1. mAutomotive Aftermarket D EPLOYING AFTERMARKET SOLUTIONS Challenges and Opportunities Presented by: Zaim Azrak CEO, Location Solutions Date: 20 November 2013 ©2013, Location Solutions Your World Within Reach!

2. Agenda © 2013 Location SolutionsYour World Within Reach!2 Who is Location Solutions (LS)? Being a mAutomotive Aftermarket player The Challenges in the Middle East The Opportunities in the Middle East The Stakeholders of an Emerging Eco-System of Services in the Middle East.

3. LS in brief © 2013 Location SolutionsYour World Within Reach!3 History Since 2004 Specialty & Expertise Aftermarket Provider of: Fleet Management Solutions AVL - Vehicle Tracking Solutions Telematics & M2M Services Regional & International Presence Regional HQ: Dubai Development HQ: Rotterdam Regional Offices: Abu Dhabi, Riyadh, Jeddah, Doha, Cairo, and Beirut US Office: Detroit Industries we serve Automotive Transportation Logistics Construction Oil & Gas Market Position One of the leading and fastest growing Telematics Service Providers in the GCC

4. © 2013 Location SolutionsYour World Within Reach!4 Transport Industry (Passenger / General) Refrigerated Cargo Industry Construction & Contracting Industry Oil & Gas (Road Safety & Driving Behavior) Container Tracking Car Lease & Rental industry Student Tracking ATM Tracking Verticals We Serve And every vertical has its own Pain points, Technical Requirements, and Business Needs

5. Being A mAutomotive Aftermarket Player © 2013 Location SolutionsYour World Within Reach!5 Our Business Model W HITE L ABELED Telematics Device 1.We are not a device manufacturer. 2.We procure the best of what OEMs have to offer. 3.Each model undergoes a solid QA assessment. 4.Hardware is a commodity. O UR O WN A CCOUNT Connectivity 1.We are not a Connectivity Provider - Connectivity is Provided by MNOs. 2.We procure Bulk SIM Cards from Local, Regional, and International MNOs. Data Centers Provisioning Tool SIM Management Tool Front End Back End Billing System Account & CRM Management System + Accommodate Several Hardware into a single platform + Ability to Customize The Solution D EVELOPED OUR OWN IN - HOUSE Sales, Marketing & BD Installation Team Technical & Support Developers & Solution Engineers Solution is offered in Several Packages of Subscription-based Service to the client! All Under One Roof from a Single Supplier Management, Admin, Accounting and Collection S OLID P ROCESSES, D EFINED O PERATIONAL W ORKFLOW, AND V ALUE C HAIN Regulatory Prices, Absence of M2M Platform, Detailed Billing…. Challenge?

6. Being A mAutomotive Aftermarket Player © 2013 Location SolutionsYour World Within Reach!6 A UTOMAKERS MNO S Promoter? Early Adopter? Niche Player? Catalyst Promoter? Early Adopter? Niche Player? Catalyst C ONNECTED V EHICLES / T ELEMATICS / MOBILE A UTOMOTIVE Provisioning of SIM… Regulatory Issues… Privacy Policies… What is the Best Business Model? C ONNECTED V EHICLES / T ELEMATICS / MOBILE A UTOMOTIVE Provisioning of SIM… Regulatory Issues… Privacy Policies… What is the Best Business Model? Service Delivery is still challenged! In Fact We consider ourselves as Industry Leaders It is NOT important to manufacture telematics devices, equip the vehicle with telemetry devices, or just offer connectivity it is mostly important to understand what your end-customer needs are and to adapt your services and solutions rapidly. Third Party Player - Aftermarket Annoyance Or maybe as: Warranty Breachers? Or maybe as: Warranty Breachers? Just another Connectivity Client A potentially Future Competitor? How are we seen? mAutomotive Aftermarket Solution & Service Provider mAutomotive Aftermarket Solution & Service Provider

7. Challenges for Being An Aftermarket in ME: Several Factors to Take Into Consideration © 2013 Location SolutionsYour World Within Reach! Regulators MNOs Car Dealerships Installation Management Socio- Economical Factors of each GCC country Low-Quality Competition Challenge Factors Internal Factors External Factors Beyond Control Time consuming Can impact our business Controllable Easy to overcome Require Proper Management 1.Client requirements differ (sometimes drastically) 2.Pricing 3.Penetration Rate of new Emerging Technologies varies We try to adapt and turn some of these challenges into opportunities: Innovative Solutions / Additional Features Customization Integration of new Accessories Pricing Packages & Payment Methods …and more Self-contained, Geographically Dispatched Smart installation Teams 7

8. Challenges – MNOs: Service Limitations, Prices, and Relationship. © 2013 Location SolutionsYour World Within Reach!8 Regulators MNOs Car Dealerships Socio- Economical Factors of each GCC country Low-Quality Competition Absence of Unified Roaming Rates No M2M Platform Expensive Connectivity Rates Not in Control of SIM Card Services Intermittent Billing Problems No Data log per SIM SIM billing starts from day 1 of delivery Not seen as Technology Partners yet Replenishment of SIM is a slow process Intermittent Technical Glitches that harmed our image

