Feasability Study for Renault Tires

PART 1: MARKET ANALYSIS

THE CAR MARKET

The automobile park – January 1st 2007

- The automobile park (except fleet of the companies and hirers) is estimated at 29,3 million vehicles at January 1, 2004 and has experienced a 24% growth in 9 years.

- The average utility life of a vehicle is 8 years. 50 % of the vehicles have more than 7 years of useful life.

- The gasoline vehicles represent more than 55%. However the number of diesel vehicles in circulation has been in clear progression for 10 years (25 % of the automobile park in 1993 versus 45 % in 2003). The diesel have a lower useful life: 7,1 years versus 8,7 years for the gasoline.

- The annual number of kilometres carried out by the French population remains stable. However mileage with the meter has increased considerably taking into account the age of the vehicles.

- The diesel owners roll more: 17 665 Km/year on average versus 11 555 Km/years for the cars using gasoline.

- The 3-4 years old vehicles represent 15,1 % of the automobile park and it is them which carry out the most kilometres per year: 17 005 Km/year.

- Secondhand cars are more numerous (58 %). This figure has remained stable for ten years.

- One envisages a potential of purchase of 2 754 000 vehicles for the year 2008.

The car age and useful life.

Average value: 7.6 years

THE TIRE MARKET

- The market represents 26 862 000 tires in volume.

- 32,5% of the drivers mounted new tires in 2006.This tendency is about stable since the 90s.

- The market is more significant in summer.It accounts for 32% in volume, versus 2,4% in winter.

- 9 drivers out of 10 call upon service providers to change their tires.Only 6 % of the drivers change the tires themselves.

- The diesel vehicles drivers change tires more often than those using gasoline (i.e. 54,8%).The second hand cars drivers need to the change tires more often than those owning new vehicles (i.e. 98,3%).

ØThe first change of tire intervenes regularly when the car has reached 20 000 to 30 000 km.

MARKET ACTORS

- There are 825 fast car specialists (Axto, Midas, Speedy) and 1968 tire producers.

- The tire producers’ weight in the workshop entries is 5%.This rate is rather low because of the presence of competitors such as automobile centres or manufacturers who have a much broader activity. However, 91% of the workshop entries at the tire producers led to a change of tires.