1. Overseas Military Sales
Audi of America
&
Overseas Military Sales
Monday, 6 August 2012

2. Attendees Audi Tony Trapalis, Corporate Sales Manager
Ari Kantrowitz, Corporate Sales Strategist
OMSC Steve Frisch, SVP Corporate & Retail Operations
Tim Daniels, SVP Worldwide Sales
Rob Schwartz, VP Marketing & Ecommerce
Afia Arneja, VP, International AutoSource
Jeff Kryjak, Director, Product Marketing
Kate Connolly, Group Manager, Product Marketing

3. Agenda About OMSC - Business Unit Review - Operations Overview
- Business Model: Special Order v. Stock
Audi of America & OMSC: A Growing Partnership
Review
- Looking Ahead
Growing The Business: Opportunities & Risks
- Faster Turns, Less Aging
- Production Planning & Management
- The Competitive Edge
- Leveraging AoA Assets
Next Steps

4. About OMSC
OMSC is the world’s leading marketer of automobiles to the U.S. Military, diplomatic foreign service, and international business communities outside the U.S..
Working in partnership with leading manufacturers, the Company’s corporate strategy is to focus on markets that are inherently difficult from logistical, cultural and sales implementation standpoints, and require entrepreneurial and organizational capabilities to effectively serve the unique needs of our partners and these customers.

5. OMSC’s Unique Value To Our Partners To Our Customers
Specialized sales, marketing and logistical expertise in niche markets
Capture otherwise inaccessible U.S. consumer markets to generate incremental business
Support customers through all aspects of pre and post purchase – finance, warranty, etc.
Downstream revenue opportunities for the U.S. dealer body – new sales, repeat sales, service, etc.
Carry your brand messages to these inaccessible markets outside the U.S.
Opportunities to test and grow targeted segments – consumer and vehicle
Trusted resource; government-endorsed contractor, longstanding Fortune 500 relationships
Convenience and service; cater to customers’ unique needs; “what you need when you need it”
Value; pre-determined no-haggle pricing, program positioned as a unique benefit
Guarantees and protections; customer is price protected from any increases after order; satisfaction guaranteed at delivery or the customer is entitled to a full refund
Financing; programs tailored to the needs of these markets

6. FINANCIAL SERVICES GROUP (FSG)
OMSC Business Units
POST EXCHANGE (PX) – 71%
U.S. Military, DOD personnel and contractors
Sell directly on U.S. military bases overseas 
TELESALES - 10%
E-COMMERCE – 8%
Sell vehicles over the phone and online
Online transactions – 24/7 Chat
Significant growth opportunities
AUTO EXCHANGE (AX) – 11%
Same unique market as PX, different brands
Retail stores located off-base in Europe
Dealer-like positioning   
FINANCIAL SERVICES GROUP (FSG)
Tremendous expertise and efficiency
Centralized F&I manager
Supports other three business units

7. About AutoExchange (AX)
Key Stats:
Established over 30 years ago
Market and sell to U.S. military stationed or transiting through Europe
16 locations just outside military bases in Germany, Italy, Belgium and the U.K.
Delivered 425 Audis in 2011, 2012 goal of 672
Over 90% of AX deliveries are in Europe
Aggressive local competition from BMW and Volvo
Major rebranding effort CY11-13
Typical Audi inventory level units on the ground 7

8. About AutoExchange Europe – Accessible Troop Strength Estimates CY12
Locations Not Mapped:
BRATISLAVASlovakia
CY12
69,421
CY13
64,522
CY14
65,022
Bremerhaven
GYOR
Hungary
Emden
Brussels Belgium
NECKARSULM
Lakenheath
Spangdahlem
Schweinfurt
INGOLSTADT
Bamberg
Mainz
Aviano
Ramstein
Vilseck
Vicenza
Kaiserslautern
Grafenwoehr
Weisbaden
Ansbach
Heidelberg
Stuttgart

9. About AutoExchange Military Sales The Customer & Sales Environment:
Military personnel typically stationed in Europe for three year tours, often accompanied by their families
Military and Department of Defense permitted to operate private vehicles in Europe, resulting in high demand for locally delivered, U.S.-spec vehicles, to be taken back to the U.S. after their tour
Europe serves as a transportation hub for worldwide U.S. military operations, extending the market beyond those stationed in Europe
Our sales managers and agents are well known in the military community and are considered “part of the family”
Military Sales

