October 2014 ey.com/automotive 10th edition. Automotive Capital Confidence Barometer. Middle-market deals to drive M&A activities

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1 October 2014 ey.com/automotive 10th edition Automotive Capital Confidence Barometer Middle-market deals to drive M&A activities

2 Automotive Capital Confidence Barometer October % of automotive companies expect to pursue acquisitions in the next 12 months Strong shift towards middle market indicates healthier M&A Oct 2013 Oct 2014 Improved outlook for corporate earnings over past 12 months 64% expect the M&A market to improve 60% of automotive companies focused on growth but not at any cost Future of work and digital transformation are driving M&A strategy 51% 71% of automotive executives expect to finance transactions with debt of automotive executives expect their deal pipeline to increase over the next 12 months

3 The automotive sector is now one of the leading industries driving transactions. A note from Mark Short, Global Automotive and Transportation Industry Leader, Transaction Advisory Services Our most recent Capital Confidence Barometer survey finds the automotive sector as the leading industry sector for driving future transactions. Optimism in the sector has never been higher. Stronger balance sheets, combined with continued debt financing opportunities, are positioning automotive companies to embark on a new wave of transactional initiatives. This Barometer finds 51% of our respondents to be actively pursuing transactions in the next 12 months, up from 29% in our April 2014 survey. Fueling this activity is increasing confidence in the growth of the automotive sector, stronger deal pipelines and a higher likelihood of closing transactions. Our survey indicates middle-market transactions, those valued up to US$250 million, will comprise the bulk of deals in the sector. Continued focus on expanding core product opportunities, coupled with increasing the mix of new products and services, are key criteria for driving M&A activity. I am excited to announce we will expand our sector coverage to include transportation in future survey results. Selected transportation sector survey results are presented near the end of this report. A note from Pip McCrostie, Global Vice Chair, Transaction Advisory Services Our 11th Capital Confidence Barometer predicts healthy growth for M&A globally, which should take the market back to levels last seen before the financial crisis. Acquisitive appetite has increased and deal fundamentals credit, cash and prices are strong, as is confidence in economic stability. The biggest indicator of this positive sentiment is deal pipeline, which has increased by a remarkable 30% since April. In addition, two-thirds of executives expect M&A pipelines to expand further over the next year more than double the number expecting expansion six months ago. As we predicted in our previous Barometer, 2014 has seen a big increase in multibillion-dollar deals. Now, increasing competition at the top end and a renewed focus on growing core businesses will fuel more middle-market deals. The majority of acquisitive companies are now focusing on M&A to strengthen their core business, with an eye to boosting market share, managing costs and improving margin growth. Megadeals are set to continue. However, the next chapter of the M&A story should be middle-market deals fueling an M&A rebound globally. Capital Confidence Barometer 1x

4 Macroeconomic environment Automotive executives are notably positive about the economic environment, with broad-based positivity on corporate earnings, credit and market stability, and job creation. At the macroeconomic level, despite a continuation of disruptive external influences, including growing political instability in some regions of the world, automotive executives indicate a greater confidence that the global economy is improving. Strong corporate earnings and credit availability are laying the foundation for optimism and future M&A growth. An optimistic economic outlook and significantly increasing confidence in leading economic indicators are laying the foundation for future M&A growth in the automotive sector. 2 Capital Confidence Barometer

