Mexican Light Vehicle Outlook

Mexican Light Vehicle Outlook LXXXIII Junta Automotriz CIEMEX March 2008 George M. Magliano Director of Auto Industry Americas Guido Vildozo Senior Market Analyst South America Pascual Francisco Senior Market Analyst South America Global Auto Group Copyright 2008 Global Insight, Inc. 1

Global Overview Copyright 2008 Global Insight, Inc. 2

Global Auto Market -The Seas of Change (Weight Reduction) Market strategy: C02 Model Proliferation Brand realignment (Fuel Efficiency) Growth Pole: Organic Growth M&A fever Organic Brand Innovation Cost strategy: (Emissions) Platform Consolidation Cross Platform/Modules J.V. Low Cost Sourcing (Reducing Complexity) 1990 1995 2000 2005 2010+ Copyright 2008 Global Insight, Inc. 3

The Global Auto Market Overview Growth of light vehicle demand and production projected at roughly 3.0% annually in the 2007 2012 period Light vehicle demand and production forecast to increase in all regions over the next five years, although at widely differing rates Emerging markets will generate 91% of total global light vehicle demand growth in the same period, with Asia alone (excl. Japan) contributing 60% Almost 89% of global light vehicle production growth will come from emerging markets, with 66% coming just from Asia (excl. Japan) A strong commitment to developing regions, Asia in particular, is absolutely essential for a successful growth strategy for both OEMs and suppliers The allure of growth in emerging markets comes with risk Exogenous issues, or change drivers, are changing the competitive landscape adding to the intense pressure in the market Picking the right country, manufacturer and segment is critical Copyright 2008 Global Insight, Inc. 4

Global Auto Industry Key Challenges Market and Demand Limited top-line growth in developed markets Japanese and Korean OEMs growing rapidly in the West The potential of Chinese exports Emerging markets (especially Asia) expected to account for bulk of the top line growth Margins dropping Concerns over oil / energy consumption Globalisation continues Manufacturing footprint essential in Emerging Markets Industry and Supply Overcapacity, intense competition and margin squeeze Faster pace of product renewal... but at lower costs Development effectiveness Scale: Leverage potential of products across markets Greater emphasis on fuel efficiency / environmental performance Cost pressure continues to be relentless Purchasing effectiveness Global sourcing Copyright 2008 Global Insight, Inc. 5

Key Global Auto Impact Change Drivers Global Warming and Energy Security creates a confluence of opinion which is now politically actionable. The era of higher fuel economy and tighter environmental standards is upon us. Globalization has accelerated boosting global economic growth and generating a new pool of potential car buyers. Development of Ultra Low Price Cars will drop the entry price point in emerging markets accelerating 4 wheel motorization. The global fuel efficiency drive (led by Europe due to stringent CO2 targets) effectively means that OEMs will have to reconsider future vehicle weight/dimensions. Reduction of the number of parts reduces complexity, and improves costs, opens up opportunities to offer budget cars aimed at developing markets. Copyright 2008 Global Insight, Inc. 6

Ultra Cost Out Cars Will CREATE Demand Millions, new vehicle sales 3.5 3.0 2.5 2.0 1.5 1.0 0.5 0.0 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 Tata Nano - 1 Lakh Car 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 TOYOTA SMALL CAR VW POINTER TATA MICROCAR DACIA LOGAN VW project gol NISSAN 1 LITRE Top Markets India Iran Russia China Romania Brazil Copyright 2008 Global Insight, Inc. 7

Global Economic Growth & Light Vehicle Sales 5% 4% Global GDP growth (% chg) 3% 2% 1% 0% 80 76 72 68 64 60 56 52 48 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 World Light Vehicle Sales (millions) 3.6% 4.8% 3.6% 3.7% 4.4% 2.7% 2.9% 4.0% 5.7% 2.4% CAGR 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Copyright 2008 Global Insight, Inc. 8 Dec 07

