CMC — Investor Presentation 2016

Nov 22, 2016

CMC Operating Results and Future Plan

November 22, 2016

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Safe Harbor Notice
This presentation contains forward-looking statements concerning the financial condition, results of operations and businesses of China Motor Corporation (“CMC”). All statements other than statements of historical fact are, or may be deemed to be, forward-looking statements.

Forward-looking statements are subject to significant risks and uncertainties which may vary from time to time and actual results may differ materially from those contained in the forward-looking statements, whether as result of new information, future events, or otherwise. CMC, its subsidiaries and representatives do not undertake any obligation to the damages resulted from the use, with or without negligence, of this presentation or other information related with it, except as required by law.

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Agenda

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Market Overview in Taiwan and Mainland China

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Auto Market in Taiwan

From July 2016 on, the light for the third consecutive month still turned green and the economic growth rate of the third quarter this year appeared 2.06%, better than the first two quarters, indicating the gradually recovering economy. There are 429,000 vehicles to be sold as expected in total in 2016, incl. 9,000 heavy trucks and buses.
As for 2017, although the recovering economy in US and UK betters the investments and the profits of the companies and drives employment and consumption rising up, there are still many uncertainties existing next year. It is modestly estimated around 429,000 vehicles in Taiwan, incl. 9,000 heavy trucks and buses, equivalent to the sales of 2016.
in ten thousand vehicles

5.0
4.7

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Auto Market in Mainland China

There are 19.36 million vehicles sold in the three quarters of this year, growing 13.2% compared to 2015. There will be expectedly 28 million vehicles this year, which is estimated by the China Association of Automobile Manufacturers this October, benefiting from several trade and investment policies implemented by the China government to boost regional development and improve employment and consumption.
In 2017, the economy in China expectedly appears slowing but stable because of the favorable effects caused by several trade and investment policies implemented by the China government and the recovering economy of other nearby countries. It is estimated that the auto market in 2017 will grow bigger than 2016.

In million vehicles

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CMC Operating Results

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Domestic and Overseas Sales in The Three Quarters of 2016

Items	Accumulative Amount up to Sept. 2016	Accumulative Amount up to Sept. 2015	Growth Rate(%)
Domestic Volume of Vehicles	38,430	34,823	10.4%
Market Share	11.3%	10.5%	7.6%
Overseas Volume
CBU	615	1,229	-50.0%
CKD(sets)	9,480	6,420	47.7%
Domestic Volume of Electric Scooters	3,861	4,287	-9.9%

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Operating Results in The Three Quarters of 2016
(disclosed in Consolidated Financial Statements)

Except for EPS in NTD, others in thousand of NTD
| Items | Q1-Q3 2016 | | Q1-Q3 2015 | | Growth Rate% |
| --- | --- | --- | --- | --- | --- |
| Revenue | 31,560,243 | 100.0% | 28,492,053 | 100.0% | 10.8% |
| Operating Profit | 2,345,996 | 7.4% | 2,081,000 | 7.3% | 12.7% |
| Non-operating gain or loss | 1,165,823 | 3.7% | 1,152,930 | 4.0% | 1.1% |
| Profit before tax | 3,511,819 | 11.1% | 3,233,930 | 11.4% | 8.6% |
| Profit after tax | 3,140,853 | 10.0% | 2,842,482 | 10.0% | 10.5% |
| Earnings per share(EPS) | 2.09 | - | 1.92 | - | 8.9% |

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CMC Prospect 2016 & 2017

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Automotive Business in Taiwan

In facing intense competition, in addition to special edition of Colt Plus, and some commercial vehicles equipped with or/and featured by superior product competitiveness, CMC not only introduces Lancer Sportback and Pajero 2017 model year in July but also launches New Outlander in October which earns good feedbacks from customers. Also, cheered by “The policy of the replacement of old vehicles with new ones”, CMC expects to sell around 47,000 vehicles in 2016.
In 2017, in addition to New Outlander, CMC will introduce current models to be slightly modified or featured by superior product competitiveness and even launch Lancer Fortis with full model change in April to increase sales. We expect to sell 50,000 vehicles in 2017, little higher than 2016.
Current Models to be slightly modified or with superior product competitiveness
Veryca and Delica modified slightly or with superior product competitiveness
Outlander Modified Model
Lancer Fortis with full model change
Colt Plus Special Edition

Pajero 2017 year model
Lancer Sportback2017 year model

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Automotive Business in Mainland China

In addition to stimulating strong buying of DX7 which launched in July,2015, SEM also introduces A0-Class SUV, DX3, this November which earns deep acclaims from customers to target at 8,000 vehicles per month for reaching its annual goal of 120,000 vehicles, growing more than 50% compared to last year. In 2017, SEM continues not only to strengthen sales of DX7 and DX3 but also to introduce several models equipped with/or featured by superior product competitiveness to target at much more sales than 2016.

All-new A0-Class SUV DX3
A-Class SUV DX7 2017 Model Year
Mitsubishi Lancer EX Special Edition
A-Class SUV DX7 Special Edition

2016

FBAC expects to sell around 12,000 vehicles in 2016, benefiting from launch of VS20 equipped with advanced engine and turbo charger this April which appeals to the market. In 2017, FBAC will continue to strengthen sales of VS20 and offer several exterior color choices and promotions to customers. FBAC expects to sell 20,000 vehicles in 2017.

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Automotive Business in Overseas Markets

As for vehicle export, due to lower purchasing power of people living in petroleum exporting countries affected by lower crude oil price and tightened safety regulations in middle east, the export of 2016 would be around 1,200~1,300 vehicles, lower than expected. In 2017, Owing to the execution of tightened safety regulations in GCC effective from Jan. 2017 which causes Veryca, Zinger and Lancer Fortis not able to timely meet all requirements, CMC conservatively estimates to export 300~400 vehicles.

CBU Exports
Veryca
Lancer Fortis
Zinger

As for CKD export, CMC may export 12,000 sets in total in 2016 because of sales to Philippines for Freeca extending to the end of 2017 and orders placed by SEM for the government bid of Delica as postal vehicle in China. In 2017, affected by Freeca unable to meet European Union (Stage IV) emission standards for vehicles to be executed in Philippines and SEM’s reconciling inventory, the export will decline to 5,500 sets.

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Green Energy Business

In 2016, CMC takes advantage of cross-industry cooperation, promotions to enterprises, public authorities and schools and diversified media channels, such as magazines, blogs and internet movies to deeply communicate with customers to enhance their awareness and impression on e-scooter brand of Greentrans and e-moving. CMC expects to sell 7,200 e-scooters in 2016, incl. e-scooters free of license plate, greater than 2015 by around 15%.
In 2017, coupled with communication and promotion policies executed in 2016, CMC plans to focus on sales to individuals and introduces one new e-scooter with higher performance and longer endurance than current models to appeal to more customers to target at the annual sales of 10,000 e-scooters , still with double digital growth.
Electric Scooter Featured by Big Body, Able in Both Public and Private Uses
Electric Scooter
Featured by
Economic Convenience
Electric Scooter
Featured by High Performance
& Long Endurance
Electric Scooter free
of License Plate

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Thanks for your listening!

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