Complete Concept Overview

The Next Generation Car Company
Concept Overview
© IndeGo Consulting Limited

2© IndeGo Consulting Limited
The auto industry model is recognisably the same as
100 years ago
• Vertically integrated manufacturers
• Few common parts – less now than then!
• High fixed costs
• Arms-length dealer network
• Volume-driven
• Transaction-focussed

This industry model drives some of the most significant
costs in the business
Body and paint
tooling and
facilities
Powertrain
engineering and
production
Marketing and
Distribution
Now compounded by reduction in credit availability

We looked to other industries where breakthrough
thinking has produced successful new models
Industry New Players Business Model
Southwest,
RyanAir
• Cost obsession
• Simplified asset base
• Fast turnaround
• No frills
Dell • Supply chain obsession
• Customer order driven
• Standard components
• Assemble close to market
Zara • Fast fashion
• Focus on lead-times
• Undersupply
• Low cost flights
• Simple configuration
• Convenience
• High fashion at low
cost
Customer Value

IndeGo concept is an extrapolation of current best
practices, grouped together to provide superior results
• Low investment, highly flexible, upstream design and manufacturing
model producing “good enough” cars for the “automotive agnostic”
customer
• Lifecycle revenue focus for downstream model, based on leasing of
vehicles to successive customers, before scrapping the vehicle at ~ 8
years old
• Customer-centric processes and organisation with clear and simple
ownership of the customer relationship
• Virtual enterprise with high levels of outsourcing and predominantly
variable cost structure

The consumer proposition is targeted at customers
who value “peace of mind” and “predictable costs”
• “Family transport” – aged in 30’s with family,
tight budgets, need reliable family transport,
possibly as second car
• “Car as a washing machine” – well-established
in suburban home, little or no interest in cars
other than as a form of transport
• “Basic wheels” – transportation for personal
use, potentially a first car for young people
starting work
• “Hassle free” – people, predominantly women,
who are nervous about technology and
interactions with dealer and workshop staff
• Financially
astute
• Open to new
ideas
• Want flexibility
+

The concept is built around managing two flows
Requalified
Customer Data
Vehicle Data
Enquiries
Assembly
Recycling
CUSTOMERS
Refurbishment/Upgrade
Mobility Offer
• Bundled package
• “Peace of mind”/”Predictable costs”
PRODUCT
Usage

Design and manufacture embodies a number of
changes relative to the traditional model
• Lean design and development resources, focussed on high value add,
low capital investment activities
• Product designed for the typical customer, not the typical
development engineer
• Sourcing reflecting higher levels of sharing across manufacturers for
key systems
• Manufacturing focussed on producing the right car for the customer
rather than sustaining processes and employment

Product development becomes a small core team
managing concept and delivery, with high outsourcing
• Full service suppliers (cost recovery within parts cost)
• Contract Engineers (hire by the hour)
• Turnkey services (fixed price for agreed deliverable)
Project
Director
Project
Director
Chief Engineer
Head of Product Creation
Head of
Styling
Chief Engineer
Body
Chief Engineer
Electrical
Chief Engineer
Vehicle
Chief Engineer
Chassis
Chief Engineer
Power TrainStyling
3-4 Internal

• Access all product design information
throughout the extended enterprise
globally
• Optimise early stages of product
development
• Embrace the dynamic nature of
change by instant communication and
resolve issues via real-time virtual
meetings
• Capture intellectual knowledge and
lessons learnt for future programmes
• Effectively re-use product information
within and across platforms
Digitisation of processes enables exchange of data
between partners at all stages in the life cycle

Product focus is on see/feel/touch features
• Leading Design
• Good Safety
• Fullsize Package
• Great Practicality
• Competitive Dynamics
• Standard basic telematics
• Late configuration of options
• In Mould Exterior paint
• Removable Trim Panels
• Infotainment options
Technology
Attributes
Features
• Long life for high investment
items
• Modular structure key to
supply chain design
Competitive with, but different
to, conventional products
Focus on usability, visual
appeal
Telematics enables customer
contact and data collection
Most features easily changed
or updated for remarketing
• Shelf Technology
• Long Life Cycle Platform
• Short Life Cycle Body & Trim
• Upgradeable Electrics
• Outsourced Powertrain

