1. Commercial Trucks Part of the Automotive Family

2. Sound Familiar? • Supplier Consolidation • Channel Consolidation • Limited Product Differentiation • Global Competitors • Government Regulation • Fragmented Aftermarket • Continual Technology Push

3. Strategic Profile – The Commercial Vehicle Sector • Key Issues • Industry Complexity • Relationship to Other Auto Sectors • Industry Drivers • Strategic Profile • Industry Outlook

4. Industry Complexity

5. Relationship to Auto Sector

6. Industry Drivers • General Economics • Productivity • Differentiation • From other modes • Fleet to Fleet • Cost Structure • Driver Skills / Availability

7. Porter’s Model For Industry AnalysisThe Global Commercial Vehicle Industry Supplier Power Rivalry Barriers to Entry Substitutes Buyer Power

8. Supplier Power • North America • Five suppliers Cat, Cummins, DDC, Eaton & ArvinMeritor provide 30% of the value • Worldwide • Supply base is more diverse • Trend • OE’s working to reduce supplier power

9. Buyer Power • North America • Large fleets [3000+] dictate specifications and buy 50% of vehicles • Worldwide • Similar to U.S. pre dereg – fragmented – low buyer power

10. Substitutes • Modal threats • Rail for distance is becoming better • Infrastructure • Highway construction is a practical limit

11. Barriers to Entry • Increasing regulation • Emissions • Safety • Distribution & Support • North America – Independent • Global - Captive

12. Rivalry

13. Commercial Vehicles • A Balance to the Auto Industry • Complementary Technologies • Different Economic Cycles • Different Drivers • Different Customers