Executive Analysis of MD-HD Value Truck Market in Select

Emerging Economies Value Truck Sales in China, India, Indonesia, and Africa to Reach Over 800

Thousand Units by 2022

BRIEF SUMMARY

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Contents

Section Slide

Number

Executive Summary 4

Definitions & Segmentation 10

Market Overview 12

Value Truck Market Outlook 17

Product Positioning 22

OEM Value Truck Strategies 32

Regional Market Analysis 39

China 40

India 45

Indonesia 50

Africa 55

Key Conclusions, Future Outlook and Predictions 60

Appendix 63

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Executive Summary

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Executive Summary — Key Findings

Value Truck Market : Key Findings, Global, 2014

3

4

5

1

China-India centric development. With 70 percent of all global value trucks to be sold in

China and India by 2022, OEMs are expected to develop value platforms based on these two

markets in the short-medium term. However these platforms will feature attributes enabling

global scalability in the long term.

Product differentiation strategies by Global OEMs for value truck to be centered around

powertrain upgrade, safety, cab features, and telematics solutions. Larger engines, better

safety, more comfort, and track and trace telematics to be key features of these trucks.

Greater degree of variance from low-cost trucks will offer western OEMs such as Daimler,

Volvo, MAN etc the chance to derive greater ROI from TRIAD based technologies, and also

faster payback to Asian OEMs for R&D dollars spent in building these trucks.

Fastest growing segment in the global trucking Industry. The medium-heavy duty value truck

segment in key emerging markets of China, India, Indonesia and Africa is expected to grow at

a CGAR of 12 .3 percent to reach over 800 thousand units by 2022.

2 Most attractive sub-segment for platform development. By 2022, 75% of all value trucks

built globally will be attributed to platform based development and manufacturing.

Key: TRIAD—The European Union, North America, and Japan; OEM—Original Equipment Manufacture;

CAGR—Compounded Annual Growth Rate Source: Frost & Sullivan

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Executive Summary— Total Truck Market Outlook — Select Regions By 2022 one out of three trucks sold in China, India, Indonesia, and Africa collectively will be a value truck;

China alone to account for two out of three of these sales.

Source: Frost and Sullivan

2014 2022

1.33 M

2.27 M

Value Truck Market: Total Truck Market Outlook, Select Regions , 2014-2022

Value Trucks,2022

16%

35.3%

48.6%

7.3 %

23.8 %

68.9 %

China 68%

India 17%

Africa 10%

Indonesia 5%

Growth in value truck sales will largely be experienced at the expense of market share taken from higher

end of low-cost truck market. Also noticeable is the rise in premium truck sales in China, India, Indonesia,

and Africa.

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Powertrain Cab Features Safety

Systems Telematics Chassis

Pric

e P

oin

t Te

ch

no

log

y

Pre

miu

m

ABS

Pneumatic

ABS + ESC

EBS

ISS, Active

Systems

Track &

Trace

Passive

Systems

Basic

Pneumatic Basic PS,

Leaf Springs

PS+

Telescopic

Adjustable

Active

Steering/

Suspensions

Leaf Springs

+ Shock

Absorbers

Analog

Display

Crash

Certification

Digital

Display,

Adjustable

Seats

A/C Cabins

Infotainment

Advanced

Cab Systems

Driver

Management

Vehicle

Management

Geo

Fencing

ECO driving

NA Engine

Turbos

Light

weighting

EGR

Advanced

Valve Train

Natural Gas

Hybrid

Engine

Brakes

Executive Summary— Value Truck Technology Clusters Mapping sub-system clusters to specific regional market requirements is imperative for successful product

positioning strategies.

