1. AASA Technology Council IT Spend and Trends Survey Results 2013 This presentation is the property of the Automotive Aftermarket Suppliers Association (AASA) and subject to the protection of copyright, trademark and other intellectual property laws. No portion of this presentation may be reproduced or distributed (including by email) without the prior written consent of AASA.

2. 2013 ATC IT Spend & Trends 2 Contents Executive Summary3 Benchmarking: Spend and Priorities7 IT Role and Relationships25 Aftermarket-Specific Technologies/Standards 36 Cataloging43 Emerging Technologies49 Appendix Answers to selected questions Demographics Methodology and Contact Information 52 54 59

3. 2013 ATC IT Spend & Trends 3 Executive Summary Key Findings

4. 2013 ATC IT Spend & Trends 4 Category Key FindingsPage IT Spend and Forecast IT budgets increased in 2013 at a slightly faster rate than in 2012 9 An overwhelming majority (97%) indicated that demand for IT at their companies was rising 11 IT Hiring Majority of respondents (77%) indicated that their companies are hiring for openings or creating jobs 14 Most Common Projects Most common 2013 projects were network infrastructure, ERP, and tablets & mobile devices 17 Most Important Projects The most important project – by far – is “Deploy or upgrade ERP or CRM”. 42% of respondents indicated this was their number one priority for 2013. 21

5. 2013 ATC IT Spend & Trends 5 Category Key FindingsPage Future Looking Respondents indicated that IT budgets would continue to increase in 2014, but growth would slow. 24 Top priorities for 2014 spending increases will be ERP and use of tablets and mobile devices. 25 Role of IT in Company Other industries’ IT departments are more likely to be playing a “leading” or “strategic” role than aftermarket IT 29 Aftermarket- Specific Technologies /Standards Average percentage of sales handled by EDI and IPO expected to increase 30% and 150%, respectively, by 2016. 38-39 Average percent of data delivered in ACES will be flat at 41% by 2016, though the amount of data delivered in PIES will double to 50% 41-42

6. 2013 ATC IT Spend & Trends 6 Category Key FindingsPage Cataloging The biggest issue the industry faces in supporting e-tailing is providing accurate catalog data. 45 Majority (65%) expect an increase in catalog data management budget in the next 12 months. 47 “Bottlenecks by third part data or cataloging services” and “Loss of control of data IP” are the most pressing issues in regards to communicating with channel partners. 49 Emerging technologies “Big data” and “e-commerce” are expected to have a slight positive impact on the aftermarket in the next ten years. 51

7. 2013 ATC IT Spend & Trends 7 Benchmarking: Spend and Priorities IT Spend and Forecast IT Hiring Most Common Projects Most Important Projects Future Looking

8. 2013 ATC IT Spend & Trends 8 IT budgets increased in 2013 at a slightly faster rate than 2012 Majority (55%) indicated an increase in budget for 2013, while the average increase for aftermarket IT was 3.8%, 0.2 percentage points greater than in 2012 YearAverage 2012+3.6% 2013+3.8%

9. 2013 ATC IT Spend & Trends 9 IT budget as percent of revenue was below 2% for majority of respondents However, the average IT budget as a percent of revenue remained steady year-over- year YearAverage 20121.6% 20131.5%

10. 2013 ATC IT Spend & Trends 10 In alignment with IT budget growth, an overwhelming majority (97%) indicated that demand for IT at their companies was rising No one indicated a decline in demand for IT

11. 2013 ATC IT Spend & Trends 11 Demand for IT is “rising” 37% more for aftermarket companies than in other industries

12. 2013 ATC IT Spend & Trends 12 Benchmarking: Spend and Priorities IT Spend and Forecast IT Hiring Most Common Projects Most Important Projects Future Looking

13. 2013 ATC IT Spend & Trends 13 Hiring: majority of respondents (77%) indicated that their companies are hiring for openings or creating jobs

14. 2013 ATC IT Spend & Trends 14 Aftermarket is “expanding” and “filling openings” in IT 14 percentage points more than other industries Expanding & Filling Openings Frozen & Cutting Aftermarket 77%24% All Industries 63%37% Aftermarket vs. All Industries 14 percentage points (+22%) Other industries are expanding by 10 percentage points more than aftermarket companies

