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THE U.S. COMMERCIAL FLEET MARKETFORECAST: 2004-2008STUDY CONSPECTUSVehicle Procurement including AdvancedVehicle and Fuel TechnologiesFuel and Payment MethodsLeasing, Maintenance & TBA, and FleetManagementHAVILLCONSULTANTS

2 – THE U.S. COMMERCIAL FLEET MARKET STUDY Copyright 2005 Havill & Company, Inc. 3178 N. Republic Blvd. Toledo, OH 43615 (419) 841-2244

THE U.S. COMMERCIAL FLEET MARKET STUDY - 3ABSTRACTCONSPECTUS CONTENTS:ACKNOWLEDGEMENT .5TABLE OF CONTENTS .7OVERVIEW .17STUDY OBJECTIVES .21RESEARCH METHODOLOGY .31APPENDIX TABLE OF CONTENTS .33QUESTIONNAIRES .37SAMPLING STRATIFICATION.81BUSINESS FLEETS SURVEYED .85STUDY PURCHASE AGREEMENT AND ORDER FORM.97THE HAVILL STUDYThe Havill study is the primary source of planning data for companiessupplying automobiles, trucks, fuel, leasing, maintenance, TBA, cardpayment solutions, and advanced technologies to the fleet industry. Thisdata is vital to marketers due to the fragmented nature of the industry.To isolate the market forces driving purchase decisions, the CommercialFleet Market Forecast separates the market into 10 unique segments:agriculture, construction, service, retail, manufacturing, wholesale, longhaul, short haul, utility, and government; and three fleet size ranges:4 to 9, 10 to 49, and 50 or more vehicles.Over forty suppliers to the industry participated in the research design.Interviews were conducted with a stratified sample of 1,100 fleet operatorsacross the U.S. to determine their current satisfaction level and find outwhat they are looking for in the next generation of products and services.The research quantifies their purchases of fleet related products andservices, and forecasts the adoption rates of new technologies. The marketposition of competing products is broken out by business segment andfleet size.Survey results are projected to the U.S. fleet population based onDepartment of Commerce benchmarks, published every five years.Trends are noted across the timeline covered by the Havill study series:1995, 2000, and 2005.

4 – THE U.S. COMMERCIAL FLEET MARKET STUDYCOMPLEMENTARY HAVILL SERVICESMarket research provides the intelligence needed to develop soundbusiness strategies and effective marketing plans. The mission of Havill& Company is to extend the value of this research to sales associates andchannel partners by providing real-time access to: A data warehouse of fleets identified by the research, The direct marketing and sales support tools required to convertthese prospects to customers.Research from The U.S. Commercial Fleet Market Forecast serves as thefoundation for these services. For the past decade, industry leaders haverelied on this multi-client study series as their primary source for fleetindustry planning data. The research is a critical examination of markettrends, the relative position of competing products, the adoption rates ofnew technologies, and the product preferences of commercial fleetoperators.The research also benchmarks vehicles by class and the consumption offuel, preventive maintenance, parts, and tires. The benchmark data isavailable by State and Metropolitan Statistical Area (MSA).Havill has compiled a research database of over 860,000 fleet operatorsacross the country. Access to the database is provided throughFleetLeads, Havill’s web-based lead management program. FleetLeadsenables subscribers to query the market by geography, type of business,fleet size, and vehicle class. Leads can be printed or downloaded fordistribution to the sales team.Havill builds proprietary data warehouses for subscribers using theresearch database as a template. A customer file analysis identifies thecharacteristics of prospects that resemble good customers. Leads thatmatch the good customer profile and that are not already present in thedata warehouse are imported. Since all list sources are incomplete tosome degree, lists are added in layers until the warehouse is complete.Subscribers access their data warehouse through a customized version ofFleetLeads, a full-featured lead management program providing acomplete set of direct marketing and sales support tools to support salesassociates and channel partners. Access rights are controlled through theuse of usernames and passwords.Havill also provides white papers on best industry practices based on fleetstudy findings. They position the subscriber as a leading solution provideron the topic covered, and are the cornerstone for Havill’s leadqualification services. Copyright 2005 Havill & Company, Inc. 3178 N. Republic Blvd. Toledo, OH 43615 (419) 841-2244

THE U.S. COMMERCIAL FLEET MARKET STUDY – 5ACKNOWLEDGEMENTRESEARCH DESIGNEach survey in this multi-client study series began by mailing issuesballots to executives in the vehicle manufacturing, leasing, maintenance,TBA, telematics, insurance, fleet card, and petroleum retailing industries.Using the 2000 study as a template, over 500 hours of executiveinterviews and background research went into updating the issues to becovered in this commercial fleet market study.The value of the research lies in its ability to address the issues facingsuppliers of the commercial fleet market. The table below lists industryleaders who have provided input to this study series. Many of thesecompanies are charter subscribers and contributed to study objectivesthrough hours of questionnaire design. Though the charter subscriber baseis diverse, one common goal exists among them, to obtain planning data,not available elsewhere, as input to their strategic and market planningprocesses.Organizations Participating in the Design ProcessAmerican HondaAllison TransmissionAMIARIBandagBridgestone/FirestoneBush TransportationCenexChevronCitgo PetroleumComdataCommercial Body BuildersCooper Tire & RubberDaimler/ChryslerDent WizardDonlenDunlop Tire CorpEarl Scheib Paint & BodyEaton CorporationEnterprise Fleet ServicesEquilon EnterprisesExxonMobilFleetmarkFleetOneFord Motor CompanyFreightlinerFleetcorGE Capital Fleet SvsGeneral MotorsGoodyear Tire & RubberHitachi Credit Fleet SvsIsuzu Motor IncKelly Springfield TireKIA Motors AmericaLeasePlanMack TrucksMarathon Ashland PetroleumMasterCardMichelinMitsubishi FusoNAPANGK Spark PlugsNissan Motor CorpPACCAR Leasing CorpPennzoilPeopleNetPeterbilt MotorsPHH Vehicle Mgmt SystemPS EnergyQuickTripRollins Leasing CorporationRyderSaabShell Oil CompanySunocoSupreme CorporationTCIToscoToyotaTruax HarrisUS BankU.S. Fleet LeasingVelcor Leasing CorporationVisa InternationalVoyagerWheels, Inc.Wright Express Copyright 2005 Havill & Company, Inc. 3178 N. Republic Blvd. Toledo, OH 43615 (419) 841-2244

