Pr

1
(No Transcript)
2
THE REVERSED GLOBALIZATION OR HOW TO THINK
GLOBALLY AND ACT LOCALLY

• MDI creates the Dealer/Manufacturer/Partner
  concept

• Instead of a unique massive production plant
  located in a single place the MDI production
  concept is based on many small turnkey units
  spread around the world.

• 80 of the car is manufactured locally and sold
  in the same location.

3
CLASSICAL WAY OF PRODUCING AND EXPORTING CARS
4
CONVENTIONAL METHOD OF MANUFACTURING AND
EXPORTING CARS
5
CONVENTIONAL METHOD OF MANUFACTURING AND
EXPORTING CARS

• Massive plant in a specific location , cars

6
CONVENTIONAL METHOD OF MANUFACTURING AND
EXPORTING CARS
then to local dealers.
7
MDI PRODUCTION CONCEPT
8
MDI PRODUCTION CONCEPT
.. manufacturing and selling cars locally.
9
ADVANTAGES OF THE CONCEPT
ACTUAL LOGISTICS
10
ADVANTAGES OF THE CONCEPT
ACTUAL LOGISTICS
11
ADVANTAGES OF THE CONCEPT
ACTUAL LOGISTICS
Distributors
12
ADVANTAGES OF THE CONCEPT
ACTUAL LOGISTICS
BOATS ? CO2
13
ADVANTAGES OF THE CONCEPT
ACTUAL LOGISTICS
14
ADVANTAGES OF THE CONCEPT
MDI CONCEPT SIMPLIFIES LOGISTICS
SIMPLIFICATION OF LOGISTICS
15
ADVANTAGES OF THE CONCEPT
MDI CONCEPT SIMPLIFIES LOGISTICS
SIMPLIFICATION OF LOGISTICS
THE OUTSOURCERS ARE CHOSEN IN VIEW TO REDUCE
COSTS, LOGISTICS AND TRANSPORT. EVERY PURCHASE
IS MADE THROUGH THE MDI PURCHASING CENTRE
Components outsourcers
Sub-components outsourcers
MDI PLANTS
Raw material Single parts outsourcers
Customers
16
ADVANTAGES OF THE CONCEPT
MDI CONCEPT SIMPLIFIES LOGISTICS
Considering the total number of MDI turnkey
units needed to produce the same amount of cars
as in a conventional car manufacturers plant,
the estimated gain is around
Components outsourcers
Sub-components outsourcers

• less of CO2 emission due to transportation and
  production.

Raw material and Single parts outsourcers

• less logistic cost.

MDI PLANTS
Customers
17
ADVANTAGES OF THE CONCEPT
Production 375 000 cars
7 500 cars 375 000 cars
Only 1/3rd of the land surface is necessary with
the MDI concept
Only 1/4th of the Plant surface is necessary
with the MDI concept
Only 1/5th of the investment is required with
the MDI concept
30 more workforce are employed with the MDI
concept
18
ADVANTAGES OF THE CONCEPT
FROM AN ECOLOGICAL POINT OF VIEW

• Only 1/3rd of the surface is necessary
• Better repartition of the energy needed for the
  production
• No emissions due to the transport of the
  finished cars

ECONOMICAL ASPECTS

• Money stays in the country ? no need for a
  strong currency
• Local employment ? no population transfer
• Distribution of knowledge and Know how

QUALITY

• One car each ½ hour ? Careful production ?
  Quality
• Use of best techniques non comparable with
  massive production

MARKETING

• Customer buys locally manufactured cars
  (?government)
• Less import taxes (very high in some countries).

COSTS

• Small infrastructures to manage.
• Logistic expenses drastically reduced
• No spare parts stocks ? parts produced  after
  time  when needed
• MDI production concept helps to decrease
  productions costs

19
ADVANTAGES OF THE CONCEPT
SELLING PRICE / COST ANALYSIS
20
ADVANTAGES OF THE CONCEPT
SELLING PRICE / COST ANALYSIS
21
ADVANTAGES OF THE CONCEPT
SELLING PRICE / COST ANALYSIS
Amortization 4 Amortization 2
Purchases 32 Purchases 28

• Through MDI purchasing centre
• Higher integration of internal production

• Through various dealers

22
ADVANTAGES OF THE CONCEPT
SELLING PRICE / COST ANALYSIS
Amortization 4 Amortization 2
Purchases 32 Purchases 28
Production costs 11 Production costs 6

• Labour, Overheads, etc
• Heavy production method
• Integrated services
• Labour transport
• Hospital
• Security services
• Banks

• Labour, Overheads, etc
• Simple production techniques
• Uses of existing public facilities

23
ADVANTAGES OF THE CONCEPT
SELLING PRICE / COST ANALYSIS
Amortization 4 Amortization 2
Purchases 32 Purchases 28
Production costs 11 Production costs 6
R D 5 Licence fee 10

• R D
• International Motor shows
• World wide advertising
• Commercial strategic offices
• Marketing resources
• Dividends

24
ADVANTAGES OF THE CONCEPT
SELLING PRICE / COST ANALYSIS
Amortization 4 Amortization 2
Purchases 32 Purchases 28
Production costs 11 Production costs 6
R D 5 Licence fee 10
Logistic 8 Logistic 1

• Raw materials transport and delivery
• Parts suppliers delivery
• Care during transport
• Car park
• Transport of cars to terminals
• Transport of cars to dealers
• Preparation before selling the car (cleaning)
• Fixing damages during transport (10 of the
  total production)

• Raw materials transport and delivery
• Parts suppliers delivery

25
ADVANTAGES OF THE CONCEPT
SELLING PRICE / COST ANALYSIS
Amortization 4 Amortization 2
Purchases 32 Purchases 28
Production costs 11 Production costs 6
R D 5 Licence fee 10
Logistic 8 Logistic 1
Commercial costs 18 Commercial costs 7

