1. Phil Dunne Vice President, A.T. Kearney

2. May 4 th, 2005 Sustaining Growth in the New Europe Automotive News Europe Congress

3. Key questions What is the future of car production in western Europe? Are Asian car makers changing the rules of the game? How can Western car makers and suppliers respond?

4. Production shifting from traditional to emerging countries World Light Vehicle Production — Percentage of Total 1995 to 2004 Volume GAGR1.8%0.6%0.5%5.6%11.8%16.8%8.0% Source: National sources, J.D. Power-LMC, A.T. Kearney analysis 26% 29%

5. Partially driven by shift in sales … World Light Vehicle Sales — Percentage of Total 1995 to 2004 Volume GAGR2.1%2.0%-1.6%1.1%13.5%6.6%1.3% Source: National sources, J.D. Power-LMC, A.T. Kearney analysis

6. Mainly driven by labour rates Comparative Manufacturing Labour Rates Euros/Hour Source: Institute of German Economy, A.T. Kearney analysis

7. Automotive OEM Revenue Growth versus Value Growth (CAGR 1993-2003) North America Europe Asia Size of Circle Represents 2003 Market Cap Average 7.0% Value Growth Revenue Growth Average 5.0% Ford General Motors Renault Peugeot Fiat Daimler Chrysler Volkswagen BMW Porsche Toyota Nissan Mitsubishi Isuzu Mazda Honda Hyundai -5% 0% 5% 10% 15% 20% 25% -20%-10%0%10%20%30% Source: Annual reports, A.T. Kearney analysis

8. Asian companies are playing the same game Metric “Typical” Asian OEM “Typical European OEM” Production per Plant 230k200k Models per Plant 3.42.3 Home Country Production as % of Total 48%37% Labour Costs (Euros/Hour) 1518 Number of Dealers in Western Europe 30004000 Sales per Dealer 250350

9. Implications for suppliers Focus on innovation and technology Globalised value chain Focus on lowest cost globally: broaden customer base  €   Volume Premium/ Niche Western European Focused Global Leverage

10. Who would you bet on in the long run?