9. Challenges – Regulators: Privacy Policies, GCC-wide Standardization… © 2013 Location SolutionsYour World Within Reach! Regulators MNOs Car Dealerships Socio- Economical Factors of each GCC country Low-Quality Competition Regulatory Policies and mandates can vary drastically Absence of Unified Approval Process across GCC Cumbersome Submission Process sometimes Privacy Policies are of high concern in some countries High Approval fees in some countries Lack of Trust in Private Telematics Service Providers Should Play a significant role in unifying roaming rates in GCC Better Control on illegal and unregistered competitors 9

10. Challenges - Relationship with Car Dealerships © 2013 Location SolutionsYour World Within Reach!10 Regulators MNOs Car Dealerships Socio- Economical Factors of each GCC country Low-Quality Competition Cannot adopt any solution without his manufacturer approval Too much worried about Warranty Breach even for OBD devices Fleet Sales Managers do not see the value proposition yet to promote it Dealers are conservative with aftermarket products: Tint Film and thats it! They come back to us only when a corporate client requires the solution Some dealers lack the proper technical knowledge about Telematics They should be an active stakeholder in this ecosystem

11. Challenges - Facing Low-Quality Competition © 2013 Location SolutionsYour World Within Reach!11 Regulators MNOs Car Dealerships Socio- Economical Factors of each GCC country Low-Quality Competition Market flooded with low-quality cheap devices Hardware that may affect the car electronics Low prices with barely no margins to sustain their business Very limited or zero after-sales support Outsourced installers – Higher Risk & Liability Usually a one or two-man-show company Import devices without Telecom Regulatory approvals They sell IT Solutions and not focused on Telematics

12. C hallenges - Different Socio-Economical Factors among GCC countries © 2013 Location SolutionsYour World Within Reach!12 Regulators MNOs Car Dealerships Socio- Economical Factors of each GCC country Low-Quality Competition Solution Requirement differs from country to another Detecting of Idling in UAE is a prime feature, in KSA it is not! Diesel monitoring is not looked after in KSA, while in UAE it is. Web User- Interface must support multiple- languages Pricing of Subscription Packages differ from country to another due to MNO Rates, Competition, and Internal Expenses Connectivity Coverage is limited still in some rural areas Some fleet managers are conservative and do NOT believe in technology whatsoever

13. Opportunities for Being an Aftermarket in the ME: Sweet Spot for Emerging Technologies © 2013 Location SolutionsYour World Within Reach!13 The MENA region and the GCC in particular are considered to be a Sweet Spot for the Emerging Technologies 3G/4G (LTE) and widely spread GPRS connectivity Internet / Smartphones and Tablets high Penetration A solid road transportation infrastructure Sustainable Economy and transformation from Oil-dependant economy to knowledge-based economy. Modern Trade & Logistics hub Backbone of Wireless Technologies High Demand Buying Power Promising Market for Automotive Telematics Solutions

14. Opportunities are increasing due to several factors © 2013 Location SolutionsYour World Within Reach!14 Technology High Dependence on Vehicles for Land Transport Government Support for New initiatives Environment 2G/3G Availability, Devices: OTA, New Features, Wide Selection of Sensors, OBD-based Devices, Faster Chipsets and GPS/GSM Components, Availability of APIs or Real-time OS inside device FLEET OPTIMIZATION, MANAGEMENT, UTILIZATION, SAFETY, SECURITY, VISIBILITY, DATA, REDUCTION IN RUNNING COSTS Harsh Climate Condition, Vast Distances, Absence of Road Landmarks, Heat Local Authorities are rapidly adopting Telematics solutions to enhance road safety, limit accidents, increase public safety, promote sustainable transport, and optimize traffic

15. Opportunities are increasing due to several factors © 2013 Location SolutionsYour World Within Reach!15 Construction & Contracting Transition towards a knowledge-based economy Multicultural Society The Oil & Gas Sector Huge increase in the number of commercial vehicles and heavy equipment in the GCC. Requirement for electronic solution that can solve the pain points of plant hire and workshop managers. GCC countries are promoting knowledge-base economy; Service, Manufacturing, Trade, Science/R&D firms are establishing themselves in the region. Highly depended on Land Transportation. Road Safety is the PRIME concern for the QHSE department in government-owned Oil & Gas operators and regulators. More then 8 languages are widely spoken in the GCC region. Uneducated drivers form the largest portion of the drivers in GCC: Lack of proper driving ethics and skills. Blame Culture

16. The Stakeholders of an Emerging Eco-System of Services in the Middle East - The M2M © 2013 Location SolutionsYour World Within Reach!16 Telematics Solution/Service Provider MNOs Telematics Hardware Vendors Telematics Hardware Vendors The Cloud / Repository Automakers & Dealerships Fleet Owners (Corporate End- Customers) Consumer The Beneficiaries Banking & Finance Insurance Vehicle Recovery Service Car Lease & Rental Firms The Technology Providers Government

17. What is the Future holding? o Connected Living o Smart Cities o Internet of Things o Big Data © 2013 Location SolutionsYour World Within Reach!17 Thank You