Intelligent Mobility and “Voice of Customer”

Kaushik MadhavanDirector, Automotive & Transportation MENASA

2

Agenda and Table of Contents

What is Intelligent Mobility?

Intelligent Mobility

Scope and Role of Multiple Stakeholders

Global Powertrain Snapshot

“Voice of Customer”

Hybrids and EVs in the Middle East

Perceptions and Willingness to pay for Hybrids and EVs [Europe]

Evolution of Mobility Services

3

Intelligent Mobility – increased interaction between end users and operators

Increasing levels of information highlighting changing user needs - increasing levels of productive travel

Increasing innovation and intelligent provision of supply, new business models and innovative financing

Intelligent Mobility Ecosystem

Source: Frost & Sullivan

4

Integrated Mobility - Technology enabled and multi-modal travel improving journey experience to the Mobility User

Source: Urban Science

TAXI SERVICES

BIKE SHARING

PUBLIC TRANSPORT

CORPORATE CARSHARING

CAR RENTAL

CARSHARING

RIDESHARING

CASH / CAR ALLOWANCE

PARKING

INTEGRATED MOBILITY

E-MOBILITY

MICRO-MOBILITY SOLUTIONS

MOBILITY AUDIT / BUDGET

LOYALTY PROGRAMME / ECOSYSTEM

PARTNERSHIP

LCV

Source: Frost & Sullivan

5

Evolution of OEMs Mobility Services from the business of manufacturing, selling cars to providing services, mobility solutions

Car Independent

Integrated Mobility: Journey Planning,

Booking and Payment

City Planners and Lifestyle

Energy Creation and Storage

Car Services

Carsharing

Parking and Charging

Ridesharing

Taxi and Limousine

Automated Driving

Car Ownership

Finance Maintenance Connected Services

Evo

lutio

n &

Exp

ansi

on o

f OE

M S

ervi

ces

Source: Frost & Sullivan

6

Dubai as a Smart City – Making infrastructure intelligent and communicating with cars the first step towards a connected city

Open architecture apps and technology solutions, e.g. mobility, security, cloud computing, etc.

Analysis and quality control of Big Data flowing from sensors

Sensors in everything – road signs, pavements, road asphalt, etc.

Wi-Fi and Fibre-optic networks

Smart City Infra Needs

Making the car “aware” and connected would enhance its communication with machines (V2V) as well as the infrastructure (V2I)

The Dubai Govt launched the Smart City campaign [Dubai Plan 2021], earmarking over €100 million for innovations, including mobility development.

Source: Frost & Sullivan

7

Global Powertrain Mix — Regional SnapshotEuropean powertrains will be seen receding from Diesel, while developing markets like India will continue to witness increasing diesel engine uptake to meet higher fuel economy requirements.

76%

16%

5%

Powertrain Market: Expected Light Vehicle* Unit Shipment by Region and Powertrain Mix, Global, 2015

~72.1 Million

2015

Key: Light vehicles include personal vehicles (PVs) and light commercial vehicles (LCVs). The powertrain mix in China and Japan consider only PVs. Mild and full hybrids in

Japan are shown under the “full hybrid” legend. Mild and full hybrids are shown as a part of gasoline and diesel in China, India, South America, and Korea. Total for 2015

represents the sum of regions shown.

Others*3.0–4.0%

98%

70% 46%

45%

92%

34% 95%

51%

51%

57%

0.0

5.0

10.0

15.0

20.0

25.0

China Japan India Europe NorthAmerica

SouthAmerica

GCC South Korea

Gasoline Diesel Alt. Fuels Mild Hybrids Full Hybrids EVs

Un

its

(Mill

ion

)

Note: All figures are rounded. The base year is 2014. Source: LMC Automotive; Frost & Sullivan

*Others in 2015 goalpost include mild hybrids, full hybrids and EVs.

8

Market Breakdown by Segment and Propulsion TypePowertrain electrification will grow significantly, while alternative and flex fuels will also witness continued adoption to make powertrains more fuel economic and clean.

Key: CNG—Compressed Natural Gas, BEV – Battery Electric Vehicles

Top markets with large selling volume have been considered.

