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© 2014 IHS / ALL RIGHTS RESERVED

MEXICO AUTOMOTIVE OUTLOOK Leon, Guanajuato

DECEMBER, 2014

Guido Vildozo, Manager Latin America Light Vehicle Sales Forecasts, IHS

© 2014 IHS

Agenda

• Global Outlook

• Global Cadence

• US Sales

• Mexico Sales

• NAFTA Production

• Mexico Production

• Key Takeaways

2

© 2014 IHS 3

… World Sales on a roll … But the strong climb has “tapered off” in recent months

© 2014 IHS Source: IHS

Auto Demand Trends- Wobbles or bigger worries/ July 2014

World auto sales on a roll Lig

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World SAAR and Trend

World Without China, SAAR and Trend

July 14

© 2014 IHS

0.4

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ASEAN C Europe E Europe Gr China

India Japan Korea Mid-East/Africa N America

S America W Europe

Se

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Source: IHS Analysis, X12 Seasonal Adjustment

2007 Sales Level

Lehman Collapse

GC

SA

IN

AS

NA

WE

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JK MEA

Region light vehicle selling rates China remains on different path than other developing markets

EE

4

© 2014 IHS

Global light vehicle sales outlook 2013-14 sales volume

83.3

85.7

+ 1.9

+ 1.0

+ 0.6

+ 0.4

+ 0.2 - 0.2

- 0.6

- 0.7

83.2

83.7

84.2

84.7

85.2

85.7

86.2

86.7

87.2

2013 Greater China North America West Europe MiddleEast/Africa

Japan/Korea South Asia Central/EastEurope

South America 2014

Mil

lio

n u

nit

s

+3%

5

© 2014 IHS

World light vehicle sales forecast Outlook optimistic due to US/Euro recovery and continued China growth

Source: IHS Automotive Sales Forecasts

85.7 88.6

50

60

70

80

90

100

110

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

Total sales 2006-13:

577 million vehicles Total sales 2014-21:

767 million vehicles

An

nu

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s, in

mill

ion

s

6

© 2014 IHS

Light vehicle sales forecast Importance of emerging markets will continue to grow

0

10

20

30

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2004

2005

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2019

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Mature MarketsChinaOthers

Source: IHS Automotive, Mature Markets = US, Canada, Japan, S Korea, Australia, NZ, W Europe

Change 2001-21:

MM down 5% China up 1,400% Others up 200%

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© 2014 IHS

Average Cycle Time by Region

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Region 2000 2005 2010 2015 2020

Europe 7.0 7.1 6.0 6.3 6.0

Greater China 8.7 7.7 5.8 7.8 7.1

Japan/Korea 3.8 6.0 5.1 7.1 5.2

North America 5.6 5.2 5.5 5.5 4.9

South America 11.3 3.1 8.4 6.9 5.5

• Integration of global platforms into NA, China and South America increases ‘cycle velocity’ • Global cycle timing is declining towards sub 6 years as all regions move lockstep with global platform

timing

• Impact of delayed timing for several European mass market offerings reflective of extended timing. For China, growth of domestic players with longer cadence underscore the shift.

© 2014 IHS

6.8 6.1

5.2

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2010 2012 2014 2016 2018 2020

Weig

hte

d C

ad

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Years

) Program Cadence

20%

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40%

50%

60%

70%

2000 2005 2010 2015 2020

Mu

lti

Re

gio

n S

ha

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Multi-Region Platforms

After 2015, multi-region (global)

platforms approach 70% of volume

90

73

110 106 115 113

128 125

161

140

115

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2010 2012 2014 2016 2018 2020

Lau

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Ev

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Global Launch Events

0 100,000 200,000 300,000 400,000 500,000

2010

2015

2020

Average Platform Volume (Over 50K/Year)

Faster, Greater Scale & Integrated Industry Pace and Risk Rises …

© 2014 IHS 9

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1.0

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1990

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6 Month Moving Average Actual

(Percent Yes)

Conference Board

Not just a needs based recovery, but wants driven

Intention to buy in the next six months

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1990 1994 1998 2002 2006 2010 2014 2018

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Current Forecast July 2011 Forecast Jan-13

(Units in millions)

The forecast is roughly 300k to 600k per year higher than a few months ago

US Light Vehicle Sales

© 2014 IHS 12

0.6

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1.0

1.1

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2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Millo

ne

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LV Sales (left scale)

Million Units

Mexico Light Vehicle Sales SAAR

© 2014 IHS

13

-35%

-25%

-15%

-5%

5%

15%

25%

35%

600,000

700,000

800,000

900,000

1,000,000

1,100,000

1,200,000

1,300,000

1,400,000

1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020Light Veh -L Annual Change -R

Units

Forecast calls for increased competition and more credit

Mexico Light Vehicle Sales More manufacturing bring us to new highs?

