1. 1 AUTOMOTIVE CUSTOMER SHIFTS October 2011

2. 2 Many of the insights in this presentation are based on market research findings In particular SA Autobrand (n=5800) and SA Lifestyle (n=10 000) – surveys conducted by RMRS RMRS is a joint venture between Ramsay Media and Bateleur Brand Planning RAMSAY MEDIA RESEARCH SOLUTIONS

3. 3 For most South Africans times are tough … - 76% are buying fewer movable assets now than in the past - 79% are more cautious about spending - 63% claim the great recession has changed their buying behaviours - 54% claimed the great recession has changed their buying behaviours forever - 36% are worried about their debts - 41% are using credit only for emergencies - 50% feel less inclined to use credit THE TIMES THEY ARE A CHANGIN’

4. 4 In 2011 there are about 52 marques – and about 325 models available More fish chasing less bait A bird in the hand is worth two in the bush – customer retention is key “If you want to be loved, be lovable.” (Ovid) THE SALES BOOM IS OVER AND COMPETITION IS UP ?

5. 5 HOW TO BE LOVABLE QUALITY Honour their warranties Strong / built Good quality vehicles Reputable / trusted VALUE Good value for money Affordable spares Good resale value SUPPORT Many dealers Spares easily available Well established in SA UBUNTU Care about the environment Involved in the community MARKETING Good press coverage Good advertising RANGE Wide range of models SERVICE Excellent customer service STRIKING Attractive looking vehicles Stylish vehicles PRESENTATION Smart shrooms Excellent vehicle brochures Good website HI-TECH Modern cars Latest technology THRILLING Exciting cars Sporty vehicles MOTORSPORT Successful in motorsport

6. 6 HOW TO BE LOVABLE – DELIVER QUALITY, VALUE, SERVICE & SUPPORT QUALITY VALUE SUPPORT SERVICE HI-TECH THRILLING STRIKING MOTORSPORT RANGE UBUNTU MARKETING

7. 7 TREND: VEHICLES OWNERS ARE KEEPING THEM LONGER Audi40% older than 5 years BMW47% older than 5 years Mercedes-Benz52% older than 5 years Toyota47% older than 5 years Volkswagen55% older than 5 years Only 35% of Topend fantasise about getting a new car (versus the 44% that fantasise about winning the lottery!) Holding onto vehicles for longer has important implications for the demand for maintenance and repair services

8. 8 New car sales are lackluster, but people are keeping their vehicles longer and the result is… - In January 2005, there were 7 479 178 vehicles on the road (RTMC) - In July 2011, there were 10 048 664 vehicles on the road (eNatis) That’s an increase of 34% Roads can’t keep up, hence congestion Congestion leads to frustration, hence road rage and general lawlessness Road congestion means people spend more time in their vehicles TREND: THE VEHICLE POPULATION IS EXPLODING

9. 9 Across all marques, only 43% of vehicle owners say they would definitely buy the same marque again … -The marque with the highest ‘definitely would buy again’ score gets 58% -The marque with the lowest ‘definitely would buy again’ score gets 20% They are spoilt for choice Loyalty is driven by perceived quality, value and service & support TREND: DISLOYAL CUSTOMERS

10. 10 99% of new car buyers have internet access - 59% access the internet more than twice a day - 8% access the internet twice a day - 14% access the internet once a day 70% use the internet to get information 76% have purchased something on the internet TREND: BRAND INTERNET PRESENCE IS CRITICAL

11. 11 The price of fuel has rocketed… - In January 2001, 1l of 95 octane cost R3.62 in Gauteng - In September 2011, 1l of 95 octane cost R10.18 in Gauteng That’s an increase of 181% Although some enthusiasm has been dented by global economic recession, 82% of the Topend claim they would definitely/probably choose a green or sustainable product over one that isn’t Hybrid engines cover both bases TREND: BURNING FUEL IS HURTING

12. 12 TREND: MOTOR VEHICLE CONSUMERS DON’T BUY IN SILOS The bigger the choice, the greater the temptation to try new options

13. 13 “Quality in a service or a product is not what you put into it. It is what the client or customer gets out of it.” (Peter Drucker) “Price is what you pay. Value is what you get.” (Warren Buffett) “All people expect good service, but few are willing to give it.” (Robert Gately) (In Topend 86% claim they would favour a supplier who they believe would offer better service.) “It is not necessary to change. Survival is not mandatory.” (W. Edwards Deming) A FINAL WORD

14. 14 Thank you