Segment Diesel Hybrids BEV Gasoline CNGGasoline-Flex Fuel

Europe ▼ ▲ ▲ ▲ ▲ ●

North America ▲ ▲ ▲ ● ▲ ▲China ● ▲ ▲ ▲ ● ▲Japan ● ▲ ▲ ▲ ▲ ●South Korea ▼ ▲ ▲ ● ● ▲India ▲ ▲ ▲ ▼ ▲South America ● ▲ ▲ ● ▲ ▲GCC ▲ ▲ ● ▲ ▲

Powertrain Market: Vehicle Growth Outlook by Region and Propulsion Type, Global, 2015

▲ Growing Declining Stable▼ ● Not Applicable

Source: Frost & Sullivan

9

2015 European Consumers’ Attitudes, Perceptions, and Willingness to Pay for

Powertrain Technologies and Alternate Hybrid and Electric Vehicles

10

Methodology and Sample Structure

Methodology Web Interviews (CAWI)

Sample Size N=2015 interviews in totalThe detailed sample structure is provided on following slide

Fieldwork November-December 2014

Past data 2012: n=2,687 (G4+ Russia)

2010: n=2,150 (G5)

Quota On vehicle segment, age group, and gender

Criteriafor Participation

• Need to own and drive a carPrimary decision maker or joint decision maker with 50% or more involvement in vehicle purchase

• Current car model not older than 2006

• Current car had to be purchased new

Reporting Notes

Due to rounding errors, percentages in charts / tables may not sum up to 100

Total France Germany UK Italy

Total 2015 493 500 526 496

By Car Segment

A&B 418 21% 100 20% 101 20% 116 22% 101 20%

C 421 21% 100 20% 102 20% 118 22% 101 20%

D 404 20% 101 20% 100 20% 102 19% 101 20%

E&F 199 10% 50 10% 50 10% 49 9% 50 10%

SUV 202 10% 50 10% 51 10% 51 10% 50 10%

MPV 371 18% 92 19% 96 19% 90 17% 93 19%

By Age

18 to 24 109 5% 17 3% 25 5% 32 6% 35 7%

25 to 34 342 17% 73 15% 81 16% 89 17% 99 20%

35 to 44 555 28% 160 33% 118 24% 105 20% 172 35%

45 to 54 486 24% 129 26% 143 29% 94 18% 120 24%

55 or older 523 26% 114 23% 133 27% 206 39% 70 14%

By Gender

Male 1176 58% 293 59% 289 58% 297 57% 297 60%

Female 839 42% 200 41% 211 42% 229 44% 199 40%

By Area

Urban area 1044 52% 250 51% 253 51% 207 39% 334 67%

Suburbs 628 31% 140 28% 146 29% 215 41% 127 26%

Rural 343 17% 103 21% 101 20% 104 20% 35 7%

Source: Frost & Sullivan

11

Overall Diesel hybrid is preferred more than petrol hybrid as more Diesel drivers are willing to consider a hybrid

Base: All respondents (n=2,015).Q14E. How likely are you to consider a hybrid engine for your next vehicle purchase?Q16. Which kind of hybrid engine would you purchase?

Diesel PHEV

Petrol mild hybrid

Diesel full hybrid

Diesel mild hybrid

Petrol PHEV

Petrol full hybrid

Don’t know

What Kind of Hybrid Engine?

n=828

41%

30%

26%3%

Consider Hybrid Engine

Likely Undecided Unlikely

Don't know

19%

18%

17%

16%

12%

10%

10%

Source: Frost & Sullivan

12

Purchase Criteria for Hybrid Vehicle (Top 2 importance rating)

Reliability/durability

Price of the vehicle

Better fuel economy

Fuel cost

Monitoring and maintaining battery charge

Overall performance

Eco friendly

Car space/carry capacity

Resale value (e.g., rate of depreciation)

Use of innovative technology

Availability of models

Vehicle designs and styles

Recycling (scrapping battery)

Congestion charge/ Toll road exemption

Cool image

83%

77%

76%

77%

69%

65%

64%

62%

61%

60%

59%

54%

51%

48%

33%

86%

80%

79%

78%

71%

70%

68%

69%

67%

64%

63%

60%

57%

53%

39%

Petrol drivers (n = 820) Diesel drivers (n = 1008)

Base: All respondents Q9. Please indicate the importance of how they will influence your purchase of a hybrid vehicle in the future?

