Demand Drivers & Trends Denny Mooney Group Vice President Global Product Development Navistar, Inc.

My#Background:#Australia#

Navistar:#A#Leader#in#Transporta:on#

•   Founded'in'1831'as'the'McCormick'Reaper'Company'

•   Products'include:'<   Interna>onal®'brand'commercial'and'military'trucks'

<   MaxxForce'®'brand'diesel'engines'

<   IC'Bus™'brand'school'and'commercial'buses'

•  $10'billion,'FORTUNE'250'company'

•  North'America’s'largest'truck'retail'organiza>on,'with'nearly'

900'dealer'loca>ons'

•  14,000'employees'

Full<line#truck,#bus,#military#vehicle#and#diesel#engine#manufacturer#

A#Leading#Class#6<8#Truck#and#Bus#Manufacturer#in#North#America#

School#Bus#37%'Market'Share'

FY2013'

Medium<Duty#24%'Market'Share'

FY2013'

Class#8################Severe#Service#22%'Market'Share'

FY2013'

Class#8#Heavy<Duty#12%'Market'Share'

FY2013'

Navistar#in#Australia:#Trucks'sold'under'Cat'brand'

Emissions#Standards:#U.S.#EPA#

2011#ADR#80<03#

Customer#Demands#

•   Fuel'Efficiency'

•   Reliability/Up>me'

•   Acquisi>on'Costs'•   Driver'Accommoda>on'

•   Weight'Reduc>on'

Emissions#Standards:#Not#Aligned#with#Customer#Priori:es#

Regulatory#Impact#

•   Less'Fuel'Efficient'

•   More'Weight'

•   Reliability'Issues'•   More'Cost'

•   Product'Complexity'

Costs#Increases#Driving#Higher#Prices#(U.S.'Dollars)'

90,000#

95,000#

100,000#

105,000#

110,000#

115,000#

120,000#

125,000#

1996#1997#1998#1999#2000#2001#2002#2003#2004#2005#2006#2007#2008#2009#2010#2011#2012#2013#

$95,000#

$100,000#

$108,000#

$117,000#

$123,000#

+5.2%#

+8%#

+8.3%#

+5.1%#

+29%'

Priori:es#of#Today/Tomorrow:#The#Customer#

Fuel#39%#

Drivers#33%#

Acquisi>on'

11%'

Adm/Fees'

6%'

Up:me#11%#

United#States##

Source:''American'Transporta>on'Research'Ins>tute'

An'Analysis'of'the'Opera>onal'Costs'of'Trucking,'Sept'2013'

(2012'survey'of'for<hire'motor'carriers')''

Electronic#Vehicle#Integra:on#

Body#Controller#

ECM#

ABS#

ECS#

Cruise#Control#•   Up#to#34#computer#modules#•   Up#to#2,900#messages#per#second#

Smart#Cruise#Control#

Smart#Cooling#System#

Smart#Charging#Systems#

Smart#Air#Compressors#

12'

Intelligent#Vehicle#Systems#

13'

Aerodynamics:##From#airflow#to#ac:ve#energy#management#

•   Leadership#History#•   Cri:cal#to#Fuel#Economy#•   Innova:ons#on#the#Horizon:#<   Smart'Grille'Shuhers'

<   Smart'Ride'Height'Adjustments'

<   Smart'Fikh'Wheel'

<   Tractor/Trailer'Integra>on'

Powertrain#

18%#*Fuel#Economy#impact#at#100#KPH#

14'

Smart#Cruise#Technologies#

Vehi

cle

Spe

ed

Maximum Set Speed

Cruise Control Set Speed

Minimum Set Speed

Ele

vatio

n

Expert Driver Normal Driver Potential downshift

Potential braking event

15'

Smart#Cruise#Technologies#

Loca:on# Terrain#

GPS# Road#Map#Database#

16'

Automated#Manual#Transmissions#

17'

Smart#Cooling#

18'

Connected#Vehicle:#Vehicle<to<Infrastructure#

19'

Connected#Vehicle:#Vehicle<to<Driver#

Autonomous#Vehicle'

20'

Connected#Vehicle:#Vehicle<to<Vehicle#

21'

Truck#of#Tomorrow:#Technology<Driven#Efficiency#