World Congress January 14, 2003

Victor Doolan President and CEO Volvo Cars of North America, LLC
Issue Date: 1/1/03 Revision Date:05/20/11
Volvo Cars of North America, LLC

C As oad ent st sid ric CR e Fa Cs ci lit ie s ns Co Best l ua Resid er Low nce ur a Ins sts Co ce en ci e lu Va d re ilo ue e Ta Val nc na Fi ards Rew & Training p. Costs ed Pre-Own s Progra m red o Tail ance Fin ram g d Pro ce w du Re ar-Ne Ne Ca rs et rk .s Ma cin gPkg i Pr ion t Op Ex pe r L Ma ower int ena nc e People Expertise t ten sis on est s C B e tic ac Pr Re d I u Co ns. ce Re st d s Ma uce in People Cos t. Develo Rewards . LLC Customer For Life es oc Pr se s Customer Satisfaction Inven to Mgm ry t Build To Expanded Demand Sa fe VCNA Business Model Pkgs Option u al In divid ls Mod e le t ab rac Ret ardtop H Hybrid Diesel Best Vehicle Pe rf o Character Fla Run tT ire s rm an ilit Ut y ty ce Vehicle e Profitability Brand Value l Va ue Br a Po Pro nd si d V tio uc ia ni t ng Envir lity onme Qua ity nta Lead bil ership l Dura ship al n de r o a ti ty ip Le nc ili h Fu Ut ers ad Le Co m ac m tio un ns - Ge t it all righ all the t t im Environm e ent Qu Du a ra lity bi lit y V ge SU an Ch ne t La ssis A ty fe e al Sa o b ion t at ir n sp Ru In et rk Gs Ma DA t Bes e s ctic Pra r ale er De om st d Cu Buil tion ta ien Or iun m s m ion Co act nt Convenie Times & Locations 1:1 CRM CRCs E-Com Maint Ow For Lif ner e C Eff ycle Loa ecti n e ve Cu Pr r Ca og r s R t.In du s Le Safe try ad t er y sh ip AWD Strate gy Resale Value R e ch Ret wa ie ai rd ve le r m t c udo rP er re m e o s ntC e i t u a f L Cr o e bati f or P l F sr ei at e R l D In ev Pr sur elo og an p r c Bo Che am e ck d Pr y Pa ici rt Inc ng s S re a Int ervi se ce er va Build ls -i Main n t. ts Expertise Retention Program Ex pe ri en c ie nc e Ca re nt te is ns est es Co B tic ac Pr Sy ste ms A Lower Inventories Lower Costs Less Unproductive Tasks(?) Pre-owned Business Improved Margin Higher Service/Parts Retention Lower Costs Loaner Cars Floorplan Retailer Profitability Growth in Volume Lower Cost of People Development Due to Lower Turnover Higher Owner Retention Profitability Better Model Mix Lower Variable More Finance Marketing Income Issue Date: 1/1/03 Revision Date:05/20/11 1 Volvo Cars of North America.

PRICING. PRODUCT DESIRABILITY. IMAGE.BUILDING RESALE VALUE RESALE VALUE IS THE ULTIMATE MIRROR THAT REFLECTS THE TRUE STRENGTH OF PREMIUM BRAND AS IT REPRESENTS THE CUMULATIVE EFFECT OF ALL ASPECTS OF THE BRAND. DURABILITY. DEALERS AND. DISTRIBUTION. CUSTOMER SATISFACTION. QUALITY. MARKETING. LLC . VOLUME MANAGEMENT. Issue Date: 1/1/03 Revision Date:05/20/11 2 Volvo Cars of North America. REMARKETING. OF COURSE.

Customer cash in lieu of leasing Issue Date: 1/1/03 Revision Date:05/20/11 3 Volvo Cars of North America.Learning's from Previous 5 Years • Large Residual Losses • Initial values set too high • Negative pricing • New car incentives • Supply – New and Used exceeded demand • Pre-owned programs to mitigate losses • 0% Finance. LLC .

LLC .Leases as a Share of Overall Vehicle Sales Issue Date: 1/1/03 Revision Date:05/20/11 4 Volvo Cars of North America.

LLC .Next 3 Years • Residuals at realistic levels • Positive pricing • Higher interest rates • Reduction in “Off Lease Vehicles” • New car incentive progressively returning to lease or dealer cash • Possibility of incentives via “Free of Charge” option packages • Continuous development of Certified PreOwned Programs Issue Date: 1/1/03 Revision Date:05/20/11 5 Volvo Cars of North America.

The art of remarketing in an era of high incentives is to market new cars correctly in the first place • Build quality – durability • Build desirability of brand – vehicle • Establish competitive – right pricing. LLC Issue Date: 1/1/03 Revision Date:05/20/11 . vehicle and options • Balance supply and demand • Reduce supply of “Near New” cars • Remarket effectively via Certified PreOwned programs 6 Volvo Cars of North America.

LLC .Benefits • Critical to ensuring effective remarketing of product • Customers show increasing preference for Certified Pre-Owned because of greater confidence in the purchase • Bring first time buyers to the brand • Great discipline on manufacturers to ensure ongoing ownership costs.Certified Pre-Owned Programs . quality and desirability are competitive • Efficient way to distribute off lease vehicles to the franchise system • Brand equity can be effectively managed by utilization of residual reserves to support the sale • Profit opportunities for franchise retailers Issue Date: 1/1/03 Revision Date:05/20/11 7 Volvo Cars of North America.

Certified Pre-Owned Programs Challenges • Substitution for new cars – retailer capacity • Cost of advertising. LLC . promotion and support for certified programs Issue Date: 1/1/03 Revision Date:05/20/11 8 Volvo Cars of North America.

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