Market Share of Passenger Vehicles With 1.6L Engines Sales volume as % of total PV (%) 75. Oct 14. Oct 15. Oct 16. Jan 16. Jan 15. Jul 14.

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1 Jan 13 Apr 13 Jul 13 Oct 13 Jan 14 Apr 14 Jul 14 Oct 14 Jan Apr Jul Oct Apr 16 Jul 16 Oct 16 Automotive Manufacturer / China China Auto Watch January 217 China Automobile Market Summary December 216 Manufacturers wholesale deliveries December 216 () yoy FY216 () yoy Automobile total 3, , Passenger vehicle 2, , Sedan 1, , 3.4 Multi-purpose vehicle , Sports-utility vehicle 1, , Minibus Commercial vehicle , Bus Truck , Source: China Association of Automobile Manufacturers (CAAM) Passenger Vehicle Monthly Sales Volume Growth yoy growth Jan&Feb Apr Jun Aug Oct Dec Jing Yang jing.yang@fitchratings.com Market Share of Passenger Vehicles With 1.6L Engines Sales volume as % of total PV Roy Zhang roy.zhang@fitchratings.com Market Update Solid December Sales Conclude Strong 216: China s automobile manufacturers wholesale deliveries of vehicles climbed 13.7% yoy in 216 to 28 million units, driven by policy-led strong sales of passenger vehicles (PV) (+14.9% yoy) and steady growth of the commercial vehicles (CV) market (+5.8%). In December, PV wholesale deliveries expanded 3.2% month-on-month (mom) and 9.1% yoy to 2.67m units, as retail demand remained strong towards the year end ahead of a rise in purchase tax of small-engine cars (no larger than 1.6L) to 7.5% in 217 from 5%. SUVs Outperformed; Sedans Recovered: SUVs remained the fastest growing PV segment with 44.6% yoy wholesale growth in 216 (2: 52.4% yoy). SUV market share expanded to 37% from 29% in 2. Sedans saw a recovery in 216 with 3.4% yoy growth in 216 versus a decline of 5.3% in 2 due to the purchase tax incentive. NEV Policy Risk Remains: China new-energy vehicles (NEV) sales growth retreated sharply to 53% yoy in 216 from 343% yoy in 2 amid policy uncertainty on NEV subsidies beyond 216. The late-216 updates of subsidization catalogue added more models and helped to boost sales in December, but subsidy cuts for both e-cars and e-buses in 217 (policy released in Dec 3, 216) is likely to dampen 217 NEV sales growth. Big Five Lose Market Share: The Big Five Chinese auto groups boosted their vehicle sales volume by around 1% yoy in 216, but lost in aggregated 2.2ppts market share to smaller players, such as Geely, Chery, Guangzhou Auto Industry Group and Great Wall Motors, which outperformed in the year thanks to strong sales of their SUVs and smallengine cars. Leading JVs posted 216 sales growth at high-single-digits, and most of them met their 216 sales targets January 217

2 Feb 14 Mar 14 Apr 14 May 14 Jun 14 Jul 14 Aug 14 Sep 14 Oct 14 Nov 14 Dec 14 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Feb 16 Mar 16 Apr 16 May 16 Jun 16 Jul 16 Aug 16 Sep 16 Oct 16 Nov 16 Dec 16 Monthly Data Snapshot Passenger Vehicle Sales Volume Growth By product segment Sedan SUV MPV Minibus Sedan wholesale delivery weakened in December 216, declining 2.3% yoy, from 8.8% in November 216, as some manufacturers deferred deliveries to January to smooth out the impact of muted sales caused by the revised vehicle purchase-tax might have on sales. SUV sales rose 35.6% yoy in December (November: 41.5%) and 44.6% yoy in 216 (2: 52.4%); MPV sales fell.5% yoy (November: +7.9%) and grew 18.4% yoy in 216 (2: 1.1%). China New-Energy Vehicle Market Sales volume and growth BEV (LHS) PHEV (LHS) NEV yoy growth (RHS) ( units) Jul 16 Aug 16 Sep 16 Oct 16 Nov 16 Dec 16 Notes: BEV - Battery Electric Vehicle, PHEV - Plug-in Hybrid Electric Vehicle, NEV - New-Energy Vehicle Sedan Market Sales Volume Growth YTD yoy growth by vehicle class ( units) 8, 7, 6, 5, 4, 3, 2, 1, 11M16 (LHS) 11M (LHS) YoY (RHS) A A A B C Source: China Passenger Car Association (CPCA) The A-class and C-class are the only sedan segments that recorded positive growth through November 216, while the other segments extended weakness from 2 to 216. A-class compact SUV was the largest and the fastest-growing SUV segment through November 216, where 11M16 yoy sales growth doubled to 64% from 32% in 11M. Luxury C-class SUV market also rose rapidly at close to 6% yoy in 11M16, while A-class and B-class SUV segments rose more moderately at mid-teens and low twenties. SUV Market Sales Volume Growth YTD YoY growth by vehicle class ( units) 6, 5, 4, 3, 2, 1, Source: CPCA 11M16 (LHS) 11M (LHS) YoY (RHS) A A B C China Auto Watch 2