5 Automotive executives maintain confidence in global economy Q: What is your perspective on the state of the global economy today? Automotive executives remain confident that the global economy is improving. An overwhelming 97% of automotive respondents view the global economy as either stable or improving. Greater economic confidence allows companies to plan more freely for growth, and stability is an essential ingredient for a healthy dealmaking environment. Improving Stable Declining 3% 11% 12% 27% 31% 38% 59% 58% 61% Apr-14 Oct-13 Strong outlook for automotive corporate earnings Q: Please indicate your level of confidence in the following at the global level. The number of automotive executives who are confident about the outlook for corporate earnings has increased dramatically over the last 12 months. In April 2014, 61% of our respondents expressed confidence in corporate earnings, a big jump from 36% last October; that sentiment further strengthens in October 2014, with 83% expressing confidence, an all-time high in our Barometer. Corporate earnings Short-term market stability Equity valuations/ stock market outlook 21% 23% 36% 42% 50% 61% 59% 73% 83% Other economic indicators are also trending positive: 73% of executives are confident in market stability, 59% express positivity about stock valuations, and 57% are confident in credit availability all healthy indicators for the deal markets. Credit availability Apr-14 Oct-13 41% 48% 57% Confidence in market indicators driving positive hiring intentions Q: With regard to employment, which of the following does your organization expect to do in the next 12 months? Improved macroeconomic sentiment is driving positive hiring intentions, as 56% of automotive executives expect to create jobs or acquire talent, up from 38% in April The number of companies planning to reduce their workforce has dropped to 6% from 17% six months ago. The positive jobs outlook is also consistent with our respondents optimistic outlook on corporate health. Apr-14 Oct-13 6% 38% 56% 6% 17% 35% 45% Reduce workforce numbers Keep current workforce size Create jobs/hire talent 59% 38% 40% Geopolitical instability cited as greatest business risk by automotive executives Q: What do you believe to be the greatest risk to your business over the next 6-12 months? While our automotive respondents identify geopolitical instability as a potential threat to their business, it is unlikely to derail the fundamental drive for growth. Tensions between Russia and Ukraine and ongoing conflict in the Middle East do pose challenges, however. Increased global political instability Pace of structural reforms in Eurozone Slowing growth in key emerging markets 13% 19% 23% 24% 33% 37% Structural reforms in the struggling Eurozone automotive market are an increasing concern for our respondents. The effects of tapering of quantitative easing Inflation 2% 6% 19% 21% Deflation 0% 3% Apr-14 Capital Confidence Barometer 3

6 Corporate Strategy Automotive companies must navigate a particularly complex business environment, shaped by government regulation, increasing shareholder activism and uncertainties about geopolitical stability. Nonetheless, with the vast majority of automotive companies confident in the economy and other market indicators, they are positioning themselves decisively for future growth, even as they keep one eye on cost and other shareholder concerns. Increasing confidence in global economic stability has more automotive companies willing to expand their core business by changing their mix of products and services and increasing product introductions. Our survey shows a significant increase in the number of companies adopting both of these strategies. 4 Capital Confidence Barometer

7 Growth is the primary focus for automotive companies Growth has made a strong comeback among automotive executives. Sixty percent call it their primary focus over the next year a significant increase after a dip in growth intentions six months ago. Companies have not wavered, however, in their focus on cost reduction and operational efficiency, as executives remain mindful of the lessons learned during the global financial crisis. At this stage, very few companies are preoccupied with survival. Q: Which statement best describes your organization s focus over the next 12 months? Apr-14 Oct-13 2% 8% 30% 60% 2% 15% 45% 38% 1% 12% 26% 61% Survival Maintain stability Cost reduction and operational efficiency Growth % focused on growth 70% 60% 55% 61% 60% 50% 40% 30% 43% 38% 20% Oct-12 Apr-13 Oct-13 Apr-14 Organic growth focused on core products and existing markets In line with their growing confidence in global economic stability, automotive companies are taking on more risk as they expand their core businesses by changing the mix of products and services. Our survey shows a sixfold increase from a year ago in the number of automotive companies changing their product mix. Automotive respondents also indicate a strong willingness, 27% in October 2014 compared with 7% a year ago, to invest in research and development and new product introductions. Q: What is the primary focus of your company s organic growth over the next 12 months? Lower-risk More rigorous focus on core products/ existing markets New sales channels Changing mix of existing products and services Increase R&D/product introductions Exploiting technology to develop new markets/products Invest in new geographies/markets 3% 6% Higher-risk 3% 9% 6% 20% 12% 7% 10% 18% 14% 27% 24% 21% 15% 28% 40% 37% Apr-14 Oct-13 Capital Confidence Barometer 5

8 Shareholder activism Activist shareholders influence boardroom agenda The C-suite agenda organic and inorganic growth priorities is increasingly swayed by the growing influence of shareholder activism. Q: Which of the following has been elevated on your boardroom agenda as a result of shareholder activism? Select up to two. Cost reduction 42% 31% 31% 27% 25% 7% 7% 7% 3% Share buyback Cash dividend payments Portfolio analysis Strategic divestment Spin-off/IPO Acquisition We do not have shareholders Our shareholders have not raised these issues With growing success and greater influence, activist investors continue to rise in prominence as the market enters a new phase of slower but stable growth. Cost management, returning cash and portfolio optimization are key areas of focus. M&A will also likely be part of the story with asset sales and acquisitions part of the ever-broadening activist dialogue. As a result, companies are stepping up their efforts to manage shareholder activism, enhancing communication with stakeholders, monitoring signs of activist pressure and performing ongoing portfolio reviews. Q: How are you preparing to manage any shareholder activism? Not applicable Nothing: we are confident in our current strategy and not actively preparing for activism among our shareholders 2% 6% 8% 17% 18% 24% 25% Making management changes as a result of activist intervention Conducting an activist audit continue with improvement around cost, efficiencies and performance Conducting ongoing portfolio review to grow revenue, increase margins and optimize value Ensuring we have open and proactive lines of communication with our shareholders Monitoring early warning signs for activist pressure 6 Capital Confidence Barometer

