles today. But nickel-metal hydride is not a perfect solution for battery electric vehicles. Instead, lithium- ion batteries have advantages in terms of their compact size, their lighter weight, their higher energy density, the longer power cycles, as well as lower discharge rates and memory effects. They’re also cleaner and safer. So lithium-ion battery chemistry is expected to take over nickel-metal hydride’s leading position inside of the next three to five years. Currently, most Chinese vehicle makers are adopting various lithium-ion battery chemistries to power their plug-in hybrids and their battery electric vehicles. With regard to vehicle and battery performance, plug-in EVs have higher battery cycle times and driving range than battery electric vehicles, however both types of EVs are inferior to hybrid vehicles in terms of range and performance, as well as refueling and recharging time. Full charge times on a home outlet for these plug-in cars range from four to nine hours, while fast charge solutions vary from 15 minutes to two hours. The maximum driving range differs anywhere from 60 kilometers up to 300 kilometers. Out of all the battery vehicles announced so far, the BYD E6 has the best combination of driving range, charting time, and speed. It’s a common understanding that several hurdles are in the way for widespread market acceptance and commercialization of electric cars. These include the cost of the battery itself, the performance of the overall vehicle, the reliability of the technology, and the infrastructure available for recharging, and maintenance, and service of the vehicles themselves. However, there are good signs from this motor show that some forward To schedule a call with Bill Russo, please contact Nelson Wong at +852 2501 0738 or nwong@glgroup.com. This Teleconference Transcript was powered by Gerson Lehrman Group. Transcripts are for your own use and may not be redistributed, disseminated, published or displayed without the prior written consent of Gerson Lehrman Group. © 2010 Gerson Lehrman Group. All rights reserved. 5
  6. 6. Consumer Auto Show 2010 Recap – What the Displays Tell You William Russo May 6, 2010 looking suppliers are aligning with the new energy vehicle makers to provide solutions. One example was the Korean company SK Telecom, their telecom divisions demonstrated a mobile in-vehicle display, which demonstrated how they can use mobile phone technology to basically control the key functions, the vehicle operating diagnostic system, including the vehicle operation diagnostic system, the car battery charging monitoring, and the other electronic equipment on the car. These types of driver interfaces can really enhance the appeal of electric cars to some of the early adopters of the technology. Another example is Better Place, a startup company out of the US, announced a partnership with Chery, together they announced a cooperative agreement for building a new electric car for a government pilot project, and they also jointly plan to set up and display solutions for battery recharging and replacement. That’s the eco mobility theme of the show, and some of my observations. Now let’s get into some of the other major findings, and what I would call key trends that are evident from what was displayed at the show. First and foremost, the reason why the Chinese auto own brand growth that I described earlier is happening is this phenomenon of growth of the lower tier cities in China, and the emergence of these first time buyers who are shopping for low priced, high fuel economy types of solutions. Well that trend is going to continue as more and more of the lower tier cities develop, and even in the higher tier one and tier two cities, there’s still a large number of entry level buyers. So the foreign brands have to get on that bandwagon, have to start to offer solutions for those types of consumers. I think one company that’s done that particularly well in China has been Hyundai, and that’s why they’ve grown at a rate higher than the market average. But if you look at the vehicles on display, the foreign brands are clearly moving downstream into smaller vehicles. Leading international OEMs like Volkswagen, Audi, General Motors, and Toyota, who already have dominate positions in large sedans and SUV segments in China, are really accelerating the introduction of smaller cars. In particular, the focus is on introducing vehicles with engine displacements of 1.4 liters and below for the compact and the small car segments where local brands today have been concentrated. The international brands are looking to leverage the brand and technology advantages to compete against the Chinese brands, who continue to leverage their price advantage. Typical examples of international brand small cars include the new generation of To schedule a call with Bill Russo, please contact Nelson Wong at +852 2501 0738 or nwong@glgroup.com. This Teleconference Transcript was powered by Gerson Lehrman Group. Transcripts are for your own use and may not be redistributed, disseminated, published or displayed without the prior written consent of Gerson Lehrman Group. © 2010 Gerson Lehrman Group. All rights reserved. 6
