The Trw Monthly Meeting Block Exemption

Contacts: Soeren Kristensen / TRW Automotive Aftermarket +49.2631.912.134

Michaela Demissy-Stöckl /TRW Automotive Aftermarket +33.160. 845. 392

THE TRW MONTHLY MEETING – BLOCK EXEMPTION

Automechanika, GERMANY, September 14, 2010 - Each month, the TRW Automotive Aftermarket management team talks about a topical or general interest subject. Following the recent announcement about the block exemption legislation, Robert Lightfoot, TRW’s European Marketing and Purchasing director, talks about‘Block exemption, an opportunity and a challenge for the independent aftermarket.’

“Block exemption provides a real opportunity for the independent aftermarket (IAM), but distributors and installers will have to work hand in hand to find solutions to the demands that the coming technological evolution will bring,” explains Robert Lightfoot, director of Marketing and Purchasing in Europe for TRW Automotive Aftermarket.

Block exemption – The Facts

On May 27, 2010, the European Commission announced its final decision on the competition rules for the automotive sector. Safeguards for the IAM on matters such as servicing and repair during the vehicle’s warranty period, and access to technical information, parts, equipment and training have been confirmed.

EU Competition Commissioner Joaquin Almunia said while at the press conference, announcing the new competition rules: "I strongly believe the new framework will bring tangible benefits for consumers by bringing down the cost of repairs and maintenance and will also reduce the cost of distribution by abolishing overly restrictive rules."

The intention of the new rules is to increase competition in the market for repair and maintenance by improving access to the technical information needed for repairs, and by making it easier to use alternative spare parts.

A 30 per cent market share threshold, above which agreements between car manufacturers and authorised repairers will no longer be ‘block exempted’, aligning the rules with the general framework of the Vertical Restraints Block Exemption Regulation 330/2010 adopted in April this year.

The new rules will strengthen repairers' access to alternative spare parts which can represent a big share of the repair bills. All this is important for consumers because repair bills account for an estimated 40 per cent of the total costs of owning a car – and costs have been rising in recent years.

The new rules covering the repair and maintenance markets came into force on 1 June 2010 and for the vehicle sales markets will come into force on 1 June 2013 and will be valid until 31 May 2023.

Consumer Choice and Market Opportunity

“The successful application of these new competition rules will provide an important benefit to the motorist, who will have the genuine choice of having their vehicles serviced and repaired at either dealer networks or independent installer networks. This will increase competition between these two channels (Original Equipment Supplier (OES) and IAM) further and it represents a real opportunity for the IAM – both distributors and installers - to raise market share,” comments Mr Lightfoot.

Over the last decade the IAM has, in theory, had the competitive advantage. This is in part due to lower labour costs in the IAM than in the Original Equipment Spares (OES) market. Although research suggests the IAM has the advantage when it comes to sustaining good customer relationships, it currently has a serious disadvantage in terms of advanced technical know-how and access to adequate technical data.

However we fully expect OEM dealer networks to see a real opportunity to participate more directly in the aftermarket, and perhaps to introduce programmes that increase the loyalty of their customers beyond the vehicles warranty period. We should not be surprised by warranty initiatives such as that recently announced by Opel/Vauxhall – there will be more. Independent installers will need to respond with their own marketing initiatives, and these will need to be supported by parts distributors.

The Commission’s new rules are a big step towards a free market, but this will not be sufficient to guaranteesuccess to the IAM players. The future is driven by technology, which means that installers have to invest and adapt themselves in order to follow the technological evolution. Training, diagnostic tools and the organisation of technical information are the keys to success. The consumer needs to be confident in the results provided by the independent aftermarket.

Distributors have a key role in this new environment. Their challenge is to not only provide the right part at the right time, but increasingly to ensure their installer partners have access to training and technical data. In fact, given the further complexity of the vehicle parc of tomorrow, both in terms of systems and in the number of producers, just keeping pace with product range coverage will be demanding enough!The supply chain management is thus a key factor. Distributors will have to integrate their supply chain model into that of the component providers supply chain. In order to obtain a more efficient logistics system, equipment suppliers and distributors must work in strong partnership, especially by using shared tools in terms of forecasting, in order to preserve the distribution and repair markets.

Making this essential step means it is necessary to invest significantly in inventory management. Increasingly, distributors choose the component suppliers providing the widest product portfolios as partners as a means of simplifying the process.

“It is clear that the interdependence of distributors and installers is getting even stronger. The capacity of each player to support developments will determine the global success of the independent aftermarket. The two players (distributors and installers) have an important role and will only move forward hand in hand”, says Mr Lightfoot.

