Presentation to the Automotive News World Congress

1. Presentation to the Automotive News World Congress Stephen J. GirskyJanuary 2004

2. Disclosures Analyst Certification Analyst Certification The following analysts hereby certify that their views about the companies and their securities discussed in this report are accurately expressed and that they have not received and will not receive direct or indirect compensation in exchange for expressing specific recommendations or views in this report: Stephen J. Girsky. Important US Regulartory Disclosures on Subject Companies The information and opinions in this report were prepared by Morgan Stanley & Co. Incorporated (“Morgan Stanley”). As of November 28, 2003, Morgan Stanley beneficially owned 1% or more of a class of common equity securities of the following companies covered in this report: Delphi, General Motors, Goodyear Tire & Rubber, Johnson Controls, Magna Intl Inc., TBC and Tower Automotive. Within the last 12 months, Morgan Stanley managed or co-managed a public offering of securities of DaimlerChrysler AG, Delphi, Ford, General Motors, Standard Motor Products and Tenneco. Within the last 12 months, Morgan Stanley, Morgan Stanley or an affiliate has received compensation for investment banking services from Aftermarket Technology, American Axle and Mfg., BorgWarner Inc., DaimlerChrysler AG, Delphi, Ford, General Motors, Standard Motor Products, Superior Industries, Tenneco, Tower Automotive and Visteon Corporation. In the next 3 months, Morgan Stanley expects to receive or intends to seek compensation for investment banking services from Aftermarket Technology, American Axle and Mfg., ArvinMeritor, AutoNation, Borg Warner Inc., DaimlerChrysler AG, Dana Corp., Delphi, Ford, General Motors, Genuine Parts Co., Goodyear Tire & Rubber, Johnson Controls, Lear Corp., Lithia Motors, Magna Intl Inc., Standard Motor Products, Superior Industries, Tenneco, Tower Automotive, United Auto Group and Visteon Corporation. The research analysts, strategist, or research associates principally responsible for the preparation of the research report have received compensation based upon various factors, including quality of research, investor client feedback, stock picking, competitive factors, firm revenues and investment banking revenues. Morgan Stanley & Co. Incorporated makes a market in the securities of Aftermarket Technology, Delphi, Dura Automotive, Ford, General Motors, Magna Intl., TBC and Tower Automotive. Global Stock Ratings Distribution (as of December 31, 2003) (Continued)

3. Disclosures Data include common stock and ADRs currently assigned ratings. For disclosure purposes (in accordance with NASD and NYSE requirements), we note that Overweight, our most positive stock rating, most closely corresponds to a buy recommendation; Equal-weight and Underweight most closely correspond to neutral and sell recommendations, respectively. However, Overweight, Equal-weight, and Underweight are not the equivalent of buy, neutral, and sell but represent recommended relative weightings (see definitions below). An investor's decision to buy or sell a stock should depend on individual circumstances (such as the investor's existing holdings) and other considerations. Investment Banking Clients are companies from whom Morgan Stanley or an affiliate received investment banking compensation in the last 12 months. Analyst Stock Ratings Overweight (O or Over) - The stock's total return is expected to exceed the average total return of the analyst's industry (or industry team's) coverage universe, on a risk-adjusted basis over the next 12-18 months.Equal-weight (E or Equal) - The stock's total return is expected to be in line with the average total return of the analyst's industry (or industry team's) coverage universe, on a risk-adjusted basis over the next 12-18 months.Underweight (U or Under) - The stock's total return is expected to be below the average total return of the analyst's industry (or industry team's) coverage universe, on a risk-adjusted basis, over the next 12-18 months.More volatile (V) - We estimate that this stock has more than a 25% chance of a price move (up or down) of more than 25% in a month, based on a quantitative assessment of historical data, or in the analyst's view, it is likely to become materially more volatile over the next 1-12 months compared with the past three years.Stocks with less than one year of trading history are automatically rated as more volatile (unless otherwise noted). We note that securities that we do not currently consider "more volatile" can still perform in that manner.Unless otherwise specified, the time frame for price targets included in this report is 12 to 18 months. Ratings prior to March 18, 2002: SB=Strong Buy; OP=Outperform; N=Neutral; UP=Underperform. For definitions, please go to www.morganstanley.com/companycharts. Analyst Industry Views Attractive (A). The analyst expects the performance of his or her industry coverage universe to be attractive vs. the relevant broad market benchmark over the next 12-18 months. In-Line (I). The analyst expects the performance of his or her industry coverage universe to be in line with the relevant broad market benchmark over the next 12-18 months. Cautious (C). The analyst views the performance of his or her industry coverage universe with caution vs. the relevent broad market benchmark over the next 12-18 months. Other Important Disclosures For a discussion, if applicable, of the valuation methods used to determine the price targets included in this summary and the risks related to achieving these targets, please refer to the latest relevant published research on these stocks. Research is available throught your sales representative or on Client Link at www.moganstanley.com and other electronic systems. This report does not provide individually tailored investment advice. It has been prepared without regard to the individual financial circumstances and objectives of person who receive it. The securities discussed in this report may be suitable for all investors. Morgan Stanley recommends that investors independently evaluate particular investments and strategies, and encourages investors to seek the advice of a financial adviser. The appropriateness of a particular investment or strategy will depend on an investor’s individual circumstances and objectives. This report is not an offer to buy or sell any security or to participate in any trading strategy. Morgan Stanley, Morgan Stanley DW Inc., affiliate companies and.or their employees may have investments in securities or derivatives of securities of companies mentioned in this report, and may trade them in ways different from this discussed in this report. Derivatives may be issued by Morgan Stanley or associated persons. (Continued)