15. 2013 ATC IT Spend & Trends 15 Benchmarking: Spend and Priorities IT Spend and Forecast IT Hiring Most Common Projects Most Important Projects Future Looking

16. 2013 ATC IT Spend & Trends 16 Most common 2013 projects were network infrastructure, ERP, and tablets & mobile devices Increasing server virtualization and “big data” are also high priority Note: Should not sum to 100 due to allowing respondents to select multiple categories ERP: Enterprise Resource Planning; CRM: Customer Relationship Management; Big Data: a collection of data sets so large and complex that it becomes difficult to process using traditional data processing applications.

17. 2013 ATC IT Spend & Trends 17 “Deploy or upgrade ERP or CRM” continues to remain a top project for aftermarket IT Upgrade network infrastructure jumped from fifth to number one; big data dropped out of the top three most common projects Note: Options were changed slightly from 2012 to 2013 Top Three Projects for 2012 1.Deploy or upgrade ERP system 2.Enhance “big data”/BI/decision- support system 3.Upgrade storage infrastructure Top Three Projects for 2013 1.Upgrade our network infrastructure 2.Deploy or upgrade ERP or CRM 3.Increase use of tablets, mobile devices, etc.

18. 2013 ATC IT Spend & Trends 18 “Upgrade our network infrastructure” was the most common initiative for both aftermarket IT and IT in other industries Information security and storage infrastructure were more often pursued in other industries than they were in aftermarket IT departments Source: Information Week Outlook 2013 Top Three Projects for 2013 for Aftermarket IT 1.Upgrade our storage infrastructure 2.Deploy or upgrade ERP or CRM 3.Increase use of tablets, mobile devices, etc. Top Three Projects for 2013 for Other Industries 1.Upgrade our network infrastructure 2.Improve information security 3.Upgrade our storage infrastructure

19. 2013 ATC IT Spend & Trends 19 Benchmarking: Spend and Priorities IT Spend and Forecast IT Hiring Most Common Projects Most Important Projects Future Looking

20. 2013 ATC IT Spend & Trends 20 However, the most important project – by far – is “Deploy or upgrade ERP or CRM” For 42% of respondents ERP is the top initiative for their company

21. 2013 ATC IT Spend & Trends 21 Top initiative for aftermarket IT remained the same from 2012 “Big data” also remained a top issue as well (though top priority for only 19% in 2013 versus 25% in 2012) Note: Options were changed slightly from 2012 to 2013 2012: Most Important Projects 1.Deploy or upgrade ERP system 2.Build/enhance big data/BI decision- support system 3.Upgrade storage infrastructure 2013: Most Important Projects 1.Deploy or upgrade ERP or CRM 2.Build or enhance a big data system / improve our data 3.Upgrade our network infrastructure

22. 2013 ATC IT Spend & Trends 22 Benchmarking: Spend and Priorities IT Spend and Forecast IT Hiring Most Common Projects Most Important Projects Future Looking

23. 2013 ATC IT Spend & Trends 23 Respondents indicated that IT budgets would continue to increase in 2014, but slow Majority (64%) indicated an expected increase in IT budget for 2014, while the average increase for aftermarket IT is expected to be 2.8% Although the average increase is positive, it is slightly lower than the growth that was indicated for 2013 (+3.8%). Is investment in IT growth slowing?

24. 2013 ATC IT Spend & Trends 24 Top priorities for 2014 spending increases: ERP and use of tablets and mobile devices More than two thirds of respondents indicated that spending would increase for these initiatives in the coming year Note: Should not sum to 100 due to each category asked a separate question

25. 2013 ATC IT Spend & Trends 25 IT Role and Relationships Role of IT in Company Relationships with Other Parts of Company What IT Spends Its Time On

26. 2013 ATC IT Spend & Trends 26 Aftermarket IT split on company approach to IT 43% of respondents indicated that their company’s approach was tactical (looped in to implement plans) where as 40% indicated that their approach was strategic (considered overall strategy for growth) Divide between whether IT is there for execution or to provide insight for growth of the company

27. 2013 ATC IT Spend & Trends 27 Other industries’ IT departments are likely to be “leading” or “strategic” more than aftermarket IT Majority of aftermarket IT (56%) is defined as “Tactical” or “Minimalist” Leading & Strategic Tactical & Minimalist Constrictive & Nonexistent Aftermarket 43%56%0% All Industries 60%37%3% Aftermarket vs. All Industries -17 per. pts. +19 per. pts. -3 per. pts.