• International Motor shows
• World wide advertising
• Commercial strategic offices
• Marketing resources

• Local advertising
• Salesmen salaries
• Commissions

26
ADVANTAGES OF THE CONCEPT
SELLING PRICE / COST ANALYSIS
Amortization 4 Amortization 2
Purchases 32 Purchases 28
Production costs 11 Production costs 6
R D 5 Licence fee 10
Logistic 8 Logistic 1
Commercial costs 18 Commercial costs 7
Dealers commission 18
27
ADVANTAGES OF THE CONCEPT
SELLING PRICE / COST ANALYSIS
Amortization 4 Amortization 2
Purchases 32 Purchases 28
Production costs 11 Production costs 6
R D 5 Licence fee 10
Logistic 8 Logistic 1
Commercial costs 18 Commercial costs 7
Dealer commission 18
Overheads 4 Overheads 8
28
ADVANTAGES OF THE CONCEPT
SELLING PRICE / COST ANALYSIS
Amortization 4 Amortization 2
Purchases 32 Purchases 28
Production costs 11 Production costs 6
R D 5 Licence fee 10
Logistic 8 Logistic 1
Commercial costs 18 Commercial costs 7
Dealers commission 18
Overheads 4 Overheads 8
Gross margin 2 Gross margin
38
29
ADVANTAGES OF THE CONCEPT
SELLING PRICE / COST ANALYSIS
Gross margin 38 THIS RESULT IS POSSIBLE
BECAUSE OF THE EXISTING MARKET PRICES
30
HOW DOES THE CONCEPT WORK ?

• Factors taken into account
• The actual market (number of new and used cars)

• A targeted potential market for MDI (around 1)

• The GDP of the country

31
HOW DOES THE CONCEPT WORK ?
NUMBER OF TURNKEY UNITS PER COUNTRY
21 production plants
32
HOW DOES THE CONCEPT WORK ?
The MDI Country company
If several  Dealers/Manufacturers/Partners 
own the various production plants of a country,
the  MDI country  company will

• Manage the relationship and competition
  between the plants inside the country and with
  foreign  Dealers/Manufacturers/Partners 
  through a share holders agreement

• Manage solidarity between its share holders
  in case of a  force majeure 

• Coordinate huge fleet contracts from big
  companies or administration of the country, for a
  fair distribution of special orders amongst the
  various factories.

• Own license(s) and the know how

• Make the link with the MDI centre of purchases

This company does not earn any profit
33
HOW DOES THE CONCEPT WORK ?
A PURCHASING CENTRE
To obtain the benefit of costs reduction due to
bulk purchase the  purchase centre  will
directly deal with them for all the turnkey
units.
All the  Dealers/Manufacturers/Partners  will
have shares in the purchase centre, to have the
possibility to control that prices negotiated
with outsourcers applies to them.
Using the network of all the turnkey units, new
outsourcers with lower prices will be identified
and purchasing cost will be decreased even more.
34
HOW DOES THE CONCEPT WORK ?
AQUIRING AN MDI TURNKEY UNIT
Acquiring an MDI turnkey unit is a partnership
that

• participate to finance the development of MDI
  products

• give the possibility to the  Dealers/Manufacture
  rs/Partners  to earn very interesting financial
  margins

• helps to fight against pollution

35
HOW DOES THE CONCEPT WORK ?
FOUR STEPS TO ACQUIRE THE LICENSE

• On the execution date a down payment of 2.5 of
  the total investment is required.

• This down payment freezes the territory defined
  for the turnkey unit and stops MDI from dealing
  with other parties with regards to that specific
  area ? Beginning of a real partnership ?
  Exclusivity for the defined area

• As a result of the partnership, the plants
  margin will be divided into 75 for the
   Dealers/Manufacturers/Partners  and 25 for
  MDI (through licence fee).

• This proportion will change to MDIs advantage
  for the contract signed after the beginning of
  car production.

36
HOW DOES THE CONCEPT WORK ?
FOUR STEPS TO ACQUIRE THE LICENCE
2) Execution of the  Licence agreement 

• On the execution date a payment of 8.3 of the
  total investment is required

• This step will occur as soon as the cars fit the
  specifications defined by MDI and is ready to be
  produced

37
HOW DOES THE CONCEPT WORK ?
FOUR STEPS TO ACQUIRE THE LICENCE
3) Beginning of the production in Carros

• Production starts in Carros , the rest of the
  amount falls due

• At that stage a timeframe for building the
  factory and a payment schedule for the turnkey
  unit will be defined

38
HOW DOES THE CONCEPT WORK ?
FOUR STEPS TO ACQUIRE THE LICENCE
4) Building the turnkey unit

• The payment for this phase is made in accordance
  with the schedule agreed in step 3 and can be
  financed (up to 70) by MDI

39
WHICH PRODUCTS ARE CONCERNED BY MDIS
PRODUCTION CONCEPT ?
40
MDI IN INDIA
TATA MOTORS IS THE EXCLUSIVE LICENCED FOR
INDIA
41
MDI IN INDIA
TATA MOTORS IS THE EXCLUSIVE LICENCEE FOR
INDIA
 Tata Motors, in keeping with its role as the
leading company in India for automotive RD, has
signed an agreement, in yet another exciting
engineering and development effort, with MDI of
France for application in India of MDIs
path-breaking technology for engines powered by
air which may be the ultimate
environment-friendly engine yet. Besides, the
engine is efficient, cost-effective, scalable,
and capable of other applications like power
generation. The agreement between Tata Motors
and MDI envisages application and licensing of
the technology for all the products in
India.  Extract of Press release 25th January
2007
42
(No Transcript)