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

Cost
Weight
Recyclability
ELI
Fuel efficiency

New Model
$1996
2748 lbs
81%
10324
22.8 MPG

Change
-$353
-241.2 lbs
+6.3%
-561.33
+1.3 MPG

Change in BIW Profit by Case Number

800
600
400
200

Change in profit ($)

0
0

10

20

30

-200
-400
-600
-800
-1000
-1200
-1400
Case number

40

50

60

Cost Savings versus Recyclability

600.00
53
500.00

50

35
32

17

Savings ($)

400.00

14

52

49
34
31

300.00

16
13

200.00

100.00

0.00
70.00

41

29
75.00

23
80.00
Recycle %

85.00

90.00

Cost Savings versus Fuel Economy

600.00
53
500.00

35

50

32

17

Savings ($)

400.00

52

14

49
34
31

300.00

16
13

200.00

100.00
23
0.00
21.6

21.8

29

41
22

22.2

22.4

22.6

Fuel economy (mpg)

22.8

23

23.2

23.4

Recyclability versus MPG

23.4
23.2

16

Fuel economy (mpg)

23

13

49
52

22.8
22.6

34

31

29

22.4
22.2
17

22
21.8
21.6
70.00

50

14

41

53

32

23

35
75.00

80.00
Recycle %

85.00

90.00

ELI Results by Case Number

11000
10900

29

10800
10700
14
ELI

32

23

35
41

50

53

17

10600
10500
10400
31

10300
10200

13

34
49

52
52

16

10100
0

10

20

30
Case number

40

50

60

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

Total ELU for Car

11000
10800

Min ELU
Max ELU

10600

Avg ELU

10400
10200
10000
9800
0

6
Change #

10

12

14

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