1. Motor Development International
MDI CONCEPT
MDI: 17 rue des Bains – 1212 Luxemburg
Tel. : 00 352 26 26 23 25
CQFD is the French subsidiary of MDI
4ème avenue - 06510 Carros (France)
Tel. : 00 33 (0) 4 97 10 20 20 / Fax : 00 33 (0) 4 97 10 20 21
Website : www.mdi.lu E-mail : cqfd.ad@mdi.lu
Motor development international
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2. Production concept 2
Turnkey factories to manufacture and sell locally
Activities 2
Buildings 2
Means of production 4
Chassis workshop
Bodyworks- and assembly workshop
Painting line
Mechanical machining workshop
Mechanical assembly workshop
Vehicle assembly line
Saddlery – upholstery workshop
Tanks workshop
Comparative study 7
Usual production system
The usual system: a complex and polluting logistics 8
8
Production of parts and components
Distribution of finished products
The MDI concept simplifies the logistics
Advantages of the MDI concept
- on the ecological level
- on the economical and social levels
- on the quality level
- on the marketing level
- on the costs
Analysis of the costs 15
The MDI concept reduces the production costs
Amortization
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3. MDI production concept
Turnkey factories to manufacture and sell locally
From 1999, MDI imagined and invented the notion of Dealer / Manufacturer / Associate
by proposing turnkey factories in order to produce and sell locally. Contrary to huge
conventional assembly factories (that are particularly polluting), the MDI concept sets up
numerous production micro-factories spread all over the world.
They are equipped with all the necessary workshops to manufacture 80 % of the vehicles
and to commercialize their products on the spot.
Activities
The Dealers / Manufacturers / Associates are distributed on definite marketing zones and
are owners of MDI factories. They carry out :
o the manufacturing of the cars
o the cars sales
o the organization of their after-sales network
o the manufacturing of the spare parts
Buildings
The factory should be located on a site near a big city, if possible in a commercial estate.
A land of 15 000 m² is sufficient to set up a MDI plant.
o Ground surface ………………………………………... 4 500 m²
o Show-room and commercial surface………………… 600 m²
o Production area…………………………..……………. 4 000 m²
o Storage surface………………… …………………..… 1 000 m²
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4. 3

5. Means of production
The totality of the means and tooling necessary to the manufacturing of the MDI cars is provided
by MDI.
Chassis workshop
Assembly tooling – Gluing gauges
Bodyworks- and assembly workshop
Moulding line (MDI patent) – Production moulds – Injection tooling – Foaming moulds – Foaming
tooling – Laser cutting – 5 axis digital trimming – Template
Painting line
Preparation – Painting cabin – Painting robot – Drying room
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6. Mechanical machining workshop
Digital machining centre – Specific machines – Special tooling – Three-dimensional
control material - Metrology
Mechanical assembly
Specific tooling – Engine test bench – General tooling – Gear-box control
Assembly line
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Tooling and handling material – Subsets assembly benches along assembly line –
Storage along assembly line
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7. Saddlery - upholstery
Necessary means
Tanks workshop
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Liners blower – Wire coiling machine –
Control implements - Drying room
Storage means
Pallets carrier – Shelving – Fork-lift – Handling material
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8. Comparative study
Usual production system
The conventional production method (practised by the global car makers) is based on a
logistics of assembly and distribution. A « giga » - assembly factory located on one spot
produces the cars that are then delivered towards several countries, to distributors who
redistribute the cars to the dealers.
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9. The usual system: a complex and polluting logistics
VANTAGES OF THE CONCEPT
ACTUAL LOGISTICS
PARTS PRODUCTION FINISHED PRODUCTS
ASSEMBLY
FACTORY
P
P
Platforms and
terminals T T
Components
suppliers
Sub-components Distributors
suppliers
Raw material Dealers
Customers
The « supply chain » of the present makers is divided into two large sectors:
The production of parts and components
This production phase goes through:
1) The transformation of raw material into unit parts and through the manufacturing of
sub-components by subcontractors (third 3)
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10. 2) The assembly of sub-components at the suppliers (third 2)
3) The manufacturing of main components (either at the suppliers, or in the plants of the
e9 maker's group) (third 1)
4) The final assembly
All those operations require transportation that increases CO2 emissions
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11. The distribution of the finished products
To bring the vehicles to the final customer, it is necessary to :
1) Store finished vehicles on platforms and terminals
2) Transport them to the importers and distributors in each selling country, who
dispatch them to the dealers (by train, by truck and even by ship)
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12. 3) Sell them through a dealers' network
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4) To finally reach the end user
All the linking means between the participants (in the distribution of the finished
products) require transportation that contributes to the increase of CO2 emissions.
