LeasePlan Interactive

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LeasePlan Interactive

• Rising Operating Costs

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Lease Break-Up

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Lease Costs 2004 versus 2006
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Lease Costs 2004 versus 2006

• Depreciation
• Increase in Corolla and Camry depreciation costs
  marginal, whilst Futura depreciation up 25

• Fuel
• 2006 fuel budget up 65-70 compared to 2004

• Maintenance
• Maintenance costs remained stable throughout the
  2004-06 period

• Registration / Insurance
• Registration costs have increased 5 since 2004,
  insurance costs remained stable

• Interest Costs
• Interest costs up approximately 20

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Pump Prices versus Market Value Chart
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RV Influences

• Continued record New Car Sales
• Yearly Record Sales have been achieved every year
  since 2002

• Increased fuel prices
•  In the three months to the end of June, pump
  prices have increased 12.2, the biggest
  quarterly rise since 1991
• This follows
• 34 increase in 2004
• 33 increase in 2005
• ..almost 20 increase so far in 2006

• Platform / Glass House changes for major makes
• Aug 2006 VE release (Current platform 9years
  old)
• Aug 2006 Camry (Current platform 4years old)
• Early 2008 Ford Falcon (Current platform
  8years old)

• Declining sales in large 6cyl market
• Large passenger vehicle sales have plunged 22 so
  far this year, following a 16 decrease in 2005
  and 11 decrease in 2004

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• Imported Vehicles Becoming More Affordable
• Tariff reductions
• Strong Australian dollar
• Lower production costs

• Chinese Built Vehicles
• Bargain-basement cars from China soon to be
  available in Australia
• Priced below 10,000 retail?
• China currently produces 6 million vehicles per
  annum, this is expected to increase to 10 million
  by 2010

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Fuel Cost Factors

• Increasing Global Demand
• Surging demand for oil is testing the capacity of
  the global industry
• Past four years alone, China alone has accounted
  for 38 of the growth in world demand

• Supply Issues
• Spare capacity remains low
• New oil sources deeper and dirtier (more
  expensive) than remaining giant oil fields

• Refinery Capacity
• Existing refineries are operating at close to
  full capacity
• World refining capacity AND world demand is
  currently at 85mb/d

• Geo-Political Tensions
• IRAN Fourth largest reserves in the world,
  producing around 4-5 million barrels per day
• SAUDI ARABIA Mystery surrounding reserves
• NIGERIA Political Tensions

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Fuel Cost Factors

• Supply Deficit?
• Strong possibility supply deficit could emerge as
  early as 2010 if global demand remains strong and
  no new large source of supply is found or becomes
  possible by new technology
• Peak Oil
• Essentially, the answer to when the peak in oil
  production will depend on
• -How much oil is left
• -accessibility? -quality?
• -The strength of future demand
• -How future technologies will impact on both
  supply and demand
• All of which are subject to great uncertainty

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Peak Oil (ASPO)
Peak Oil Pre-2010

• Deepwater Oil (gt500m)
• -Mostly found Gulf of Mexico the South Atlantic

• Polar Region Oil
• Expensive, destructive and risky.

• NGL Natural Gas Liquid

• Heavy Oil Dirty and expensive.

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Demand At The Pump

• Demand for petrol in Australia fell by 8 in
  2005, the sharpest reduction in twenty years
• (Commonwealth Bank research unit - 2006)

• Survey conducted by by AC Neilson Market Research
  (2006) confirmed
• 61 of respondents are trying to use their car
  less
• 59 are trying to combine trips to save on fuel
• 29 were cutting back on non-essential living
  expenses
• 19 are using public transport more.
• 8 of respondents had bought a more fuel
  efficient vehicle

• 2 of respondents said they were switching to a
  motorbike, scooter or bicycle

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ANZ Oil Demand/Supply Forecasts

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LPG Fuel Savings

• COST SAVINGS
• LPG an attractive leasing alternative due to
• rising petrol prices
• and greater demand for used LPG vehicles
• a wider range of manufacturer developed LPG
  vehicles
• Break-Even Points
• Ford Falcon E-Gas 20,000kilometers
• Holden Commodore Dual Fuel 60,000 kilometres
  (assuming 90 LPG utilisation)
• Government conversion subsidy of 2000 for
  LPG-powered used cars and 1000 for new vehicles
  as at 1 October 2006

• USED MARKET VALUES
• Demand for LPG powered vehicles has increased
  dramatically and took used car prices with it
• LeasePlan has seen a solid increase in the prices
  LPG vehicles return over the same petrol powered
  model

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Demand For LPG Vehicles

• Rising petrol prices driving 40 increase in
  demand for E-Gas Falcons since Q1 2005
• Holdens new VE Commodore range includes a Dual
  Fuel variant (release date 14 August) at a 3,850
  cost (GST incl.)
• LeasePlans current fleet reflects demand and
  supply of Ford's dedicated E-Gas has far
  outstripped the dual fuel Commodore
• Dual Fuel Commodores make up 2 of the current
  the VY/VZ Commodore
• E-Gas models make up 13 of the BA/BF Falcon and
  Futura models
• 20 of Falcon orders placed in 2006 were for
  E-Gas variants

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LPG Fuel Cost Saving Analysis

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Diesel

• Why Buy Diesel?
• Fuel Economy
• Passenger diesel vehicles show an average
  reduction in fuel consumption of 20 over their
  petrol variants
• Commercial diesel vehicles show an average
  reduction in fuel consumption of 30 over their
  petrol variants
• Power
• Greater torque over petrol variants.
• Cost
• Retail prices of Diesel vehicles generally carry
  a premium over their petrol variants
• Residual Value
• Due to greater efficiency and durability of
  diesel vehicles, LeasePlan has seen these
  vehicles return a price premium over their petrol
  variants.

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Diesel Commercial

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Diesel Passenger