© 2016 IHS Markit. All Rights Reserved.© 2016 IHS Markit. All Rights Reserved.

AUTOMOTIVE

Global Production Forecast Outlook:Global Auto Sales Growth to Slow in 2018, Yet Remain at Record Levels

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SALES OF THE PRODUCTION

Seven-year forecast offers comprehensive future vehicle

flows

SOURCING

Each vehicle registered is sourced from his production

plant.

SALES POTENTIAL

Seven-year independent analysis of light-vehicle demand and segment

growth integrates current information with 10 years of

historical data.

The Sales-to-Production Methodology

PRODUCTION

Seven-year forecast offers comprehensive future vehicle

cycle plans, projected volumes and plant capacity utilization data for OEMs and suppliers

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The global auto industry looks set for a robust performance in 2018

74.3

95.1

103.5

110.5

60

70

80

90

100

110

120

130

2010 2015 2020 2025

Millions

CAGR +3.6%

CAGR +1.9%

SHORT-TERMNavigating the

geopolitical risks

MID-TERMGrowth Stagnation

LONG-TERMNew mobilties

RECOVERYChinese growth and Mature

markets recovery

Today

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42.6

50.9 51.1

51.7

24.2

42.2

50.0

57.3

20

30

40

50

60

70

2010 2015 2020 2025

Millions

The global auto industry looks set for a robust performance in 2018

SHORT-TERMNavigating the

geopolitical risks

MID-TERMGrowth Stagnation

LONG-TERMNew mobilties

RECOVERYChinese growth and Mature

markets recovery

Today

Emerging

Mature

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But challenges remain in 2018, navigating the geopolitical risks that have intensified in the last months

CanadaTurkey and others

EU28

United StatesJapan

South Korea

Mexico

+2.0%

+1.5%

+1.0%

-0.4%

+8.6%

+12.3%

+12.3%

2017 2018 2017 2018 2017 2018 2017 2018 2017 2018 2017 2018 2017 2018

Greater China Europe NAFTA Japan/Korea Indian Subcontinent Mercosul Greater Russia

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A zoom in the European industry, by destination sales markets

Europe sales to production walk, 2017 and 2018In Thousand of vehicle unit

+2.0%

+1.6%

2016 2017 2018

CAGR 2018-2025 +0.5% via export

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But challenges remain in 2018, navigating the geopolitical risks that have intensified in the last months

CanadaTurkey and others

EU28

United StatesJapan

South Korea

Mexico

+2.0%

+1.5%

+1.0%

-0.4%

+8.6%

+12.3%

+12.3%

2017 2018 2017 2018 2017 2018 2017 2018 2017 2018 2017 2018 2017 2018

Greater China Europe NAFTA Japan/Korea Indian Subcontinent Mercosul Greater Russia

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Europe

Greater China

Greater Russia

Indian

Subcontinent

Japan/Korea

Mercosul

NAFTA

Other

-2%

0%

2%

4%

6%

8%

10%

12%

14%

-100 0 100 200 300 400 500 600 700

Volkswagen

Renault-Nissan-

MitsubishiToyota

Hyundai

General Motors

Ford

Honda

FCA

PSA

Suzuki

Daimler

BMW

-2%

0%

2%

4%

6%

8%

10%

12%

14%

-100 0 100 200 300 400 500 600 700

Challenges remain in 2018

Absolute and relative 2017-2018 growth, by region and OEM In Thousand of vehicle unit

Average = 2.0%

2017-2018 Volume gain

2017-2

018

Gro

wth

Average per OEM = +124 ThousandAverage per Region = +267 Thousand

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Europe

Greater China

Greater Russia

Indian

Subcontinent

Japan/Korea

Mercosul

NAFTA

Other

-1%

1%

3%

5%

7%

9%

-1000 0 1000 2000 3000 4000 5000 6000 7000

Volkswagen

Renault-Nissan-

Mitsubishi

Toyota

Hyundai

General MotorsFord

HondaFCA

PSA

Suzuki

DaimlerBMW

-1%

1%

3%

5%

7%

9%

0 500 1000 1500 2000 2500

That shape the overcoming 2017-2025 performances

Absolute and relative 2017-2025 growth, by region and OEM In Thousand of vehicle unit

Average = 1.9%

Average per Region = +1,900 Thousand Average per OEM = 880 Thousand

2017-2025 Volume gain

2017-2

025

Gro

wth

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RECOVERING MARKETS(MERCOSUR, GREATER RUSSIA)

2.4+M

Stronger recovery phase forWestern mature markets andMexico -- but offset byJapanese industry.

MATURE MARKETS(EU, JAPAN/KOREA, NAFTA)

0.8+M

CHINA

6.1+M

Next decade will bring verydifferent challenges in China ashigh double-digit sales growthis expected to be replaced by acomplex combination of lowsingle single-digit growth,intense competition, extrememarket fragmentation, morecity restrictions, regulatorypressure on air pollution.

