The document discusses strategic outlooks and trends in the global commercial vehicle industry and their impact on members of the American Trucking Associations (ATA). It covers several topics: - Key issues facing senior trucking industry executives in 2014-2015, such as fuel price volatility, proliferation of electronics/data, and autonomous vehicles. - Projected growth rates for medium and heavy commercial vehicles by region from 2012-2022, with developing economies like India and China offering high growth potential. - A forecast that global medium and heavy truck sales will reach 4.6 million units by 2022, led by growth in China, India, and other emerging markets. - Analysis of trends in engine technologies, with developed

1. 1ND32-18
Strategic Outlook of Global Commercial Vehicle Industry
Trends and Impact on ATA Members
Executive
Presentation
Wallace Lau
Senior Industry Analyst- Commercial Vehicle Research

2. 2ND32-18
2014–2015 CV Industry Senior Management Top-of-Mind Issues
0
1
2
3
4
5
Last frontiers of globalization-
Next 11, Africa
Fuel price volatility
Rising relevance of North
America for manufacturing
and sales
Proliferation of electronics
and big data
Urban logistics, bricks-and-
clicks, and multi-modality
Autonomous driven
connected trucks
Service and maintenance
revenue focused business
models
New truck types (e.g. mega-
trucks, city trucks, etc.) and
pricing models
Note: Data collected from 2013-2014 interviews and discussions with Sr. Manager to CEO level executives of truck
OEMs and tier-1 suppliers in NA, EU, APAC, China, India, Latin America and other regions
Source: Frost & Sullivan analysis.
Global CV 2015 Vision: Senior Executive Top of Mind Issues, Global, 2014-2015

3. 3ND32-18
Region
GDP Growth
Estimates: 2012-
2022 (%)
MCV Growth
(CAGR%)
HCV Growth
(CAGR%)
Overall CV
Growth
(CAGR%)
Market
Opportunity
North
America
2.1-2.5 4.3 3.6 3.9 Moderate
South
America
4–5 4.4 5.7 5.3 Moderate-High
Europe 1.0–1.5 4.2 3.8 3.9 Moderate
China 6.5–7.0 2.9 5.4 4.7 Moderate-High
India 6.0–7.0 4.4 7.0 5.9 Moderate-High
Russia 3.5–4 10.3 8.4 8.9 High
Next 11 5–6 7.1 9.2 8.2 High
RoW 4–5 8.4 8.2 8.3 High
Global 4–4.5 5.1 5.7 5.5 Moderate-High
Global GDP and Commercial Truck Market Growth Outlook:
Growth in BRIC and Next 11 economies will offer strength to global truck demand. Developed economies to
start offering momentum from 2015 onwards.
Global CV Vision 2020: World GDP and CV Growth Outlook—Global: 2012-2022
Source: OECD, Frost & Sullivan analysis.

4. 4ND32-18
0
200,000
400,000
600,000
800,000
1,000,000
1,200,000
1,400,000
1,600,000
1,800,000
North
America
South
America
China India Russia Europe Next 11 RoW
MCV HCV
2013
2022 Regional Shares
Note: All figures are rounded; the base year is 2012. Source: Frost & Sullivan analysis.
Global CV 2020 Vision: Unit Shipments—Global: 2013–2022
2022
~2.7
million
~4.6
million
5.5% CAGR Growth
44%
31%
24%
42%
21%
45%
53%
34%
36%
64%
55%
69%
76%
58%
72%
79%
55% 47%
66%
Next 11 includes the following countries: Egypt, Indonesia, Iran, Mexico, Nigeria, Pakistan, Philippines, Turkey, South Korea, Vietnam, and Bangladesh.
MCV: 6T to 16T
HCV: 16T and above
Global Medium and Heavy Truck Market Forecast:
Despite short-term global headwinds, stabilizing BRIC markets and rising Next 11 and African markets to
elevate global MCV and HCV sales to 4.6 Million by 2022
28%

5. 5ND32-18
North America
South America
China
India
Russia
Europe
Next 11
RoW
0
20,000
40,000
60,000
80,000
100,000
120,000
140,000
160,000
5000 10000 15000 20000 25000 30000 35000
GVWR (kilogram)
Price($)
Global CV Vision 2020: Highest-selling Weight Segment in Each Region—Global: 2022
Size of the bubble: Sales units of top segments in each country in 2022.
Attractive Segment by Region—2022
The 22 to 27 Ton GVWR Segment to Emerge as Most Attractive Among Trucks Globally at Price Band of
$45,000 to $75,000
Note: All figures are rounded; the base year is 2013. Source: Frost & Sullivan analysis.

