The Most Dangerous Trends Facing Auto Dealer’s Today! What we want to talk about here is sharing some information that we feel every dealership, every dealer manager and every dealer principal should know. We feel that knowing this information will allow management to mitigate the potential issues facing the auto industry today. DONE 1 1 1

Today’s Meeting – Areas Covered A look at some of the current challenges facing the Automotive industry today. Dangerous trends you need to be aware of and how they’re affecting revenue and profits. What actions you can take to avoid these trends and prosper. How ARS can help you. This is your Agenda for the Orientation. Read today’s agenda & let them know that the information we are going to present is very powerful. As we looked at the market research we became somewhat alarmed and although some of these things we found the average dealer knows instinctively, it was eye-opening to actually look at the market data that supports our findings. Today we’ll look at the current challenges facing the automotive industry, the Dangerous Trends to be aware of and how they’re affecting revenue or profit, what actions you can take to avoid these trends and prosper and lastly how Automotive Retail Solutions can help. 2 2 2

Your Business Is Under Attack! Fact: Profit margins are shrinking! Fact: Today’s vehicles require less maintenance and dealers are seeing their customers less frequently. Fact: Warranty dollars are down by $10 billion over the last 5 years and continuing to dwindle. Fact: Competition is more fierce than ever before and the “players and coaches” have changed! Fact: The rising cost of legal, workman's comp & health insurance are having a huge impact on bottom line profits. Fact: Amount of training is declining as dealerships spend less money per employee on training & education. These are all Pain Points. Without pain, there is no call for action! What I say on this slide is I start talking about the front end of the dealership and in doing so I talk about how the Internet has had a negative impact on profit margins. Take front end gross for example because of all the information regarding the cost of a vehicle to a dealership it limits the amount of money that a dealer can make on a sale of the vehicle, and as a result most new car departments are actually losing money. The next fact is vehicles require less maintenance today and dealers are seeing customer less frequently so this too is impacting service department profitability. Another factor to consider is that warranty dollars are down by $10 billion over the last five years and are continuing to dwindle. Most of us can remember a time when we used to forecast warranty dollars and thus it was an important part of the net profitability of the dealership. Another factor to consider is that today’s competition is more fierce than ever and “the players and the coaches have changed”. Another factor to consider is rising legal costs; workman comp and health insurance are having a huge impact on bottom-line profits. And the last fact to consider is that as a result of all the above, dealerships are spending less money on employee development and training. All these things are a recipe for disaster. 3 3 3 3

Dangerous Trends Effecting Your Profits Less vehicles sold in 2007-2010 will continue to have a major impact on future Service revenue and profits. Because of depressed auto sales in 2008 and 2009 projected Service volume may reach a low point in 2013, according to the J.D. Power and Associates 2010 Customer Service Index (CSI) Study released recently. Dealer Service traffic volumes are expected to decline by approximately 20 percent between 2009 and 2013, resulting in a 25 percent decrease in service dollars from owners of late (2005 to 2009) model year vehicles. These are examples of using Market Data to validate the need for Change! Now I would like to get into some of the data, there were less vehicles sold in 2007 to 2010 and as a result this will have a major impact on future service revenues and profit. Because of the depressed sales in 2008 and 2009, projected service volume may reach a low point in 2013 according to JD Power and Associates. Dealer traffic is expected to decline by 20% between 2009 and 2013. This will result in a 25% decrease in service dollars from the owners of late 2005 to 2009 model year vehicles. I don’t have to tell you that if the dealership service dollars decreases by 25% that you can expect your income to do the same. 4 4 4

The trends you need to be aware of ….. Less Maintenance Required = Less Revenue The trends you need to be aware of ….. Today’s vehicles require less routine maintenance resulting in less visits to the dealer and less profit. 1990 – most vehicles require service every 3,000 miles 2005 – the average vehicle requires service every 5,000 miles 2011 – certain vehicles now only require service every 10,000 miles (or less in some vehicles) The trend = manufactures continue to build vehicles that require less routine maintenance! These are examples of using Market Data to validate the need for Change! Let’s take a closer look at the service intervals over the last 20 years. In 1990 when you purchased a new vehicle you were told to bring your vehicle in for a 1000 mile inspection and would then be told to bring your vehicle in every 3000 miles thereafter for maintenance. Then sometime between 1990 and 2005 you were told to bring your vehicle in every 3750 miles. Then in 2005 it went to every 5000 miles. Then sometime between 2005 and 2011 it went to 7500 miles and now some vehicles don’t need to come in for service until between 9,000 and 15,000 miles. I don't know about you but one of the questions that I have is how am I the dealer supposed to make money. These trends are turning our business upside down. 5 5 5