  7. 7. Consumer Auto Show 2010 Recap – What the Displays Tell You William Russo May 6, 2010 Volkswagen, the 1.4 liter TSI Polo GTi model. The 1.2 liter TSI Golf 6, the C Segment SUV called the Tiguan, and the Buick Excel, the Chevrolet Sail, and the Chevrolet Spark. All are examples of smaller international branded products. Toyota also announced plans to launch their fuel efficient Lexis IS250, and the RX270, which have smaller engine sizes than the products that they currently have on the market. So clearly, foreign brands need to move downstream, need to get smaller in the Chinese market in order to grow with this wave of low-end consumers. Local brands are also at the same time, the second trend is the local brands are moving upstream to medium and large segments. So leading Chinese local vehicle manufacturers, such as BYD, Chery, Geely and Great Wall have now announced and shown their 1.8 liter and above four cylinder and six cylinder cars and SUVs. With their introductions they now are aiming to create an image of advance technology and obtain a share of the higher margin segments. Typical examples here are the BYD D Segment sedans called the L3 and the I6, Great Wall’s code name CHO41, CHO51, and CHBO11, all larger vehicles than they’ve had in their portfolio before. Chery’s Rich, it’s branded Rich G3 model, as well as B16, as well as Geely’s Emgrand EC825. So clearly, while the foreign branded companies want to access these entry level segments, you’ve got at the same time local brands trying to move upstream to access higher margin segments. This creates hyper competition across all the segments in the marketplace. The third key trend observable at the show is the prevalence of coupe and crossover concept designs. With increasing maturity, as the market evolves from being people buying their first sedan, Chinese consumers are looking for more variety clearly in the things that they’re purchasing. If you look at the evidence of that, in the first quarter of this year, the SUV segment and the MPV segments all grew more than double versus last year. The market overall grew about 70% in the first quarter relative to last year, but the SUV segment grew 160% versus last year’s first quarter, and the MPV segment, multi purpose vehicle segment, more than double, 1205%. So clearly there’s a trend in the marketplace for people shopping for more than just sedans. Now these two segments combined represent just slightly more than 10% of the total market, so it’s still not mainstream, it’s still a sedan market for the large part, but it’s clearly trending towards more variety. Chinese consumers are looking for more variety in what they’re shopping for, and particularly the younger To schedule a call with Bill Russo, please contact Nelson Wong at +852 2501 0738 or nwong@glgroup.com. This Teleconference Transcript was powered by Gerson Lehrman Group. Transcripts are for your own use and may not be redistributed, disseminated, published or displayed without the prior written consent of Gerson Lehrman Group. © 2010 Gerson Lehrman Group. All rights reserved. 7
  8. 8. Consumer Auto Show 2010 Recap – What the Displays Tell You William Russo May 6, 2010 generation and the female buyers are pursuing a more recreational lifestyle choice, and they’re looking for more individualistic choice, they don’t just want to drive what their parents have driven in the past. So coupe and crossover concept vehicles are becoming more evident, both international and Chinese brands are launching more two and four door coups, city utility vehicles, crossover concept cars with a more dynamic and sporty look, evidence of that the Audi A3 and A5 Sport Back, Honda’s Cross Tour, Hyundai’s new SUV called the IX35, the Infinity IX35, BYD’s S6, Mitsubishi’s RVR, and Chang’an Auto Group’s H30 Cross are all examples of what I’ve just described. And the other significant finding from this motor show is the progress made by the Chinese brands in styling design. Though a majority of local brand products have similar appearance between their base vehicles with international branded vehicles, some would call it privacy of designs, a few Chinese OEMs like Geely, Chery, and SAIC, are moving forward to create distinctive styling designs. In this regard, Geely has seen the most significant changes. They’re introducing new design concepts to ensure their newly launched brands stand apart from the traditional perception of a low end economy car manufacturer. Among the 21 new models that they intend to launch this year, the GLEagle G5 model has quite a bold and sporty appearance, and better aerodynamics with sleek sideline and rear end design. The [INAUDIBLE] design of the Emgrand brand