1. OEM’s and The Aftermarket… A New Direction… Renewed Partnership Charlie Gorman ETI April 18, 2012 ToolTech 20121

2. Current Diagnostic Market Scan tool makers design and build tools for both dealers and the aftermarket, but not the same tools. In many cases they use different business units. OEM tools are marketed and distributed through dealer sales and distribution channels To all customer types Aftermarket tools are marketed and distributed through aftermarket channels To all customer types April 18, 2012 ToolTech 20122

3. Current diagnostic market April 18, 2012 ToolTech 20123

4. Problems OEM Side It is expensive to develop diagnostic tools for a small installed base (dealers) Automakers are required to sell tools to the aftermarket but in many cases do not design or plan for it. For security reasons some tools are de-contented thus making them incapable of completing some repairs Distribution to aftermarket is provided through the same channel dealers use. This channel doesn’t always lend itself to the aftermarket delivery, purchase and support needs. OEM tools sometimes become obsolete quickly and new tools do not always have backward compatibility. The aftermarket must work on models much older than what the new car dealership sees April 18, 2012 ToolTech 20124

5. Problems Aftermarket Side It is a monumental task to put full OEM capability for every OEM into an aftermarket scan tool and keep it up to date. Even if it were possible, it is cost prohibitive so completeness vs. market demand decisions are always made. Data stream information is lacking from some OEMs and the quality can be questionable. At least some reverse engineering is required for every brand. Verification testing is required, expensive and time consuming. April 18, 2012 ToolTech 20125

6. Concept ETI and its members have always looked at OEMs in two ways during ToolTech As a customer – everyone would like to have their tools become required or recommended for dealership use. As an information source. Kind of an extension of Tech Week. This ToolTech we will also be looking at OEMs as potential suppliers Using aftermarket distribution channels April 18, 2012 ToolTech 20126

7. Future Diagnostic Market April 18, 2012 ToolTech 20127

8. Concept cont. The “After Chart” is not meant to indicate a single distribution channel, but rather the same products flowing through OEM as well as aftermarket channels. Causes OEMs to design for a broader market. Support such as training inventory, repair, etc. handled by third party OEM makes sure third party is up to speed. OEM spreads development cost over more units (systems). Can become profit center. April 18, 2012 ToolTech 20128

9. Current Diagnostic Tool Design – OEM (there are exceptions) OEM puts out an RFP for a dealership tool Customer base assumed to be just dealers There is no design criteria regarding aftermarket use. Tool Company is chosen & then works with OEM to design diagnostics hardware and software Tool is tested in lab and in dealerships using specific dealership information and other proprietary OEM dealership tools. Tool is sold to aftermarket as is, maybe de- contented, hope for best. April 18, 2012 ToolTech 20129

10. New Diagnostic Tool Design OEM puts out an RFP for a repair industry tool Customer base assumed to be anyone who repairs the years & models the tool covers. Design criteria includes multiple internet platforms, operating systems and environments. Tool Company is chosen and works with OEM to design diagnostics hardware and software that works in all environments where it will be sold Tool is tested in lab, dealerships, and aftermarket shops where it can be determined what the minimum of support information and other tools is required. April 18, 2012 ToolTech 201210

11. Beyond Scan Tools Make Special Tool Lists available to independent shops along with opportunity to purchase. Providing Minimum OEM Tool Specifications to Aftermarket Shops (what does an independent shop have to purchase in order to be as well equipped as a new car dealer?) Publish a list of training programs you feel technicians need to take and make them available to third party training companies through licensing programs and train the trainer programs. April 18, 2012 ToolTech 201211

12. What about Aftermarket Scan Tools? In the beginning I said that the repair market seems to think that there is a need for both OEM and Aftermarket tools. Many AM tools, although not complete, are very capable at lower cost Across multiple brands With the same look and feel. Not all shops want to do every diagnostic repair no matter how difficult. Aftermarket scan tools are supported longer than OEM tools The market for these tools will remain strong and should be supported by OEMs for the same reasons they make their tools available. To make sure the motorist has good repair experience throughout a vehicles life. April 18, 2012 ToolTech 201212

13. The Rest of the Conference Brian Herron – Specific OEM tool Trends Bob Augustine & Donny Seyfer – OEM tool experiences – Good and Bad Scott Bolt – diagnostic tool development challenges Greg Potter – Importance of the long awaited new version of the SAE J2534 standard Robert Vogt – Diagnostics via Telematics Collision Repair Panel on how carmakers can help make aftermarket collision repair shops more successful April 18, 2012 ToolTech 201213