APU AU Market Entry October 2011 Brent Brownell

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Summary
• Australia (AU) is the 6th largest country in the world with an area of 2.9 million square miles, opposed to that of U.S. with 3.7 million square miles. With a population of 22 million, it has just 7% compared U.S.‟s 312 million, plus it has a primitive infrastructure with major cities far apart and no railroads between them. As an Australian friend of mine 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 majorities were the conventional-type at 3,552 units, while 1,812 cab-over units were sold mainly by Volvo and Kenworth. The primary truck thoroughfares in Australia run between Brisbane and Sydney, with Brisbane being the Mecca of trucks due to mining and exportation. Australia is a continent that experiences a variety of climates due to its size. The weather can range from below zero 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 by a few AU domestic and one foreign firm. But no one device has the power and features to provide for trucks covering the vast ranges of the AU landscape, and that‟s a primary reason why Hodyon‟s 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 for Dynasis in the AU market. Together with its two retail and service partners, MVM has a combined '30 locations‟ covering all of AU, where MVM handles New South Whales (Sydney), Truck Art deals with Victoria (Melbourne) and stretches 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 first entered the market nearly 4 years ago - it had major flaws relative to the electrical system and engine mountings. So with the support and guidance of ABC Auto‟s 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." 2

Questions & Answers
① What are the major truck publications, i.e. TransportTopics (TT). If TT not in AU market, then what publication would 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 Magazine appear 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 Australia‟s Truck Industry Council (TIC): Tony McMillan, CEO. Finally made contact with Tony, and his partner, Simon Humphries, was very helpful in providing yearly sales data for HC conventional and cab-over trucks. Further ongoing information on HC trucking market statistics can be gained by subscribing to the T-MARK database 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 unit total < 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 BE WILLING 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 (cont.)
⑥ Market representatives for existing idle reduction technology products, i.e. MVM or Briskair? What dealers in AU are selling 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 dealers act as a quasi group in considering and developing new anti-idling products for the AU market. All inquiries are run through MVM Auto‟s David Saliba, Managing Director. (see Slides 6-7) ⑦ Five OEMs to consider: VOLVO: Volvo (inexpensive but low market-share in US), Mack (average pricing, low market-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 for each 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) ⑧ New truck sales (OEM): talk with the „dealers‟, not the manufacturers, i.e. Brown & Hurley? Spoke with a handful of dealers. There was some basic interest from Brown & Hurley - PACCAR dealer, and Hartwigs - Daimler dealer. It should be noted in being careful in trialing with truck dealers. If there are any noted problems with a trial, this could make an irreparable name for Hodyon/Dynasis in the AU market. (see Call Notes Item 6) ⑨ Haultech Engineering: Icepack? Still in business? What is the dealer coverage for exiting products? How many have they sold? Yes, Haultech is still in business. It‟s primary product is Icepack 2000-S, selling ~600 units yearly in AU. It sells direct and through a dealer network similar to competitors. (see Slides 14-16 and Slide 21) ⑩ How are idling reduction technologies advertised? Is adverting done at all, or just through word of mouth? Mostly through word of mouth but some advertising is done, primarily by Icepack. It would be best to consider advertising in the Big Rigs, Owner Driver, Diesel publications. (see Slide 8)

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AU High Combination (HC) Truck Sales Breakdown
Statistics provided by Australia‟s Truck Industry Council (TIC)
YEAR/TYPE 2010 TOTAL 2010 Conventional 2010 Cab-Over 2009 TOTAL 2009 Conventional 2009 Cab-Over 2008 TOTAL 2008 Conventional 2008 Cab-Over 2007 TOTAL 2007 Conventional 2007 Cab-Over Kenworth Volvo Western Star Mack Freightliner International YEARLY TOTALS

2106 1474 632 1536 1075 461 2664 1865 799

1009 0 1009 908 0 906 1119 0 1119

814 814 0 618 618 0 1151 1151 0

758 758 0 761 761 0 777 777 0

570 399 171 908 636 272 797 558 239

107 107 0 177 177 0 410 410 0

5364 3552 1812 4908 3267 1639

6918
4761 2157 8062 5499 2563

2757
1930 827

1383
0 1383

1114
1114 0

1366
1366 0

1178
825 353

264
264 0

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% for conventional/cab-over, respectively, for both Freightliner and Kenworth.

