Commercial vehicle market trends Russian Automotive Market Research

Truck market, January-April 2017 New truck sales, January-April, 2017/2016, units New truck sales, shares of TOP-10 brands, January-April, 2017/2016, % Source: Russian Automotive Market Research Source: Russian Automotive Market Research

Truck market, January-April 2017 Average prices for new trucks, TOP-10 brands Average prices for new trucks by body types Brand Average price, I quarter of 2017, rubles KAMAZ 3 903 930 GAZ 1 916 967 MAZ 3 781 578 SCANIA 8 510 353 VOLVO 14 035 148 URAL 3 338 925 MERCEDES-BENZ 8 088 302 MAN 6 997 637 DAF 5 382 984 ISUZU 3 390 602 Body type Average price, I quarter of 2017, rubles Tractor unit 4 398 877 Dump truck 4 108 614 Dropside truck/curtainsider 2 900 491 Van 2 988 760 Tank 2 904 490 Truck crane 6 570 876 Multifunctional road truck 3 786 600 Refrigerator 2 874 035 Garbage truck 3 975 885 Insulated van 2 991 432 Fuel truck 3 346 813 Mobile workshop 3 042 414 Logging truck 4 427 897 Vacuum truck 3 493 867 Source: Russian Automotive Market Research

Bus market, January-April 2017 New bus sales, January-April, 2017/2016 New bus sales, shares of TOP-10 brands, January-April, 2017/2016, % Source: Russian Automotive Market Research

LCV market, January-April 2017 New LCV sales, January-April, 2017/2016 New LCV sales, shares of TOP-10 brands, January-April, 2017/2016, % Source: Russian Automotive Market Research

Commercial vehicle market trends, January-April 2017 Trucks Sales: +36,4% Against the backdrop of market growth Russian trucks are losing their market share Growing demand for 16 - 24-tonne trucks   Buses Sales: + 45% LIAZ, YUTONG and Volgabus showed a considerable growth in sales LCV Sales: + 25,8% MERCEDES-BENZ is the market leader among foreign brands Source: Russian Automotive Market Research

Commercial vehicle production, January-April 2017 Truck production Bus production LCV production Source: Russian Automotive Market Research

New truck sales till 2022, thousand units Commercial vehicle market forecast New truck sales till 2022, thousand units Source: Russian Automotive Market Research

Commercial vehicle market forecast New Russian and foreign truck sales till 2022, % (baseline scenario) New truck sales by price segments till 2022, % (baseline scenario) Source: Russian Automotive Market Research

New bus sales till 2022, thousand units Commercial vehicle market forecast New bus sales till 2022, thousand units Source: Russian Automotive Market Research

Commercial vehicle market forecast New Russian and foreign bus sales till 2022, % (baseline scenario) New bus sales by classes till 2022, % (baseline scenario) Source: Russian Automotive Market Research

New LCV sales till 2022, thousand units Commercial vehicle market forecast New LCV sales till 2022, thousand units Source: Russian Automotive Market Research

Commercial vehicle market forecast New Russian and foreign LCV sales till 2022, % (baseline scenario) New LCV sales by body types till 2022, % (baseline scenario) Source: Russian Automotive Market Research

Commercial vehicle production forecast Truck production till 2022, thousand units Russian and foreign truck production till 2022, % Source: Russian Automotive Market Research Source: Russian Automotive Market Research

Commercial vehicle production forecast Bus production till 2022, thousand units Russian and foreign bus production till 2022, % Source: Russian Automotive Market Research Source: Russian Automotive Market Research

LCV production till 2022, thousand units Commercial vehicle production forecast LCV production till 2022, thousand units Source: Russian Automotive Market Research Source: Russian Automotive Market Research

Alternative fuel 2022* New gas truck sales: 4 500 – 6 500 units 2022* New gas bus sales: 1 100 – 1 400 2022* New gas LCV sales: 4 500 – 7 500 * - Forecast ** - Originally manufactured Source: Russian Automotive Market Research