6 – THE U.S. COMMERCIAL FLEET MARKET STUDYRESEARCH STUDY TEAMHavill & Company consultants routinely conduct both syndicated andproprietary studies for clients serving the transportation industry. Wehave performed numerous in-depth studies of the commercial fleet market.From this previous research, we have developed extensive databases offleet operators.These databases are used for survey research and to support our clients’direct mail and telemarketing programs. Our proprietary Internet basedlead distribution and sales support website, www.FleetLeads.com,provides marketing support to our clients’ direct sales and channel partnerorganizations. The team of consultants that published this multi-clientresearch report and deliver these marketing services is listed below. Adam C. RetliAlicia GoodAmy C. NeifertAmy K. HammanAnthony J. ZippayChelsea L. HavillDavid J. DatsonFaith A. OntiverosJeffrey M. SimsJuliette LittleJustin H. ZohnLaura B. HoffmanMichelle L. ZygelaMiles F. PongrassNicholas R. HavillRyan C. SutterSumana KaosanguansinValentino Jonas Copyright 2005 Havill & Company, Inc. 3178 N. Republic Blvd. Toledo, OH 43615 (419) 841-2244

THE U.S. COMMERCIAL FLEET MARKET STUDY – 7TABLE OF CONTENTSINTRODUCTIONACKNOWLEDGEMENT . 2RESEARCH DESIGN . 2RESEARCH STUDY TEAM . 3TABLE OF CONTENTS . 4OVERVIEW . 13STUDY OBJECTIVES . 17MARKET RESEARCH OVERVIEW . 17VEHICLE PROCUREMENT SURVEY . 18Vehicle Procurement Issues . 18Advanced Vehicle and Fuel Technology Issues . 19FUELING AND PAYMENT METHOD SURVEY . 21On-site Fueling Issues. 21Off-site Fueling Issues . 21Payment Method Issues. 22FLEET MANAGEMENT SURVEY . 24Leasing Issues . 24Maintenance & TBA Issues. 25Fleet Administration Issues. 25RESEARCH METHODOLOGY. 27REPORT SYMBOLS . 28CHAPTER 1 MARKET DEMOGRAPHICS .1-1EXECUTIVE SUMMARY .1-1Background .1-1Major Issues.1-2Summary .1-3Vehicle Classes .1-6Commercial Market Segments .1-7Primary Sources for Fleet Demographics.1-8U.S. FLEET MARKET DEMOGRAPHICS .1-9Known Segmentation for All U.S. Vehicles .1-9Four-Plus Fleet Commercial Vehicles.1-10Four-Plus Fleet Commercial Vehicles by Market Segment . 1-11Four-Plus Fleet Commercial Vehicles by Vehicle Class. 1-12Four-Plus Fleet Commercial Trailers. 1-14Four-Plus Fleet Vehicles Requiring Commercial Driver License (CDL). 1-15Average Annual Mileage.1-17Average Miles Per Gallon.1-18Total U.S. Fuel Consumption.1-19Fuel Consumption by Type of End User. 1-19Breakout of Motor Gasoline versus Diesel Consumption . 1-21FLEET DEMOGRAPHICS .1-22Four-Plus Fleet Commercial Vehicles – Owned versus Leased .1-22Four-Plus Fleet Commercial Vehicles – Owned Versus Leased. 1-24Future Four-Plus Commercial Vehicles – Owned versus Leased . 1-26Fleet Disbursement .1-27Single Location versus Multiple Location . 1-27Home-Based versus Dispersed Commercial Fleets. 1-29Travel Characteristics of Commercial Fleets . 1-31 Copyright 2005 Havill & Company, Inc. 3178 N. Republic Blvd. Toledo, OH 43615 (419) 841-2244

8 – THE U.S. COMMERCIAL FLEET MARKET STUDYFour-Plus Fleet Commercial Fuel Consumption . 1-33Four-Plus Commercial Fuel Consumption by Fuel Type . 1-34Four-Plus Commercial Fuel Consumption – On-Site Versus Off-Site . 1-36FUTURE VEHICLE PROCUREMENT PLANS . 1-38Future Four-Plus Fleet Commercial Vehicles. 1-38Future Change in Size of Four-Plus Commercial Fleets. 1-38Future Four-Plus Fleet Commercial Vehicles. 1-40Future Diesel Vehicle Purchases . 1-41Familiarity with New Low Sulfur Diesel Engines. 1-42Intend to Pre-Buy in Advance of Regulations . 1-43CHAPTER 2 VEHICLE PROCUREMENT . 2-1EXECUTIVE SUMMARY . 2-1Background. 2-1Major Issues . 2-1Summary . 2-3Implications . 2-5Replacement Frequency of Vehicles . 2-6Vehicle Replacement. 2-7Basis of Vehicle Replacement .2-7Vehicle Replacement Cycle by Years .2-8Vehicle Replacement Cycle by Miles.

THE U.S. COMMERCIAL FLEET MARKET FORECAST: 2004-2008 STUDY CONSPECTUS Vehicle Procurement including Advanced Vehicle and Fuel Technologies Fuel and Payment Met