3 Jan 13 Jun 13 Nov 13 Apr 14 Sep 14 Mar Aug Jun 16 Dec 16 Jan 13 Mar 13 May 13 Jul 13 Sep 13 Nov 13 Jan 14 Mar 14 May 14 Jul 14 Sep 14 Nov 14 Jan Mar May Jul Sep Nov Mar 16 May 16 Jul 16 Sep 16 Nov 16 Monthly Data Snapshot (Cont.) China Automotive Sector Fixed-Asset Investment Year-to-date yoy growth Full-year 216 automotive fixedasset investment (FAI) growth slowed in 216 to 4.5% yoy, from 14.2% yoy in 2. Sector-wide net profit expanded 12.7% in 11M16, from 13.9% in 1M16. Profitability of Auto OEMs in China Sales volume growth versus net profit growth Vehicle sales volume YTD (LHS) Net profits YTD (RHS) Jan&Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Source: National Bureau of Statistics (NBS) Vehicle Inventory Alert Index China auto market sentiment based on dealer surveys A reading above 5% indicated low market demand and high dealer inventory The Vehicle Inventory Alert Index fell to a 3-year low at 42.9% in December 216 (November: 49.9%). Dealers inventory plunged, for JV brands in particular, as wholesale delivery lagged strong retail sales. This could be partially driven by manufacturers deferring wholesale deliveries to dealers to January to avoid the sharp volume drop the tax-hike might engender. Notes: OEMs - Original Equipment Manufacturers Source: NBS, CAAM Automobile Discounts Source: China Automobile Dealers Association (CADA) Dealer retail discounts narrowed meaningfully in November 216 due to strong retail demand. Discounts might have fallen further in December 216, but dealers may start to expand discounts to partly compensate consumers for the 2.5ppts tax hike from 1 Jan Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Source: CPCA China Auto Watch 3

4 SAIC VW FAW VW SAIC GM Beijing Hyundai DF Nissan Chang'an Ford Geely FAW Toyota DPCA DF Yueda Kia Great Wall SAIC VW Chang An SAIC GM SAIC GM FAW VW DF Nissan SAIC GM Wuling Beijing Hyundai Chang An GAC Motor Beijing Hyundai DF Honda DF Nissan SAIC GM Wuling Great Wall Chang'an Ford Chang'an Ford JAC Geely Monthly Data Snapshot (Cont.) Automobile Deliveries by Auto Group Monthly PVs & CVs sold (' units) 216 Dec 216 yoy 216 Market yoy yoy share chg Auto group Abbr. () () Shanghai Automotive Industry Corp. Group SAIC Group , Dongfeng Motor Corporation DFM , First Automotive Works Group Corporation FAW Group , China Chang'an Automobile Group Corp. CCAG , Beijing Automotive Group Co Ltd BAIC Group , Guangzhou Automobile Industry Group Co GAIG , Great Wall Motors Company Limited GWM , Brilliance Auto Group Brilliance Anhui Jianghuai Automobile Co., Ltd JAC Zhejiang Geely Automobile Holdings Ltd Geely Chery Automobile Co., Ltd Chery BYD Auto Co., Ltd BYD Industry total 3, , Vehicle sales volume at the Big- Five Chinese auto groups rose around 1% yoy in 216, but they lost 2.2ppts in aggregate market share to smaller manufacturers. Geely, Chery, Guangzhou Auto Industry Group and Great Wall Motors outperformed the Big-Five in 216 thanks to the strong sales of their SUVs and small-engine cars. Leading JVs posted 216 sales growth at high-single-digits, and most of them achieved their 216 sales targets. Some JVs reported meaningful year-on-year declines in December sales, implying deferral of wholesale deliveries to January 217 to smooth market volatility. Top-1 Passenger Vehicle OEMs in China By full-year sales volume ( units) 2,5 2, 1,5 1, (LHS) 2 (LHS) yoy growth (RHS) Notes: Passenger vehicle volume excludes minibusus; OEMs - original equipment manufacturers Top 1 Sedan OEMs in China By full-year sales volume ( units) 2, 1,5 1, (LHS) 2 (LHS) yoy growth (RHS) Notes: OEMs - Original Equipment Manufacturers Sedan sales performance diverged across JVs in 216. SAIC-VW and FAW-VW outperformed with lowteens sedan sales growth, but lagged peers in SUV sales. Great Wall and Chang an remained the largest SUV makers by sales volume in 216, but both experienced weakness in the sedan market. Geely outperformed peers in sedan sales and rapidly expanded its SUV sales. GAC Motor and SAIC-GM-Wuling doubled their SUV sales in 216 with new model launches. Top 1 SUV OEMs in China By full-year sales volume ( units) 1, (LHS) 2 (LHS) yoy growth (RHS) Notes: OEMs - Original Equipment Manufacturers China Auto Watch 4