Value Truck

Product Boundary

Low

-co

st

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China Indonesia India

HD

M

D

Tata Prima LX

AL Captain

AL Boss

U Truck

VE Pro

VE Pro

CNHTC Howo T5-G

FAW J6P

JAC HF Series

SIAC IVECO Genylong

Auman GTL

Foton Aumark

Isuzu FPR

Quester CG

Fuso FE

CV Outlook: Value Truck Partial Product Portfolio, Key Emerging Markets, 2015

Executive Summary— Major Value Truck Models in Selected Markets 4 emerging markets show considerable activity in the value truck segment; Evolving European and Chinese

OEM product positioning will continue to challenge Japanese OEMs in this segment

BharatBenz 2523

Source: Frost & Sullivan

Africa

Isuzu F-Series

Fuso FE 7 136

Hino 700

Quester CWE

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Executive Summary— Value Truck Market — Powertrain Profile Fuel efficient180-300HP diesel engines coupled with 6-12 Speed manual transmissions reported by most OEMs

as most desirable configuration for value trucks in China, India, Indonesia, and Africa

Value Truck Market: OEM Powertrain Range, Key Emerging Markets, 2014

0 100 200 300 400 500

BEIBEN

CAMC

CNHTC

DongFeng

FAW

Foton

JAC

SAIC-IVECO

AMW Trucks

Ashok Leyland

BharatBenz

Eicher

Mahindra

Tata Motors

Hino

Isuzu

Mitsubishi FUSO

UD

Fuso

Isuzu

Hino

Engine Power (HP)

China

India

Indonesia

Africa

• Value positioning is rapidly moving

towards the higher ranges of 350-

400HP in China.

• Fleets are willing to pay a premium

for higher powered trucks as the road

infrastructure expands to

accommodate bigger trucks with

higher power engines.

• Engine HP in Indian value trucks

is likely to move upwards albeit

slowly compared to China in the

short term.

• Power range to move towards

280-310HP range in line with fleet

requirements through to 2022.

Global Bandwidth 2014 Focus Areas 2018-2022

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Parameters Current Outlook (2014) Future Outlook (2022)

Forecasts Value truck unit shipments in China, India,

Indonesia and Africa: 316K units

Value truck unit shipments in China, India, Indonesia

and Africa: 800K units

Value Offering

Powertrain: Power/Torque Upgrade

Safety: ABS, passive technologies

Telematics: Track and Trace

Cab: A/C cabs, comfort adjustable seats

Chassis: Power steering, Shock Absorbers

Powertrain: Natural Gas, engine brakes, SCR

Safety: ESC, EBS and Active safety systems

Telematics: Diagnostics, driver/Vehicle management

Cab: Infotainment, digital interfaces

Chassis: Active suspensions and steering

Platforms

Platform sharing for value trucks is around 40-45

percent globally.

Platform commonality is restricted to frame,

drivetrain and axles systems,

Platform sharing for value trucks to feature 65-

70percent commonality across various markets in the

global value truck market

Platform sharing is expected to be extended to cabin,

safety and chassis technology clusters, telematics

systems, powertrain systems and others.

Manufacturing Current value truck manufacturing bases are

located in China, India and Japan predominantly

A bulk of global production to be centered in China

and India, however production bases to shift to

emerging value truck markets in APAC, Africa and

Latin America.

Executive Summary— Current and Future Outlook

Value Truck Market : Current and Future Outlook, Global, 2014–2022

Source: Frost & Sullivan

Buoyed by the integration of premium-features at competitive costs owing to improved platform sharing

strategy ,the value truck segment will grow to over 800,000 units in key emerging markets by 2022.

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Return to contents

Definitions and Segmentation

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Classification

MDT (Medium Duty Trucks): >= 6 ton - 16 ton

HDT (Heavy Duty Trucks): >= 16 ton

Weight Segments

Regions Covered China India

Indonesia Africa

Key Assumptions • Price segments are classified according to various regions based on

the local market conditions.

• Markets such as India, China and Africa clearly have a segment

between low and premium segments, where the price, specifications

and features fall right between the two. This segment here is defined

as the ‘value segment’.

• In markets such as South America, North America, and Western

Europe the trucks are classified into only low and premium, as there

is no intermediate space to be classified as value.

• Another distinction to be made is that these segmentations are

region specific and may overlap. For example: Trucks in the value

segment in China and India may be similar to those in the low-cost

segment in Western Europe and North America. Source: Frost and Sullivan

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Market Engineering Methodology

One of Frost & Sullivan’s core deliverables

is its Market Engineering studies. They are

based on our proprietary Market

Engineering Methodology. This approach,

developed across the 50 years of

experience assessing global markets,

applies engineering rigor to the often

nebulous art of market forecasting and

interpretation.

A detailed description of the methodology

can be found here.

Source: Frost & Sullivan