EV8, MPV, and the EC825 D segment sedan also fit with their intended premium conditioning. The Englon, which is a new brand name, formerly used for the London tax product, but the Englon brand also plans a variety of C and D segment sedans and SUVs with a more classic appearance. So those are the other findings that stand apart from the overarching theme of the show, which was in the area of EcoMobility. So that gives you a kind of a snapshot, an overview if you will, of what went on in the 2010 Beijing Motor Show. I’ll turn it back over to Nelson. Nelson Wong: Thank you Bill. To start the discussion Bill, here are a couple of questions for you. The first question is, from what you have seen during the show, how broad is the technology gap or development gap between the foreign and domestic auto OEMs? To schedule a call with Bill Russo, please contact Nelson Wong at +852 2501 0738 or nwong@glgroup.com. This Teleconference Transcript was powered by Gerson Lehrman Group. Transcripts are for your own use and may not be redistributed, disseminated, published or displayed without the prior written consent of Gerson Lehrman Group. © 2010 Gerson Lehrman Group. All rights reserved. 8
  9. 9. Consumer Auto Show 2010 Recap – What the Displays Tell You William Russo May 6, 2010 Bill Russo: Well every year it gets narrower, but it’s still a significant gap. Locally branded cars are suitable for first time buyers in China who are shopping primarily on price. The car companies here are no more than ten to 15 years old. In terms of their own branded vehicles, they’re no more than a decade old, in terms of their existence as companies the oldest is 25 years old and that would be Shanghai Auto, and roughly around Beijing Auto about the same time, they started with their foreign JVs. They have not done a lot of their own development. Their own branded vehicles are a relatively recent phenomenon, and I’d say where you find the most significant gap is in vehicle design, as well as overall systems integration. So this is where the local companies largely rely on either their joint venture partners, or major international suppliers to provide the integration expertise to be able to put the various technologies together into their automobiles. They’re getting better at it, they’re doing it faster than it was done in Japan, and faster than it was done in Korea, largely because of the size and scale of the Chinese market. So they get a lot of foreign investment that comes into the market making available locally the technologies that previously they had to import into the country. Nelson Wong: The second question is, in your opinion who do you think are the winners from the show in terms of ability to market its models to the public, and maybe showing surprise to the group with technology or concept breakthroughs? Bill Russo: Well I was most impressed in terms of what was displayed, and not just in scope but also in terms of depth of technological capability on display. I was most impressed with Geely’s display. They showed not just their 21 new models, they also have shown that they can evolve their brand strategy from what was initially announced last year, which was a bit confusing, to what now appears to be a three brand strategy with unique products under each umbrella. So the GLEagle, Englon and Emgrand brands all have uniquely styled cars with a lot of technology now that they’ve begun the process for transferring into their own development capabilities. Obviously they’re ambitious, all Chinese companies are, and I think the big challenge for most of them is can they do even half of what they set out to do. The other company that I think is pretty impressive in terms of how quickly they’ve evolved is Great Wall. They now have D segment cars in their pipeline, C segment cars on display, they were just a year ago announcing their first passenger car. So this is a company that’s To schedule a call with Bill Russo, please contact Nelson Wong at +852 2501 0738 or nwong@glgroup.com. This Teleconference Transcript was powered by Gerson Lehrman Group. Transcripts are for your own use and may not be redistributed, disseminated, published or displayed without the prior written consent of Gerson Lehrman Group. © 2010 Gerson Lehrman Group. All rights reserved. 9
