Continue leadership positions on the commercial vehicle market Bo Inge Andersson President & CEO, GAZ Group August 2010 GAZ GROUP PRODUCT STRATEGY Light commercial vehicles Buses Current Gazelle improvements New family of low floor buses Updated power train Alternative fuels and environmental solutions Diesel engines Alternative fuels Process & product quality continuous improvement New Gazelle development Bus modular concept development and implementation across all bus segments Power train Modernization and upgrades to improve performance of gasoline engine, LPG and CNG options Light diesel solution Euro 4/5/6 Medium diesel development with AVL Heavy diesel, Renault license Trucks Off road truck product line upgrade and development New Truck portfolio to offer medium duty trucks, road trucks and offroad vehicles with different GVW Passenger cars GAZ to utilize modern manufacturing capability and open capacity Ongoing discussions with the major global players Opportunities for components localization MAIN FOCUS AREAS Quality improvements, warranty claim reduction, reduce cost of ownership Improve operational efficiency Sales increase for all GAZ Group Divisions New products LCV QUALITY IMPROVEMENT Quality performance results July 2009 – July 2010 (12 month) Warranty incidents per thousand vehicles – 2 months in service (2MIS IPTV ) reduction by 37% Supplier incidents per thousand vehicles (IPTV) reduction by 46% MFG direct run loss – average number of defects per vehicle in production ( DRL) reduction by 35% IMPROVE OPERATIONAL PERFOMANCE Projects Implementation of direct pull system: Sales production purchasing Facilities consolidation and optimization By 42% In-process inventory reduction By 60% Extra equipment elimination By 46% Revenue per employee increase By 47% Facilities consolidation and optimization Results Consolidation and creation of processes/material flows next to assembly lines Work stations standardization Cost reduction (12 months) GAZelle CONTINOUS IMPROVEMENT CNG GAZelle 4,2t 4х4 GAZelle Business + Diesel Reduced cost of ownership LPG GAZelle Business Reduced cost of ownership Improved reliability Product extension Improved consumer properties Warranty retained for engine and fuel system SOP: 4.02.2010 SOP: 10.04.2010 line Reduced fuel consumption Expansion of product line Extended engine service life Improved gearbox July 2010 Improved frame rigidity for long vehicle Extended product line in 4х4 segment Payload increased to 2 tons Extended product line Reduced cost of ownership Extended product line Extended engine offering Retention of warranty on all vehicle’ elements Improved body stiffness for metal van versions Use of the cheapest fuel for today Exhaust system with improved corrosion protection Immobilizer December 2010 February 2011 February 2011 March 2011 GAZELLE-BUSINESS IMPROVEMENTS and CUSTOMERS VOICES Safety Steering Fuel Efficiency 10%-Petrol; 20% - LPG Warranty 80 000 km Vehicle Braking (brake response) Suspension 100 000 km systems Cost of Ownership 20% Heated mirrors 3-point seat belts ABS ( 4x4 & BUS) Energy-absorbing steering column Вячеслав Лымарь, Ижевск, предприниматель: «Моя «Газель» окупила себя за 9 месяцев. Опять же – не имею возможности простаивать месяц. А для «Газели», если что, запчасти всегда под рукой. Алексей Зарипов, Пермский край, предприниматель: «Эта машина помогла мне стать хозяином своей жизни. … пока со мной мой автомобиль, мне не страшно оказаться без работы, я сама себе начальник, я спокоен за себя и свою семью». Андрей Логинов, ген. Директор ООО «Автотен»: окупаются быстрее и дешевле, учитывают специфику именно российского бизнеса перевозок, чего нет у иномарок. .. достойной замены мы на сегодняшний день не видим. NEW BUS PRODUCT and 2010 LAUNCHES PAZ-3204-12 length: 8,5 м. engine: CUMMINS (YMZ) transmission: ZF axle: KAAZ PAZ-3204 length: 7,6 м. engine: CUMMINS (YMZ) transmission: ZF axle: KAAZ GOLAZ 5251 LIAZ-5292 Intercity engine: YMZ transmission: ZF axle: RABA City, low floor Hybrid (EURO-6) HEAVY DUTY TRUCKS PRODUCT DEVELOPMENT and 2010 LAUNCHES URAL Е33 – Е40 Heavy duty off road vehicles for commercial applications with GVW 33-40t, flat nose cab . URAL Е13 – Е26 Off road vehicles for commercial applications: major facelift, conventional and flat nose cab MAJOR POWER TRAIN 2010 LAUNCHES Medium diesel YMZ-530 Heavy diesel YMZ-650 4 & 6 cylinders 4.4 L/6.6 L Cooperation with AVL 6 cylinders 11 L Renault license SUMMARY GAZ Group is aimed at customer satisfaction GAZ Group set the direction for improvements in quality and cost of ownership of its products GAZ Group constantly strives to improve and update its diversified commercial product vehicle portfolio GAZ Group will be successful by having a collaborative relationship with its dealers, suppliers and customers GAZ Group will continue to be the market leader in commercial vehicles in Russia