1. PREPARED BY: VAUGHANS CONSULTING GROUP INC. JULY 30,2013 Dynamic Motors Is this business venture economically viable?

2. Purpose To determine whether the Canadian economic and sector factors are conducive to launch a luxury automotive business venture To recommend or disapprove of a market entry

3. Economic Landscape Economic factors are trending in positive territory  Positive Highlights: Real Disposable Income, Consumer Spending and GDP  Negative Highlights: Exchange Rate, Consumer Price Index and Overnight Target Rate %

4. Automotive Vehicle Segmentation Compact Luxury Utility – Honda: CRV, Land Rover: Freelander, Mazda: Tribute Intermediate Luxury Utility – Toyota Highlander, Jeep: Grand Cherokee Large Luxury Utility – Land Rover: Range, Discovery, Lexus: LX470, Mercedes Benz: G/M Class, BMW X5, Dodge Durango Luxury High – Audi: A6, A8, BMW: 5/7 Series, Infiniti: Q45, Mercedes Benz: C/E/S Class Luxury – BMW: 3 Series, Audi: A4, Infiniti G20, Lexus IS300 Luxury Sport – Audi: TT, BMW: Z8, Mercedes Benz: Roadsters, Porsche: All Models Sport – Acura: Integra, Chevrolet: Camaro, Ford: Mustang

5. New Luxury Vehicles by Segment Luxury vehicle sales continue to rebound Total % of luxury vehicle sales in comparison to non luxury vehicle sales has increased by 27.5% since 2007

6. New Luxury Vehicle Sales - Canada

7. Compact luxury utility vehicles lead sales volume percentage growth

8. Aggregate New Luxury Vehicle Sales - Canada

9. Used Vehicles - Automotive Consumer Market Increasing size of the used car market  2003 – 2012 vehicle sales grew from 58.4 to 63.2 of the total vehicle market (8.2% increase)  Contributing trends: vehicle quality, availability of *credit & financing options and the growing premium and luxury marketplace Record residual values of vehicles  36 month passenger car residuals measured in 2012 53.6% Further data can be obtained on sales volume however, not by vehicle segment

10. Canadian Automotive Price Trends

12. Vehicle Maintenance & Repair – Canada 2012 Average vehicle operating expenditure reached $744 a decrease of 7% ($796) from 2011  30% of maintenance and repair was performed by operator – 2012 an increase of 2% from 2011  In 2012, owners of vehicles aged 1-3 years reported the lowest average cost of maintenance and repair; location service preference (48.7%) new car dealers  Most costly repair for Canadians were brake replacements averaging $252 in 2012  Vehicle brand and segmentation influence the average cost of maintenance and repair  Independent repair shops market share (36.7%) vs. New car dealers 34.5% in 2012 Source: National Survey 4500 vehicle owners – DesRosiers Light Vehicle Study

13. Recommendation Dynamic Motors market entry is recommended based on the following factors:  Aforementioned positive economic variables  Used vehicle market size and growth trend  Growing luxury segment for new and used vehicles in Canada  Specialized business venture on the luxury and sport vehicle segment  Residual value growth trend  Consumer preferences indicate an attraction to luxury used and new vehicles  Consumer financing flexibility

14. Next Steps Business Model Development  How will Dynamic Motors create value for future consumers?  Customer Segments, Value Proposition, Channels, Customer Relationships, Revenue Streams, Key Resources, Key Activities, Key Partnerships and Cost Structure – Required Consulting Session Business Plan Development  Given the market assessment and the business model functions noted above, how will this be executed ?  Conduct market research to define and validate business model and to formulate business strategy  Outline the marketing strategy based on market research findings  Develop proforma statements including expenses and revenues for the first 3 years based on the target market.

15. Entrepreneurship Tips 1. Complete a market assessment  Who will you sell to? Talk to people, do a survey. 2. Start slow, grow slowly  Don’t go out buying the most expensive items  Have a part-time gig to decrease risk 3. Plan and think ahead 4. Invest in your staff  Invest in your partners 5. Treat clients well  Ensure that the value of money a client pays is delivered 6. Be passionate, but profit focused

16. Resources of Interest Canadian Finance & Leasing Association  http://www.cfla-acfl.ca/ http://www.cfla-acfl.ca/  Governs the financing and leasing vehicle landscape in Canada  Provides business owners with educational resources in the area of asset-based financing, equipment and vehicle leasing business in Canada  National business network Canadian Black Book  http://www.canadianblackbook.com http://www.canadianblackbook.com  Source for vehicle information used by the industry  Advertising and future partners  Specialized industry reports available currently widely used in the industry