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RETAIL AGENTS: MVM Auto Repairs Group

Briskair Chris Liddelow

MVM Auto David Saliva
Truck Art Terry Gibbs

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AGENTS: MVM Auto Repairs Group – Our Mission, Your Satisfaction

6/130 Forrester Road, St Marys N.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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Trade Magazine Advertising
Big Rigs Owner Driver Diesel Magazine

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Bull Dust

(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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Ecowind Systems

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Ecowind Systems

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ICEPACK 2000-S

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ICEPACK 2000-S

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ICEPACK Published Price List

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Viesa Air Evaporative Coolers INTERNAL II SYSTEMS

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Viesa Air Evaporative Coolers INTERNAL II SYSTEMS

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Blizzard Systems

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Anti-Idling Diesel Competitive Landscape
Features
Power Cooling (btu) Warranty Noise Level at (4) meters Main Unit Dimensions (W x H x D) Cylinders Controls Shore Power Diesel / Time Oil Change Weight Engine Ignition Heating

Ecowind (recently
bought by Kohler)
3.5 kW 13,000 24 months or 1,000 hours 60 dB 11” x 22” x 28” 1 solid state integrated optional .1849 gallons / hr Every 300 hrs 240 lbs 15LD 350S Diesel key none no ECM, no thermostat, no controls

Icepack 2000-S
6 kW 18,000 12 months or 2,000 hours 70 dB 16” x 20” x 25” 1 simple none .1849 gallons / hr every 100 hrs 330 lbs air/oil-cooled 6hp Kubota key and remote panel none no ECM, no thermostat, no controls

Dynasis
6 kW 12,000 heat 12,000 hermetic AC 24 months or 4,000 hours 68 dB 18” x 27” x 25” 2 state-of the-art touch screen standard .1650-.3300 gallons / hr depending on cycling every 1000 hrs 385 lbs liquid-cooled 12 hp Yanmar In-cab control standard meets ECM standards, has thermostat & controls

Others

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Anti-idling Competitive Product Prices, Sales and Warranties
Manufacturer Products Warranty Price to Dealer Installed Price to Customer DELTA of Installed Price and Price to Dealer Years Available in AU Market Total Yearly Sales in the AU Market Units on AU Roads Today Units Sold by MVM Auto (Not Including Other Group Members)

Lombardi (Italy)
Ecowind 1-cylinder, diesel 12 months or 1,000 hours AU$5,900 (US$6,030) AU$8,500 (US$8,690) AU$3,300 (US$3,375) 4 800 Units 2000-3,000

Haultech (Australia)
Icepack 1-cylinder, diesel 12 months or 2,000 hours AU$5,700 (US$5,825) AU$8,500-$9,500 (US$8,690-$9,710) AU$2,000 (US$2,045) 15 600 Units 5,000

Colven (Argentina)
Viesa Air Evaporative 2 years (less than 1% have warranty issues) AU$2,000 (US$2,045) AU$3,300 (US$3,375) AU$1,300 (US$1,330) 12 1,000 Units 12,000-15,000

200 Units

50 Units

250 Units

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Supporting Slides

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AU Market Truck Sales Statistics
Statistics provided by Australia‟s Truck Industry Council (TIC)

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Owner Driver Ad Rates

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IMPORTER: CTIS – Sleeper Cab Cooling Specialists

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IMPORTER: CTIS – Agent List

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Pure Air

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KOOLkat

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EcoStation

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