Sourcing pattern is driven by the approach taken on
powertrain and body, and by short life cycle
Powertrain
• Global supplier
(likely to be
existing VM)
• Also drives
sourcing of related
systems e.g. fuel,
exhaust, cooling
Body Structure
• Tooling from low
cost country
(~40% cheaper)
• Stampings
sourced on lowest
total cost basis
• Low variety and
modular design
enables global
sourcing
• Supplied painted
(e.g. powder coat)
Other
• Leverage supplier
scale - use
industry standard
parts where
possible
• Low cost/short life
tooling for body
and interior parts
• Lowest total cost
sourcing including
systems
engineering

Body structure design and process has some
similarities with premium aluminium cars
• Major structural sub-assemblies supplied from a separate facility:
– Floor assembly
– Front-end and rear-end assemblies
– Body right-hand and left-hand sides (including door inner)
• Sub-assembly design would include features enabling dimensional
accuracy (Master Build Sections and Master Location Holes), and
would be designed to achieve maximum packing density
• Framing at the satellite assembly plants would consist of two stations:
– Riv-bond process would be used in the framing process providing
a joint stronger than spot-welding
– Adhesive would be applied robotically and the joints made by
either self-pierce rivets or mechanical fixings.

Plastic has a number of advantages for the body
cladding panels
• Can use moulded in colour process to eliminate paint shop
• Other materials considered, but not suitable:
– Steel requires paint process and is then susceptible to damage
during shipment and assembly
– Aluminium is only suitable for high-priced vehicles where weight is
critical (high material and tool costs)
– Reinforced plastic (e.g. SMC) is most suitable for low-volume
niche applications
• Skin panel design should contain interface to body structure
supporting flexibility for model changes and easy panel replacement
• More dramatic styling is possible with moulded plastic
• Recycling gains due to easy disassembly and grinding of
thermoplastics

Product structure enables radical changes to
manufacturing processes and economics
• Inbound
supply of
systems and
components
from supplier
plants with
economies of
scale
• Body structure
assembled on
2 stage
framing line
using bonding
and riveting
• Final trim and
assembly using
supplier
modules with
coloured body
cladding added
during
assembly
Procurement Body in White
Body
Assembly
Paint Trim & Final

More but smaller assembly sites – 50,000 units p.a.
with 500 people, using standard industrial buildings
Assembly Hall
Class A
Receiving &
Marshalling
Offices
FramingLine
Under-floor/internal
Trim,Doors&Skins
Driveline&Test
Finished Vehicle
Marshalling &
Collection
Class B/C Inbound
Logistics &
Consignment
Stock
Logistics Area

Sales and distribution fundamentally changes the
processes and principles of the traditional model
• Focus on providing mobility to the customer, with flexibility to
adapt to their changing needs
• Additional value added services are key to deepening the
customer relationship, and their profitability to the business
• Business emphasis on maximising profitability from a managed
asset pool and a stable customer base, rather than “moving the
metal”
• Key customer relationship is direct and phone/internet based

The consumer proposition is targeted at customers
who value “peace of mind” and “predictable costs”
• “Family transport” – aged in 30’s with family, tight
budgets, need reliable family transport, possibly as
second car
• “Car as a washing machine” – well-established in
suburban home, little or no interest in cars other than
as a form of transport
• “Basic wheels” – transportation for personal use,
potentially a first car for young people starting work
• “Hassle free” – people, predominantly women, who
are nervous about technology and interactions with
dealer and workshop staff
• Financially
astute
• Open to new
ideas
• Want flexibility
+

Market position will not be based on product
technology or price, but superior service
• Product
– Competitive in all key areas – dynamics, performance, safety,
environment
– Superior in see/feel/touch features – infotainment, telematics, storage,
“surprise and delight”
• Price
– Aligned with BMW Mini One, rather than volume producers such as Ford,
GM, Volkswagen
• Service
– “Best in the industry” – IT and process enabled – think “Four Seasons
Hotels”
– Continuous value-adding consumer relationship based on quality, trust
and value, rather than price