Another critical point is the quality of the spare parts provided by distributors and fitted by installers. The challenge of gaining market share must not be driven by the price factor. The risk of providing low quality parts is a dangerous game that might serve to undermine the entire independent sector. Security should be the watchword.

“Product piracy and counterfeiting are of great concern to TRW. We believe our customers have the right to have absolute confidence in genuine products and trust in the manufacturer - and to be able to pass that reassurance on to the installer. Legislation now dictates that responsibility lies with every link in the chain, so to the installer, having absolute assurance of the origin of a part is more important than ever.

“Estimates suggest that product piracy costs the automotive industry 5-10 billion Euros each year. As a manufacturer of safety critical, OE quality parts for the European aftermarket, we see it as our duty to address the issue. In an increasingly complex global market place, it is more important than ever that distributor and installer are able to ensure that the consumer is protected from rogue products”, continues Mr Lightfoot.

In 2009, TRW Automotive Aftermarket and other leading industry names, announced a radical new way of tackling parts counterfeiting with a two-dimensional (2D) matrix code on product box labels, more than 30 per cent of TRW’s products carry labels featuring unique codes. By the close of this year it will be 60 per cent and next year 95 per cent. These codes will protect TRW parts, in a bid to eliminate parts counterfeiting. The project is in line with recommendations made by CLEPA, and allows every installer to check the part delivered to ensure it’s genuine.

“The perfect control of the supply chain, the ability to face the technological evolution together with a total respect of quality and security of parts - will give a real chance to the independent aftermarket to increase its presence in the repair and maintenance market. The market is changing and that change is due to accelerate,” Mr Lightfoot concludes.

Ends

About TRW

With 2009 sales of $11.6 billion, TRW Automotive ranks among the world's leading automotive suppliers. Headquartered in Livonia, Michigan, USA, the Company, through its subsidiaries, operates in 26 countries and employs over 60,000 people worldwide. TRW Automotive products include integrated vehicle control and driver assist systems, braking systems, steering systems, suspension systems, occupant safety systems (seat belts and airbags), electronics, engine components, fastening systems and aftermarket replacement parts and services. All references to "TRW Automotive", "TRW" or the "Company" in this press release refer to TRW Automotive Holdings Corp. and its subsidiaries, unless otherwise indicated. TRW Automotive news is available on the internet at

About TRW Automotive Aftermarket

TRW Automotive Aftermarket is a division of TRW Automotive and one of the main suppliers of quality replacement car parts, as well as a leading player in the maintenance, diagnostics, training and technical support sectors, whether for the independent aftermarket or official OEM networks. For more information, see

Forward-Looking Statements

This release contains statements that are not statements of historical fact, but instead are forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. We caution readers not to place undue reliance on these statements, which speak only as of the date hereof. All forward-looking statements are subject to numerous assumptions, risks and uncertainties which can cause our actual results to differ materially from those suggested by the forward-looking statements, including those set forth in our Report on Form 10-K for the fiscal year ended December 31, 2009 (our “Form 10-K”)and our Form 10-Q for the quarter ended April 2, 2010, such as: the financial condition of our customers adversely affecting us or the viability of our supply base; disruptions in the financial markets adversely impacting the availability and cost of credit negatively affecting our business; any shortage of supplies adversely affecting us; any further material contraction in automotive sales and production adversely affecting our results, liquidity or the viability of our supply base; escalating pricing pressures from our customers; commodity inflationary pressures adversely affecting our profitability or supply base; our dependence on our largest customers; costs of product liability, warranty and recall claims and efforts by customers to adversely alter contract terms and conditions concerning warranty and recall participation; costs or liabilities relating to environmental, health and safety regulations; limitations on available cash and access to additional capital due to our substantial debt; strengthening of the U.S. dollar and other foreign currency exchange rate fluctuations impacting our results; any increase in the expense of our pension and other postretirement benefits or the funding requirements of our pension plans; risks associated with non-U.S. operations, including foreign exchange risks and economic and political uncertainty in some regions; work stoppages or other labor issues at our facilities or at the facilities of our customers or suppliers; assertions by or against us relating to intellectual property rights; the possibility that our largest stockholder's interests will conflict with our or our other stockholders’ interests; and other risks and uncertainties set forth in our Form 10-K and in our other filings with the Securities and Exchange Commission. We do not undertake any obligation to release publicly any update or revision to any of the forward-looking statements.