Central

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Central Eastern Europe Developments
Automotive News Global Conference - Detroit Jan
08 Chris Lacey General Motors
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Today

• Central Eastern European Markets
• What are they
• How are they developing
• GMs go-to-market strategy
• Conclusions
• ..and finally

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GMs Central Eastern Europe

• 29 countries
• East of Germany, North, West East of both India
  China!
• 12 time zones / 25 million sq. kilometers
• 475 million population 8 of the world, 54 of
  Europe
• 84 million vehicles in car parc today Average
  age 12 years
• 30 languages, 4 religions
• GDP range (nominal 2006)
• GDP Total (million USD) Per Capita
  (USD)
• Russia 986 940
  Slovenia 22 079
• Moldova 3 266 Uzbekistan
  753
• Complex legislative environment
• Less than 20 years ago private vehicle retailing
  illegal now one of the fastest growing vehicle
  markets in the world !

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To put the Region in perspective
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Diverse demand and usage
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How are they developing ?
Automotive Industry Market CE Region
25,10 of Europe 8,70 Global

Annual Growth 20
13,30 of Europe 4,60 of Global
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GMS Go-to-market approach

• Our 5 Ps
• The right Partners within GM to provide products
  for the range of price points required
• The right Partners in market place for
  manufacturing
• The right Partners for component supply
• The right Partners in the market for vehicle
  distribution and repair
• The right Partner philosophy with our customers

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The right Partners within GM for Product

• European Opel SAAB
• North American Cadillac / Hummer / Chevrolet
  SUVs
• Asian GM DAT Chevrolet cars and SUVs
• Russian GM AvtoVaz Chevrolet Niva
• Real evidence of GMs
  Globalisation and One Company
  approach.

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The right Partners within GM for Product
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The right Partners for manufacturing

• GM and GM DAT (formerly Daewoo) have a long
  history of manufacturing in the CE Region from
  early 90s
• GM in late 90s actually stopped vehicle
  manufacturing in 3 GM plants in the region
  Hungary, Poland (Warsaw), and Turkey
• Daewoo had 4 regional plants (licensed
  assemblers) all still operating (in Ukraine,
  Poland (FSO), Uzbekistan, Romania)
• 180,000 GM DAT vehicle kits assembled in these
  plants are not recorded in GM Sales in the region
• Recent developments include the new GM plant in
  St Petersburg and manufacturing licenses being
  granted to Zastava in Serbia, Azia Avto in
  Kazakhstan, and FSO in Poland
• Currently GM vehicles are manufactured or
  assembled at 9 locations in the region

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GM Manufacturing Footprint in CE Region
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The right Partners for component supply

• GMs Global Purchasing and Supply Chain group
  aims to increase component sourcing close to
  where we build
• They extend supply channels, identify local
  suppliers and develop to GM standards for local
  and global manufacturing
• Purchases in CE region increased by 81 from
  2003 to 2007, now 21.4 of total GME purchases
• 440 TIER 1 Suppliers in CE region
• Resident Global Purchasing staff in CE region
  increased by 305
• CE region purchasing transactions 100
  integrated in GPSC processes

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Innovative customers need to be served well !
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The right Partners for Distribution Repair

• GM network growth contracts95 202 01
  402 07 765
• In depth blueprinting
• Best applicant selectionManagement focus / site
  location / funding / customer service attitude
• Full multi-brand approach appropriate to location
  opportunity
• Facilities to full European standards from day 1
• Communication / motivation / training guidance

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The right Partners for Distribution Repair
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The right Partner philosophy with our customers.

• Changing the old image of the pre 90s
  industry treating customers with respect
• Transparent retail pricing no premiums
• Warranty Policy
• Realistic labor / repair rates
• Satisfaction survey
• CRM activities
• Retail finance and leasing options
• Vehicle exchange or buy back policy
• Excellent parts warehousing and fast delivery
• Open communication /dialogue / CACs
• G2 used car programme

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Self Assessment / Learnings Observations

• Could we have done better?
• Dealer in house systems
• Full portfolio - only in 60 of market
  covered- Full CV range - Low cost product 8,000
• Wholesale Retail finance in all markets
• Faster manufacturing capacity increases
• More training more training

• Learnings Observations
• No phones to mobiles
• Cash to credit cards
• Brand is King
• High Internet use
• Mobile / clothes / travel / car / apartment /
  house
• Millionaires Show Russia
• Distribution partners positive can do attitude
  and investment policy
• Entrepreneurs everywhere

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Operational Difficulties and Legislation
We try hard not be lost in the complex maze
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2001 through 2007 A Success Story
GM Volume Share Development Central Eastern
Europe
Excludes 180K GM Daewoo Kits sold in the region
in 2007
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..and finally

• Market Volumes
• - Russia 2,708,659
• - Ukraine 584,823
• - Turkey 625,843
• - Poland 372,054
• - China 8,190,436
• Brazil 2,220,481
• India 1,812,375

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.and finally .Emerging Markets ??
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..and finally

• RequestCan all of the Global Automotive
  Industry stop calling these markets Brazil,
  China and many others
  
  Emerging
• FactThey have Emerged and are our markets of
  
  Growth Opportunity We forget / ignore/
  mistreat them at our peril.

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Central Eastern Europe
Playing To Win