© 2014 IHS

0%

10%

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30%

40%

50%

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70%

80%

90%

100%

2005 2007 2009 2011 2013 2015 2017 2019

Others Mitsubishi Daimler Suzuki BMW

Mazda Toyota Honda Fiat Ford

Volkswagen General Motors Renault/Nissan

Percentage

Nissan, GM and VW will face competition

Mexico Light Vehicle Sales Market Share

© 2014 IHS

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Mil

lon

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2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Units

Mexico Light Vehicle Sales Bodytype

© 2014 IHS

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2001 2003 2005 2007 2009 2011 2013 2015 2017 2019 2021

Mill

ones

Sales Production

Post Restructuring

Lo

caliz

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Exp

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Exp

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• From 2001- 2009, regional sales eclipse output by 27% or 3.7 million units

• 2017 – 2021, future sales levels outpace production by less than 7.0% or by ~1 million units

• Positive sales trajectory tapers after peak in 2017

• Long-term output nears 18.5M units – far surpasses 16.0M unit pre-2009 levels

N. America - LV Sales and Production

© 2014 IHS 16

© 2014 IHS

-40%

-30%

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-10%

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40%

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2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Y-O

-Y %

Ch

an

geO

utp

ut (M

illio

ns)

United States Mexico Canada Change

CAGR 1.2%

CAGR 7.1%

CAGR -4.3%

2014 – 2020

17

North American Market Structure

© 2014 IHS 18

OEM 2013

(000s) 2014F (000s)

% ∆ ∆ Units (000s)

GM 3,287 3,375 2.7% 89

Ford 3,080 3,020 -1.9% -60

Chry/Fiat 2,509 2,749 9.5% 240

Detroit 3 8,876 9,144 3.0% 269

Toyota 1,863 1,960 5.2% 97

Honda 1,782 1,828 2.6% 47

Ren/Nissan 1,470 1,718 16.9% 248

Hyundai 769 767 -0.3% -2

Asian 4 5,884 6,273 6.6% 389

VW 654 626 -4.2% -28

BMW 297 349 17.3% 51

Daimler 206 248 20.1% 41

German 3 1,157 1,222 5.6% 65

Others 260 379 45.9% 119

Total 16.2M 17.0M 5.2% ~842

• Healthy production growth rate as recovery progresses

• Ford – Down time for F-150 and 2015 programs and less exports (MEX)

• Chrysler – Fiat-based product ramps-up

• Nissan – Migration of CUV production; Mexico expansion

• Honda and Mazda start new operations in Mexico!

Source: IHS Automotive Light Vehicle Production Forecast

North America Light Vehicle Production 2013 vs 2014

30

43

24 23

20

17 18

25

16

34

21

29

34

37

32

23

0

10

20

30

40

50

2005 2007 2009 2011 2013 2015 2017 2019

North American Program Launches

19 Source: IHS Automotive Light Vehicle Production Forecast

Market Dynamics Launch Activity Surges, Investment & Competition Too

© 2014 IHS

© 2014 IHS

1.0

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2002 2004 2006 2008 2010 2012 2014 2016 2018 2020

PROD

(Millions of units)

Forecast at risk due to Brazil

Mexico Light Vehicle Production More growth to come

© 2014 IHS 21

Presentation Name / Month 2014

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

TOTAL VOLUME 2,258,727 2,547,270 2,865,872 2,926,860 3,243,398 3,360,884 3,562,545 4,225,453 4,492,197 4,802,667 4,930,505

PLATFORMS BEING PRODUCED 19 19 19 19 22 21 28 27 31 30 29

NUMBER OF LAUNCHES 0 1 2 2 4 0 7 1 7 2 1

VOLUME/PLATFORM 118,880 134,067 150,835 154,045 147,427 160,042 127,234 156,498 144,910 160,089 170,017

© 2014 IHS 22

0.0

0.5

1.0

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2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Europe South AmericaMiddle East/Africa AsiaNorth America

No

rth

Am

erica

n V

eh

icle

Exp

ort

s (M

illio

ns)

Mexico Vehicle Exports by Region

1.64 1.37

1.76

1.98

1.71

2.14

2.32 2.37

2.64

2.94

• Greater use of global platforms allows for more “export ready” product

• 40+ Free trade agreements drive Mexican output

• Expansion of luxury segment capability across the region into Mexico

• SA exports hurt by Brazil and Argentina

• Sourcing patterns favor NA expansion as a safe haven; with currency hedge & export prospects

3.25

Source: IHS Automotive Light Vehicle Forecast

North America Light Vehicle Production Exports bolster prospects

© 2014 IHS

Global Top 10 Production Countries

2010 2014 2015 2020

1 China China China China

2 Japan United States United States United States

3 United States Japan Japan Japan

4 Germany Germany Germany India

5 South Korea South Korea India Germany

6 India India South Korea Mexico

7 Brazil Mexico Mexico Brazil

8 Spain Brazil Brazil South Korea

9 Mexico Thailand Spain Thailand

10 France Canada Thailand Spain

23

• Mexico is definitely on the industry’s radar

• Will continue to ascend among Top 10 in the 2015-2020 time period

• Could build more than Brazil!

© 2014 IHS 24

• Global growth is driven by TRIAD as opposed to emerging nations in 2014

• US has another solid year, we are now back to business as usual

• July/August Mexico sales could herald potential of the market

• Used car imports should hold momentum

• SUVs will diversify, here comes the wave of B-SUVs

• Luxury Segment is key

• NAFTA production sees more investment, particularly due to localization

• Mexican production is at 3 million unit mark quickly ascending to 5 million units!

• Continues to rely heavily on the US

Key Takeaways

Guido Vildozo Manager, Latin America Vehicle Sales guido.vildozo@IHS.com

Thank you! Muchas Gracias! Muito Obrigado!

© 2014 IHS

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