Facts about your competition…. Today's competitors: Mom and Pop replaced by Fortune 100 companies with Billions! Fact: Jiffy Lube is now owned by Shell Oil Company, one of the most powerful companies in the World. Fact: There are 37 independent repair / maintenance shops for every 1 new car dealership. Fact: The automotive franchise industry, excluding dealers, generates around $25 billion in sales annually and employs over 175,000 people in 35,600 franchise establishments. Fact: Your customers have more options than ever before! With this slide you should discuss how Mom and Pop shops are no longer their competition. Now let’s talk about today’s competitors. Remember the mom-and-pop? What a nice picture. As a dealer they were not strong competitors. They didn’t have the equipment, the budget, the marketing expertise or the state-of-the-art facilities. Today all that has changed and mom-and-pop have been replaced by fortune 100 companies with billions of dollars. Jiffy Lube is now owned by Shell Oil Company, one of the most powerful companies in the world. Chrysler Corporation did a study and found that there are 37 independent repair shops and maintenance shops for every new car dealership. Another factor to consider is that the automotive franchise industry, excluding dealers, generates around 25 billion in sales annually and employs 175,000 people in 35,600 franchise establishments. Just to be clear this is not all of the independents, this is just the franchised independents. So the summary to this information is that your customers have more options than ever before and mom-and-pop are now these muscular teams of people that I like to refer to as superhero’s. 6 6 6 6

Can You Change These Trends? What if you could offer a product that 80% of your clients had a need for when they pulled into your service drive? What if you could offer that product to your clients at no cost to them? (85% of the time) What if that product was also a unique retention tool that brought additional vehicles into your service drive ? In this slide you are starting to give them hope for a solution and beginning to make the transition to how we can help. On this slide I talk about how you can change these trends. I pose this in the form of a question. I use the concept of what if. What if you could offer a product that 80% of your clients had a need for when they pulled into your service drive. What if you could offer this product to your clients at no cost to them 85% of time. What if this product was also a unique retention tool that brought additional vehicles into your service drive? 7 7 7

Changing the trends in your favor What if there were products that actually incentivized your Service Advisor to conduct a World Class walk around – every vehicle, every time? What if these products came with world-class monthly Service Advisor training at no additional cost? What if these products allowed your Service Advisors to add as much as $250.00 per week to their income? What if these products could offer an additional $10K - $15K-$20K - $30K a month to your “Net Profit” bottom line? If products like these existed, would you be interested in hearing more about it? (of course you would!) This is the What if Slide – You are starting to get them to believe that there is a way to mitigate these Dangerous Trends. What if there were products that actually incentivized your service advisor to conduct a world class walk around on every vehicle every time? What if these products came with world-class monthly service advisor training at no additional cost? What if these products allowed the service advisors to add as much as five hundred dollars per week to their income? What if these products could offer an additional $10,000-$30,000 a month of additional net profit to your bottom line? It products like these existed you would be interested in hearing more about them wouldn’t you? Of course you would. 8 8

ARS Products & Services TRAINING DIVISION GLASS DIVISION PROTECTION DIVISION This Orientation is sponsored by ARS and this is how we can help. Now I would like to take a couple of moments to explain some of the products and services that ARS offers. We have four divisions in our company, we have the training division, we have a glass division, we have the business development division and we have the protection division. We wanted to talk primarily about our training & glass divisions today. BUSINESS DEVELOPMENT DIVISION 9 9 9

ARS has found that product! Did you know that…… Up to 80% of the vehicles in your service drive today have a need for this service. More than 90% of these customers will seek to resolve this “safety issue” after it’s already to late? Did you know that the windshield is the third most important safety related items on a vehicle (tires # 1 and brakes # 2)? Did you know that 40% of small “chips” will turn into larger “cracks” that can not be repaired and must be replaced? Did you know that more than 85% of those customers are entitled to receive this service at no-cost to them? Did you know in most cases these “repairs” can be taken care of at your dealership with little or no additional time added to the repair? Now I asked the client a few questions. Did you know that, up to 80% of the vehicles in your service drive today have a need for this service. More than 90% of these customers will seek to resolve this safety issue after it’s already too late. Did you know the windshield is the third most important safety-related item on a vehicle after tires and brakes? Did you know 40% of small chips will turn into larger cracks that cannot be repaired and must be replaced? Did you know that more than 85% of those customers are entitled to this service at no cost to them? And did you know that in most cases these can be taken care of at your dealership with little or no additional time added to the repair? 10 10 10 10

WINDSHIELD DANGER Over 22,000,000 windshields are affected each year. 11,000,000 are replaced Only 20% of them are replaced correctly There are over 6,000,000 auto accidents each year 290,000 of them are rollovers. Barbara Walters of 20/20 reports that thousands of people are at risk when their car rolls over after faulty installations. Now let’s talk about some additional windshield dangers. Over 22 million windshield are affected each year (a statistic from the video) 11 million windshields are replaced annually, but only 20% of them are replaced correctly (80% installed wrong!). There are over 6 million auto accidents each year - 290,000 of them are rollovers. The scary thing is that with a defective windshield you are at risk because the windshield is 70% of the roof’s support! As the Barbara Walter 20/20 report showed, millions of people are at risk as a result of faulty windshield installations. Repair of the windshield should always be your first option.