10. About Military AutoSource
Key Stats:
Reach inaccessible customers and provide remote sales channel – online sales
Accomplished through , live chat and phone
Delivered 294 Audis in 2011, 2012 goal of 298
Off-base brick and mortar presence not possible due to environment and/or economics (e.g., Iraq, Afghanistan)
Customer Profile:
Military member located in a region outside of Europe
Needs vehicle delivered in the U.S.
Saved money while overseas – combat pay
Channel preference – opts to conduct business over the internet
Market Size:
Est. 75,000 10
2011 Audi Delivery Share

11. About International AutoSource (IAS)
Key Stats:
Established close to 20 years ago
Sell to American and foreign nationals transferring to and from the U.S.
IAS & Diplo delivered 423 Audis in 2011, 2012 goal of 520
Customer Profile:
Executives from Fortune 500 companies
Foreign nationals with no U.S. credit history or driving record – makes financing a challenge
60% lease due to short-term assignments
25% repeat purchase
Affluent, high disposable income
Large sphere of influence – high referral rate
Seeks high-quality products; knowledgeable and well informed
Market Size :
Returning U.S. expatriates – 100,000*
Foreign nationals – 1,051,919**
* Source: Employee Relocation Corporate Estimates
** Source: U.S. Department of Justice Immigration and Naturalization Service
2011 Audi Delivery Share

12. About Diplomatic Auto Sales (Diplo)
Customer Profile:
Members of the international diplomatic and foreign service community
Marine security forces stationed in areas where there are no PX locations
Affluent and high profile
High-end buyer, purchases every 3-5 years
Loyal with a high referral rate
Market Size:
Small, but stable market
9,000 U.S. foreign service employees overseas (not including spouses)
1,000 Marine security guards
Telesales
37%
2011 Audi Delivery Share 12

13. OMSC Operations Overview
Sales Administration New York & Kronberg
Ensure all orders are qualified and coordinate with salesperson and customer once order is submitted
Warranty Support New York & Kronberg
Provide customer support with any vehicle-related issues after delivery. In Europe this includes support for military personnel who did not buy their Audi through OMSC
Technical Services
New York
Coordinate submission and tracking of orders and all logistics through delivery; manage OMSC’s order bank; prioritize production against allocation budget
Dealer Services
New York
Coordinate preparation of all delivery paperwork and related communication; maintain relationships with more than 180
U.S. Audi dealers

14. The Model: Special Order (SPO) vs. Stock
On average, pre-sold Special Orders (SPOs) represent roughly 40% of annual Audi deliveries
Special Ordering is positioned as a unique program benefit
The customer SPO order to delivery window ranges from days
SPOs are written with a Requested Deliver Date (RDD), based on the customer’s transportation needs and/or expected duty rotation
“Order Accepted” SPOs carry a commitment (contract) from OMSC
SPO lead times are managed by OMSC based on current tracking against forward allocation and other production dynamics (MY changeover, plant downtime, etc.)
SOLD
BUILT
DELIVERED

15. AoA & OMSC: A Growing Partnership
Quick Stats:
Relationship with Volkswagen Group of America began close to 30 years ago
Began working with Audi of America in 1993
Growth acceleration began in 2009
Volkswagen Credit floorplan Audi/VW line at $15mm, doubled from 2011, pursuing an additional increase to $19mm
Audi Financial penetration close to 30%
1.151
1,021
Deliveries
603
242 15

16. 2012 Review
OMSC Audi Deliveries Through July
823
551
622

17. Key Drivers Through July 2012
2012 Review
YTD Business Unit Performance
Key Drivers Through July 2012
Business Unit
Leads
Orders
Deliveries
Plan
Actual
% Plan
Auto Exchange
1,064
1,846
173%
519
366
71%
396
264
67%
IAS & Diplo
2,061
1,554
75%
398
191
48%
263
163
62%
ECommerce
2,385
1,665
70%
214
172
80%
164
124
76%
TOTAL
5,510
5,065
92%
1,131
729
64%
823
551

18. 2012 Review YoY Mix Performance CY12 Delivery Mix CY11 Delivery Mix
Full Year
CY12 Delivery Mix
Through July 18

