Carl-Peter ForsterPresident General Motors Europe

„Innovation – The Future of the Automobile Industry in Europe“

May 5, 2005Barcelona

Automotive News Europe Congress

The European Automobile Market

Stagnating demand

New production facilities by 2007

Non-European car manufacturers entering the market

Pricing pressure and decreasing margins

Conditions for Vehicle Development

Economic, environmental and social issues

Changing customer preferences

Legal regulations

Market SituationAutomobile Industry

In Western and Central Europe:

– stagnating demand

– increasing competition

– overcapacities

– falling prices

Recent Market Development

Newly registered passenger cars in Western/Central Europe:

Q1 2004Q1 2004 Q1 2005Q1 2005

3.8 million

s

-2.5%

3.9 million

s

Fundamental Changes inModel Segments

Conventional cars in the mid-size segment: losing market share since 1999

Compact and mini-vans, such as Opel/Vauxhall Zafira and Meriva: market share has been growing for years

GME: Expansion of Product Portfolio

Increase the share of innovative vehicle concepts, including niche models like Opel/Vauxhall Tigra TwinTop

Customer Demands on Individual Mobility

Exciting design

Versatile and flexible cars

Fun to drive and expression of lifestyle

Optimizing Conventional Engines

Gasoline and diesel engines: continually refined and developed further

Innovative Propulsion: Natural Gas

Suitability for daily use

Opel: market leader in Germany

Environmental compatibility

Innovative Propulsion: Hybrid Technologies

Hybrid study based on Astra GTC

Proving the scalability of GM‘s hybrid technology

Changing market needs: extension to diesel-hybrid

Innovative Propulsion: Fuel Cell Technology

GM: investment of more than one billion dollars in the development of hydrogen-powered fuel cell vehicles

HydroGen3: prototype based on the Opel Zafira

Suitable for everyday use: FedEx delivery vehicle in the USA and Japan, taxi in Berlin

The Future of Automobile Electronics

2010: 35 % of production costscould be accounted for by electricalequipment and electronics

90 % of all future innovation willbe based on electronics

Volume of software doubles everytwo to three years

Increasing Efficiency in Development

Avoid duplication of engineering activities

Full integration of ITDC in Rüsselsheimand Saab Technical Development Center in Trollhättanin GM’s worldwide engineering organization

One Company – Strong Brands

Strengthen each brand with the synergies of GM’s

global network

Create additional economies of scale and free up resources

Customer benefit: wider range of models and innovative technologies

Continuation of Product Offensive in Europe

2005: Opel/Vauxhall Astra GTC, the new Zafira, Saab 9-3 Sport Combi and Chevrolet Matiz

2006: Opel/Vauxhall crossover SUV, new Chevrolet SUV, the new Corsa and a new two-seat roadster

45 new models or variants in the next five years

First Generation Zafira

Redefined its class, took over market leadership

Four years in row: best-selling car in its segment

More than 1.4 million units sold

The New Zafira

Further refined Flex7 seating system

Progressive design and distinctive dynamic driving performance

High-tech chassis and state-of-the-art engines

Wide range of equipment

Million Mile Test Drive

Largest test drive campaign ever conducted

35,000 cars available in 40 European countries for three-day test drives

More than 700,000 people signed up to participate

Definition of GM Brands in Europe

Cadillac in the premium/luxury top segment

Definition of GM Brands in Europe

Cadillac in the premium/luxury top segment

Saab as entry premium contender

Definition of GM Brands in Europe

Cadillac in the premium/luxury top segment

Saab as entry premium contender

Opel/Vauxhall: innovative core brands ofthe volume business

Definition of GM Brands in Europe

Cadillac in the premium/luxury top segment

Saab as entry premium contender

Opel and Vauxhall as innovative core brands of the volume business

Chevrolet with growth potential involume business