111010 Bull Dust - APU AU Market Entry

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APU AU Market Entry

October 2011

Brent Brownell1


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Australia (AU) is the 6th largest country in the world with an area of 2.9 million square miles, opposed to that ofU.S. with 3.7 million square miles. With a population of 22 million, it has just 7% compared U.S.s 312 million, plus ithas a primitive infrastructure with major cities far apart and no railroads between them. As an Australian friend ofmine once put it, "Australia is a lot of brush and empty space with a few nice towns in between. (see Slide 10)

Considering last year there were an estimated 90,000 Class-8 trucks sold in the U.S., Australian High Combination(HC, or Class-8) trucks reflect its population of 7% with just 5,360 sold in 2010. Of these 5,360 trucks, the majoritieswere the conventional-type at 3,552 units, while 1,812 cab-over units were sold mainly by Volvo and Kenworth. Theprimary truck thoroughfares in Australia run between Brisbane and Sydney, with Brisbane being the Mecca of trucksdue to mining and exportation.

Australia is a continent that experiences a variety of climates due to its size. The weather can range from belowzero temperatures in the mountains south-east of Sydney to intolerable heat in the north-west. It is considered to be

one of the driest continents on earth. HC trucking anti-idling diesel devices are popular in AU and are controlled bya few AU domestic and one foreign firm. But no one device has the power and features to provide for truckscovering the vast ranges of the AU landscape, and thats a primary reason why Hodyons Dynasis would be a good

fit.

MVM Autos, in business since 1991, is the group that appears most adequate for Hodyon to gain more feedback forDynasis in the AU market. Together with its two retail and service partners, MVM has a combined '30 locationscovering all of AU, where MVM handles New South Whales (Sydney), Truck Art deals with Victoria (Melbourne) andstretches westward to Perth, while Briskair covers Queensland (Brisbane) and the Northern Territory.

Italian-made Ecowind is a simple 1-cylinder unit and presently the best in market. When it f irst entered the market -nearly 4 years ago - it had major flaws relative to the electrical system and engine mountings. So with the supportand guidance of ABCAutos General Manager, David Jones, and after a lot of time, money and sweat equity,Ecowind made the changes and finally got it right. According to MVM, The only reason Ecowind has been

successful in the AU market is because of its association with MVM.

David states plainly, "People (of AU) are NOT scarred to try something new. If it is built well, they will come."

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Summary


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What are the major truck publications, i.e. TransportTopics (TT). If TT not in AU market, then what publicationwould be best? There are a great number of trade publications in Australia that deal with the HC trucking market.Based on the conversations with various tucking industry experts, Big Rigs, Owner Driver, Diesel Magazineappear to be the leading periodicals. It appears there are more than 10 appropriate periodicals in AU related to

trucking. (see Call Notes Item 8)

Make contact Australias Truck Industry Council (TIC): Tony McMillan, CEO. Finally made contact with Tony, andhis partner, Simon Humphries, was very helpful in providing yearly sales data for HC conventional and cab-overtrucks. Further ongoing information on HC trucking market statistics can be gained by subscribing to the T-MARKdatabase at a cost of AU$3,300 (US$3,375) per year. (see Slide 9)

Number of long-haul trucks sold each year (Class HC, sleepers)? Cab-over vs. long-nose/bonnet-type? In 2010,

5,364 HC trucks were sold in AU, consisting of 3,552 conventional and 1,812 cab-over trucks. (see Slide 5).Additionally, there are said to be 70,000 HC registered trucks in the AU market, with an estimated addressable unittotal < 50,000.