When compared overall, Petrol drivers and Diesel drivers do not differ strongly in their purchasing criteria for Hybrid vehicles. Diesel puts slightly higher emphasis on reliability and overall performance

Source: Frost & Sullivan

13

Urban Drivers are more likely to consider hybrid or electric vehicles while males prefer hybrid than females do

Urban

Suburbs

Rural

Male

Female

47%

37%

29%

44%

37%

30%

29%

33%

30%

31%

21%

31%

33%

25%

28%

Consider Hybrid Vehicle

Likely Undecided Unlikely Don't know

Base: All respondents (n=2,015).Q14D. How likely are you to consider an electric / hybrid vehicle for your next vehicle purchase?

29%

17%

13%

23%

22%

30%

27%

23%

28%

27%

39%

53%

60%

47%

47%

Consider Electric Vehicle

Likely Undecided Unlikely Don't know

Source: Frost & Sullivan

14

Consideration for hybrid engines (split by type) - 2015

Petrol mild hybrid

Petrol PHEV

Petrol full hybrid

Diesel mild hybrid

Diesel PHEV

Diesel full hybrid

Don’t know

33%

21%

15%

8%

7%

6%

10%

8%

4%

4%

24%

27%

22%

11%

Petrol Drivers (n = 288) Diesel Drivers (n = 404)

Base: All petrol drivers considering hybrid vehicle for next purchase Q14E. How likely are you to consider a hybrid engine for your next vehicle purchase?Q16. Which kind of hybrid engine would you purchase?

When considering hybrid vehicles for next purchase data shows that drivers will tend to stay with their current fuel type

Source: Frost & Sullivan

15

24% 25%19% 18%

24%34%

21%32%

35%

52%

45%40%

22%

27%

23%

22%

19%

13%

15% 24%

32%

23%

14%

12%

22%11%

21% 18% 23%16%

42%35%

Total A&B C D MPV E&F SUV S/M SUV L

Not willing to pay

Lower price point

Medium price point

High price point

A quarter of all drivers are willing to pay a high price point for hybrid engine while more than a third of SUV drivers are not willing to pay at all

Base: those who consider hybrid (n=828).Q14. How likely are you to consider a hybrid engine for your next vehicle purchase?Q26. Basically, how much premium are you willing to pay for a hybrid engine vehicle over a traditional engine?

Accepted Price Difference for Hybrid Engine - 2015 by Segment

Price Option A/B C D MPV E/F SUV S/M SUV L

Lower price point € 500 € 500 € 2,000 € 2,500 € 3,000 € 6,000 € 6,000

Medium price point € 1,500 € 1,500 € 4,000 € 5,000 € 6,000 € 10,000 € 10,000

High price point € 3,500 € 3,500 € 6,000 € 8,000 € 12,000 € 15,000 € 20,000

Mean: €6,100 €1,800 € 2,300 € 4,000 € 5,200 € 7,000 € 10,300 € 12,000

Source: Frost & Sullivan

16

Of the 23% who consider EV in their next purchase, 40% prefer EV with range extender whereas full electric is not favourable

Base: All respondents (n=2,015).Q14D. How likely are you to consider an electric vehicle for your next vehicle purchase?Q17. Which kind of electric vehicle would you purchase?

n=457

23%

28%

47%

3%

Consider Electric Vehicle

Likely Undecided Unlikely

Don't know

Full Battery Electric Vehicle

Extended Range Electric Vehicle

Plug-in Hybrid Electric Vehicle

Don’t know

Preferred Electric Vehicle Technology

19%

40%

33%

9%

Source: Frost & Sullivan

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When divided between petrol and diesel drivers, consideration of EV with range extender still remains favourable

Base: All petrol and diesel drivers considering electric vehicle for next purchase Q14D. How likely are you to consider an electric vehicle for your next vehicle purchase?Q17. Which kind of electric vehicle would you purchase?