9 External trends reshaping automotive corporate strategies Automotive executives expect global megatrends related to rethinking government, global rebalancing, digital transformation and the future of work to have a significant impact on their business and acquisition strategies. Q: Which of the following will affect your core business strategy most in the next 12 months? Select up to two. Cybersecurity Resourceful planet Reconfiguring the financial system Future of work Digital transformation 6% 22% 23% 30% 32% 35% Global rebalancing Rethinking government 41% When asked about the impact of global megatrends on core business strategy, automotive executives are most concerned about the reconfiguration of government, global rebalancing and digital transformation. Governments worldwide are rethinking strategies and policies in response to huge challenges. This may have far-reaching implications for automotive businesses, creating an urgent need to stay agile, keep up with policy changes in other countries and ensure compliance and collaboration with public sector agencies. While the rethinking of government is automotive executives top issue affecting core business strategy, when it comes to acquisition strategy, executives are most concerned about the future of work. Driven by shifting employment patterns and the impact of technology and mobility on workplace practices, the traditional talent contract is being rewritten. Governments and policymakers worldwide have raised these issues as long-term structural concerns, as an increasing number of mobile, part-time and self-employed workers change the nature of work and the workplace. The move to a more flexible workforce will provide more opportunities for collaboration and productivity, as well as acquisitions. Digital transformation is also a primary concern. Even as companies are focused on their core competencies, technology assets are in demand. Emergent technologies are combining with advanced networks, computing and new ways of communicating to fundamentally change businesses. As companies adapt to these advances, executives will need to decide where to strategically invest in technology. Front-end early adapters will be the most attractive acquisition targets, offering innovative and nimble strategic capabilities to acquirers. Q: Which of the following will impact your acquisition strategy most in the next 12 months? Select up to two. Future of work Global rebalancing Reconfiguring the financial system Cybersecurity 38% 35% 34% 25% 23% 23% 7% Global megatrends Digital transformation Resourceful planet Rethinking government As these global megatrends increasingly alter business models and investment strategies, those most able to appreciate their impact will be best positioned for future success. Capital Confidence Barometer 7

10 M&A outlook Automotive sector M&A is being motivated by renewed optimism, brought about by increasing sales in both developed and emerging markets and a sector-wide drive to decrease costs and improve efficiencies. A significant number of deals focus on acquiring emergent technologies, particularly around vehicle connectivity and advanced driverassistance technologies. Increasing confidence in global economic stability has more automotive companies willing to expand their core business by changing the mix of products and services and increasing product introductions. Our survey shows a significant increase in the number of companies adopting both of these strategies. 8 Capital Confidence Barometer

11 Strong deal market outlook in automotive Appetite to acquire surges in automotive Automotive companies appetite for M&A is at a fouryear high, with 51% of executives expecting to pursue acquisitions in the next 12 months. This is a clear signal of intent to look at deals as a route to growth. The improvement in the number of companies expecting to pursue acquisitions resonates with the notable increase in the number and quality of acquisition opportunities, as well as significant improvement in the likelihood of deals closing. Q: Do you expect your company to actively pursue acquisitions in the next 12 months? 60% 50% 40% 30% 20% 10% 19% 33% 38% 29% 51% Oct-12 Apr-12 Oct-13 Apr-13 Q: Please indicate your level of confidence in the following at the global level Likelihood of closing acquisitions Quality of acquisition opportunities 37% 36% 37% 38% 54% 59% Number of acquisition opportunities 47% 57% 65% Apr-14 Oct-13 Improving M&A market in the near term Q: What is your expectation for the M&A market in the next 12 months? An improving view of deal volumes resonates from the alignment of core fundamentals: positive economic sentiment, strong equity markets, enhanced corporate earnings and the expectation to create jobs. While 2014 has been notable for some high-profile megadeals, the Barometer suggests that middle-market M&A will provide a significant lift to deal activity. Improve Stay the same 0% 26% 36% 35% 60% 64% 70% Decline 5% 4% Apr-14 Oct-13 Capital Confidence Barometer 9