Light Vehicle Sales By Region 22 20 18 16 14 12 10 8 6 4 2 0 Units/MM 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 NA WE OASIA EE JAPAN SA OTHER Copyright 2008 Global Insight, Inc. 9

BRIC s Will Power Global Autos Growth Again in 2007 Adding An Extra 2.7m Light Vehicle Sales Unit sales Growth in 000 s total Light Vehicles for 2007 2500 +20% 2000 1500 1000 500 +14% +34% +29% 0 China India Russia Brazil Copyright 2008 Global Insight, Inc. 10

BRIC s: Provide Solid Foundation To An Otherwise Difficult Year in 2008 Unit sales Growth in 000 s total Light Vehicles for 2008 1200 1000 +13% 800 600 +19% +14% +18% 400 200 0 China India Russia Brazil Copyright 2008 Global Insight, Inc. 11

Global Production Centers Growth vs. Risk 16% 14% Average Global Manufacturing Risk Circle Size = Unit Production in 2005 Unit production growth, CAGR %, 2005-2020 12% 10% 8% 6% 4% 2% 0% -2% -4% Cluster of USA Can. Australia India Thailand Mexico Poland Brazil Turkey Russia Cluster of WE Big 5 Japan & S. Korea Russia China Iran 0 5 10 15 20 25 30 35 40 45 50 55 60 Manufacturing risk score - 5 year Average Global Automotive Growth Copyright 2008 Global Insight, Inc. 12

Light Vehicle Sales (Units) Top Ten Developed Countries (2012 Forecast) Millions 18 16 14 12 10 8 6 4 2 0 World Growth 2007-12 / 24% World Unit Growth 2007 12 / 16.2mm 6% Top 10 Unit Growth 2007 12 / 1.3mm Developed Countries Represent 52% of Global Sales US Developed = NA, WE, Japan -4% - 0.4% 3% 7% -1% -2% 4% 11% 15% JAPAN GERMANY UK FRANCE ITALY SPAIN CANADA MEXICO AUST. %=Growth 2007-12 Copyright 2008 Global Insight, Inc. 13

Light Vehicle Sales (Units) Top Ten Emerging Countries (2012 Forecast) Millions 14 12 10 8 6 4 2 89% World Growth 2007-12 / 24% World Unit Growth 2007 12 / 16.2mm Top 10 Emerging Unit Growth 2007 12 / 12.0mm Emerging Countries Represent 48% of Global Sales 87% 141% 57% 24% 25% 36% 14% 9% 60% 0 CHINA RUSSIA INDIA BRAZIL S. KOREA IRAN THAILAND S. AFRICA TURKEY POLAND %=Growth 2007-12 Copyright 2008 Global Insight, Inc. 14

Light Vehicle Sales (Units) Top Ten Volume OEMs (2012 Forecast) Millions World Growth 2007-12 / 24% 12 10 22% 12% World Unit Growth 2007 12 / 16.2mm Top 10 OEM Unit Growth 2007 12 / 9.7mm Top 10 OEMs Represent 70% of Global Sales 8 25% 2% 6 4 2 27% 23% 31% 11% 42% 44% 2 0 Toyota GM VW Ford Hyundai Honda Nissan PSA Renault Fiat Copyright 2008 Global Insight, Inc. 15

Light Vehicle Sales (Units) Top 10 Growth OEMs (2012 Forecast) Millions 1.2 1 0.8 193 World Growth 2007-12 / 24% World Unit Growth 2007 12 / 16.2mm Top 10 OEM Unit Growth 2007 12 / 3.9mm 83 Top 10 OEMs Represent 8% of Global Sales 99 220 92 0.6 140 51 0.4 292 87 84 0.2 0 Tata SAIC Volume in 2012 over 300k Geely Changan Chery FAW Beling Great Wall Brilliance Dongfeng Copyright 2008 Global Insight, Inc. 16