6. 6ND32-18
~2.7 million
~4.6 million
Global Medium and Heavy Truck Market Forecast:
China and NA to show greater preference towards advanced powertrain systems; NG to emerge as fastest
growing powertrain technology across regions
Global Medium-heavy truck sales to reach 4.6 million by 2022
2022 – Powertrain Mix
Segment: GVWR 6T and above
NG fastest
growing
powertrain
in trucks
globally
Global CV Vision 2020: Powertrain Mix, 2022
2013 2022
0%
20%
40%
60%
80%
100%
World NA SA China India Russia Europe RoW
Gasoline 1.4 6 1 0.5 0.1 0.3 0.1 2.1
HEV 3 4 1.3 4.9 0.6 1 4.6 0.6
NG 8.9 16.8 6.4 10.2 6.3 7.45 8.25 4.4
Diesel 86.7 73.2 91.3 84.4 93 91.25 87.05 92.9

7. 7ND32-18
Global Engine Displacement and Power Recalibration:
Dominant Narrative in Diesel Technologies in Engine Downsizing in Developed Markets Contrasted Against
Engine Upsizing in Developing Markets
12
12.2
12.4
12.6
12.8
13
13.2
13.4
13.6
13.8
14
14.2
14.4
14.6
14.8
15
2011 2018
~ 3%
reduction
11
11.2
11.4
11.6
11.8
12
12.2
12.4
12.6
12.8
13
13.2
13.4
13.6
13.8
14
2012 2018
~ 3 %
reduction
Truck Engine Power
Bandwidths, China, 2010 and
2020
2010 2020
100
300
400
500
Power (kW)700
MDT
LDT
200 kW
100 kW
60k W
HDT
220 kW
400 kW 350 kW
HDT
600 kW
MDT
300 kW
140 kW
(Medium-High Duty)
LDT
80 kW
200
600
HD Truck Diesel Engine
Displacement Overview, North
America, 2011 & 2018
HD Truck Diesel Engine
Displacement Overview, Western
Europe, 2012 & 2018
While there is noticeable downsizing trend in both North America and Europe truck engine markets
(especially in the HD segment); the emerging markets (in particular China as shown here) on the other
hand are expected to experience up-sizing.
13.7 – 14.1
13.4 – 13.7 12.3 – 12.7
11.9 – 12.3
Weightedaveragedisplacement(inL)
Weightedaveragedisplacement(inL)
Note: All figures are rounded. Source: Frost & Sullivan analysis.

8. 8ND32-18
7
4
7
4
8
3
7
3
6
3
5
4
3
3
3
3
2
1
2
2
7
2
7
3
6
3
6
3
6
2
5
2
4
1
5
1
5
2
5
2
3
1
4
2
3
1
3
2
0
10
20
30
40
50
60
70
Observed no. of distinct
platforms, 2013
Estimated no. of global
platforms available,
2013
Observed no. of distinct
platforms, 2020
Estimated no. of global
platforms available,
2020
Beiqi Foton
Dongfeng Motor
Corp.
CNHTC
Ashok Leyland
TATA Motors
Navistar Inc.
PACCAR Inc.
IVECO
Scania AB
MAN SE
Volvo Group
Daimler Group
58
24
57
29
Vehicle Platform Strategies of Key Global HD OEMs:
By 2020, 29 Global HD Truck Platforms are Expected, with Individual Regional Products Built with
up to 70% Localized Components in Certain Markets
Note: All figures are rounded. The base year is 2011. Source: Frost & Sullivan analysis.
OEMs whose global strategy was in early stages of execution in 2013 are expected to show more
pronounced, platform-based product development as they expand geographically.
NumberofPlatforms(Units)
Year
Note: Within the split Auman GTL, and MAN SITRAK platforms are accounted to
both individual OEMs involved, but are counted only once for computing the total.
Global CV Vision 2020 : Heavy-duty Truck Market: Key Truck Platforms—Global: 2013 and 2020

9. 9ND32-18
7
8
6
3
2
7
6 6
4
5
3 3
4
3 3 3
1
2
3
2
1
2
1 1
7 7
5
3
2
7
6
5 5 5
4
3
4
3
4
3
2
3 3
2
1
2 2 2
0
1
2
3
4
5
6
7
8
9
Daimler
Group
Volvo
Group
MAN SE Scania AB IVECO PACCAR
Inc.
Navistar
Inc.
TATA
Motors
Ashok
Leyland
CNHTC Dongfeng
Motor
Corp.
Beiqi Foton
Observed no. of distinct platforms, 2011
Estimated no. of global platforms available, 2011
Observed no. of distinct platforms, 2018
Estimated no. of global platforms available, 2018
Heavy-duty Truck Market: Key Truck Platforms by OEM, Global, 2011 and 2018
Average no. of distinct platforms, 2011 Average no. of global platforms, 2011
2.2
5.0
Source: Frost & Sullivan analysis.
Leading OEMs Expected to Consolidate Regional Platforms and Launch New Multi-national
Platforms, Thereby Increasing the Number of Global Platforms Going Forward
OEM
Numberofplatforms(Units)