12 Middle market M&A activities driven by middle-market deals Q: What is the maximum single deal value expected over the next 12 months? Apr-14 Oct-13 US$0 US$250m US$251m US$1b Greater than US$1b 87% 61% 27% 12% 3% 71% 26% Our previous Capital Confidence Barometer anticipated a rise of multibillion-dollar deals in With the climate still favorable for these megadeals, we can expect to see further transformational and market-disrupting transactions in the near term. However, with the appetite to acquire at its highest in four years for the automotive sector, we now expect a new wave of M&A with much more focus on mid-market-sized deals. This new middle market momentum should lift M&A activity as companies seek to strengthen and expand their core business. Our analysis of year-on-year changes in deal volumes shows that previous upturns have been led by megadeals and upper middle-market deals, followed by an upswing in the lower middle market. Large transactions create M&A activity further down the deal-size chain as companies look to reshape recently acquired assets. The majority of automotive companies are focusing on acquiring businesses in their core sectors, with an eye to boosting market share, managing costs and improving margin growth. As cost efficiencies are paramount, planned M&A activity will consist of bolt-on acquisitions that will complement current business models. 13% The majority of deals filling pipelines are focused on strengthening the core business, boosting market share, managing costs and improving margin growth. 10 Capital Confidence Barometer

13 Increase in pipelines a leading indicator of deal activity Bullish deal intentions as pipelines expand Q: How do you expect your deal pipeline to changes over the next 12 months? Renewed discipline in dealmaking is forcing companies to thoroughly examine many more investment opportunities to find the best strategic fit. The number of automotive companies that expect their deal pipelines to increase over the next 12 months has increased significantly, 71% in October 2014 compared to 27% six months ago, a further sign of growing M&A momentum. This move toward larger pipelines bodes well for a rebound in M&A in the near term especially in the middle market, where expectations indicate most transaction opportunities exist. Increase No change Decrease 0% 8% Apr-14 27% 29% Q: How many deals of all sizes do you have in your pipeline today? 65% 71% >=5 20% 27% 4 2% 10% 3 14% 23% 2 24% 41% 1 16% 23% Apr-14 Automotive companies, focused on improving the performance of their existing businesses and pursuing organic growth strategies the last few business cycles, appear more willing to pursue M&A growth opportunities over the next 12 months. Capital Confidence Barometer 11

14 Stable valuations to enable dealmaking Modest valuation gap reflects confidence in asset prices Q: How do you think that buyers expectations currently compare to the sellers (valuation gap)? There is a strong consensus among our survey respondents: nearly half of automotive executives see only a small discrepancy between buyers and sellers expectations on asset valuations. This, combined with the outlook for stability in the valuation gap and the overall value of assets, will encourage dealmaking in the near term. The more stable outlook for both the valuation gap and price of assets in the next 12 months reinforces the view on stability in macroeconomic conditions and the M&A market. 1% 2% 9% 39% The gap is small (<10%) Somewhat higher (10-25%) Significantly higher (25% more) Somewhat lower (10-25%) As buyers become more confident in newly acquired assets long-term value, and sellers no longer hold out for higher prices, volumes will likely accelerate especially in the middle market, where value differences are most easily bridged. 49% Significantly lower (25% or more) Q: What do you expect the price/valuation of assets to do over the next 12 months? 35% Increase 46% 46% Remain at current levels 46% 44% 60% 5% Decrease 8% 10% Apr-13 Oct Capital Confidence Barometer

15 Debt to fund future dealmaking Balance sheet strength leads to drop in highly leveraged companies Q: What is your company s current debt-to-capital ratio? Leverage has declined since the global financial crisis, thanks in part to an increase in equity value. According to the S&P Global BMI (Broad Market Index) a crosscountry, cross-sector index the value of average market capitalization has increased 60% since October 2009, whereas total debt rose by only 19%. Less than 25% % 19% 37% 33% 34% 49% 70% Automotive companies financials are in an especially strong position, with a clear majority reporting healthy balance sheets. Seventy percent of automotive respondents report a current debt-to-capital ratio of less than 25%, a major improvement from a year ago, and leaving them well positioned to withstand any nearterm increase in interest rates % % 10% 14% 20% 1% 4% 9% Apr-14 Oct-13 Debt ranks as leading vehicle to achieve growth strategies More than half of automotive executives expect their companies debt-to-capital ratios to increase over the next 12 months, indicating a willingness to take on more debt to fund growth ambitions. The number of companies looking to decrease debt-to-capital ratios has dropped considerably since April A clear majority of automotive companies expect debt to be their primary source of financing for inorganic growth in the next 12 months. Q: How do you expect your company s debt-to-capital ratio to change over the next 12 months? Apr-14 Oct-13 24% 25% 51% 37% 41% 22% 31% 48% 21% Decrease Remain constant Increase Q: What is likely to be the main source of your company s deal financing in the next 12 months? Debt 51% Alternate funding 27% Cash Equity 11% 11% Capital Confidence Barometer 13

