1. A Bombardier Perspective on Doing Business in China Andres Friedman Analyste principal, Stratégie et développement d’affaires Chaîne d’approvisionnement BOMBARDIER AERONAUTIQUE March 2006

2. 2 Bombardier in China Business Environment in China Lessons Learned Company Overview

3. 3 Bombardier  Corporate office based in Montréal, Canada  Workforce of some 59,550 people worldwide as at January 31, 2005  Revenues of $15.8 billion US for fiscal year ended January 31, 2005  More than 95% of revenues generated outside Canada  Listed on the Toronto Stock Exchange (BBD)

4. 4 Bombardier’s manufacturing facilities Australia Austria Belgium Brazil Canada Czech Republic Denmark France Germany Hungary India Italy Mexico Norway People’s Republic of China Poland Spain Sweden Switzerland United Kingdom United States A worldwide presence

5. 5 Bombardier regional aircraft Bombardier* Q100/200* Bombardier* Q300*Bombardier* Q400* Bombardier* CRJ200*Bombardier* CRJ700*Bombardier* CRJ900* * Trademark(s) of Bombardier Inc. or its subsidiaries.

6. 6 Bombardier business aircraft * Trademark(s) of Bombardier Inc. or its subsidiaries. Bombardier* Learjet* 40 Bombardier Challenger 800 Bombardier* Challenger* 604 Bombardier Learjet 60 Bombardier Global 5000* Bombardier* Global Express* Bombardier Learjet 45 Bombardier Challenger 300 Bombardier Learjet 45 XR

7. 7 Transportation, a full spectrum of railway solutions * Trademark(s) of Bombardier Inc. or its subsidiaries. ** Trademark(s) of third parties. FLEXITY* Outlook (Linz, Austria) Light Rail Vehicles MOVIA* - Guangzhou Metro Line 2 (China) MetrosCommuter Trains Regional Trains Voyager** DEMU (UK) Intercity Trains ICE** 3 EMU (Germany/Netherlands) High-speed TrainsLocomotives Low-floor freight wagon Freight Wagons Electrostar* EMU (UK) Interregional Trains EMU M-7 (New York, USA) Double-Deck Coache (Germany, Denmark, Israel, Luxembourg) TRAXX* F140 AC (Switzerland)

8. 8 Total Transit Systems Transportation, a full spectrum of railway solutions * Trademark(s) of Bombardier Inc. or its subsidiaries. Mitrac* TC 1000 Traction Converter for Medium Power Application Propulsion and Controls Wayside Equipment Rail Control Solutions Fleet Management (London, UK) Services Bogies Monorail (Las Vegas, USA)

9. 9 Bombardier in China Business Environment in China Lessons Learned Corporate Overview

10. 10 Bombardier in China Rail transportation  4 business offices Beijing, Shanghai, Guangzhou, Hongkong  3 joint ventures Metros (Changchun) Inter-city cars (Qingdao) Propulsion (Changzhou)  Strong market presence Beijing, Shanghai, Zhengzhou, Shenyang, Guangzhou Aerospace  2 business offices Beijing, Hong Kong  Existing supply relationships: Xian Aircraft Corp. -CL-415 components Shenyang Aircraft Corp. -Q-Series doors  Strong market presence No. 1 in regional aircraft -35 aircraft with 7 operators No. 1 in business aircraft -44% of installed base 2,100 employees

11. 11 Bombardier Transportation in China - Locations and employees Qingdao Shanghai Hong Kong Beijing Changchun Shenyang Guangzhou Bombardier Transportation China Representative Office CBRC Joint Venture 合资企业： CBRC Established: in 1996 成立于 1996 年 CBRC Joint Venture 合资企业： CBRC Established: in 1996 成立于 1996 年 BSP Joint Venture 合资企业： BSP Established: in 1998 成立于 1998 年 BSP Joint Venture 合资企业： BSP Established: in 1998 成立于 1998 年 Bombardier Transportation China Representative Office Bombardier Transportation China Representative Office Bombardier Transportation China Representative Office Bombardier Inc. Representative Office Bombardier CPC Propulsion System Joint Venture(BCP) 庞巴迪 BCP 牵引系统合资企业 Established: in 2003 成立于 2003 年 Bombardier CPC Propulsion System Joint Venture(BCP) 庞巴迪 BCP 牵引系统合资企业 Established: in 2003 成立于 2003 年 Changzhou Bombardier Railway Transportation Equipment (Shanghai) Co. Ltd. Established: in 2003 Bombardier Railway Transportation Equipment (Shanghai) Co. Ltd. Established: in 2003 Bombardier Transportation Engineering Service (Beijing) Co. Ltd. Established: in 2005 Bombardier Transportation Engineering Service (Beijing) Co. Ltd. Established: in 2005 Bombardier Transportation Railway Equipment (Qingdao) Co. Ltd. Established: in 2005 Bombardier Transportation Railway Equipment (Qingdao) Co. Ltd. Established: in 2005 IPO (Shanghai)