Questions for large fleets in Australia: With price of diesel at 5.99/gallon, are you using idle reduction technology(anti-idling) ? Do you have single or tandem drivers? Do you do your own maintenance? WOULD YOU BEWILLING TO TRIAL OUR PRODUCT? Australian truck fleet owners and operators are typically very conservative,especially when it involves testing something that is not supplied nor endorsed by the vehicle's manufacturer. In

speaking with at least 5 fleets, they all asked for Hodyon product information and to briefly describe our interest.None of these fleets have yet returned any interest... (see Call Notes Item 5)

Existing idle reduction technology products in the Australian market? (Blizzard is the closest to Hodyon, Ecowind,KOOLkat, Etc.) Main players are Ecowind, Icepack, and Viesa Air. (see Slides 11-21)

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Questions & Answers


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Market representatives for existing idle reduction technology products, i.e. MVM or Briskair? What dealers in AU areselling and servicing? Questions to MVM: what existing anti-idling products do you have? Pricing? Installation?Warranty? The main dealers of anti-idling products in AU are MVM Auto, Briskair, and Truck Art. These three dealersact as a quasi group in considering and developing new anti-idling products for the AU market. All inquiries are run

through MVMAutos David Saliba, Managing Director. (see Slides 6-7)

Five OEMs to consider: VOLVO: Volvo (inexpensive but low market-share in US), Mack (average pricing, lowmarket-share in US); DAIMLER: Freightliner (inexpensive, high market share in US), Western Star: PACCAR:Kenworth & Peterbilt (top of the line, expensive, lower market share in US). What is the market share in AU foreach OEM brand? According to the Trucking Industry Council, it is Kenworth 39%, Volvo 19%, Western Star 15%,Mack 14%, Freightliner 11%, and International 2%. (see Slide 5)

New truck sales (OEM): talk with the dealers, not the manufacturers, i.e. Brown & Hurley? Spoke with a handful ofdealers. There was some basic interest from Brown & Hurley - PACCAR dealer, and Hartwigs - Daimler dealer. Itshould be noted in being careful in trialing with truck dealers. If there are any noted problems with a trial, this couldmake an irreparable name for Hodyon/Dynasis in the AU market. (see Call Notes Item 6)

Haultech Engineering: Icepack? Still in business? What is the dealer coverage for exiting products? How many havethey sold? Yes, Haultech is still in business. Its primary product is Icepack 2000-S, selling ~600 units yearly in AU. Itsells direct and through a dealer network similar to competitors. (see Slides 14-16 and Slide 21)

How are idling reduction technologies advertised? Is adverting done at all, or just through word of mouth? Mostlythrough word of mouth but some advertising is done, primarily by Icepack. It would be best to consider advertising inthe Big Rigs, Owner Driver, Diesel publications. (see Slide 8)

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Questions & Answers (cont.)


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AU High Combination (HC) Truck Sales BreakdownStatistics provided by Australias Truck Industry Council (TIC)

YEAR/TYPE Kenworth Volvo Western Star Mack Freightliner InternationalYEARLY

TOTALS

2010

TOTAL2106 1009 814 758 570 107 5364

2010Conventional

1474 0 814 758 399 107 3552

2010Cab-Over

632 1009 0 0 171 0 1812

2009

TOTAL1536 908 618 761 908 177 4908

2009Conventional

1075 0 618 761 636 177 3267

2009Cab-Over

461 906 0 0 272 0 1639

2008

TOTAL2664 1119 1151 777 797 410 6918

2008Conventional

1865 0 1151 777 558 410 4761

2008Cab-Over

799 1119 0 0 239 0 2157

2007

TOTAL2757 1383 1114 1366 1178 264 8062

2007Conventional

1930 0 1114 1366 825 264 5499

2007Cab-Over

827 1383 0 0 353 0 2563

All Volvo are cab-over. All Macks and Western Stars are conventional. All Freightliners EXCEPT Argosy are

conventional. All Kenworth EXCEPT K200 (previously K108 & K104) are conventional estimates based on 70/30% forconventional/cab-over, respectively, for both Freightliner and Kenworth. 5


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RETAIL AGENTS: MVM Auto Repairs Group

Briskair

Chris Liddelow

Truck Art

Terry Gibbs

MVM Auto

David Saliva

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AGENTS: MVM Auto Repairs Group Our Mission, Your Satisfaction

6/130 Forrester Road, St MarysN.S.W (Sydney) 2760, Australia

Tel: +61-2-9833-1900

Truck Art the - One Stop Truck Stop" Our Customers are the Coolest!