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5. Overview Auto Outlook: Same problems; Less of them • Global Dilemma: Most participants spending for growth yet the industry does not grow. • Demand growth is likely to be modest despite economic recovery. • Competitive pressures are likely to remain difficult. • Weaker dollar could level provide some offset. • Higher rates create risk of weaker demand, weaker mix and lower finance company earnings. • Big Three opportunity: Actual quality is better than perceived quality.

6. Global Light Vehicle Sales: Slow Growth CAGR 1.2% Source: LMC~J.D. Power & Morgan Stanley Research

7. Global Sales Forecasts: 2003 - 2004 Source: Global Insight & Morgan Stanley Research * Note forecasts are derived from Global Insight

8. U.S. Sales 16.7mm Units FY03E 16.8mm Units FY04E Source: Autodata & Morgan Stanley Research

9. Japanese SAAR 5.6mm Units FY03E 5.7mm Units FY04E Source: Morgan Stanley Research

10. Western European SAAR 14.1mm FY03E 14.2mm FY04E Source: Morgan Stanley Research

11. Global Excess Capacity at 25%-30%or 20mm units Source: Autofacts & Morgan Stanley Research

12. CapEx / D&A FY2003E: OEMs Spending for Growth Source: Company data & Morgan Stanley Research *Adjusted to fit scale

13. Zero Sum Game Global Dilemma: Most participants are spending for growth, yet the industry does not grow. • Slow growth & excess capacity suggest deflation / revenue pressures are likely to continue. • Not everybody can be a winner. • Winners will be low cost producers who deliver a good product that consumers are willing to pay for.

14. Modest Demand Growth Demand growth is likely to be modest despite economic recovery: • Auto sales did not weaken materially in the most recent recession and thus, significant pent-up demand was never created. • The number of off-lease vehicles is falling sharply – fewer consumers are being forced back to a dealer to buy or lease a new vehicle. • Extended financing terms are likely to prolong vehicle turnover. • Economic conditions appear mixed.

15. Light Vehicle Sales Trend Line Demand Source: Morgan Stanley Research

16. Light Vehicle Sales Cycle: Trough to Trough Source: R.L. Polk, Global Insight & Morgan Stanley Research

17. Weighted Median Age of a Vehicle vs. Sales 1 Year Lead Correlation 77.6% Source: Polk & Morgan Stanley Research

18. Off Lease Vehicles Begin to Decline Fewer Consumers Being Forced Back to the Dealerships Source: Manheim & Morgan Stanley Research

19. Average Maturity of Vehicle Loans (months) Source: Federal Reserve Board & Morgan Stanley Research

20. Taking Longer to Establish Consumer Equity Source: FRB & Morgan Stanley Research

21. Peak Trough Now Jan-02 Oct-02 Nov-03 Interest Rates Consumer Confidence Gasoline Prices Used Car Prices Employment Economic Conditions Better than they were, but still not robust Source: CPI & Morgan Stanley Research

22. Affordability Near 25 Year Best Number of Weeks of Income to Purchase a Vehicle Source: FRB & Morgan Stanley Research

23. Intense Competition Competitive pressures are likely to remain difficult: • Capacity growth to continue in 2004. • Pricing is likely to remain difficult although a weak dollar may provide a modest offset. • Market share pressures to continue as well.