Light Vehicle Production (Units) Top Segments (2012 Forecast) Millions 14 12 10 37% 39% World Growth 2007-12 / 24% World Unit Growth 2007 12 / 16.2mm Top 10 Segments Unit Growth 2007 12 / 13.0m Top 10 Segments Represent 72% of Global Sales 8 35% 6 3% 9% 56% 59% 17% 4 5% 16% 2 0 B C1 A D1 D2 SUV-C SUV-D C2 MPV-D E1 Copyright 2008 Global Insight, Inc. 17

Mexico: Sales Overview Copyright 2008 Global Insight, Inc. 18

Mexico Light Vehicle Sales Seasonally Adjusted Annual Selling Rate - SAAR (Units in millions) 1.20 Monthly 1.10 1.00 0.90 0.80 Annual Average 0.70 Jan-00 Jan-01 Jan-02 Jan-03 Jan-04 Jan-05 Jan-06 Jan-07 Jan-08 Copyright 2008 Global Insight, Inc. 19

Mexico Light Vehicle Sales: SAAR Annual Average (Units in millions) 0.50 0.45 0.40 0.35 Import Mexico 0.30 0.25 US & Canada 0.20 0.15 Jan-01 Jan-02 Jan-03 Jan-04 Jan-05 Jan-06 Jan-07 Copyright 2008 Global Insight, Inc. 20

Vehicle Sales Units 1,200,000 1,200,000 1,100,000 1,100,000 1,000,000 1,000,000 900,000 900,000 800,000 800,000 700,000 700,000 600,000 1998 2000 2002 2004 2006 2008 2010 2012 Light Veh -L Total - R 600,000 Copyright 2008 Global Insight, Inc. 21

Mexico Import Light Vehicle Sales Sourced Outside of Mexico Units Truly an open market 65.0% 700,000 500,000 55.0% 300,000 45.0% 100,000 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Volume - L Share -R 35.0% Copyright 2008 Global Insight, Inc. 22

Mexican Sales Regional Shares 30% 25% 20% 15% 10% 5% 0% 1999 2001 2003 2005 2007 2009 2011 2013 US / Can. S. Am. Europe Asia Copyright 2008 Global Insight, Inc. 23

Sales All Car Segments Units 750,000 75.0% 700,000 70.0% 650,000 65.0% 600,000 60.0% 550,000 55.0% 500,000 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Volume - L Market Share - R 50.0% Copyright 2008 Global Insight, Inc. 24

A & B Seg. City & Mini Cars Units 400,000 350,000 35.0% 300,000 250,000 200,000 150,000 31.0% 27.0% 23.0% 100,000 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Volume - L Market Share - R 19.0% Copyright 2008 Global Insight, Inc. 25

C1 / C2 / D1 Seg. Medium Cars Units 355,000 36.0% 335,000 315,000 295,000 34.0% 32.0% 30.0% 28.0% 275,000 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Volume - L Market Share - R 26.0% Copyright 2008 Global Insight, Inc. 26

D2 / E1 / E2 Luxury Cars Units 35,000 3.5% 30,000 25,000 3.0% 20,000 15,000 10,000 2.5% 5,000 0 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2.0% Volume - L Market Share - R Copyright 2008 Global Insight, Inc. 27

Light Commercial Vehicle Sales Units 500,000 450,000 400,000 45.0% 40.0% 350,000 300,000 250,000 35.0% 30.0% 200,000 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Volume - L Market Share - R 25.0% Copyright 2008 Global Insight, Inc. 28

Sales MPV Segments Units 60,000 5.5% 50,000 40,000 30,000 5.0% 20,000 10,000 0 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Volume - L Market Share - R 4.5% Copyright 2008 Global Insight, Inc. 29

Sales PUP Segments Units 200,000 180,000 160,000 140,000 120,000 19.5% 18.5% 17.5% 16.5% 15.5% 14.5% 13.5% 100,000 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Volume - L Market Share - R 12.5% Copyright 2008 Global Insight, Inc. 30