10. 10ND32-18
How OEMs Will Differentiate Their Brand in the Future
All major OEM R&D focal points indicate automated mobility as a strategic priority and a key brand
differentiator.
POWERTRAIN
EFFICIENCY
SERVICE &
MAINTENANCE
ADVANCED
SAFETY
SUSTAINABILITY &
ENVIRONMENT
AUTOMATED
MOBILITY
QUALITY &
RELIABILITY
COMFORT &
CONVENIENCE
COST OF
OWNERSHIP
CONNECTIVITY &
SMART
HEALTH &
WELLNESS
PRE 2000 TODAY FUTURE
Source: Frost & Sullivan

11. 11ND32-18
Autonomous Commercial Vehicle Incremental Cost Analysis
While the cost of ingredient technologies will vary between 2014 and 2025, the total incremental cost for the
autonomous driving technology module in heavy-duty trucks will not decline by more than 10%.
6%
41%
39%
6%
8%
2025
Telematics/Connectivity
HMI
Algorithms/IT
Driveline
Sensors
Key: HMI = human-machine interface; IT = information technology. Source: Frost & Sullivan
Cost ~$20,000 Cost ~$18,000
2014: ~$2,000
2025: ~$1,000
Autonomous Heavy-duty Truck Market: Incremental Cost Analysis, Western Europe and North America, 2014 and 2025
Sensors
2014: ~$10,000
2025: ~$7,500
Driveline
2014: ~$1,000
2025: ~$1,000
HMI
2014: ~$5,000
2025: ~$7,000
Algorithms/IT
2014: ~$2,000
2025: ~$1,500
Connectivity
10%
50%
25%
5%
10%
2014
Telematics/Connectivity
HMI
Algorithms/IT
Driveline
Sensors

12. 12ND32-18
Automated Driving Benchmark
Truck OEMs have the capability to create semi- or highly automated vehicles today. The biggest challenge is
taking the driver out of the loop and providing a robust business case for fleet adoption.
Level of
Automation Level 1 Level 2
Truck
Platooning Level 3 Level 4
Enabling
Technology
None
Electric power steering (EPS),
electric braking systems (EBS),
electronic throttle control, adaptive
cruise control (ACC), advanced
driver assistance systems (ADAS)
V2X, DSRC,
integrated safety
systems (ISS),
cameras,
sensors, ACC
Intersection assist,
redundancy backup for
connectivity, self-driving
capability until driver takes
over control
Multiple
redundancies
(hardware) and
artificial intelligence
(software)
Incremental
Cost
$0 $5,000–$10,000 $5,000–$10,000 $20,000–$25,000 $30,000 +
Year
Expected
Today ~2015–2020 ~2018–2020 ~2025–2030 ~ 2035 +
Distance/
Duration of
Automation
None Low Moderate Moderate-High High
Driver
Involvement
Very High High Moderate Moderate-Low None
Vocation
Application
(Long-haul,
Regional,
Vocational)
All
Long-haul
Regional
Vocational
Long-haul
Regional
Vocational
Long-haul
Regional
Vocational
Long-haul
Regional
Vocational
Autonomous Heavy-duty Truck Market: Levels of Automated Driving, Western Europe and North America, 2014
Source: Frost & SullivanHigh Medium-High Medium Low

13. 13ND32-18
Key Implications on Human Factors
Autonomous driving technologies could significantly affect the trucking industry, especially regarding driver
shortages, driver performance, and driver safety.
Driver-related Fuel Efficiency
Driver Wages
Recruiting Drivers Driver Performance
Productivity
Retaining Drivers
Driver Safety
Source: Frost & Sullivan
Level 4 Automation

14. 14ND32-18
Snapshot of Global Automated Truck Adoption, 2025 and 2035
In 2035, an estimated 182,031 autonomous-enabled trucks will be commercially sold for on-road applications
globally, up from 7,970 units in 2025.
# Source: Frost & Sullivan
North America
Japan1
Rest of World7
Russia5
Europe2
3
~2,700
~2,400
(36.7%)
~2,800
~8,500
~10,200
Level 2
Level 3
109,000
200,1163,160
25,664
0
306
2025 2035
Level 4
Ranking by government support of autonomous commercial vehicle technology
Note: No level 4 commercial vehicles are expected in 2025 globally Australia4
Legend
162,450
259,692
3,610
40,863
0
1,910
2025 2035
69,324
152,7600
21,386
0
0
2025 2035
15,750
23,800
700
3,850
0
350
2025 2035
237,313
565,212
0
84,782
0
0
2025 2035
China6
17,500
26,000
500
1,400
0
0
2025 2035
60,000
203,171
0
1,528
0
0
2025 2035671,337
7,970
0
2025
Total Market
~ 679,307
1,430,751
179,465
2,566
2035
Total Market
~ 1,612,782
Autonomous Heavy-duty Truck Market: Automated Truck Adoption, Global, 2025 and 2035

