1. Mario Astengo Senior Vice President Medium & Heavy Commercial Vehicles
3rd IRU Euro-Asian Road Transport Conference
Best Technologies available to serve the Asian Road Transport Market
Beijing, September 27, 2005

2. Iveco is one of the world’s largest manufacturers in the transport sector. The group operates through the following brands: Iveco, Iveco Motors, Iveco Magirus, Astra, Seddon Atkinson and Irisbus.
The company designs, builds and markets: a comprehensive range of light, medium and heavy commercial vehicles - on and off highway
engines for vehicle and industrial applications
passenger transport vehicles
special vehicles
Iveco also complements its product range with an array of after-sales, financial and used vehicles services. Iveco has a global approach: plants number 49 and research and development centres 15, in 19 countries on the five continents.
Iveco operates in over 100 through joint ventures, licensees and participating investments countries.

3. Iveco Global Profitable Growth
Leading Technology & Reliable Performance
Quality Excellence of Products and Services
Strengthen global market presence, principally Heavy Duty
Iveco Motors as a world top diesel engine manufacturer
Enhance Dealership and Market Image
Leading technology and reliable performance of our products by quality excellence both for products and services.
Strengthening our global market presence, especially in Asia Pacific and South America.
Regarding engines, we are already one of the major players in the world. The new regulations will be more and more challenging and this will help us to keep this growing leading position by exploiting our technological excellence.
Very important for us will be to keep enhancing our dealership and our market image.

4. Correlation GDP/Transport in Regional Areas7%
CHINA &
INDIA
BRAZIL 5%
AVG GDP GROWTH RATE
USA EU 2%
The reason why we are strongly investing in the Asian market is clear and it is shown in the slide.
If we compare the correlation between GDP growth rate and growth rate of transport in mature and emerging countries, we get two pictures entirely different from each other.
As shown in the slide, EU and US have a correlation factor close to 1, that means that for each point in GDP growth we have 1 point in transport growth.
Conversely, in countries like China, India or Brazil transport is growing at a faster pace than GDP.
In summary, the logistics business is expected to grow significantly in the coming years at the global level, and the Asian road transport market will be on top of the list worldwide as far as expansion pace and volumes (in absolute value). 2% 6%
10%
14%
AVG GROWTH RATE OF TRANSPORT (TKM)
Estimate CSST, Universitè de Paris

5. Industry Competitiveness and Logistics
Tipically, industries struggle their way up to cost-effectiveness through improving:
MANUFACTURING PROCESSES
Phase 1
“HARDWARE SQUEEZING” (COST PER KILOMETER)
DISTRIBUTION SYSTEMS
Phase 2
In the past decades, the actions aimed at improving cost-effectiveness in the manufacturing industries affected just that segment of the value chain related to manufacturing processes
Further on, the battle came out to distribution systems: emphasis on cost-bashing has led to an optimization of distribution related operation, which meant minimizing the costs per kilometer, basically through improving fuel consumption, enhancing driver’s productivity, and reducing hardware related costs.
Today, cost-effectiveness is ultimately sought in optimization of vehicle use, for instance through communication technologies, with a view to maximize the time the vehicle is in use and minimize the duration of stops.
OPTIMISE SUPPLY CHAIN
(MAXIMISE VEHICLE USE)

6. Total Cost of Ownership (Europe)
STRONG COMPETITION/
LOW PROFITS
VARIABLE COSTS
- FUEL
- TYRES
- ROAD/FUEL TAXES
PROFIT
PURCHASE PRICE
- DEPRECIATION
- INTEREST
COST
REDUCTION
IMPROVED
SERVICE LEVEL
REVENUES
TOTAL COST OF OWNERSHIP
Presently in Europe the profit for logistic operators is quite low.
In this toughly competitive scenario, achieving costs reduction through an appropriate product together with an improved level of services is crucial to remain in business.
The slide shows the components of the Total Cost of Ownership. Proportions refer to the EU logistics market.
FIXED COSTS
- SALARY
- INSURANCE
- VEHICLE TAXES
AFTER SALES
- SERVICING
- PARTS

7. Reducing TCO: the Iveco approach
Iveco addresses the logistics industry needs through:
Engine technology
Leader in fuel consumption
Maximum durability and low maintenance costs
Remote diagnosis/maintenance
Leading technology for environmental care
Euro 4 and Euro 5 technologies available today
Emissions level ahead of timing requirements
Looking into alternative fuels for sustainable mobility
Iveco is aware of the factors currently affecting competitiveness of the logistics industry
Gearbox technology
Transmission not affected by driver’s skills
Efficient driving

8. Trends in Logistics – The Asian markets
Will Asian markets follow the “western” path?
Probably not: a strong catch-up effect is driving them directly to state of the art solutions
Asia relies on a 60-year logistics experience to couple technologies with infrastructure
BUT
It is highly unlikely that the Asian markets will develop through the same steps the Western market did over the last 60 years: they will catch-up the 21st century’s opportunities AND challenges
China is rapidly equipping itself with state-of-the-art infrastructure AND China can put in good use the 60-year experience and know-how developed in the West in order to couple the best way technologies and infrastructure
However, an increasing pressure on costs will soon cause Asian markets to react by squeezing costs directly at the level of distribution system, that is jumping to state of the art solutions, hunting for cost-effectiveness.
Asian markets need to face the 21st century challenges, too.

9. Reducing TCO: Iveco Product Features
Iveco is technology leader in:
Fuel consumption
Reliable performance
Pay-back period
Customer service

10. Reducing TCO: Iveco Customer Services
Better
Efficient
Development
Evolution
Customer
Focused
Tools
Comunication
of skills
of methods
Systems
Organization
Profit
Market
CUSTOMER
Service
Process
CUSTOMER LOYALTY
WIRELESS WORKSHOP
The customer global service is a fundamental area for Iveco, since customer loyalty is one of our main objectives. Not only we have workshops, technologies, productivity sites, but in strategic areas around world you can find 24h per day, 7days per week, 365 days per year service available.
We are creating network partnerships with our dealers, introducing the wireless workshop and using diagnostic technology to improve productivity.
In addition to the hardware support services we have, we are increasingly investing in software processes to ensure that our vehicles are fully compatible with the customer’s choice of Telematic solutions.
NETWORK PARTNERSHIP
TECHNOLOGY & PRODUCTIVITY

11. Iveco: We look ahead Customer Satisfaction Product Technology
Quality Excellence
Lean Enterprise
Safety & Environment
Global Profitable Growth
Shareholder Satisfaction
Our primary objective is to satisfy our customers by the supply of leading product technologies, being excellent in terms of quality and proactive in our contributions to the improvement of total cost of ownership, in view of the 21st century challenges.
We want to achieve these goals by a lean enterprise organization based on environment-friendly industrial processes.
And, of course, we have the target to achieve a global profitable growth which will guarantee our future and the satisfaction of our employees and of our shareholder.

12. Mario Astengo Senior Vice President Medium & Heavy Commercial Vehicles
3rd IRU Euro-Asian Road Transport Conference
Best Technologies available to serve the Asian Road Transport Market
Beijing, September 27, 2005