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 RoofSteel QPISMC QPOSMC 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 ChangeCost $1996 -$353Weight 2748 lbs -241.2 lbsRecyclability 81% +6.3%ELI 10324 -561.33Fuel efficiency22.8 MPG +1.3 MPG

Change in BIW Profit by Case Number

-1400

-1200

-1000

-800

-600

-400

-200

0

200

400

600

800

0 10 20 30 40 50 60

Case number

Chan

ge in

pro

fit ($

)

Cost Savings versus Recyclability

0.00

100.00

200.00

300.00

400.00

500.00

600.00

70.00 75.00 80.00 85.00 90.00

Recycle %

Savi

ngs

($)

1613

232941

3134

4952141732

3550

53

Cost Savings versus Fuel Economy

0.00

100.00

200.00

300.00

400.00

500.00

600.00

21.6 21.8 22 22.2 22.4 22.6 22.8 23 23.2 23.4

Fuel economy (mpg)

Savi

ngs

($)

294123

16

49

13

52

3134

14

17

5053

35

32

Recyclability versus MPG

21.6

21.8

22

22.2

22.4

22.6

22.8

23

23.2

23.4

70.00 75.00 80.00 85.00 90.00

Recycle %

Fuel

eco

nom

y (m

pg)

1316

3134

49

52

29

1417

233235

415053

ELI Results by Case Number

13

14

16

17

23

29

31

32

34

3541

49

50

52

53

10100

10200

10300

10400

10500

10600

10700

10800

10900

11000

0 10 20 30 40 50 60

Case number

ELI

52

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

9800

10000

10200

10400

10600

10800

11000

11200

0 2 4 6 8 10 12 14

Change #

Tota

l ELU

for C

ar Min ELUMax ELUAvg ELU

ELU Sensitivity

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