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2 a atiat apital t at pl ata t l al ipcti Global Vice Chair pip.mccrostie@uk.ey.com Follow me on t Deputy Global Vice Chair steve.krouskos@uk.ey.com Follow me on a i Global Lead Researcher bperkins@uk.ey.com +44 (0) i a i a a t Americas Leader richard.jeanneret@ey.com Follow me on tti t ta t a t Global Automotive and Transportation Industry Leader mark.short@ey.com a l Central Region Automotive and Transportation Industry Leader bradley.hehl@ey.com t p a ll a GSA Automotive Leader stephan.hellmann@de.ey.com i Ca t Americas Automotive Industry Leader jim.carter@ey.com a ill Global Automotive and Transportation Leader randall.miller@ey.com Contacts ia a i p john.hope@hk.ey.com p i l a t ia a i a a i EMEIA Leader andrea.guerzoni@it.ey.com apa t it Japan Leader kenneth.smith@jp.ey.com

3 Companies embrace sustainable M&A as deal markets generate renewed growth Adverse political or economic conditions are also a t EY Global Automotive & Transportation Industry Leader, Capital C a t

4 environment and corporate strategy Capital C a t

5 of automotive executives view the l al a i pi of automotive companies will t ti a p ati al i in the next 12 months of automotive companies p t t at i tal t in the next 12 months Continuing geopolitical issues in Eastern Europe, the Middle East and in certain areas of South America and Asia are a leading cause of concern around economic risk. The stability of the eurozone is also becoming a more prominent risk factor for automotive executives. Ongoing high volatility in commodities and currencies continues to challenge automotive companies long-term planning. of automotive executives view increasing global and regional p liti al i ta ilit as the at t i i to their business for the next 12 months and an additional of automotive executives view the i a p liti al it ati i t as the at t i i to their business for the next 12 months. Meanwhile of automotive executives view increasing latilit i iti a i as a top boardroom agenda topic Capital C a t 3

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7 A wide majority of automotive executives expect the global M&A market to thrive in the next 12 months. This sentiment is driven by persistently low-growth environment. of automotive executives expect the at t i p in the next 12 months of automotive companies expect to p ai iti in the next 12 months around li li t l t a a ti alit and pp t iti Likelihood of closing acquisitions Quality of acquisition opportunities Number of acquisition opportunities % of positive attitude Deal metrics 31% 42% 54% 59% 62% 65% 68% 73% 77% Oct 14 Apr 15 Oct 15 of automotive companies expect to l t a al in the next 12 months when compared to the prior year of future transactions are anticipated to illi in value of automotive companies intend to p ai iti t i t i t Capital C a t

8 While more than 20% of automotive companies are planning to acquire in their home country or domestic market, a larger number are looking not just across borders but outside of their immediate region entirely. This is unsurprising in a fast-moving and increasingly divergent global economy. of automotive executives are planning acquisitions outside their immediate region Concerns with l i t i i at have increased, resulting in the majority of allocation for global investment continuing to be l p at Top investment destinations for automotive India Germany Kingdom Automotive executives have increased plans to acquire assets in the eurozone. This is in part due to companies catching up on program of quantitative easing by the European Central Bank may also help improve dealmaking in the eurozone. Strengthening growth across the area, together with changes in the euro exchange rate and local asset valuations, will make this a dynamic and fast-moving market for deals in the near term. of automotive companies intend to i a t i ai iti i t Assurance Tax Transactions Advisory EY is a global leader in assurance, tax, transaction and advisory services. The insights and quality services we deliver help build trust and confidence in the capital markets and in economies the world over. We develop outstanding leaders who team to deliver on our promises to all of our stakeholders. In so doing, we play a critical role in building a better working world for our people, for our clients and for our communities. EY refers to the global organization, and may refer to one or more, of the member firms of Ernst & Young Global Limited, each of which is a separate legal entity. Ernst & Young Global Limited, a UK company limited by guarantee, does not provide services to clients. For more information about our organization, please visit ey.com. t EY a a ti i i How you manage your Capital Agenda today will define your competitive position tomorrow. We work with clients to create social and economic value by helping them make better, more informed decisions about strategically managing capital and transactions in fast-changing markets. Whether you re preserving, optimizing, raising or investing capital, EY s Transaction Advisory Services combine a unique set of skills, insight and experience to deliver focused advice. We help you drive competitive advantage and increased returns through improved decisions across all aspects of your Capital Agenda EYGM Limited. All Rights Reserved. EYG no. ED0149 ED None This material has been prepared for general informational purposes only and is not intended to be relied upon as accounting, tax or other professional advice. Please refer to your advisors for specific advice.