Continue leadership positions on the commercial vehicle market

August 2010

Bo Inge AnderssonPresident & CEO, GAZ Group

GAZ GROUP PRODUCT STRATEGY

New family of low floor buses

Alternative fuels and environmental solutions

Bus modular concept development and implementation across all bus segments

Buses

Off road truck product line upgrade and development

New Truck portfolio to offer medium duty trucks, road trucks and off-road vehicles with different GVW

Trucks

Current Gazelle improvements

Updated power train

Diesel engines

Alternative fuels

Process & product quality continuous improvement

New Gazelle development

Light commercial vehicles

GAZ to utilize modern manufacturing capability and open capacity

Ongoing discussions with the major global players

Opportunities for components localization

Passenger cars

Modernization and upgrades to improve performance of gasoline engine,

LPG and CNG options

Light diesel solution

Euro 4/5/6

Medium diesel development with AVL

Heavy diesel, Renault license

Power train

MAIN FOCUS AREAS

Sales increase for Sales increase for all GAZ Group all GAZ Group

DivisionsDivisions

Quality Quality improvements, improvements, warranty claim warranty claim

reduction,reduction,reduce cost of reduce cost of

ownership ownership

Improve Improve operational operational efficiencyefficiency

New products New products

LCV QUALITY IMPROVEMENT

Quality performance results July 2009 – July 2010 (12 month)

Warranty incidents per thousand vehicles – 2 months in service (2MIS IPTV ) reduction by 37%

MFG direct run loss – average number of defects per vehicle in production ( DRL)

reduction by 35%

Supplier incidents per thousand vehicles (IPTV)

reduction by 46%

IMPROVE OPERATIONAL PERFOMANCE

Projects

Results (12

months)

Implementation of direct pull system:

Sales production purchasing

Facilities consolidation and optimization

Consolidation and creation of processes/material flows next to assembly lines

Work stations standardization

Cost reduction

Facilities consolidation and optimization

In-process inventory reduction

Extra equipment elimination

Revenue per employeeincrease

By 42%

By 47%

By 60%

By 46%

GAZelle CONTINOUS IMPROVEMENT

4х44х4

Extended product line in 4х4 segment

Extended product line in 4х4 segment

SOP: 4.02.2010

SOP: 10.04.2010

Payload increased to 2 tons

Extended product line

Payload increased to 2 tons

Extended product line

Improved reliability

Improved consumer properties

Improved reliability

Improved consumer properties

Reduced cost of ownership

Product line extension

Warranty retained for engine and fuel system

Reduced cost of ownership

Product line extension

Warranty retained for engine and fuel system

Improved frame rigidity for long vehicle

Improved body stiffness for metal van versions

Exhaust system with improved corrosion protection

Immobilizer

Improved frame rigidity for long vehicle

Improved body stiffness for metal van versions

Exhaust system with improved corrosion protection

Immobilizer

GAZelle BusinessGAZelle Business

LPGLPG

DieselDiesel

Reduced cost of ownership

Reduced fuel consumption

Expansion of product line

Extended engine service life

Improved gearbox

Reduced cost of ownership

Reduced fuel consumption

Expansion of product line

Extended engine service life

Improved gearbox

GAZelleGAZelleBusiness +Business +

CNGCNG

Reduced cost of ownership

Extended product line

Extended engine offering

Retention of warranty on all vehicle’ elements

Use of the cheapest fuel for today

Reduced cost of ownership

Extended product line

Extended engine offering

Retention of warranty on all vehicle’ elements

Use of the cheapest fuel for today

GAZelle 4,2tGAZelle 4,2t

July 2010 February 2011

February 2011

March 2011December 2010

Cost of Cost of OwnershipOwnership

20%20% 20%20%

WarrantyWarranty80 00080 000 km Vehicle

100 000100 000 km systems

80 00080 000 km Vehicle

100 000100 000 km systems

Steering

Braking (brake response)

Suspension

Heated mirrors

3-point seat belts

ABS ( 4x4 & BUS)

Energy-absorbing steering column

Steering

Braking (brake response)

Suspension

Heated mirrors

3-point seat belts

ABS ( 4x4 & BUS)

Energy-absorbing steering column

SSafetyafetySSafetyafety Fuel EfficiencyFuel Efficiency

10%-Petrol;10%-Petrol; 20% - LPG20% - LPG

Вячеслав Лымарь, Ижевск, предприниматель:

«Моя «Газель» окупила себя за 9 месяцев. Опять же – не имею возможности простаивать месяц. А для «Газели», если что, запчасти всегда под рукой.

Алексей Зарипов, Пермский край, предприниматель:«Эта машина помогла мне стать хозяином своей жизни. … пока со мной мой автомобиль, мне не страшно оказаться без работы, я сама себе начальник, я спокоен за себя и свою семью».

Андрей Логинов, ген. Директор ООО «Автотен»:

окупаются быстрее и дешевле, учитывают специфику именно

российского бизнеса перевозок, чего нет у иномарок. .. достойной замены мы на сегодняшний день

не видим.

GAZELLE-BUSINESS IMPROVEMENTS and CUSTOMERS VOICES

NEW BUS PRODUCT and 2010 LAUNCHES

PAZ-3204

PAZ-3204-12

length: 7,6 м.engine: CUMMINS (YMZ)transmission: ZFaxle: KAAZ

length: 8,5 м.engine: CUMMINS (YMZ)transmission: ZFaxle: KAAZ

GOLAZ 5251

Intercityengine: YMZtransmission: ZFaxle: RABA

LIAZ-5292

City, low floorHybrid(EURO-6)

HEAVY DUTY TRUCKS PRODUCT DEVELOPMENT and 2010 LAUNCHES

.

Heavy duty off road vehicles for commercial applications with GVW 33-40t, flat nose cab

URAL Е13 – Е26URAL Е33 – Е40

Off road vehicles for commercial applications: major facelift, conventional and flat nose cab

MAJOR POWER TRAIN 2010 LAUNCHES

Heavy diesel YMZ-650

6 cylinders11 L Renault license

Medium diesel YMZ-530

4 & 6 cylinders4.4 L/6.6 LCooperation with AVL

SUMMARY

GAZ Group is aimed at customer satisfaction

GAZ Group set the direction for improvements in quality and cost of ownership of its products

GAZ Group constantly strives to improve and update its diversified commercial product vehicle portfolio

GAZ Group will be successful by having a collaborative relationship with its dealers, suppliers and customers

GAZ Group will continue to be the market leader in commercial vehicles in Russia