24. Net Increase Of 853,000 Units or Roughly 5.1% of NA sales 2003 2004 2005 Ford (122) Nissan 250 2006 GM 125 Toyota 180 Ford (146) 308 (211) Ford 180 Honda (98) GM Toyota 150 Nissan 200 80 DCX Toyota 30 Hyundai 235 389 = 100,000 units 6 NA Capacity Additions, Despite Flat Sls Outlook Source: Company data & Morgan Stanley Research

25. Excess Capacity & More Is On The Way Every 1% Pt. of Market Share Translates into $1.0bn in Profits 853,000 Units of Added Capacity is 5.1% of NA Capacity, or $5bn in Pretax Profits FY03E (in MM) $1,971 NA Pretax Profit Big Three Source: Morgan Stanley Research Estimates

26. Revenue Pressures Worst Since 1970’s New Car CPI vs. Domestic Light Vehicle Sales Source: CPI & Morgan Stanley Research

27. Y/Y Change in Monthly New Car CPI Source: CPI & Morgan Stanley Research

28. Price Reductions Pressure Manufacturers • Every 1% Decline in Prices is Worth • $1.0bn at GM • $850mm at Ford • $550mm at DCX Source: Morgan Stanley Research

29. Big Three Market Share Continues to Slide Every 1% Point of Share is Worth Roughly $1bn in Profit 76.0% 61.7% 60.2% Source: Autodata & Morgan Stanley Research

30. Market Share Winners / Losers – FY03 Source: Autodata & Morgan Stanley Research

31. Big Three Share of Sales by Segment: FY-03 vs. FY-02 Source: Autodata & Morgan Stanley Research

32. US Dollar per Euro: Jan 03 - Present Source: FactSet & Morgan Stanley Research

33. Japanese Yen vs. U.S. Dollar Source: FactSet & Morgan Stanley Research

34. Yen to US Dollar Price Sensitivity: YTD 03 Source: Company Data & Morgan Stanley Research Note: * Includes Acura, Infiniti, Lexus

35. Weaker Dollar Could Help a Little Source: Morgan Stanley Research

36. Global Operating Margins FY02 Excluding Pension & OPEB Expense for the Big Three 16.4% 10.6% 8.9% 8.4% 8.1% 6.1% 5.7% 5.0% 4.7% 4.0% 3.8% 1.7% 1.8% -6.2% Porsche Nissan BMW Honda Toyota Hyundai GM Peugeot Kia VW DCX Renault Ford Fiat Source: Company data & Morgan Stanley Research *Morgan Stanley Estimates

37. Higher Rates Could be a Negative Higher rates create risk of weaker demand, weaker mix and lower finance company earnings • Extended terms suggest longer replacement rates. • Every 1% increase in financing rates on 5-year loans is worth $730-750 per vehicle.

38. Auto Finance Terms: Fall 2001 vs. Now Source: FRB & Morgan Stanley Research

39. GMAC / FMCC Borrowing Costs Source: FRB & Morgan Stanley Research

40. Big 3 Opportunity: Actual Quality is Better than Perceived Quality Source: JD Power, CNW & Morgan Stanley Research

41. The Big Three: Positives & Negatives Each Company Faces Unique Challenges: • GM has operational momentum and has made significant strides relative to its fixed legacy costs. • Ford’s share is likely to remain under pressure. While earnings and cost cutting have been strong, cash flow needs to catch up. • DCX continues to struggle with its product line. Quality issues, both perceived (Chrysler) and actual (Mercedes) continue to linger.

42. Big Three Relative Stock Performance: 2003 Source: FactSet & Morgan Stanley Research

43. General Motors • GM still appears to have a variable cost advantage vs. F & DCX and a fixed cost disadvantage. • GM’s aggressive funding of pension and healthcare have helped to narrow the fixed cost disadvantage. • Significant new product launches give GM its best chance of gaining share/reducing incentives in years. • GM is going into 2004 with above average inventory. • Finance company earnings are likely to decline due to higher interest rates and lower mortgage refinancing activity.

44. GM Market Share 35.5% 28.4% 28.0% Source: Autodata & Morgan Stanley Research

45. $1,134 $740 $1,899 $88 $185 $601 $1,159 $814 $889 $902 $1074 U.S. Healthcare & Pension Cost/Unit FY03 Source: Company data & Morgan Stanley Research

46. GM Pension Funded Status: 2003 Update Source: Company Data & Morgan Stanley Research

47. GM Has Built Inventory in 2003 Source: Autodata & Morgan Stanley Research

48. Financial Service Earnings Unlikely to Match 2003 Source: Company data & Morgan Stanley Research

49. GM New / Replacement / Redesigned Products Source: Company Data, Ward’s Automotive & Morgan Stanley Research

50. Ford Motor Company • Earnings have exceeded expectations. Now cash flow needs to catch up. • With the exception of the F-Series, new products are limited until year-end, suggesting share pressure is likely to continue. • International Operations / Premier Auto Group need to start pulling their weight. • Stability in management ranks is important.