28. 2013 ATC IT Spend & Trends 28 IT Role and Relationships Role of IT in Company Relationships with Other Parts of Company What IT Spends Its Time On

29. 2013 ATC IT Spend & Trends 29 Aftermarket IT has the best relationship with “Customer Service” and “Finance” among other company functions Relationship with “Marketing” was fairly low at 3.6

30. 2013 ATC IT Spend & Trends 30 On average, aftermarket IT interacts with customers on occasion, but amount of interaction varies widely One fifth of respondents indicated they interact with customers on a daily basis

31. 2013 ATC IT Spend & Trends 31 IT Role and Relationships Role of IT in Company Relationships with Other Parts of Company What IT Spends Its Time On

32. 2013 ATC IT Spend & Trends 32 Respondents indicated that most of their time (44%) is spent on “Internal centric projects” External projects: IT projects that are directed toward the end consumer IT centric projects: IT projects that are directed toward bettering internal IT Internal centric projects: IT projects that are directed at bettering internal functions

33. 2013 ATC IT Spend & Trends 33 For other industries, IT spends the majority of its time (66%) on IT centric projects, whereas aftermarket IT only spends one-third of its time Aftermarket IT spends 27% more time on “External projects” than Other industries

34. 2013 ATC IT Spend & Trends 34 On average, respondents spend 30% of their time on ERP software This is three times as much time as spent on any other business application

35. 2013 ATC IT Spend & Trends 35 Aftermarket-Specific Technologies/Standards

36. 2013 ATC IT Spend & Trends 36 Average percentage of sales handled by EDI projected to increase 30% by 2016 Average percentage of sales handled by EDI increased 13% from 2012 as EDI continues to remain an integral part of aftermarket IT +13% +30% (+9.1% per year)

37. 2013 ATC IT Spend & Trends 37 Average percentage of sales handled by IPO to increase 150% by 2016 IPO expected to account for one-fifth of sales transactions

38. 2013 ATC IT Spend & Trends 38 Percentage of customers utilizing virtual inventory expected to increase by 130% by 2016 However, the percent of customers utilizing it was flat year-over-year +130% (+36.2% per year)

39. 2013 ATC IT Spend & Trends 39 Average percent of data delivered to customers in ACES format expected to remain steady through 2016 Respondents indicated only a 1 percentage point increase from now until 2016

40. 2013 ATC IT Spend & Trends 40 Average percent of data delivered to customers in PIES format to nearly double by 2016 Respondents indicated that in 2015 half of all data delivered to customers will be in PIES

41. 2013 ATC IT Spend & Trends 41 For 32% of respondents, mapping North American vehicle data to a global table is a critical issue However, for the majority of respondents (68%) this is not a burning issue 32% Note: Rated on a scale of 1 to 7 where 1 is "Not critical" and 7 is "Very critical"

42. 2013 ATC IT Spend & Trends 42 Cataloging

43. 2013 ATC IT Spend & Trends 43 The biggest issue the industry faces in supporting e-tailing is providing accurate catalog data If successful, accurate data throughout multiple channels could lead to increased revenue and profit “Biggest challenge is consolidation and cleaning of data from multiple systems.” “From an industry viewpoint, manufacturers/suppliers need to understand the importance of providing accurate data and how that translates into increased revenue and profits.” What issues does your company face in providing accurate catalog and application data to e-tailing sites? What does the industry need to do to address the issues? “Harmonize data across various applications.” For full results, see Appendix

44. 2013 ATC IT Spend & Trends 44 72% have 3 or more FTEs working in product & catalog data management Note: 70% had 3 or greater FTE in product and catalog data management in 2012

45. 2013 ATC IT Spend & Trends 45 Majority (65%) expect an increase in catalog data management budget in the next 12 months Budget expectations increased 1.2 percentage points from last year, proving catalog data management is increasingly integral to aftermarket success Note: None cited a decrease in catalog budget YearAverage 2012+4.4% 2013+5.6%

