1. Mercedes-Benz: A Greener Luxury Sedan Stephanie Dalquist Seward Matwick Bill Nickerson 13 May 2002

2. Mercedes-Benz Strategy Manufacture world-class luxury cars Maintain industry leadership in technology and design Maximize profits, delivering consumer and environmental benefits “Resource management” value system –Free market: get the prices right –Earth as a closed system –Technology is the answer: improved efficiency, recyclability

3. Motivations for Change Maintain profitability Meet environmental mandates –Recycling laws –Fuel efficiency Balance the competing mandates while still achieving profitability

4. Impact on Design Goals Profitability first –A corporation, above all Deliberate material selection –Aim to meet new EU mandates –Improve fuel efficiency –Provide return on perceived customer value EPS to confirm design choices

5. The New Mercedes-Benz: Materials Aluminum Roof Steel QPI SMC QPO SMC Floor Production 50,000 BIW Cost $1996 81% recyclable 22.9 mpg

6. Advantages of the New Mercedes-Benz Increased profit margin, savings on BIW Meet EU recycling mandate Lighter total weight –Greater fuel economy –Lower emissions

7. Base Case Comparison New ModelChange Cost$1996-$353 Weight2748 lbs-241.2 lbs Recyclability81%+6.3% ELI10324-561.33 Fuel efficiency22.8 MPG+1.3 MPG

8. Change in BIW Profit by Case Number

9. Cost Savings versus Recyclability

10. Cost Savings versus Fuel Economy

11. Recyclability versus MPG

12. ELI Results by Case Number

13. Experience and Challenges Diversify product line with new materials Changeover will be smoothed by years of manufacturing experience Meet future mandates, look forward to more improvements

14. Design Conclusions: the Future of Mercedes-Benz New materials selected to reach manufacturing goals Meet 2006 recyclability mandates of the EU Improved fuel efficiency Stay on the cutting edge of technology and profitability

16. 9800 10000 10200 10400 10600 10800 11000 11200 02468101214 Change # Total ELU for Car Min ELU Max ELU Avg ELU ELU Sensitivity

17. Graph explanation Legend: ELUs of all 54 options Change # –1: original ELU –2: -10% ELUs –3: -30% ELUs –4: -50% ELUs –5: 50% ELUs –6: 30% ELUs –7: 10% ELUs –8: - biodiversity ELUs –9 - production ELUs –10 - energy ELUs –11 - health ELUs –12 – biodiversity/production ELUs –13– energy/health ELUs