INDIA

4.0+M

Used to be weaker thananticipated, but strongfundamentals for the long-term

Almost all key emerging marketeconomies had decelerated, ofwhich South American (mainlyArgentina & Brazil) and Russianmarkets did enter recession.Medium term trend growth willbe due to pent-up demand.Concerns are still focus oninadequate evidence onprogress of structural reforms

A four-speed automotive industry (2017-2025 absolute growth)

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European Union, Battery electric vehicles outlook

EU28 production, by Propulsion System DesignIn Million Vehicle unit

0.0 0.5

1.2

2.8

3.9

4.9

6.4

7.4

8.0

0.50.6 0.7

1.1 1.31.5

1.71.9

2.1

0.3 0.6 1.0 1.3 1.5 1.9 2.3

7

11

15

19

23

2017 2018 2019 2020 2021 2022 2023 2024 2025

Electric

Hybrid-Full

Hybrid-Mild

ICE: Stop/Start

CAGR 2017-2025 -1.9%

CAGR 2017-2025 -0.7%

CAGR 2017-2025 +0.5%

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vehicle produced in European Union will be Battery Electric by 2025

/

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Types of battery electric vehicles

The program consists in fitting batteries into an existing program on a

conventional ICE platform

Example: VW e-Golf

Standalone program, either based on a bespoke

platform, or on the redesign of an ICE platform.

Example: Audi e-tron

The platform is designed to cater to both BEV and ICE

applications.

Example: Volvo CMA

The platform is designed from scratch and only for

pure BEV applications.

Example: VW MEB

DEDICATED PLATFORMSPILOT PROGRAMSCONVERSION PROGRAMS MULTI-ENERGY PLATFORMS

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European Union, Battery electric vehicles outlook

0.04 0.06 0.07 0.06 0.11 0.14 0.17 0.21 0.240.08

0.130.22 0.28

0.29 0.24 0.18 0.11 0.09

0.12

0.24 0.33 0.390.52

0.80

0.01

0.02

0.13

0.29

0.46

0.65

0.84

0.98

0.6%1.0%

1.6%

2.9%

4.4%

5.5%

6.5%

7.9%

9.8%

-1.0%

1.0%

3.0%

5.0%

7.0%

9.0%

0.0

0.5

1.0

1.5

2.0

2.5

2017 2018 2019 2020 2021 2022 2023 2024 2025

Dedicated platforms

Multi-energy platforms

Pilot programs

Conversion programs

BEV share

EU28 BEV production, by typologyIn Million Vehicle unit

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BEV strategies, Volkswagen Mainstream

VW-Seat-Skoda brands BEV production in EU28In vehicule unit

1%

3%

8%

0%

1%

2%

3%

4%

5%

6%

7%

8%

9%

-

100,000

200,000

300,000

400,000

2017 2020 2025

Dedicated platforms

Multi-energy platforms

Pilot programs

Conversion programs

BEV Share

The MEB platform will be VW’s foundation to make BEVsbecome a new hallmark of the group and ensure fleetcompliancy in key markets such as Europe and China. MEBis a matrix of common parts, offering RWD and AWDoptions, wheels on the corners, and batteries installed inchocolate bar pattern.

MEB program are de facto standalone models. As a firststep, 8 models in the compact segment are expected inEurope off the MEB31 variant: 2 models for each brand (VW,Audi, Skoda, and Seat), plus one bigger model on theMEB41 variant, the ID Buzz. The Mosel plant will beconverted from 2019 to make exclusively MEB models witha capacity 400k units/year, following an investment of 1billion euros.

It is assumed that the multi-energy option will beeventually picked for the electrification of subcompactsegments.

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BEV strategies, Audi-Porsche

Audi and Porsche brands BEV production in EU28In vehicule unit

0%

3%

10%

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

0

100,000

200,000

300,000

400,000

2017 2020 2025

Dedicated platforms

Multi-energy platforms

Pilot programs

Conversion programs

BEV Share

Audi and Porsche have no presence on the market. Audipilot programs will start in 2018 with e-tron and e-tronSportback in Brussels, while Porsche pilot programs areexpected by 2020 with Taycan and Taycan Cross Turismo inZuffenhausen.

Starting from 2021, their second-generation BEVs will bebased on a joint-platform called PPE. PPE will be the BEVvariant of PPF (premium platform of the future).

Although they will go for a multi-energy platform strategy,Audi and Porsche will launch a range of bespoke models.PPE models will include Audi E5, E7, E8/Aicon, eQ5, eQ6,eQ7, eQ8, eQ9, Porsche Macan (reportedly 100% BEV),Cayenne, Panamera, and the second generation Taycan.Audi will also leverage the MEB platform for two standalonemodels in the compact segment.