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http://www.mvmautos.com.au/http://www.mvmautos.com.au/http://www.mvmautos.com.au/http://www.truckart.com.au/http://www.truckart.com.au/http://www.briskair.com.au/http://www.briskair.com.au/http://www.briskair.com.au/products/Refrigeration/viesahttp://www.truckart.com.au/http://www.truckart.com.au/http://www.truckart.com.au/http://www.truckart.com.au/http://www.truckart.com.au/pages/Air-Conditioning.htmlhttp://www.mvmautos.com.au/http://www.mvmautos.com.au/http://www.mvmautos.com.au/http://www.mvmautos.com.au/http://www.mvmautos.com.au/


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Trade Magazine AdvertisingBig Rigs

Owner Driver

Diesel Magazine

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http://www.bigrigs.com.au/http://www.ownerdriver.com.au/http://www.intermedia.com.au/index.cfm?page=mag.magDesc&mid=6&area=magazineshttp://www.intermedia.com.au/index.cfm?page=mag.magDesc&mid=6&area=magazineshttp://www.ownerdriver.com.au/http://www.bigrigs.com.au/


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Bull Dust

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(return to Slide 2)


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MVM Anti-Idling Offerings

PRODUCTS

Ecowind Diesel Powered System

Haultech Engineering Icepack 2000 / 2000-S Diesel Powered

Viesa Air Evaporative Coolers

Blizzard Diesel Power AC Cooling and Heating System

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http://www.mvmautos.com.au/ecowind.htmlhttp://www.icepack.com.au/index.php?MMID=2558&SMID=2571http://www.icepack.com.au/index.php?MMID=2558&SMID=2570http://www.mvmautos.com.au/viesainternal.htmlhttp://www.mvmautos.com.au/blizzard.htmlhttp://www.mvmautos.com.au/blizzard.htmlhttp://www.mvmautos.com.au/blizzard.htmlhttp://www.mvmautos.com.au/blizzard.htmlhttp://www.mvmautos.com.au/blizzard.htmlhttp://www.mvmautos.com.au/blizzard.htmlhttp://www.mvmautos.com.au/viesainternal.htmlhttp://www.icepack.com.au/index.php?MMID=2558&SMID=2570http://www.icepack.com.au/index.php?MMID=2558&SMID=2570http://www.icepack.com.au/index.php?MMID=2558&SMID=2570http://www.icepack.com.au/index.php?MMID=2558&SMID=2571http://www.mvmautos.com.au/ecowind.html


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Ecowind Systems

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http://www.mvmautos.com.au/ecowind.htmlhttp://www.mvmautos.com.au/ecowind.html


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Ecowind Systems

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http://www.mvmautos.com.au/ecowind.htmlhttp://www.mvmautos.com.au/ecowind.html


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ICEPACK 2000-S

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http://www.icepack.com.au/index.php?MMID=2558&SMID=2570http://www.icepack.com.au/index.php?MMID=2558&SMID=2570http://www.icepack.com.au/index.php?MMID=2558&SMID=2570http://www.icepack.com.au/index.php?MMID=2558&SMID=2570


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ICEPACK 2000-S

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http://www.icepack.com.au/index.php?MMID=2558&SMID=2570http://www.icepack.com.au/index.php?MMID=2558&SMID=2570http://www.icepack.com.au/index.php?MMID=2558&SMID=2570http://www.icepack.com.au/index.php?MMID=2558&SMID=2570


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ICEPACK Published Price List

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http://www.haultech.com/Price.shtmlhttp://www.haultech.com/Price.shtml


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Viesa Air Evaporative Coolers INTERNAL II SYSTEMS

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http://www.mvmautos.com.au/viesainternal.htmlhttp://www.mvmautos.com.au/viesainternal.htmlhttp://www.mvmautos.com.au/viesainternal.htmlhttp://www.mvmautos.com.au/viesainternal.html


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Viesa Air Evaporative Coolers INTERNAL II SYSTEMS

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http://www.mvmautos.com.au/viesainternal.htmlhttp://www.mvmautos.com.au/viesainternal.htmlhttp://www.mvmautos.com.au/viesainternal.htmlhttp://www.mvmautos.com.au/viesainternal.htmlhttp://www.mvmautos.com.au/viesainternal.htmlhttp://www.mvmautos.com.au/viesainternal.html


