Industry Analysis An analysis of the of the industries best operators. September 2008 quarter V 6 months to June 2008

©2008 Deloitte. All rights reserved You can keep afloat in this rough market! Analysis performed We have grouped a selection brands together to keep the study simple yet relevant –Group 1 volume brands –Group 2 other non luxury –Group 3 prestige brands –Group 4 luxury brands Group averages and top 30% performers at the selling gross level for each department have been stated against each other. These performances have been compared for the 6 month ended June 2008 to the quarter ended September 2008.

©2008 Deloitte. All rights reserved What does this analysis tell us Issues: Pressure on the front end margins due to drop in volumes and inventory levels. Selling gross contribution under pressure in new and used vehicles. Top 30% dealers Have managed to keep within benchmark in most Drive best practices and are prepared to change to match market conditions. Take advantage of opportunities in used cars Continue to drive performance in the back end

©2008 Deloitte. All rights reserved % Net Profit % Sales Top 30% of Dealers V Average Group1:Toyota, Holden, Ford Group2:Mitsubishi,Nissan, Hyundai Group3:Mazda,Honda,Subaru,Peugeot,Volkswagen Group4:MercedesBenz,BMW,Audi,Jaguar

©2008 Deloitte. All rights reserved Net Profit % Sales Issues: The average dealer has experienced a significant drop in Net Profit as a % of sales. The Top 30% of dealers are still achieving results at or near benchmark levels. Top 30% dealers Engage all managers and staff – this will develop buy in and reduce misunderstanding around required performance and break even levels. Ensure department managers are aware of their breakeven point. Compare actual expenses to Benchmark as a percentage of gross whilst maintaining a focus on actual expense $.

©2008 Deloitte. All rights reserved % New Vehicle Selling Gross % Top 30% of Dealers V Avg Group1:Toyota, Holden, Ford Group2:Mitsubishi,Nissan, Hyundai Group3:Mazda,Honda,Subaru,Peugeot,Volkswagen Group4:MercedesBenz,BMW,Audi,Jaguar

©2008 Deloitte. All rights reserved New Vehicle Selling Gross % Issues: All dealers are experiencing pressure on New Vehicle selling Gross % due to the drop in volume and rising inventory levels. The majority of Top 30% dealers are still achieving results at or near benchmark levels on the back of excellent CRM strategies and maintaining gross profit $ per sales people at levels close to benchmark. Top 30% dealers Ensure stock levels are within benchmark limits for both dollars and units – based on projected not historic volumes. Ensure stock vehicles are only ordered with the approval of the DP. Focus heavily on driving prospect management.

©2008 Deloitte. All rights reserved % Used Vehicle Selling Gross % Top 30% of Dealers V Avg Group1:Toyota, Holden, Ford Group2:Mitsubishi,Nissan, Hyundai Group3:Mazda,Honda,Subaru,Peugeot,Volkswagen Group4:MercedesBenz,BMW,Audi,Jaguar

©2008 Deloitte. All rights reserved Used Vehicle Selling Gross % Issues: The Top 30% of used vehicle operators are still operating at benchmark levels. The current market conditions have seen the gap widen between benchmark and average dealer performance in used vehicles. Top 30% dealers Adopt a dynamic pricing policy to maximise their R.O.I. Ensure the utilisation of Stock Provisions Drive stock turn and have re-assessed their used car strategy for 2009.

©2008 Deloitte. All rights reserved % Service Selling Gross % Top 30% of Dealers V Avg Group1:Toyota, Holden, Ford Group2:Mitsubishi,Nissan, Hyundai Group3:Mazda,Honda,Subaru,Peugeot,Volkswagen Group4:MercedesBenz,BMW,Audi,Jaguar

©2008 Deloitte. All rights reserved Service Department Selling Gross % Issues: The current conditions highlight the stability of the dealerships service operations in providing consistent selling gross performance. Many benchmark dealers have actually improved their performance. Top 30% dealers Measure and reward individual technician performance. Have in place a consistent CRM process that drives customer retention. Have strategies in place that encourage the retention of 3 – 5 year old vehicles. Understand the financial impact of small improvements in service retention %.

©2008 Deloitte. All rights reserved % Parts Selling Gross % Top 30% of Dealers V Avg Group1:Toyota, Holden, Ford Group2:Mitsubishi,Nissan, Hyundai Group3:Mazda,Honda,Subaru,Peugeot,Volkswagen Group4:MercedesBenz,BMW,Audi,Jaguar

©2008 Deloitte. All rights reserved Parts Department Selling Gross % Issues: The current conditions highlight the stability of the dealerships parts operations in providing consistent selling gross performance. Top 30% dealers Ensure stock levels are within benchmark limits (maximum 45 days) Drive stock levels by movement code e.g. fast movement parts <14 days Monitor and drive R.O.I.

©2008 Deloitte. All rights reserved New Vehicle GP$ Salesperson Per Month Top 30% of Dealers Group1:Toyota, Holden, Ford Group2:Mitsubishi,Nissan, Hyundai Group3:Mazda,Honda,Subaru,Peugeot,Volkswagen Group4:MercedesBenz,BMW,Audi,Jaguar

©2008 Deloitte. All rights reserved Used GP Salesperson Per Month Top 30% of Dealers V Avg Group1:Toyota, Holden, Ford Group2:Mitsubishi,Nissan, Hyundai Group3:Mazda,Honda,Subaru,Peugeot,Volkswagen Group4:MercedesBenz,BMW,Audi,Jaguar

©2008 Deloitte. All rights reserved Gross Profit per Salesperson per Month Issues: Falling volumes are impacting on the productivity of sales staff The ability of salespeople to earn sufficient incomes under current department structures is an issue in some Dealerships and may become a bigger issue moving forward. Top 30% dealers Compare sales staff productivity levels to benchmark. Have commission schemes that been reviewed in light of changes in the market, they are exponential in nature.

©2008 Deloitte. All rights reserved