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BEV strategies, Daimler

Daimler BEV production in EU28In vehicule unit

1%

6%

13%

0

0.02

0.04

0.06

0.08

0.1

0.12

0.14

-

100,000

200,000

300,000

400,000

2017 2020 2025

Dedicated platforms

Multi-energy platforms

Pilot programs

Conversion programs

BEV Share

Daimler has been an early entrant with misc conversionprograms including the Smart ED and the B-Class electric.They launched the second generation Smart ED based onthe Edison multi-energy platform in 2017. BEV conversionsof new Vito and Sprinter LCVs are planned for 2018.

Different technical solutions will co-exist, but all will bemarketed under the « EQ » umbrella. The pilot program forMercedes passenger cars is the EQC crossover, with aproduction launch in 2019 in Bremen. From 2020 on, atleast two MFA-2 models are expected to be full-electric,with European production taking place in Rastatt andHambach.

Finally, from 2021, Mercedes EQ models will be based onEVA-2, a dedicated scalable architecture for BEVs. Europeanproduction will include two standalone sedans, to be builtin Sindelfingen. EVA-2 will also spawn two large SUVssourced in the US. EVA-2 will also be localized in China.

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BEV strategies, PSA

PSA BEV production in EU28In vehicule unit

0%

1%

6%

0

0.01

0.02

0.03

0.04

0.05

0.06

-

100,000

200,000

300,000

400,000

2017 2020 2025

Dedicated platforms

Multi-energy platforms

Pilot programs

Conversion programs

BEV Share

PSA has a marginal presence in BEV via conversions of CDVsand partnerships with Mitsubishi (iOn/C-Zero) and Bolloré(E-Mehari). Initial push will be on segment B via the e-CMPplatform starting from 2019. e-CMP allows for optimumbattery installation in the conventional CMP platform, withunaltered interior space.

Although most volumes will be with ICE applications, CMPcan be classified as a multi-energy platform. At least 6 top-hats are planned on the four brands of the group in Europeby 2022, all of them to be marketed as electric variants ofcore models.

This strategy allows for high flexibility in manufacturingdepending on the demand for electric vehicles, andmitigates the risk compared to a bespoke platform. AllEuropean B-segment plants of the group are expected tobuild an e-CMP models. PSA will also expand conversionprograms in LCV segments.

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BEV strategies, Renault-Nissan

Renault-Nissan Alliance BEV production in EU28 In vehicule unit

2%

3%

7%

0

0.01

0.02

0.03

0.04

0.05

0.06

0.07

0.08

-

100,000

200,000

300,000

400,000

2017 2020 2025

Dedicated platforms

Multi-energy platforms

Pilot programs

Conversion programs

BEV Share

Nissan and Renault have been at the forefront of BEVs withthe Leaf and Zoé pilot programs. The Alliance is theEuropean BEV leader and like VW, they have enoughvolume scale to commit a bespoke platform on themainstream market.

For the second generation of BEVs in 2022, the Alliance willadopt a joint scalable platform with a flat floor layout thatwill free up interior space and allow for innovative vehicledesign. Douai will be the CMF-EV production hub forRenault in Europe. Nissan program allocations is yet to bedefined.

On top of Leaf and Zoé, a second pillar model will be addedfor the Renault and Nissan brands with the CMF-EVarchitecture. In addition, Renault will include conversionprograms for LCVs.

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BEV strategies, Summary

Porsche Taycanand Taycan Turismo

In Zuffenhausen

Audi e-tronand e-tron Sportback

In Brussels

Mercedes EQCIn Bremen

Smart EdisonFortwo and Forfour

In Hambach and Novo Mesto

PSA e-CMP208, 2008, Corsa, Mokka, C4, DS3 Crossback

In multiple plants

BMW Gen 4 electric drivetrainMini, i4, X3

Multiple plants (X3 in US)

LCVs

VW MEBIn EU, 2 compact models for each brand + ID-Buzz

Mainly in Mosel

Renault-Nissan CMF-EV2 pillar models for Renault and Nissan

In Douai for Renault, TBD for Nissan

Daimler EVA-22 sedans + possibly a showcase flagship

In Sindelfingen (SUVs outside EU)

Audi-Porsche PPEE5, E7, E8 , eQ5, eQ6, eQ7, eQ8, eQ9

Panamera, Macan, CayenneIn Ingolstadt and Leipzig

BMW Gen 5 electric drivetrainStarting with iNext and up to 12 models globally

Multiple plants

Daimler MFA-22 compact models

In Rastatt and Hambach

LCVs

BMW i3

Renault Zoé

Nissan Leaf

VW e-Golf /e-up

Smart ED

Mercedes B-Class ED

LCVs

Before 2017 Transition period From 2020 on

Versati

le

B

esp

oke

Programs Platforms