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Blizzard Systems

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http://www.mvmautos.com.au/blizzard.htmlhttp://www.mvmautos.com.au/blizzard.html


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Anti-Idling Diesel Competitive Landscape

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FeaturesEcowind (recentlybought by Kohler)

Icepack 2000-S Dynasis

Power 3.5 kW 6 kW 6 kW

Cooling (btu) 13,000 18,00012,000 heat

12,000 hermetic AC

Warranty24 months or1,000 hours

12 months or2,000 hours


Noise Level at (4) meters 60 dB 70 dB 68 dB

Main Unit Dimensions(W x H x D)

11 x 22 x 28 16 x 20 x 25 18 x 27 x 25

Cylinders 1 1 2

Controls solid state integrated simplestate-of the-arttouch screen

Shore Power optional none standard

Diesel / Time .1849 gallons / hr .1849 gallons / hr.1650-.3300 gallons / hrdepending on cycling

Oil Change Every 300 hrs every 100 hrs every 1000 hrs

Weight 240 lbs 330 lbs 385 lbs

Engine 15LD 350S Diesel air/oil-cooled 6hp Kubota liquid-cooled 12 hp Yanmar

Ignition key key and remote panel In-cab control

Heating none none standard

Othersno ECM, no thermostat,

no controlsno ECM, no thermostat,

no controlsmeets ECM standards,

has thermostat & controls


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Anti-idling Competitive Product Prices, Sales and Warranties

ManufacturerLombardi

(Italy)

Haultech

(Australia)

Colven

(Argentina)

Products

Ecowind

1-cylinder, diesel

Icepack

1-cylinder, diesel

Viesa Air

Evaporative

Warranty12 months or1,000 hours


2 years (less than 1%have warranty issues)

Price to DealerAU$5,900(US$6,030)

AU$5,700(US$5,825)

AU$2,000(US$2,045)

Installed

Price to Customer

AU$8,500

(US$8,690)

AU$8,500-$9,500

(US$8,690-$9,710)

AU$3,300

(US$3,375)

DELTA of Installed Priceand Price to Dealer

AU$3,300(US$3,375)

AU$2,000(US$2,045)

AU$1,300(US$1,330)

Years Availablein AU Market

4 15 12

Total Yearly Salesin the AU Market

800 Units 600 Units 1,000 Units

Units on AURoads Today

2000-3,000 5,000 12,000-15,000

Units Sold by MVM Auto(Not Including OtherGroup Members)

200 Units 50 Units 250 Units

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Supporting Slides

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AU Market Truck Sales StatisticsStatistics provided by Australias Truck Industry Council (TIC)

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Owner Driver Ad Rates

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IMPORTER: CTIS Sleeper Cab Cooling Specialists
http://ctyre.com.au/index.htmlhttp://ctyre.com.au/index.htmlhttp://ctyre.com.au/index.htmlhttp://ctyre.com.au/index.htmlhttp://ctyre.com.au/index.htmlhttp://ctyre.com.au/index.htmlhttp://ctyre.com.au/index.htmlhttp://ctyre.com.au/index.htmlhttp://ctyre.com.au/index.html


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IMPORTER: CTIS Agent List
http://ctyre.com.au/page/agents.htmlhttp://ctyre.com.au/page/agents.htmlhttp://ctyre.com.au/page/agents.htmlhttp://ctyre.com.au/page/agents.htmlhttp://ctyre.com.au/page/agents.htmlhttp://ctyre.com.au/page/agents.htmlhttp://ctyre.com.au/page/agents.html


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Pure Air

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http://ctyre.com.au/page/aircon.htmlhttp://ctyre.com.au/page/aircon.html


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KOOLkat

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http://ctyre.com.au/page/aircon.htmlhttp://ctyre.com.au/page/aircon.html


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EcoStation
http://www.ecostation.com.au/http://www.ecostation.com.au/


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111010 Bull Dust - APU AU Market Entry

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