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13. The MDI concept simplifies the logistics
VANTAGES OF THE CONCEPT
MDI CONCEPT SIMPLIFIES LOGISTICS
X PARTS PRODUCTION FINISHED PRODUCTS
X
X X X ASSEMBLY PLANT X
X
X X
X
X XX
P
P
X
X X XX
Platforms and
T T
X X
terminals
X
X
X
X
X
Components
suppliers
Sub-components Distributors
suppliers
Raw material Dealers
suppliers
Customers
o No distributors
o No intermediate stocks
o Less suppliers: 80% of the vehicle are achieved on the spot
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o The assembly plant is replaced by several MDI factories
o The suppliers are selected in view of reducing the costs, the logistics and the
transport
o The purchases for all the factories are managed by the MDI Trading Group in order
to derive profit from bulk purchases
Considering the number of MDI factories necessary to the production of the same amount
of cars produced in a conventional plant, the MDI concept enables:
o A reduction of the CO2 rate caused by the transport of raw material and finished
cars
13 o A reduction of the logistics costs
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14. Advantages of the MDI concept
By way of example, to produce the same number of cars as a usual maker in his assembly
factory, 50 MDI's concept factories are required, that is to say:
VANTAGES OF THE CONCEPT
Usual plant MDI production concept
1 PLANT 50 PLANTS
Production : 375 000 cars 7 500 cars 375 000 cars
Land surface : 2 370 000 m² 15 000 m² 750 000 m²
Plant surface : 880 000 m² 4 350 m² 217 500 m²
Workforce (2 shifts) : 4 650 - 120 - 6 000 -
Only 1/3rd of the land surface is necessary with MDI concept
Only 1/4th of the plant surface is necessary with MDI concept
To sum up, the MDI concept requiresinvestment is required with MDI concept
Only 1/5th of the (in relation to the usual production mode):
30% more workforce are employed with MDI concept
 1/3rd of the land surface
 1/4th of the built surface
 1/5th of the investment amount
 30 % more labour
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15. On the ecological level
o Only one third of the ground surface is necessary
o Better distribution of the energy used for production
o No pollution due to the transport of the finished products
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On the economic and social levels
o The currency remains in the country  no need for change
o Creation of local employment  no population transfer
o Sharing out of the knowledge and of the know-how
On the quality level
o A car produced every ½ hour  careful production  quality
o Use of techniques that are not compatible with mass production
From the marketing point of view
o Customers buy cars that are produced locally (especially public services)
o Reduction of import duties/taxes (very high in some countries)
On the costs
o The MDI plants are small and easy-to-manage infrastructures (SME)
o Logistics expenses are drastically reduced
o No stocks of spare parts. These are manufactured « after-time »
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16. Analysis of the costs
The MDI concept reduces the production costs
Hereunder, a quick analysis of the costs' distribution on the selling price of a vehicle reveals the
important margin made by a Dealer / Manufacturer / Associate who has acquired an MDI's
concept factory.
VANTAGES OF THE CONCEPT
SELLING PRICE / COST ANALYSIS
CONVENTIONAL CAR MDI AIR CAR
Amortization 4% Amortization 2%
Purchases 32% Purchases 28%
Production costs 11% Production costs 6%
R&D 5% Royalties 10%
Logistics 8% Logistics 1%
Commercial costs 18% Commercial costs 7%
Dealer commission 18%
Overheads 4% Overheads 8%
Gross margin 2% Gross margin 38%
Amortization
(- 2% for the MDI concept)
This is the amortization portion that includes the buying price of the factory, the tooling, the
machines, etc. In the case of a MDI plant, simple manufacturing methods enable to reduce the
impact of that amortization on the selling price.
Purchases
(- 4% for the MDI concept)
The reduction of the percentage concerning the purchases is due to the fact that 80 % of the car
are really produced on the spot. That integration allows reducing the number of intermediate
suppliers. The purchases are made through a MDI Trading Group for all the production factories.
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17. Production costs
(- 5% pour the MDI concept)
Those production costs are related to the staff and to the various running charges. Simple
production techniques, as also the use of already existing public services (no need for integrated
services, such as banks, buses, catering, safety, etc.) enable to reduce the production costs by
50 %.
Royalties
(+ 5% for the MDI concept)
Whereas a usual car maker reinvests about 5 % of a car's selling price into the R&D, MDI
deducts 10 % of that selling price as royalties. Those 10 % will be used for the R&D, but also
towards:
o the participation in international motor-shows
o the publicity worldwide
o the commercial and strategic management
o the marketing resources
o the dividends for the shareholders
Logistics
(- 7% for the MDI concept)
Only the transport and delivery of raw materials, as also the transport of the parts that are not
manufactured in the plant, are part of the logistics of the MDI concept.
The suppression of some steps, such as:
o transport of parts and subsets
o cocooning and protection during transport
o storage
o transport of the cars to the terminals
o transport of the cars to the dealers
o preparation of the cars before selling
o reparation of damages caused during transport (10% of the total production)
allows reducing the logistics costs by about 7 %.
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18. Commercial costs
(- 11% for the MDI concept)
In this item, only the wages of the salespeople, the commissions and the local publicities play a
part in the MDI concept. Whereas in the case of the usual car makers, the international motor-
shows, the publicity worldwide, the commercial and strategic offices, as also the marketing
resources are counted.
Dealers' commission
(- 18% for the MDI concept)
No commission for dealers, since the MDI production unit itself is the dealer.
Charges
(+ 6% for the MDI concept)
Since the production factory is a SME, it will not be able to negotiate the charges (social or for
electricity supply, for example) to the same extent as the big car makers.
This analysis of costs allows calculating the important margin that a Dealer / Manufacturer
/ Associate can get, thanks to the MDI production concept.
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