Mercedes-Benz: A Greener Luxury Sedan

Stephanie Dalquist
Seward Matwick
Bill Nickerson
13 May 2002
 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
 Motivations for Change
• Maintain profitability
• Meet environmental mandates
– Recycling laws
– Fuel efficiency
• Balance the competing mandates while still
achieving profitability
 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
 The New Mercedes-Benz: Materials
Aluminum Roof
Steel QPI
SMC QPO
SMC Floor

• Production 50,000
• BIW Cost $1996
• 81% recyclable
• 22.9 mpg
Advantages of the New Mercedes-Benz
• Increased profit margin, savings on BIW
• Meet EU recycling mandate
• Lighter total weight
– Greater fuel economy
– Lower emissions
 Base Case Comparison
New Model Change
Cost $1996 -$353
Weight 2748 lbs -241.2 lbs
Recyclability 81% +6.3%
ELI 10324 -561.33
Fuel efficiency22.8 MPG +1.3 MPG
Change in BIW Profit by Case Number
800

600

400

200

0
Change in profit ($)

0 10 20 30 40 50 60
-200

-400

-600

-800

-1000

-1200

-1400
Case number
 Cost Savings versus Recyclability
600.00

53
50
500.00 35

32 17
400.00 14 52 49
34
Savings ($)

31
300.00 16
13

200.00

100.00

29 23
0.00 41
70.00 75.00 80.00 85.00 90.00
Recycle %
 Cost Savings versus Fuel Economy
600.00

53
50
500.00 35
32 17
52
400.00 14 49
Savings ($)

34
31
300.00 16
13

200.00

100.00

23
41 29
0.00
21.6 21.8 22 22.2 22.4 22.6 22.8 23 23.2 23.4
Fuel economy (mpg)
 Recyclability versus MPG
23.4

23.2 13
16
23 49
52 31
Fuel economy (mpg)

22.8 34

22.6 29

22.4

22.2
14
17
22
50 41
53 32 23
21.8
35
21.6
70.00 75.00 80.00 85.00 90.00
Recycle %
 ELI Results by Case Number
11000

10900 29

10800 35 53
23 32
41 50
10700
17
14
10600
ELI

10500

10400
34 52
10300 31 52
49

10200 16
13
10100
0 10 20 30 40 50 60
Case number
 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
 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
 ELU Sensitivity

11200

11000

10800
Total ELU for Car

Min ELU
Max ELU
10600
Avg ELU
10400

10200

10000

9800
0 2 4 6 8 10 12 14
Change #
 Graph explanation
• Legend: ELUs of all 54
options
• Change #
– 1: original ELU – 8: - biodiversity ELUs
– 2: -10% ELUs – 9 - production ELUs
– 3: -30% ELUs – 10 - energy ELUs
– 4: -50% ELUs – 11 - health ELUs
– 5: 50% ELUs – 12 – biodiversity/production ELUs
– 6: 30% ELUs – 13– energy/health ELUs
– 7: 10% ELUs