Tom Kotenko General Manager Snap-on Business Solutions

Independent Repair Shops Fleet Maintenance Dealerships # Shops~13,000~50,000~3,000 # Bays/Shop Average Mechanic Age = 48 to 55

Dealerships & large fleets continue to gain market share--> This trend will continue with increasing vertical integration in the OE market and with the OEMs effort to increase proprietary technology integration Owner and fleet operators at one time dominated truck service industry, however, outsourced service is forecast to increase: Increasing complexity of trucks: Increased use of electronic features increases complexity of truck repair. This will drive truck owners towards Large Fleet and OE service versus conducting in-house service. Consistent increase in need for tools, equipment and labor costs will raise maintenance costs. The number of smaller (1 to 5) truck fleets is forecast to increase at a faster rate than the larger (25 or more) fleets. These smaller fleets do not have on-site repair and maintenance facilities. Outsourced repair forecast

Truck manufacturers will transition from a brand image centered on the vehicle to one that addresses the larger transportation solution - Navigation / Routing - Full Service Contracts Today vehicles are sold with non-integrated add-ons By 2020, the value will be in integrated solutions The differentiation wont be on products, but on services – European Truck OEM Integrated Telematics Bundled Services Comprehensive Serviceability Advanced Vehicles © 2009 IBM Corporation

Truck manufacturers must aggressively expand their thinking about partnerships beyond traditional industry boundaries…. The dilemma for truck manufacturers – Brand of the vehicle is being commoditized, truck manufacturers will have to evolve their definition of brand and develop solutions – Telematics is the important investment for the future – Hybrid truck development is critical for the future, particularly given increased urbanization globally The winners by 2020 will have significantly transformed their workforce

EOBR – Electronic On-Board Recorders become standard on all vehicles Idling regulations Canada adopts Top Speed limit of 65MPH

Secluded Shops of Dirt and Darkness Shops that time forgot. Isolated and often ignored.

Managing Technology – The Fear of the Future Connecting the Shops – Information Flow

Managing Technology– Fear of the Future Difficult to obtain the CORRECT Tools Electronics and computerization are AFFECTING the future. Computers as tools.

Diagnostic Tools – PC based vs Scan tools 13 and growing different applications – 13 different User Interfaces – Engines, Transmissions, Brakes…etc. Different Scan tool products offering various functionality – Service Information – OEMs supply to large fleet customers – each having a different approach… – Aftermarket Service Information providers…

Large Fleets and Dealers – – Internet Access Many fleet shops remain without…including the nations largest. Parts accessibility – Inventory Cross-referencing – Accessible low-use aftermarket parts – working with local dealer to obtain correct OEM part.

The Federal Government The Right to Repair – For Commercial Vehicle Availability of manufacturer-specific scan tools. Manufacturers shall make available for sale their own manufacturer-specific diagnostic tools at a fair and reasonable cost. These tools shall also be made available in a timely fashion either through the manufacturer Web site or through a manufacturer-designated intermediary. Manufacturers who develop different versions of one or more of their diagnostic tools that are used in whole or in part for emission-related diagnosis and repair shall insure that all emission-related diagnosis and repair information is available for sale to the aftermarket at a fair and reasonable cost.

OEM product has been made available – Differentiated version of OEM product is available to the aftermarket Scan tool products Service Information Parts accessibility – OEM Cross-reference products

Coping and adapting to significant change – Smaller shops becoming larger by networking through an acquisition or working with buying groups Fleet Pride – FleetPride complete acquisition of Midway Truck Parts (5/3/11) HD America VIPAR Benefits: Increased purchasing power Access to some OEM information

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