  10. 10. Consumer Auto Show 2010 Recap – What the Displays Tell You William Russo May 6, 2010 moving also very rapidly. I don’t think they’ve converged on a brand strategy and a name plate strategy that yet makes sense to me, but they seem to be moving in the right direction in terms of their pipeline. Nelson Wong: Maybe we should wrap up with one last question here. With almost 50% growth in the consumer vehicle sales last year China has already surpassed the US and become the world’s largest auto market. How sustainable do you think this growth is, and how soon will the growth actually reach a more realistic rate when comparing that it’s growing at an exponentially large growth rate? Bill Russo: I think the exponential path is definitely going to come down to something more rational. A lot of China’s growth in the past few years has been fixed asset dependant, a lot of infrastructure investment, a lot of investment in building up the city infrastructures, which creates a lot of the opportunity for people to profit by taking jobs in urban centers that previously - What’s fuelling the growth in China, and this is I think miss-categorized by a lot of the industry [watches] last year. A lot of people attributed last year’s growth to the incentive plan which was for the entry level consumers, a tax break for vehicles below 1.6 liters. Sure, that definitely pulled ahead some demand, but what’s driving growth in China is growth of the urban infrastructure and the creation of an urban middle class and growth in GDP per capita. Those trends are going to continue. Maybe not at the rates that we’ve seen in the past few years, I think last year I like to describe it as taking a fire that was there and throwing gasoline on it, it just made the fire bigger, but the fire is still there. You’ve got in the next ten years what’s forecasted to be a flip-flop in population from today’s 45% urban/55% rural to a population that’s going to be more than 60% urban to rural. As people move to the cities in these numbers, we’re talking about in the ten years about 200 million people of the population of China migrating to the cities that creates wealth that creates the ability to spend money that creates a demand for cars. What will limit ultimately the growth in the car population will be the capacity of the market to handle the number of vehicles that are on the road. Eventually cities like Shanghai did last year, will limit the number of registrations available for people. So you won’t see years like last year where things grew 46% year-over-year every year, but you will see probably double digit growth this year, and probably for the next several years. To schedule a call with Bill Russo, please contact Nelson Wong at +852 2501 0738 or nwong@glgroup.com. This Teleconference Transcript was powered by Gerson Lehrman Group. Transcripts are for your own use and may not be redistributed, disseminated, published or displayed without the prior written consent of Gerson Lehrman Group. © 2010 Gerson Lehrman Group. All rights reserved. 10
  11. 11. Consumer Auto Show 2010 Recap – What the Displays Tell You William Russo May 6, 2010 Nelson Wong: Thank you. That will conclude our teleconference for today. Thank you, Bill again for your time, and thanks to all the participants who joined us. If you would like to follow up with Bill, or have any other enquiries, please contact your Gerson Lehman Group Research Manager. END William Russo is the President and Founder of Synergistics, an automotive consulting firm. Mr. Russo has over 25 years of experience in strategy and performance improvement in Fortune 500 environments with the latest five years in the Chinese auto industry. He was the Vice President – Northeast Asia at Old Carco LLC (formerly known as Chrysler LLC) where he negotiated agreements with partners and obtained required approvals from China Government to bring six new vehicle programs to the market in a three year period, as well as established an infrastructure for localization and sales distribution. Mr. Russo is able to assemble new organizations and mobilize teams to capitalize on market and process improvement opportunities. He is also knowledgeable about negotiating favorable agreements, building strong relationships with government officials and clients, and leveraging functional synergies. Gerson Lehrman Group (GLG) provides technology and services to support a marketplace for expertise. Since 1998, its platform for consultation and collaboration has helped the world's leading financial services firms, consultancies, corporations, and nonprofits find, engage, and manage experts in a broad range of industries and disciplines. GLG’s unparalleled network of the world's leading expert consultants, known as the GLG Councils, includes more than 200,000 subject-matter experts who educate and provide insight to decision makers through a wide range of consulting methods, including telephone consultations, expert surveys, and seminars. The GLG CouncilsSM is a network of more than 200,000 experts worldwide, including physicians, scientists, engineers, business executives, attorneys, and other professionals across every industry sector. To schedule a call with Bill Russo, please contact Nelson Wong at +852 2501 0738 or nwong@glgroup.com. This Teleconference Transcript was powered by Gerson Lehrman Group. Transcripts are for your own use and may not be redistributed, disseminated, published or displayed without the prior written consent of Gerson Lehrman Group. © 2010 Gerson Lehrman Group. All rights reserved. 11

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