20%

39%

29%

12%

Full Battery Electric vehicle

Extended Range Electric vehicle

Plug-in Hybrid Electric Vehicle

Don't know

Petrol Drivers Consideration for Electric Vehicles (8%) –2014 (Top 2 box – Somewhat Likely and Very Likely)

2014 (n=161)

15%

45%

33%

7%

Full Battery Electric vehicle

Extended Range Electric vehicle

Plug-in Hybrid Electric Vehicle

Don't know

Diesel Drivers Consideration for Electric Vehicles (11%) –2014(Top 2 box – Somewhat likely and Very likely)

2014 (n=218)

Source: Frost & Sullivan

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23%14% 16% 21% 25%

32%21%

37%

20%

22% 19%

24%23%

13%

15%

25%

30% 47%40%

28%30%

14% 32%

13%

27%17%

24% 27% 23%

41%32%

25%

Total A&B C D MPV E&F SUV S/M SUV L

Not willing to pay

Lower price point

Medium price point

High price point

Similar to Hybrids, about 23% of the drivers willing to pay a large premium; Large SUV drivers willing to pay highest

Base: those who consider Electric vehicle (n=457).Q14. How likely are you to consider an Electric engine for your next vehicle purchase?Q27. Basically, how much premium are you willing to pay for an Electric engine vehicle over a traditional engine?

Accepted Price Difference for Electric Engine - 2014

Price Option A/B C D MPV E/F SUV S/M SUV L

Lower price point € 1,000 € 1,000 € 2,500 € 3,000 € 7,000 € 6,000 € 6,000Medium price point € 3,500 € 3,500 € 5,000 € 6,000 € 12,000 € 10,000 € 10,000

High price point € 6,000 € 6,000 € 9,000 € 9,000 € 20,000 € 20,000 € 20,000

Mean: €7,400 €2,500 € 3,800 € 5,200 € 5,800 € 15,200 € 11,300 € 14,200

Source: Frost & Sullivan

19

Audi has regained the leading position as a fuel efficient premium car, followed by BMW

Q40. In your opinion, which premium vehicle manufacturers are most dedicated to delivering fuel efficient vehicles?

Note: Top-five brands selected from number-one ranking only.

Audi

BMW

Mercedes

Lexus

Volvo

24%

19%

12%

9%

7%

17%

18%

13%

11%

8%

23%

20%

12%

10%

8%

18%

19%

13%

19%

9%

2014 (n=2015) 2012 (n=2,687) 2010 (n=2,150) 2008 (n=2,648)

Top-Five Premium Manufacturers: Fuel Efficient Vehicles– Total

Source: Frost & Sullivan

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Toyota continues its leadership position as a fuel efficient volume car brand with stable increase since 2010

Q41. In your opinion, which volume vehicle manufacturers are most dedicated to delivering fuel efficient vehicles?

Toyota

Volkswagen

Ford

Citroen

Renault

Honda

Fiat

Hyundai

20%

15%

7%

6%

6%

5%

4%

3%

18%

11%

8%

9%

4%

5%

7%

3%

17%

8%

7%

9%

4%

8%

7%

2%

29%

7%

5%

10%

8%

8%

4%

4%

2014 (n=2,015) 2012 (n=2,687) 2010 (n=2,150) 2008 (n=2,648)

Note: Top-ten brands selected from number-one ranking only.

Top-Five Volume Manufacturers: Fuel Efficient Vehicles– Total

Source: Frost & Sullivan

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Summary and Conclusions

Evolution of car as a Service and not just a product• Integrated Mobility solutions• Change in ownership patterns• Focus on overall Mobility experience and freedom

Hybrids and EVs gaining popularity among buyers• Increased customer willingness-to-pay• Limited overall customer understanding of technologies• Need for increasing awareness

OEM Product Portfolio and Mobility Solutions• OEMs offering subscription services• Multi-modal transport options and infrastructure• Focus shifting from driving to mobility

Thank You

Kaushik MadhavanDirector, Automotive & Transportation

kaushikm@frost.com+91 44 6681 4513