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A strategic vision for

operational leasing business


2009 October 5th Gianluca SOMA - CEO - ALD Automotive
1. Operational leasing amidst the crisis
2. Trends on corporate mobility
2.1 Trends on market demand
2.2 Trends on market offer

3. A way to the future


3.1 Industry SWOT
3.2 Expectations 2015
3.3 New role for market players
3.4 New product offering

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Business metrics
Used car sale prices New orders

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Contract extensions New deliveries

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Consequences of the crisis Where are we today ?


• Fall in used car sale prices • Drop of orders
Industry reaction • Drop of deliveries
• Propose contract extensions • Slight signs of improvements
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Resulting structural adjustments

• Progressive reduction of yearly mileage and extension


of contract duration
• Reduction of maintenance costs
• Selection of economical cars (engine downsizing)
• Development of insurance penetration
• Multi-channelling for remarketing

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1. Operational leasing amidst the crisis
2. Trends on corporate mobility
2.1 Trends on market demand
2.2 Trends on market offer

3. A way to the future


3.1 Industry SWOT
3.2 Expectations 2015
3.3 New role for market players
3.4 New product offering

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Trend on corporate mobility - market demand

SME’s growing interest


Retail sales decline Taxation changes
in operational leasing

+ + +
Growing demand for
Fleet sales stability Fuel price volatility
packaged clean mobility

Demand for ecological cars Growth potential in SME


Rise in fleet market share
(Size & engine downsizing) & consumer segments

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Trend on corporate mobility - market offer
OEM’s & captives
Liquidity crisis Taxation changes Sales channel on
& government subsidies (Taxes, CO2) domestic & core markets

+
Low registrations, rebates Used car market impact Vehicle + service
& used car market drop (Finland, NL, France, W-Eu) package offering

UCS loss, RV reduction Risk management & Cross subsidies from


& contract extension re-marketing investments manufacturers (?)

Lower profitability Leasing rates adjustments

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1. Operational leasing amidst the crisis
2. Trends on corporate mobility
2.1 Trends on market demand
2.2 Trends on market offer

3. A way to the future


3.1 Industry SWOT
3.2 Expectations 2015
3.3 New role for market players
3.4 New product offering

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Industry SWOT
Strengths Weaknesses
• Outsourcing benefits (cost driven • Residual Value exposure
offering) • Car dependant product
• Response to mobility evolutions • “Authority” of operating lease
• Global presence & economy of industry
scale • Capital intensive business

• Economy upturn & corporate cars • Funding cost volatility


need • IFRS new rules
• New mobility needs • New automotive distribution
• New market segments scheme (BER)
• Supply – demand of new cars (?) • Supply – demand of used cars (?)
• Manufacturers & government
environmental policies (taxes)
Opportunities
9 Threats
Expectations 2015 – from a double-digit growth to…
Mature countries BRIC & emerging
• Leasing market still shrinking (today -30%) • Leasing market recovering
• Concentration of players, reallocation of • Credit risk alert
2010 market shares
• Used car market recovering
• Used car market improving 2nd semester
• New vehicles offering
• Car mix evolving (no revolution)

• Leasing market stabilizing • Leasing market growth (one-digit)


• Return to profitability • Product offering adaptation
2011
• Used car market stabilizing • China : anticipation of new vehicle
• New market segments developing
fleet mix (?)

• Leasing market back to growth (one-digit) • Double-digit growth


2012 • Right level of profitability vs risk • Used car market structuring
- management
2015 • Significant mix evolution

10 • Consumer market start


New role for market players

• Multi modal mobility providers (road, rail, air…)


• Captive re-focalisation
• Partners for OEM’s in product specification & tuning
• Risk management experts
• Asset management experts
• Re-marketing experts (partnerships ?)
• “System integrator” & “business application provider”

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New product offering : 2 scenarii
Enterprises Consumers / enterprises

Price increase Intelligent fleet mix

+ +
Elimination of Clean mobility trend &
risk premium changing culture

Mutual appetite for


Mobility package offers
open-end products

Price increase may generate Growing expertise in leasing


customers’ interest in industry could favour
Open-end products Multi modal packaged mobility

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Thank you

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