VOLVO TRUCKS INDIA

PHILIPPE DIVRY – MD, Volvo India Pvt. Ltd

SVP TRUCK JOINT VENTURES INDIA

MAJOR TRENDS IN GLOBAL CV INDUSTRY

Center of gravity shift

Major global trends

Volvo in India

Industry needs in India

1,000 units, 2011

Germany 61,000

France 41,000

Uk 30,000

Spain 13,000

Italy 13,000

Other

6%

Russia

4%

WORLD'S LARGEST TRUCK MARKETS (> 14T)

CHINDIA HELD OVER HALF OF THE GLOBAL HD TRUCK INDUSTRY IN 2011

VOLVO IN ASIA STRONG GROWTH – A SIGNIFICANT PART OF THE GROUP’S BUSINESS

24%

INDIA

CHINA

THAILAND

MALAYSIA

SINGAPORE

PHILIPPINES

JAPAN

KOREA

OF GROUP SALES

Technological convergence of developed markets

Value for money products

DUAL WORLD

MAJOR GLOBAL TRENDS

Nox (g/kWh)

EMISSIONS BROUGHT TOWARDS ZERO MAP FOR EMISSION STANDARDS 1995-2016

Tier 2 2001 Tier 3 -06 (-05)

Tier 4B

Tier 4A

EPA 02

EPA ’2010

EPA’07

EPA 98

Japan new Short term regulation

2005

Japan new Long term regulation

2007

2.0 3.5 5.0 7.0

0.15

0.10

0.02

PM (g/kWh)

0.05

0.20

EU-II 95

EU-III 00/01

EU-IV 05/06

EU-V 08/0

9

Euro VI demands Further reduced levels of

NOx and Particulates (PM)

Particulate counting

Extensive On Board

Diagnostics

New in service conformity

emission requirements.

Emission durability:

300000-700000 km

(depending on application)

TOWARDS ONE COMMON TECHNOLOGY CONVERGENCE EUROPE / US / JAPAN

US’04

+ EGR

Euro IV

+ SCR

Euro V

+SCR + Opt. DPF

US’07

+HEGR + DPF

Tier 3

+ internal EGR Tier 4A

+ HEGR + DPF

NLT

+ EGR

Off Road

2004 2006 2007 2009 2010 2011 2012 2005 2008 2013 2014 2015 2016

SCR + EGR + DPF

The Global Engine

HDEP+

Tier 4B

EPA 2010

PNLT

HDEP+

EPA Next

PPNLT

Euro VI

VALUE PRODUCTS STRIVING TOWARDS ~70% PERFORMANCE AT ~50% COST

100

75

50

25

1995-2000

2003-2005

2008-2009

Earlier

predictions

Actual

development

Premium

Europeans

High/Mid end

Japan/Korean

1st upgrade ‘Copy cats’

Moderni-

zation

2nd upgrade ‘Own development’

+

JVs

Price index

Performance Horsepower

Features

Quality

Design

3rd upgrade JV products?

2012-2015

“30s”

trucks

1949-95

Technological convergence of developed markets

Value for money products

West goes East, East goes West

Platforms, Alliances

DUAL WORLD

GLOBAL GAME

MAJOR GLOBAL TRENDS

Technological convergence of developed markets

Value for money products

West goes east, east goes west

Platforms, alliances

Urbanization, Electromobility

Customer efficiency & TCO Focus

DUAL WORLD

GLOBAL GAME

NEW NEEDS

MAJOR GLOBAL TRENDS

VECV JOINT VENTURE

THE VOLVO GROUP IN INDIA A DUAL PRESENCE

WHOLLY OWNED OPERATIONS

3,000

EMPLOYEES

WHOLLY OWNED OPERATIONS A STRONG FOOTHOLD IN INDIA

CONSTRUCTION

EQUIPMENT

TRUCKS BUSES MARINE & INDUSTRIAL

POWER SYSTEMS

AERO

MARKET PRESENCE

SOURCING & COMPETENCE HUB

INFORMATION

TECHNOLOGY PRODUCT

EXPORTS

3P PRODUCT DEVELOPMENT &

GLOBAL SOURCING

SERVICES

PARTS LOGISTICS

X 5

VOLVO EICHER COMMERCIAL VEHICLES A SUCCESSFUL JOINT VENTURE IN INDIA MASS MARKET

Strong partner adding market presence, competence in frugal

engineering and speed to market

Combination of frugal approach and selective introduction of

Volvo hard & soft technology

Total alignment and high cooperation

between AB Volvo and Eicher Motors

Eicher brand to take its natural

place in the Indian market

BUSINESS

ENVIRONMENT

INFRASTRUCTURE

& LOGISTICS REGULATION

CV INDUSTRY NEEDS

INFRASTRUCTURE AND LOGISTICS

Road transport 4.7 % of GDP

Average speed 30-40 km/h

Logistics cost India = 13-15% of GDP

(7-8% in US & Europe, 10% in China)

Consistent infrastructure needed

(500 MUSD/year lost in idling)

Better infrastructure allows more

efficient trucks

15

ACCELERATING REPLACEMENT OF OLD TRUCKS FASTER EFFECT THAN EXPENSIVE NEW TECHNICAL REGULATIONS

Clean Air

Fuel Consumption

Road Safety

Reliability

CONTRIBUTING TO IMPROVEMENT OF TRANSPORT INDUSTRY

12 year Limit

=

1 to 2

Emission Steps

CONCLUSION

A global game

India high on the global map

CV industry can contribute to India’s modernization

Volvo and VECV will deliver

THANK YOU