Model Concept for the Future

1. Model Concept for the Future Núria Margarit Bel Josh Chambers Victoria Heindorff Steve Jacobsen Marion Kantz Andy Mantovan Miguel Molina Cecchetti Toma Teves Group 2 Team leader: Dr. Ulix Göttsch München, 14th of January 2003

2. Background and Motivation • Motivation • Traditional markets: USA, Europe, and parts of Asia are largely saturated • Difficult to significantly increase sales in a competitive market. • „Emerging Markets“ offer the most growth potential • New market opportunities in countries with quickly growing economies • The problem to solve: • Design a model program for a global car manufacturer. • Can there be a car that satisfies the demands of all emerging markets? • Could there be a “world car”?

3. Markets Are Different • Political and Legal Differences • Taxation • Environmental regulations • Customs • Safety standards • Labor laws • Social/Cultural Differences • Demographic trends • Family structures • Aesthetic preferences • Status and prestige • Environmental awareness • Economic Differences • Quality of infrastructure • Purchasing power • Availability of natural resources • Technological capability • Labor costs

4. The Current Markets • India • Imported used cars • Regionally produced discontinued cars • 2-stroke motorcycles • Middle East • Imported used American cars • Japanese cars • Luxury cars • Africa • Jeeps and Trucks • Latin America • Inexpensive cars • Midsize • Trucks (4WD) • Australia • Sedan with pick-up bed and big engines • Europe • Regionally produced cars • Family sedans/station wagons • Fuel efficient and diesel cars • USA • SUV’s • Midsize • Pick-ups • Mini-vans • California • Gas-electric hybrids • China • Inexpensive cars • Small cars • Motorcycles • Japan • Intelligent cars • Small cars • Hybrids • South East Asia • Fuel efficient cars • Inexpensive cars • Regionally produced cars

5. A Look at Emerging Markets Characteristics of the Markets: • Limited purchasing power • High sales taxes • High density urban areas • Low fuel qualities • Increasing use of IT • Inadequate transportation infrastructure • Lack of skilled labor • Limited distribution and service network

6. Meetings the Market Needs Characteristics of the Markets: • Limited purchasing power • High sales taxes • High density urban areas • Low fuel qualities • Increasing use of IT • Inadequate transportation infrastructure • Lack of skilled labor • Limited distribution and service network Characteristics of the Car: • Inexpensive • Compact • Fuel efficient • Simple to produce • Robust to quality of fuel • Durable • Easy to maintain • Tolerant to poor road conditions

7. The Solution Basic Configuration:(simple version, min. luxury) - “Safety Cell“(engine and passenger compartments) - Drive Train (engine to wheels) - Chassis and Suspension - Passenger compartment(Interior: front seats, dash board) Utility car Utility car (camper) Family car

8. The Solution Modular Additions: Exterior: - body panels (plastics) - bed for utility car (load zone) - doors for the family car - rear seat “safety cell“ - luxury upgrades(e.g. designer panels) - utility upgrades (e.g. cover, camper) Interior: - rear seats for the family car - luxury upgrades(e.g. navigation system or CD player)

9. Strategies for Success • Local government partnerships • Worldwide manufacturing • Consistent quality standards • Local investment • Reduced production costs • Brand name affiliation • Customer support • Standardized generic parts

10. Conclusions • Emerging markets offer greatest potential for sales growth in the near future. • A “Modular Automobile Concept” addresses the various requirements in different market regions. • Standardization and local cooperation can be used to reduce production costs. • Modularization allows market segmentation to maximize profit.

11. Group Photo          Thank You!