ARS Windshield Facts Third most important “Safety feature after tires and brakes! Cold weather stress: In cold weather conditions, windshields will develop a more concave shape. As a result, windshield chips and dings are more likely to spread in a horizontal fashion. Warm weather stress: Warm weather conditions cause windshields chips to spread more vertically. Driving and fatigue stress: Driving over a speed bump, pothole or other uneven terrain can cause a chip to crack. The force radiates through the car and puts additional pressure on the edges of the chip, which can quickly lead to a crack. As stated in the windshield video. The windshield is the third most important safety feature behind tires and brakes. Now I want to talk about three other items that impact windshield safety. The first being cold weather stress which can have a negative impact on a windshield as a result of the changing temperatures. One reason for this is that you will get into your vehicle after the windshield has frozen, turn on the defroster, then scrape the window. This is a perfect recipe for cracking your windshield. Warm weather can do the same thing except in reverse. Your vehicle’s been sitting out in the sun and has reached temperatures of 120° to 150°, then you run the vehicle thru a car wash and the windshield cracks! The last point is driving fatigue. You run over a speed bump or uneven terrain and the force radiates thru the car which can put additional stress on the edges of a chip and before you know it you have a cracked windshield. Also think of the environmental impact. Windshields are not recyclable so they wind up in land fills and take 4,000 years or so to be dissolved into the ground, if ever! 13 13 13

ARS Product Facts Assist our clients in increasing their net profit with their existing service customers. In about 85% of the time it doesn’t cost the customer anything! All inclusive turnkey approach that increases the dealership’s “Net Profit” with virtually no out of pocket investment. Saves your Clients time and money, helps them maintain vehicle safety and gives them “Peace of Mind” Helps improve Service Advisor selling skills – If they can’t “give away” a product their customers need and it costs nothing, what else are they struggling to sell? Here are some additional ARS product facts. We are going to assist our dealer clients in increasing net profit with their existing Service customers. 85% of the time it won’t cost the customer anything. Our process is an all-inclusive turnkey approach that increases the Dealership’s net profit with virtually no out of pocket investment. We will help the clients save time and money as well as giving them peace of mind. Most importantly we will help improve the Service Advisor’s selling skills. Let’s face it, if they can’t give away a product that their customers need that cost the customer nothing, what else are they struggling to sell. DONE 14 14 14

Integrated Seamless Process Service Advisor does a vehicle walk around with the products incorporated. Service Advisor writes up the client. Service Advisor opens an icon on their desktop. Service Advisor completes the on-line documentation, prints it and has the customer approve it. ( Signed paper work will be sent to ARS Corporate daily) The process is integrated and seamless. The service advisor does a walk around with the product incorporated in it. The service advisor writes up the client. The servicer advisor opens an icon on the desktop. The service advisor completes the online documentation prints it and has the customer approve it. The repair is done with the other items that the client came in for and they’re done. ARS handles the three way call with the client and their insurance company and ARS sends the Dealership their funds on the 10th of the following month. 15 15 15

Performance Reporting We provide immediate follow up via telephone and email for three years…. We provide access to management reports to senior management in real time We provide feedback on Service Advisors overall performance through observation on the service drive Now we want to spend a moment talking about performance reporting. We provide immediate follow-up via telephone or e-mail for three years to those clients whose windshield is repaired. We like to thank them for protecting the environment, we also want to remind them to check any other vehicles in their home for chips. This is a great way to get additional vehicles into the service department that your service department might not ordinarily see. Then every 90 days we remind the client to check and see if they have any additional chips in their windshield. We also provide daily management reports so that management can evaluate the performance of their staff. In addition to this report we provide feedback on Service Advisor performance through observation on the service drive before and after training so that corrective measures can be taken. 16 16 16

Getting Started Agree to the Dealer Covenant Schedule a Pre-Launch Training Date Schedule the Launch Authorize the agreement Now we want to discuss how you can get started with this program. The first thing that I will need is your authorization on this dealership agreement. The second thing that I will need is for you to agree to the Dealer Covenant which says that you will ensure that every client will receive a presentation 100% of the time on your service drive. Then we will need to schedule a pre-launch training meeting for the advisors and the management team and finally schedule we will schedule your actual launch. 17 17 17