16 Investment focuses on core business Acquisition goals focused on cost reduction, supply chain improvements The majority of automotive companies are focusing on acquiring businesses in their core sectors, with an eye to improving margin growth and supply chains, and accessing new technologies and intellectual property. Companies are planning to strengthen and expand the core. They are assessing a range of transaction drivers but cost efficiencies are paramount. Consequently, for most automotive companies (62% of respondents), planned M&A activity will consist of bolton acquisitions that will complement current business models or be in adjacent sectors. In the current climate, transformative M&A highvalue acquisitions that significantly change the size of the acquirer and deals that shift the scope of their business look set to continue. More than a third of automotive respondents are considering such transactions. Q: What are the main drivers impacting your M&A strategy over the next 12 months? Select up to three. Reduce costs, improve margins 44% Improvements to supply chain Access new technology/intellectual property Gain market share in existing geographical markets Move into new geographical markets Move into new product/service areas Acquire assets at a discount - opportunistic M&A Acquire talent Optimize tax efficiencies Navigate regulatory issues Leverage regulatory/legislative opportunities Q: Are your M&A deals planned in or outside your core sector? 2% 2% 9% 14% 17% 33% 39% 38% 40% 40% However, mid-market deals appear to be the trend to drive volume in the automotive M&A market over the coming 12 months. We are looking to acquire competitors/similar companies in our core sector We are looking both inside and outside of our core sector 25% 59% We are looking outside of our core sector 16% Q: Which statement best describes your M&A plans? We will focus on growing the core (expanding your core offering into new markets or products) 57% We will do defensive deals (ensuring assets don t fall into competitor hands) We will do disruptive deals (innovative investments which shifts scope of buying business could be into another industry sector) 16% 27% Q: Your M&A activity will mostly be: Bolt-on (complement current business model 62% Transformative (high value acquisition which significantly changes the size or acquirer 38% 14 Capital Confidence Barometer

17 Automotive companies are focused on optimizing capital but also developing growth strategies Raising: Do we have the right capital structure to meet our strategic priorities? With an active focus on growth and healthy balance sheets, automotive companies are expecting to take on more leverage to fund deals; 33% of executives expect to focus on raising capital. Investing: What is the best way for our company to grow and is it aligned to our core business? Companies are actively refocusing on investment, building dealmaking rigor and discipline, and setting the stage for later growth; 16% of automotive companies are devoting their attention and resources to investing. Preserving: How can we improve the performance of our assets? As companies come out of survival mode and focus on growth, executives are no longer focused on preserving capital but are now turning to other Capital Agenda areas. Optimizing: What steps can we take to maximize our portfolio s performance? More than half (51%) of automotive executives are planning to optimize capital and preparing to increase their focus on strategic dealmaking. A strong Capital Agenda should be at the core of all strategic boardroom decisions. It is the framework for all growth and capital management questions. Capital Confidence Barometer 15

18 Automotive companies continue to focus their cross-border M&A activity around a core group of developed and top-tier emerging countries. The US, China, India and Brazil remain very attractive dealmaking destinations for our survey respondents. The UK replaces Germany in the top five destinations for outbound investments in this survey. 16 Capital Confidence Barometer

19 Top investment destinations for automotive (outside your local market) China India Brazil United Kingdom United States China remains attractive due to the size of its economy and growth of the middle class. Economic growth forecasts have tempered slightly, but China remains the top destination for outbound investments. India s deal market is expected to improve. Investor sentiment is seeing a significant recovery, with stock markets hitting all-time highs. In addition, the new government s pro-business stance should foster a more benign investment landscape for inbound investment. M&A in Brazil is likely to remain firm, supported by a governmental focus on infrastructure and a weakening currency, and underpinned by Brazil s growing middle class. The UK is a new top destination for outbound investments in the automotive sector. With strong domestic growth forecast through and efforts on reducing onerous red tape, the UK is expected to be a focused geography in the near term. The US M&A market is attractive to foreign investors, thanks to improving economic fundamentals, strong corporate earnings and the opportunity to provide a natural hedge for foreign companies. In this positive transaction environment and with an interest rate rise not expected before early 2015 we expect high levels of deal activity to sustain over the coming months. Capital Confidence Barometer 17

