European Light Commercial Vehicle Production Outlook – SMMT Open Forum

1. European Light Commercial Vehicle Production Outlook – SMMT Open Forum Ian Henry, AutoAnalysis March 30, 2011

2. 5 categories of Light Commercial Vehicles made in Europe MicrovansSmall vans Medium vansLarge vansPick-up trucks

3. Market dominated by joint product development & manufacturing arrangements • Traditionally c2-2.5mn LCVs made in Europe pa, incl. commercial versions of cars • Market supplied almost entirely with local production – limited imports • Alliances are a key feature of market, with some VMs having >1 alliance: • Fiat with PSA, and with GM • PSA with Fiat, and Mitsubishi • Renault with GM, Nissan and Mercedes • Mercedes with VW and Renault … • Over 1/3 European LCVs supplied through alliances • 5 main segments: • Microvans, eg Peugeot Bipper • Small vans, eg Ford Transit Connect • Medium vans, eg Vauxhall Vivaro • Large vans, eg Fiat Ducato • Pick-up trucks, eg Nissan Navarra • VW adding pick-up production to European offering – the first European VM to make a purpose-built pick-up • Chinese, through Chery and Great Wall, will add LCV production in Europe

4. Significant dip in 2009 production – recovery unlikely to exceed 2007 peak; some PSA/Renault/Fiat production shifting to South America and Russia …

5. Daimler • Currently has two vans, Viano/Vito medium van made in Spain, and Sprinter large van made in Germany • Sprinter also supplied to Volkswagen as Crafter and has been supplied to Dodge and Freightliner in low volume for US market • Will source Mercedes version of Kangoo from Renault to give it a small van – previous offering in small vans (Vaneo based on A-class) was not a success • Recently announced a production JV with GAZ in Russia, to make Sprinter for local market: • Timing to be confirmed • Initial volume 25,000 pa • This will be Mercedes’ initial route into Russia; car production in Russia not currently scheduled

6. Fiat • Widest range of LCVs, mostly made in JVs with PSA: • Microvans: Fiat Fiorino, made by Tofas in Turkey, JV with PSA • Small van: Fiat Doblo, made by Tofas; will build version for Opel/Vauxhall under contract • Medium van: Fiat Scudo, made by Sevel Nord, French-based arm of PSA JV • Large van: Fiat Ducato, made by Sevel Sud, Italian-based arm of PSA JV • Iveco Daily: heavy duty large van, made in Italy and Spain • Production in Russia highly likely in new Fiat factory, to replace low volume kit production at local assemblers

7. Ford • Only major European VM without an alliance in LCVs • Transit van is, arguably, the most iconic van in Europe, certainly in UK: • Mostly now made in Kocaeli, Turkey; major investment for new model – crosses medium and large van sub-segments • Limited production of chassis-cabs in UK • Transit Connect small van currently make in Turkey: • Production to shift to Romania • Transit Connect is one of three candidates to be next New York City taxi: • Could boost new model production in Craiova, or lead to US production

8. GM • Heavily reliant on Renault for most of its presence in LCVs: • Medium Vivaro van made in joint development and manufacturing programme with Renault; production of new model secured for Luton, saving the factory, starting in 2013; but new van programme will only see Vauxhall/Opel models made in Luton – no Renaults or Nissans • Large Movano van sourced on OEM basis from Renault (rebadged version of Master) • Still makes own small van: Combo, based on Corsa: • However, for new model, GM is switching Combo van replacement to a modified version of Fiat Doblo from the Tofas plant in Turkey

9. PSA • Mix of own vehicle programme and JVs with Fiat • Microvan: Citroen Nemo/Peugeot Bipper, made by Tofas in Turkey, JV with Fiat • Small van: Citroen Berlingo/Peugeot Partner, self-developed programme, made in Spain; will add EV version with Mitsubishi electric powertrain; CKD arrangement in Turkey, full production also in Brazil – both leading to fall in Spanish production • Medium van: Citroen Jumpy/Peugeot Expert, made by Sevel Nord, French-based arm of Fiat JV • Large van: Citroen Jumper/Peugeot Boxer, made by Sevel Sud, Italian-based arm of Fiat JV

10. Renault-Nissan-Dacia • Renault: • Small van: Kangoo, formerly supplied to Nissan as Kubistar, also to be supplied to Mercedes (name unknown) • Medium van: Trafic, currently made in Spain and UK, switching to France for new model; joint development programme with GM • Large van: Master, also supplied to GM and Nissan on OEM basis • Nissan now going down a partially independent path in LCVs: • Formerly sourced all European vans from Renault • But Nissan Spain now making own small-medium van (NV200) and will also make new pick-up truck • Dacia: new factory in Morocco will add small van from 2013 … details awaited

11. VW group • Small van: Caddy, made in Poland, based on old Golf platform • Medium van: Transporter, mostly made in Germany, with chassis cab versions made in Poland; also made in minibus and coach versions in Germany • Large van: Crafter sourced from Mercedes on OEM basis • Pick-up truck: developed Amarok for South American market; will add European production in 2012, the first European VM to make a purposed-designed pick-up in Europe • Skoda also makes low volume Praktik van, based on Fabia, mostly for domestic market

12. In summary … European LCV production ... • Is characterised by joint production arrangements, some full JVs (Fiat-PSA), some pure OEM supply (Mercedes for VW, Renault for Mercedes) • Will see more alliances like these in the years ahead • Is dominated by European brands – Nissan apart, the Japanese have largely stayed away from this market; and probably will stay away, because of entrenched nature of European suppliers and better opportunities elsewhere • Chinese will appear at the margins, in small vans and cheap pick-up trucks, while Hyundai will aim for a slice of Turkish/Near East market with a Turkish production JV