Truck market trends Top priority Production Export Market One of the largest markets in Europe One of the largest manufacturers in Europe Big number of production sites of global OEMs Small production volume of foreign brands Predominance of Russian brands in production: 85-90% Export Export prospects look more promising than in the car segment Export limitations: Localization requirements in foreign markets National standardization systems Adopting a EU emission standard in emerging markets Revision of current customs unions, alliances Tariffs/non-tariffs barriers Cost of each market penetration/ market size Severe competition with Chinese, Indian OEMs Significant overcapacity in production sites in in China Export possibilities: «Good enough», reliable truck, high utilization, high mileage, low-cost TCO Top priority ● Maintain a 50%+ share of Russian trucks ● Import substitution in the segment of foreign trucks ● Increase attractiveness for investors Market 2/3 of trucks sold – low-cost segment Dramatic fluctuations in the share of Russian makes: 45-70% Expansion of imported vehicles during the recovery period Competition with Chinese OEMs Customer requirements: greater capacity, more robust suspension systems, low-cost TCO, fuel efficiency, telematics systems Key profit drivers for OEMs Modularization Telematics/ Connected vehicles ADAS Prospects for suppliers Growth in attractiveness for foreign suppliers during the recovery period OEMs’ suppliers Low-cost segment TIER 1 – KAMAZ, GAZ Group Aftermarket suppliers The largest segment – spare parts for Russian, Belorussian makes, diesel trucks The potential of gas /bi-fuel trucks in the mid-term future is not high. Source: Russian Automotive Market Research

LCV market trends Top priority Production Export Market One of the largest markets in Europe One of the largest manufacturers in Europe Small production volume of foreign brands Predominance of Russian brands in production: 85-95% Export Export limitations: Severe competition with global and Chinese OEMs Localization requirements in foreign markets National standardization systems Adopting a EU emission standard in emerging markets Revision of current customs unions, alliances Tariffs/non-tariffs barriers Cost of each market penetration/ market size Export possibilities: «Good enough», reliable LCV, high utilization, high mileage, low-cost TCO Top priority ● Maintain a 50%+ share of Russian LCV ● Import substitution in the segment of foreign LCV ● Increase attractiveness for investors Market Dramatic fluctuations in the share of Russian makes: 50-70% Prevalence of the low-cost segment Prevalence of vehicles for cargo transportation Prevalence of petrol vehicles Customer requirements: greater capacity, more robust suspension systems low-cost TCO, fuel efficiency, telematics systems Key profit drivers for OEMs Modularization Telematics/Connected vehicles ADAS Prospects for suppliers Low-cost segment Russian models   OEMs’ suppliers TIER 1 – GAZ Group, UAZ, AVTOVAZ Aftermarket suppliers The largest segment – spare parts for Russian makes Petrol/diesel vehicles The potential of gas /bi-fuel LCV in the mid-term future is not high. Source: Russian Automotive Market Research

Bus market trends Top priority Production Export Market One of the largest markets in Europe One of the largest manufacturers in Europe Predominance of Russian brands in production: 99% Export Export limitations: Severe competition with global and Chinese OEMs Localization requirements in foreign markets National standardization systems Adopting a EU emission standard in emerging markets Revision of current customs unions, alliances Tariffs/non-tariffs barriers Cost of each market penetration/ market size Export possibilities: «Good enough», reliable bus, high utilization, high mileage, low-cost TCO Top priority ● Maintain a 80%+ share of Russian buses ● Import substitution in the segment of foreign buses ● Increase attractiveness for investors Market Dependence on public procurement Predominance of the low-cost segment Prevalence of Russian makes A considerable share of small class buses A considerable share of petrol and diesel buses Steady demand for gas buses as long as supported by the government Development of public transport in megacities In megacities – competition with shared mobility, e-hailing In small towns, rural areas – competitions with private cars Development of multiple mobility system Growth in expansion of Belorussian, Chinese, Korean buses during the recovery period Prospects for suppliers Growth of attractiveness for foreign suppliers during the recovery period Low-cost segment   The prospects of gas /bi-fuel buses in the mid-term future are moderate, depend on government support. OEMs’ suppliers TIER 1 – GAZ Group, Aftermarket suppliers The largest segment – spare parts for Russian makes Source: Russian Automotive Market Research

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