Sales SUV Segments Units 250,000 200,000 150,000 100,000 50,000 22.0% 20.0% 18.0% 16.0% 14.0% 12.0% 10.0% 8.0% 0 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Volume - L Market Share - R 6.0% Copyright 2008 Global Insight, Inc. 31

Sales M & H Van Segments Units 40,000 3.5% 35,000 30,000 3.0% 25,000 20,000 2.5% 15,000 10,000 2.0% 5,000 0 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Volume - L Market Share - R 1.5% Copyright 2008 Global Insight, Inc. 32

Light Vehicle Sales By Major Manufacturer 25% Manufacturer mix is different vs. U.S. 20% 15% 10% 5% 0% 1999 2001 2003 2005 2007 2009 2011 2013 GM FORD CHRYSLER NISSAN VW GROUP TOYOTA HONDA OTHERS Copyright 2008 Global Insight, Inc. 33

Mexico: Production Overview Copyright 2008 Global Insight, Inc. 34

Mexico Light Vehicle Production Seasonally Adjusted Annual Selling Rate - SAAR (Units in millions) 2.40 Monthly 2.20 2.00 1.80 1.60 1.40 Annual Average 1.20 1.00 Jan-00 Jan-01 Jan-02 Jan-03 Jan-04 Jan-05 Jan-06 Jan-07 Copyright 2008 Global Insight, Inc. 35

Producing for the United States 2.4 Heavily focused on satisfying U.S. market, primarily for the Big 3 Mexico Light Vehicle Production (millions of units) 1.9 1.4 0.9 0.4 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Export Domestic Copyright 2008 Global Insight, Inc. 36

New Products Drive Outlook Light Vehicle Production for Export (millions of units) 2.2 2.0 1.8 1.6 1.4 1.2 1.0 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Volume - L Share -R 88% 86% 84% 82% 80% 78% 76% 74% 72% Copyright 2008 Global Insight, Inc. 37

Nissan Production 500,000 450,000 400,000 350,000 300,000 250,000 200,000 150,000 100,000 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Volume - L Export Share - R 80.0% 75.0% 70.0% 65.0% 60.0% 55.0% 50.0% 45.0% 40.0% 35.0% 30.0% Copyright 2008 Global Insight, Inc. 38

General Motors Production 900,000 800,000 700,000 600,000 500,000 95.0% 90.0% 85.0% 400,000 300,000 80.0% 200,000 100,000 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 75.0% Volume - L Export Share - R Copyright 2008 Global Insight, Inc. 39

DCX Production 400,000 100.0% 350,000 300,000 99.0% 98.0% 97.0% 250,000 96.0% 200,000 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Volume - L Export Share - R 95.0% Copyright 2008 Global Insight, Inc. 40

VW Group Production 450,000 400,000 80.0% 350,000 300,000 250,000 200,000 ``` 75.0% 150,000 100,000 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 70.0% Volume - L Export Share - R Copyright 2008 Global Insight, Inc. 41

Ford Production 360,000 100.0% 320,000 280,000 240,000 200,000 160,000 120,000 80,000 90.0% 80.0% 70.0% 40,000 0 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Volume - L Export Share - R 60.0% Copyright 2008 Global Insight, Inc. 42

Toyota Production 120,000 96.0% 100,000 80,000 92.0% 60,000 88.0% 40,000 20,000 84.0% 0 2005 2006 2007 2008 2009 2010 2011 2012 2013 Volume - L Export Share - R 80.0% Copyright 2008 Global Insight, Inc. 43

Thank You! George M. Magliano Tel: +1 (212) 884-9509 Guido Vildozo Tel: +1 (781) 301-9037 Pascual Francisco Tel: +1 (781) 301-9053 Visit our Web site at www.globalinsight.com Copyright 2008 Global Insight, Inc. 44