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

2. 2 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”? Background and Motivation

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

4. 4 The Current Markets 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 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

5. 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. 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. 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 carFamily carUtility car (camper)

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

9. 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. 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. 11 Group Photo Thank You!