20 Transportation Capital Confidence Barometer October % of transportation companies expect to pursue acquisitions in the next 12 months Oct 2013 Oct 2014 Improved outlook on job creation/hiring Focus on growth without compromising efficiency Strong shift towards middle market indicates healthier M&A 47% expect the M&A market to improve Rethinking government is driving M&A strategy 53% 65% of executives from the transportation industry indicate they will do transformative deals of transportation executives expect their deal pipeline to increase over the next 12 months 18 Capital Confidence Barometer

21 Growth agenda of transportation focused on optimizing capital allocation A note from Mark Short, Global Automotive and Transportation Industry Leader, Transaction Advisory Services We see similar positive trends in our survey results with transportation sector respondents. Survey results regarding the macroeconomic environment, corporate strategy, M&A outlook, including a focus on middle-market deals, using debt to finance deals and increasing the pipelines, all are similar to the responses received from auto sector executives. As a result, we anticipate increased transactional activities in the transportation sector in the near term. Raising: Do we have the right capital structure to meet our strategic priorities? With a growing focus on growth and healthy balance sheets, transportation executives are expecting to take on more leverage to fund deals; 37% of executives expect to focus on raising capital. Investing: What is the best way for our company to grow and is it aligned to our core business? Companies are actively beginning to focus on investment, building dealmaking rigor and discipline, and setting the stage for later growth; 10% of transportation companies are prioritizing their focus and resources to investing. Preserving: How can we improve the performance of our assets? As companies come out of survival mode and focus on growth, executives are no longer focused on preserving capital but are now turning to other Capital Agenda areas. Optimizing: What steps can we take to maximize our portfolio s performance? A majority, 53%, of transportation companies are planning to optimize capital and preparing to increase their focus on strategic dealmaking. Capital Confidence Barometer 19

22 About this survey The Global Capital Confidence Barometer gauges corporate confidence in the economic outlook and identifies boardroom trends and practices in the way companies manage their Capital Agendas EY s framework for strategically managing capital. It is a regular survey of senior executives from large companies around the world, conducted by the Economist Intelligence Unit (EIU). Our panel comprises select global EY clients and contacts and regular EIU contributors. In August and September, we surveyed a panel of more than 1,600 executives in 62 countries; more than half were CEOs, CFOs and other C-level executives. Automotive sector companies represented in this survey: 34% with revenues greater than US$5b 34% with revenues between US$1b US$4.9b 19% with revenues between US$500m US$999.9m 13% with revenues less than US$500m 45% publicly listed 25% privately owned 17% private equity/ portfolio-owned 13% family-owned Transportation sector companies represented in this survey: 34% with revenues greater than US$1b 38% with revenues between US$500m US$1b 42% publicly listed 20 Capital Confidence Barometer

23 For a conversation about your capital strategy, please contact us. Mark Short Global Automotive and Transportation Industry Leader Transaction Advisory Services mark.short@ey.com Americas Jim Carter Americas Automotive Industry Leader Transaction Advisory Services jim.carter@ey.com Europe, Middle East, India and Africa (EMEIA) Christian Uphaus Transaction Advisory Services christian.uphaus@de.ey.com Far East and Oceania Tony Tsang Far East and Oceania Automotive Industry Leader Transaction Advisory Services tony.tsang@cn.ey.com Additionally, please feel free to contact EY s Global Automotive and Transportation Center through the contacts listed below. Randy Miller Global Automotive and Transportation Leader randall.miller@ey.com Regan Grant Global Automotive and Transportation Marketing Leader regan.grant@ey.com Acknowledgements Our special thanks go to the global Capital Confidence Barometer panel for their contribution to the survey. The global Capital Confidence Barometer panel comprises an EIU panel of senior executives and selected EY clients and contacts who participate in the Capital Confidence Barometer on a biannual basis. The surveys are conducted on an independent basis by the EIU. Contact us Japan Peter Wesp Transaction Advisory Services peter.wesp@jp.ey.com Capital Confidence Barometer 21

24 EY Assurance Tax Transactions Advisory About EY 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. About EY s Transaction Advisory Services 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. ED 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. ey.com