15. 15
Why the Connected Truck is Important in Future ?
Telematics will turn the truck into a ‘value truck’ through an ecosystem of customer-centric services and
applications
Globally 35 Million LMH Trucks to be Connected by 2020
Strong Push from Fleet Operators
Future Trucks Can be Used as Payment Solution
High Value Proposition for All Eco-System Partners
Integrated Mobility – Connected Living

16. 16
New FMS Vendors Evolving – Increasingly Crowded Ecosystem
Consolidation is the key force driving this trend.
Software and
Application
Providers

17. 17ND32-18
Big Data Analytics Potential Savings for OEMs and Fleets:
Leveraging big data & analytics total potential savings per long-haul truck per year is ~ $ 4,286.
Product
Development
&
Manufacturing
Marketing
&
Sales
Warranty
&
Quality
Fuel
&
Route
Optimization
Usage Based
Insurance
Prognostics/
Predictive
Maintenance
6 - 20 %
8 - 17 %
7 - 15 % 17 - 25 %
10 - 25 %
7 – 30%
Estimated Potential Savings by Function Estimated Potential Savings for a Fleet
Note: Values obtained from primary & secondary research Source: ; Frost & Sullivan
Executive Analysis of Big Data in Commercial Vehicles , Potential Savings , Global, 2014

18. 18ND32-18
Uber for Trucks is Here- Cargomatic, Transfix, etc.- Big Data Leveraged
by Small Devices
Several Leading OEMs Are Already Emerging as Stake Holders
25 Trucks, 25
Loads, One Day=
1,725 Empty Miles,
Driver Fatigue,
Traffic Congestion
With Automated
Matching System
Empty Miles
Reduced to 272,
Less Tired Drivers,
Less Traffic, Happy
Shippers, Happy
Fleets
If you scale this up
to 2 Million Trucks
in US that drive
through US cities
each day about 12
Billion Empty Miles
Can be Reduced

19. 19NEF9-18
Currently Evaluated Pricing Model
Shift from no upfront investment model to profit sharing model; 2014 will see few players
evaluating various ways to get this started, though it will take another 3 years to be launched
High upfront investment
with low monthly service
fee – fleet operator buys
hardware for a set fee and
pays low monthly
subscription fee
Profit sharing model -
Sharing of cost savings
with fleet management
vendor (for example; for
every ‘X’ per cent of cost
savings achieved by using
the vendor’s fleet
management solution, they
get paid about ‘X’ per cent
of that cost saving)
Low High Low High Low High
Hardware
Monthly
Subscription
Fee
No upfront investment
with high monthly
service fee – hardware is
offered as free; vendor
recovers the hardware cost
with high subscription fee
Low hardware cost
and service cost
Low hardware cost
but high service cost
High hardware cost
but low service cost
Currently
evaluated only in
‘matured’ markets

20. 20NEF9-18
Driver
Mgt.
Fuel
Mgt.
Vehicle
Management
Order
Management
Warranty
Optimisation Prognostic & Repair
Management
Driver
Behaviour and Training
Advanced Driver
Assistance System
Integration
Usage based
Insurance
Automated Driving
/ Platooning
Transport
Management - TMS
ENVIRONMENTSAFETY
ACCESSIBLE AFFORDABLE
RevenueGenerationProfitGenerator
Evolving Service Opportunity
Business model of connected truck is like an “Iceberg”; most important revenue generators are not yet
seen
$3.5 Billion Today

21. 21
Here, Now, and Future of Connected Fleets
Fleet telematics growth likely to be aggressive and active.
•Safety & Security
•Fuel
•Vehicle
Diagnostics
•Maintenance &
Service
•Order
Management
•Driver Behavior
•Video Surveillance
•Prognostics
•UBI
•Driver Simulators
•Business Intelligence
(using big data)
•Platooning (Semi-
Autonomous)
•Dealership network
integration
•Mobile Freight
Brokering
•Speedy Road/Load
Testing
•Intermodal Logistics
IntelligentMobilityforPeople&ForGoods

22. 22ND32-18
Contact
Wallace Lu
Senior Industry Analyst
Commercial Vehicle Research
Direct: 416.490.0813
Fax: 416.490.1553
Email: wallace.lau@frost.com