5 Appendix 1 Monthly Best-Selling Models in Selected Segments A-Class Sedan Rank OEM Brand Model FY16 yoy Dec 16 yoy 1 Shanghai VW VW (Gran) Lavida 548, , Shanghai GM Buick Excelle GT 37, , DF Nissan Nissan Sylphy 367, , FAW VW VW Jetta 348, , FAW VW VW Sagitar 341, , FAW Toyota Toyota Corolla 36, , Chang'an Ford Ford Escort 296, , Shanghai VW VW Santana 282, , Beijing Hyundai Hyundai Elantra Langdong 254, , Chang'an Ford Ford Focus 225, , B-Class Sedan Rank OEM Brand Model FY16 yoy Dec 16 yoy 1 Shanghai VW VW Passat 188, , FAW VW VW Magotan 171, , Beijing Hyundai Hyundai Mistra 148, , Shanghai VW VW Lamando 143, , GAC Honda Honda Accord 136, , Chang'an Ford Ford Mondeo 14, , GAC Toyota Toyota Camry 1, , DF Nissan Nissan Teana 9, , Shanghai GM Chevrolet Malibu 85, , Shanghai GM Buick Lacrosse 8, , Luxury Cars (incl. SUV) Rank OEM Brand Model FY16 yoy Dec 16 yoy 1 Brilliance BMW BMW BMW 5 Series 143, , FAW VW Audi Audi A6 135, , FAW VW Audi Audi Q5 129, , Beijing Benz Mercedes Benz C-series, , FAW VW Audi Audi A4 97, , Brilliance BMW BMW BMW 3 Series 97, , FAW VW Audi Audi Q3 88, , Beijing Benz Mercedes Benz GLC 87,263 nmf 1, FAW VW Audi Audi A3 84, , Beijing Benz Mercedes Benz GLA 66, , SUV Rank OEM Brand Model FY16 yoy Dec 16 yoy 1 Great Wall Haval Haval H6 58, , GAC Trumpchi Trumpchi GS4 333, , Shanghai GM Wuling Baojun Baojun , , Shanghai GM Buick Envision 275, , BAIC Yinxiang BAIC Huansu 268, , Shanghai VW VW Tiguan 242, , Chang An Chang'An CS75 29, , Great Wall Haval Haval H2 196, , JAC JAC S3 196, , DF Honda Honda CR-V 18, , China Auto Watch 5

6 Appendix 2 Global Automobile Issuer Ratings Global Automobile Issuer Ratings Issuer Country Rating/Outlook (current) Rating/Outlook (prior) Beijing Automotive Group Co Ltd China BBB+/Stable A-/Stable Daimler AG Germany A-/Stable A-/Stable Dongfeng Motor Group Company Limited China A/Stable A/Stable Fiat Chrysler Automobiles N.V. Netherlands BB-/Positive BB-/Stable Ford Motor Company United States BBB/Stable BBB-/Positive General Motors Company United States BBB-/Positive BBB-/Stable Honda Motor Co., Ltd Japan A/Stable A/Stable Hyundai Motor Company South Korea BBB+/Stable BBB+/Stable Jaguar Land Rover Automotive plc United Kingdom BB+/Stable BB-/Positive Kia Motors Corporation South Korea BBB+/Stable BBB+/Stable Nissan Motor Co., Ltd. Japan BBB+/Stable BBB+/Stable Peugeot S.A. France BB+/Stable BB/Positive Renault SA France BBB-/Positive BBB-/Stable Tata Motors Limited India BB/Stable BB/Stable Toyota Motor Corporation Japan A/Stable A/Stable Volkswagen AG Germany BBB+/Negative A/Rating Watch Negative China Auto Watch 6

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