The consumer will select from a limited menu of
bundled deals covering everything other than fuel
Vehicle Type
• Sub-compact
sedan
• Compact
sedan
• Mini-MPV
• Crossover
Usage
• Mileage
• Driver flexibility
• Damage
excess
• Holiday Cars
• Car Pooling
Service level
• Roadside
assistance
• Repair and
maintenance
arrangements
• Concierge
services
Lease
• Period –
months to
years
• Break points
• Flexibility
options
All slotted against a price table based on vehicle age

Focus on the whole life cycle offers additional revenue
Vehicle Usage Related Services Adjacencies
• Insurance
• Servicing
• Repairs
• Product customisation
• Product substitution
• Driver changes
• Temporary vehicles
• Mileage options
• Condition surcharges
• Fuel payment (SIM-Pay)
• Mobile telephony (Virtual
Network Operator)
• Daily rental access
• Music/video on-line
• Emergency support
• Navigation helpline
• Traffic alert
• Concierge services
• Non-auto insurance
• Mortgages
• Personal Loans
• Credit Cards
• Fashion products
• Travel
• Entertainment
€

Service and repair will be provided by third parties as
part of tiered service packages
• Integration of vehicle
diagnostic software and
supporting telematics
allows customer care to
contact the customer to
advise them of servicing or
repair requirements and to
schedule the appointment
• Both fixed network and
mobile servicing will be
provided – all outsourced,
with usage and response
time determined by the
service level selected by
the customer
Bronze
Silver
Gold
Platinum
Service Level
In-car Telematics
Linked to Call
Centre
Branded 3rd Party
Service Providers

Low perceived transaction value of €10/day will allow
direct sales – but test drives still needed
Transactions Made Primarily through
Virtual Channels
• Single channel only – no internal competition
from independent dealers
• Centralised call centre for vehicle support and
sales backup
• Proactive approach to customers to make
tailored offers or alert them to service needs
• Indego will operate a small number of physical
outlets in major retail locations
• Test drives will be available there, and through
selected daily rental partners
55%
29%
7% 6%
3%
Extrem
ely
Very
Som
ew
hat
N
otVery
N
otAtAll
Importance
84% of Customers Want to
‘Touch’ the Car When Choosing

Cars will be delivered direct to the customer, at home
or work, including all supporting services
• Distribution will be outsourced to third parties
complying with required customer care standards
• Branded transporters will operate from assembly
plants and distributed “break bulk” facilities to
deliver direct to customer on a 5 day lead-time
from the plant
• Vehicle registration, taxation, other pre-delivery
requirements and refurbishment of returned
vehicles will be handled by the logistics operator
• The vehicle will be handed over by the driver who
will also capture additional customer profile data
and collect the vehicle which is being replaced
• Distributor and delivery vehicles will be fully
integrated into the IndeGo IT infrastructure for both
supply chain and customer care applications

We have developed a practical launch strategy which
is flexible, but provides a realistic way forward
• Purchase commercially available
product as a fleet buyer
• Add aftermarket telematics
functionality to the extent
possible by technical constraints
• Offer as a “mobility package”
through direct marketing and
marketing partners
• Leverage existing aftermarket
infrastructure for service and
customer support
• Include used cars within the offer
from the outset in order to test
repetitive lease concept
Downstream
• Commission exclusive
adaptations of existing product
• Commission unique variants
(body and trim features) on
existing platforms
• Commission bespoke flexible
platforms with high level of
outsourced systems
• Own industrial capacity in market
for new car assembly and used
car refurbishing and upgrade
Upstream

We believe that the IndeGo downstream approach is
defensible for a period without exclusive product
• “Clean sheet of paper” approach, unconstrained by legacy and tradition
• More flexible leasing periods – not a fixed multi-year commitment
• Superior service in all interactions – not easily replicated by existing players
with dominant transactional cultures
– Named account manager for each customer
– Proactive contact for customer care and additional services
– Collection/delivery of vehicles at start and end of contract and for servicing
• “Peace of mind” assured by telematics fit to all vehicles
• Availability of used cars, at correspondingly lower price points
• Upgrade opportunities to switch cars or add new features e.g. infotainment
• Bundled additional services e.g. daily rental vehicles when travelling
• Links to car-pooling schemes to share costs and reduce parking issues
All addressable by competitors, but not immediately,
and together form a strong defence

Complete Concept Overview

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