46. 2013 ATC IT Spend & Trends 46 Majority (65%) of respondents indicated that catalog and data management function resided with the marketing department Only 4% of respondents indicated that cataloging had its own department Note: Respondents were not given choices; they were able to write in their own responses

47. 2013 ATC IT Spend & Trends 47 “Bottlenecks by third party data or cataloging services” and “Loss of control of data IP” are most pressing issues in regards to communicating with channel partners

48. 2013 ATC IT Spend & Trends 48 Emerging Technologies

49. 2013 ATC IT Spend & Trends 49 “Big data” and “e-commerce” are expected to have a slight positive impact on the aftermarket in the next ten years Most emerging technologies were rated as having no impact

50. 2013 ATC IT Spend & Trends 50 Respondents indicated that in their company “IT” and “Marketing” are focused on these emerging technologies One-fifth of respondents indicated that “No one” is addressing these emerging technologies Note: Respondents were able to write in answers and allowed multiple responses and therefore does not sum to 100

51. 2013 ATC IT Spend & Trends 51 Appendix I Full responses to selected questions

52. 2013 ATC IT Spend & Trends 52 What issues does your company face in providing accurate catalog and application data to e-tailing sites? What does the industry need to do to address the issues? “A data assessment standard would be helpful.” “Biggest challenge is consolidation and cleaning of data from multiple systems.” “Continue to build strong cross reference information.” “Data spread across multiple systems.” “[Our company] supplies to data to the customer buying the products. It is cumbersome to get updated information past the "middle-man" to the e-tailers.” “Direct interaction with e-tailers. They buy through WD's.” “From a Company viewpoint, no real issues- accurate data is our standard. From an Industry viewpoint, manufactures/supplier need to understand the importance of providing accurate data and how that translates into increased revenue and profits. How to do that, is the responsibility of all Industry participants, but must be driven from the top down- Executive Level support of manager level processes and budgets.” “Harmonize data across various applications.” “Keeping up with enhanced data.” “Lack of resource.” “Not enough data to make a statement at this time.” “Pricing controls” “Proprietary formats.” “Staffing, overcoming our bid data issues like hosting and BI” “Users actually doing correct data entry. There's not much the industry can do to fix this.”

53. 2013 ATC IT Spend & Trends 53 Appendix II Demographics

54. 2013 ATC IT Spend & Trends 54 Job Title

55. 2013 ATC IT Spend & Trends 55 Company Size

56. 2013 ATC IT Spend & Trends 56 Product Categories / Business Segments

57. 2013 ATC IT Spend & Trends 57 Customer Base Composition

58. 2013 ATC IT Spend & Trends 58 Appendix III Methodology

59. 2013 ATC IT Spend & Trends 59 AASA Technology Council IT Spend and Trends methodology notes The AASA Technology Council IT Spend and Trends survey presents the latest information on aftermarket supplier sentiments and market trends. The purpose of the survey is to provide participants with information regarding spending benchmarks and IT trends in the aftermarket. Participation is only available to AASA supplier members. There were 31 survey responses. Comments are edited only for spelling and diction and may contain grammatical errors due to their verbatim nature. All 2012 numbers were obtained through the 2012 ATC IT Spend & Trends Survey Responses to this survey are confidential. Therefore, only aggregated results will be reported. Individual responses will not be released and will be destroyed after results are compiled.

60. 2013 ATC IT Spend & Trends 60 AASA Technology Council Chris Gardner Vice President, Programs and Member Services Office: +1 919.406.8830 | Mobile: +1 919.523.0013 Email: cgardner@aasa.mema.org AASA Industry Analysis AASA | Automotive Aftermarket Suppliers Association 10 Laboratory Drive | Research Triangle Park | NC | 27709 | USA www.aftermarketsuppliers.org Contact Information Paul McCarthy Vice President Industry Analysis, Planning and Member Services Office: +1 919.406.8812 | Mobile: +1 248.914.2567 Email: pmmcarthy@aasa.mema.org Bailey Overman Analyst/Coordinator, Programs, Industry Analysis, and Member Services Office: +1 919.406.8823 Email: bwatson@aasa.mema.org