Bo Andersson

Chairman of the Board

OAO GAZPresident

GAZ Group

Navigating new Paradigm Changes

and the opportunities they present

• Russian market

• GAZ portfolio

• Maintaining LCV leadership

• Focus Areas for 2009/2010

• GAZ Supply Base and Expectations on Suppliers

• Summary & Outlook

• 141 million people

• 11 time zones

• Average age 30 – 35 years

• GDP per sector:Agriculture 4.7%Industry 37.6%Service 57.7%

• Labor force 68 million

• Central bank interest rate 8,75%

• Foreign Direct Investments $27 billion

• Cars per 1000 people: 216

• Non-Russian Automotive OEM: 6

Russia

Russian Market / Change (LCV & Passenger Car)

0

1

2

3

4

5

19982

1.1

1999

1.1

2000

1.2

2001

1.1

2002

0.2

1.0

1.2

2003

0.30.1

1.0

1.5

2004

0.8

19952

0.91.1

19972

0.5

0.2

0.9

1.6

2005

0.8

0.3

0.9

2.0

2006

1.2

0.5

0.9

2.6

2007

1.5

0.6

0.9

3.0

19962

2008

1.51.5

2009

2.1

1.7

2010

E

2.5

1.9

2011E

3.0

2.1

2012

E

3.5

2.3

2013

E

4.0

2.3 2.4

2016

E

4.7

2.4

2017E2015

E

5.0

2.3

0.9

5.2

2.1

2019

E

4.4

5.4

3.1

2.12.3

4.34.5

2018

E

2014E 2020E

Import

Localized

Russian

manufacturers

Optimistic scenario

Growth due to innovations

Pessimistic scenario

Continuation ofrecession

+20%

Sales of new passenger carsand LCV’s (mln units)

Periodof initial growth Stagnation Period of

backwardnessPost-crisis

recovery

+0%

+16%

Economic crisis

1. The data on the Russian automotive manufacturers do not include prospective sales of future models. 2. No data on the share of international automotive manufacturers are available; accuracy up to 10%Source: Global Insight (Dec 2008); Avtostat; BCG projects experience; BCG market model

Global Insightscenario

Sales of passenger cars and LCV’s only

Economic crisis

+9-21%

-3%/+5%

Stabilization of the market

GAZ Nizhny Novgorod

GAZ Product Portfolio

Light Commercial Vehicles

The success factors of the Gazelle

• Especially in a segment driven by high payload, low initial cost, basic comfort and low cost of ownership

• Improved quality and reliability is critical to maintain leadership

GAZ LCV Portfolio

Chassis CabChassis Cab

VanVan

BusBus

Special PurposeSpecial Purpose

ОСНОВНЫЕ ПОЖЕЛАНИЯ КЛИЕНТОВ

в порядке значимости1

47

%

34%

36

%

33

%

32%

27%

22

% 29%

29%

24%

24%

27%

19%

23

%

15

% 23

%

19%

14

%

16%

17

%

15

%

17

%

16%

13%

11%

12

%

14

%

9%

22%

24%

22

%

22

%

22

%

27

%

28

% 19

%

19

%

21

%

21

%

15

%

22

%

17%

24

% 15%

16

%

21

%

19

%

17

%

19

%

15%

13%

14%

12%

14

%

13%

11

%

14%

19

%

15%

14

%

0%

10%

20%

30%

40%

50%

60%

70%

80%

Значимость

для

потребителя

, %

Нужные мероприятия

Мероприятия первостепенной значимости

TOP-10

TOP-20

TOP-30

Gazelle Continuous Improvement

Main customer preferencesF

ore

ign

clu

tch

Ge

arb

ox

wit

h s

yn

ch

ron

ize

rs

Rea

r a

xle

qua

lity im

pro

ve

men

t

Re

info

rce

d s

lid

ing

do

or

Hea

ted

Mir

rors

Up

gra

de

d d

oo

r lo

ck

s a

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s

Up

gra

de

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eri

ng

Co

oli

ng

sys

tem

im

pro

ve

me

nt

Ba

ttery

wit

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reased

ca

pac

ity

Up

gra

de

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ran

sfe

r case

Fo

reig

n d

iese

l e

ngin

e

Bra

ke

sys

tem

im

pro

ve

me

nt

Dri

ve

sh

aft

im

pro

ve

me

nt

Exh

au

st

syste

m im

pro

ve

men

t

New

kin

gp

in u

nit

Ne

w g

ea

rbo

x

Doub

le-la

ye

r te

nt

Ge

ne

rato

r cap

acity e

xte

nsio

n

LP

G

Ne

w d

oo

r lin

ing

New

en

gin

e m

ou

nts

Ele

ctr

ic m

irro

rs

New

sh

ock

ab

so

rbers

Win

do

w-w

iper

mo

de

rniz

ati

on

Fro

nt

su

sp

en

sio

n m

od

ern

iza

tio

n

Lo

ad

cap

acity e

xte

nsio

n u

p to

2 ton

Fu

el ta

nk

Bu

mp

er

an

d g

rill

e r

es

tyli

ng

Ins

tru

me

nta

l p

an

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Mirro

rs in

bod

y c

olo

r

Necessary actions

High-priority actions

Rele

van

cy f

or

the c

usto

mer,

%

Main customer preferences

Gazelle Major Suppliers

ГАЗельГАЗель БИЗНЕСБИЗНЕС((отот 425 000 425 000 рубруб.).)

1.1.Power steering

2.2.Breakemaster cylinder & brake booster

4. 4. Gearbox with synchronizers

7. 7. Engine mount dampersAnvis

8.8.Shock absorbers

3.3.Clutch

9. 9. Increase battery capacity

5. 5. Two-way aluminiumradiator (TRM)

6. 6. Shaft Drive quality improvement (Tirsan-Kardan)

15. 15. Window-wipersmodernization(Autopribor)

14. 14. Front suspension modernization(DAC)

10.10.New bumper design

11. 11. Changes in the kingpin unit sealing (DAC)

12. 12. Mirrors with heating elements

(ZAC)

13.13.New instrument panel(ZAC)

1919. . Rear doors locks and fasteners (PAZ)

16.16.Rear axle(new seals and bearings)(DAC)

17. 17. 2 point safety belts on passenger seats

1188. . Upgrading of sliding door construction

GAZelle CC GAZelle Van/Bus

Focus areas

����

GAZ Supply Base

2009 LCV Bus Truck Power train

Passenger Car

SpecialEquipment

GAZ in-house 50% 15% 25% 48% 0% 25%

Domestic Suppliers 43% 60% 67% 47% 1% 55%

International Suppliers(produced in Russia)

5% 10% 0% 2% 20% 10%

International Suppliers(produced outside of Russia)

2% 15% 8% 3% 79% 10%

Summary & Outlook

� In 2009 LCV market in Russia dropped over 50%

� During the crisis GAZ managed to remain the market

leader with almost 54% share

� GAZ will continue to be the market leader in commercial

vehicles in Russia

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

� GAZ has launched a ten point improvement plan

� GAZ will only be successful by having a collaborative

relationship with its dealers, suppliers and customers