12. 12 Hong Kong Beijing Bombardier Aerospace in China Xi’an Dash 8 Q100/200/300 Doors Sous-contract (SAC) depuis 1986 Dash 8 Q100/200/300 Doors Sous-contract (SAC) depuis 1986 Shenyang Bombardier Aerospace Beijing Office Bombardier Aerospace Beijing Depot Bombardier Aerospace Beijing Office Bombardier Aerospace Beijing Depot CL215/415 Parts sous- contracts (XAC) depuis 1980 CL215/415 Parts sous- contracts (XAC) depuis 1980 Bombardier Aerospace Flexjet Asia pacific & BBAD bureau de vente Bombardier Aerospace Flexjet Asia pacific & BBAD bureau de vente Shanghai Bombardier Aerospace Shanghai Regional Aircraft Customer Support Office

13. 13 Bombardier in China Business Environment in China Lessons Learned Corporate Overview

14. 14  Still transitioning from a planned to a market economy  State sector is still important  Still a political aspect to many large purchasing decisions  Central Government approvals necessary for large projects  Personal relationships remain very important Unique Environment  Economic growth  Emerging consumer society  Installed industrial base  Commitment to modernize and improve = sales opportunities Industry Infrastructure Military  Many new and/or improving suppliers – (Global Sourcing) Unique Opportunities

15. 36 Xuzhou – Lanzhou (1400km) Qingdao – Taiyuan (770km) Beijing – Harbin/Dalian (1860km) Beijing – Shanghai (1300km) Intercity Transport Systems (2000km) Beijing – Shenzhen (2230km) Hangzhou – Shezhen (1600km) Hangzhou – Changsha (880km) Nanjing – Chengdu (1900km) Notes Dedicated Passenger Line Existing Line

16. 16 China Urban Transit Market Overview Existing BeijingShanghaiGuangzhou ShenzhenNanjing Wuhan DalianHong Kong ChongqingChangchun Tianjin Under Construction Shenyang Xi’anQingdaoSuzhou Hangzhou Planning HarbinAnshanShijiazhuang ChengduChangshaWenzhou Kunming Xiamen Macau State Criteria for Urban Metro Project

17. 17 Bombardier Aerospace is exploring several partnership opportunities in China  Bombardier is considering sourcing major aero structures from suppliers in China Cost optimization Supplier development for future programs Better positioning for eventual market access  For example, active discussions are being held with the Shenyang Aircraft Company (SAC), which already supplies components to Bombardier, Boeing and Airbus

18. 18 Challenges and considerations: Ability to manage a fast and flexible supply chain  Supplier capability Manufacturing at a high production rate Meeting western certification standards  Transportation environment Inbound/outbound logistics  Business environment Customs and other regulatory procedures Import/re-export of sub-components

19. 19 Bombardier in China Business Environment in China Lessons Learned Corporate Overview

20. 20 Some things we’ve learned  China: a big market opportunity, a big sourcing opportunity  China is not just for low-tech, high labour-content products  The Canadian Embassy and the Bureau du Québec à Beijing can be very helpful Understanding the market, making introductions, securing government interest/approval for your project if required  Importance of knowing basic Chinese history, culture, and business practices  Importance of “personal” relationships Chinese do business with the person first, then the company  Importance of understanding hierarchies and decision-making power  Three most important things: patience, patience, patience

21. A Bombardier Perspective on Doing Business in China