19. 2012 Review YoY Top Seller Performance | Through July -24% -61% +8%
-15%
-24%
+88%
-71%
-120% 19

20. Looking Ahead Audi Deliveries | YoY Long Range Forecast 2,102 2,000
+620, 40% from CY12
2,102
2,000
1,823
1,490 5%
10%
1,084
22% 20

21. Manual Vehicle Ordering Ability to Easily Change Destination
Opportunities & Risks
Faster Turns & Less Aging
> Quick turns and minimizing levels of aged inventory is a priority
> Pre-selling stock inventory and maximizing SPO delivery timeframes are cornerstones of OMSC’s pro-active inventory management strategy
Production Transparency
Efficient and accurate information from order to delivery ensures that :
Customers have a positive experience and reduces the likelihood of cancellations
Salespeople have confidence in the process and more readily advance sell
ORDER
BUILD
SHIP
Challenge:
Manual Vehicle Ordering
Solution: Batch Ordering Mechanism
Challenge:
Vehicle Build Status
Solution: Expanded Data Transmission
Solution: Define various AIM statuses
Challenge:
Location of Vehicle
Solution: Expanded Data Transmission
Ability to Easily Change Destination
Solution: Possible direct access to this filed in AIM or other system?

22. Opportunities & Risks
Faster Turns & Less Aging
AIM to OMSC CRM

23. Opportunities & Risks Faster Turns & Less Aging Optimize Logistics
Port of Bremerhaven
Optimize Logistics
> All OMSC vehicles travel to Emden, then Bremerhaven - even those staying in Europe
> On average this adds four to five weeks to the delivery time and additional cost
> Possible alternative: establish a more central delivery center; preliminary discussions with Rittersbacher Kaiserslautern
Port of Emden
Tale Of An A6
Sergeant Andrew Kline Delivering in Kaiserslautern
Over 1,003 miles and roughly 30 days,
to go 264 miles
Kaiserslautern
Delivered Here
INGOLSTADT
Built Here

24. Opportunities & Risks Production Planning & Management
Product cycle
Model year changeover plan
Production “scheduling schedule”
Monthly production submission
deadlines
Tracking orders vs. allocation
Allocation Budget
Monthly budget review process?
CY13 budget planning timeline
More capacity and flexibility expected?

25. Opportunities & Risks The Competitive Edge #1: Demonstrator Program
Audi Military | Europe
> Over 60,000 troops in Europe
> BMW Military delivers an estimated 3,000 units annually, and Volvo roughly 1,200
> We can do better!
#1: Demonstrator Program
> Invaluable sales and marketing tool, currently a competitive disadvantage
> Proposed program: 15 units per quarter (60 per year) for active demonstrator use
> Support with marketing and awareness campaign
> Announce to sales force at the sales meeting in October

26. Opportunities & Risks The Competitive Edge
#2: Navigation & AudiConnect™
> Audi’s navigation and new AudiConnect™ technology are non- functioning in Europe
> These features are extremely important to customers so this presents a significant sales and marketing challenge and competitive disadvantage
> Standard on all Prestige trims; at this price point customers are discouraged to learn this equipment won’t work
> What options are there to get the technology to work in Europe?

27. Opportunities & Risks The Competitive Edge #3: Return Home Shipping
> Provide military customers with the option to put their vehicle back into the Audi transport system for shipment to the States for their next assignment
> This is a tremendous value-add, and a natural extension of the Premium Brand Ownership Experience
> This kind of program is currently available to BMW military customers

28. Opportunities & Risks The Competitive Edge #4: Factory Delivery/Tour
> A factory delivery and/or tour would enhance the Audi experience for new and potential customers
> Customers often ask about this program - how can we offer this to our customers or craft a special military package?

29. Opportunities & Risks Leveraging AoA Assets
> Maximize the Audi assets and resources including:
Collateral Materials & Sales Tools
- Brochures, photo, video, product launch kits and events
Merchandising
- Showroom display, POS kits
Sales Training
- classroom materials, Ride and Drive events (stateside and Europe)
Customer Experience Programs
Audi Driving Experience
Audi Forum
> Collaborative Marketing Planning
- Review stateside/U.S. dealer marketing calendar; tie in and create synergies whenever possible
- Identify and propose marketing opportunities for potential Audi support

30. Overseas Military Sales Group
Audi of America
&
Overseas Military Sales Group