1. CATs PRODUCTION CONCEPT AND MDIS BUSINESS MODEL

2. THE REVERSED GLOBALIZATION OR OR HOW TO THINK GLOBALLY AND ACT LOCALLY 80 % of the car is manufactured locally and sold in the same location. 80 % of the car is manufactured locally and sold in the same location. MDI creates the Dealer/Manufacturer/Partner concept 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. 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.

3. CLASSICAL WAY OF PRODUCING AND EXPORTING CARS A unique massive production plant…

4. CONVENTIONAL METHOD OF MANUFACTURING AND EXPORTING CARS

5. …Massive plant in a specific location, cars sent to distributors in various countries..

6. …then to local dealers. CONVENTIONAL METHOD OF MANUFACTURING AND EXPORTING CARS

7. MDI PRODUCTION CONCEPT Small production units spread around the world…

8. MDI PRODUCTION CONCEPT.. manufacturing and selling cars locally... manufacturing and selling cars locally.

9. ADVANTAGES OF THE CONCEPT ACTUAL LOGISTICS PRODUCTION PARTSPRODUCT BUILT UP Raw materials Single parts outsourcers Sub-componentsoutsourcers Componentsoutsourcers CAR MANUFATURER TRANSPORT

10. ADVANTAGES OF THE CONCEPT ACTUAL LOGISTICS PRODUCTION PARTSPRODUCT BUILT UP Raw materials Single parts outsourcers Sub-componentsoutsourcers Componentsoutsourcers CAR MANUFATURER Platforms and terminals P P TT Distributors Dealers Customers

11. ADVANTAGES OF THE CONCEPT ACTUAL LOGISTICS PRODUCTION PARTSPRODUCT BUILT UP Raw material Single parts outsourcers Sub-componentsoutsourcers Componentsoutsourcers CAR MANUFATURER Platforms and terminals P P TT Distributors Dealers Customers P P TT TRAINS

12. PRODUCTION PARTSPRODUCT BUILT UP Raw materials Single parts outsourcers Sub-componentsoutsourcers Componentsoutsourcers CAR MANUFATURER Platforms and terminals P P TT Distributors Dealers Customers P P TT P P TT P P TT ADVANTAGES OF THE CONCEPT ACTUAL LOGISTICS BOATS CO 2

13. ADVANTAGES OF THE CONCEPT ACTUAL LOGISTICS

14. ADVANTAGES OF THE CONCEPT MDI CONCEPT SIMPLIFIES LOGISTICS SIMPLIFICATION OF LOGISTICS NO DISTRIBUTORS X X X X X X NO INTERMEDIATES STOCKS XX X X LESS OUTSOURCERS: SINCE 80% OF THE CAR IS PRODUCED LOCALLY X X X X X X X X X X X X X X X UNIQUE PLANT REPLACED BY MDI TURNKEY UNITS X

15. ADVANTAGES OF THE CONCEPT MDI CONCEPT SIMPLIFIES LOGISTICS Raw material Single parts outsourcers Sub-componentsoutsourcers Componentsoutsourcers Customers SIMPLIFICATION OF LOGISTICS MDI PLANTS THE OUTSOURCERS ARE CHOSEN IN VIEW TO REDUCE COSTS, LOGISTICS AND TRANSPORT. EVERY PURCHASE IS MADE THROUGH THE MDI PURCHASING CENTRE

16. ADVANTAGES OF THE CONCEPT MDI CONCEPT SIMPLIFIES LOGISTICS Raw material and Single partsoutsourcers Raw material and Single parts outsourcers Sub-componentsoutsourcers Componentsoutsourcers Customers MDI PLANTS MDI CENTER OF PURCHASES 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: % less logistic cost.% less logistic cost. % less of CO 2 emission due to transportation and production.% less of CO 2 emission due to transportation and production.

17. Only 1/3rd of the land surface is necessary with the MDI concept ADVANTAGES OF THE CONCEPT Classic plant (Renault Flin) MDI production concept Production : 375 000 cars 7 500 cars 375 000 cars 1 PLANT 50 PLANTS Only 1/4th of the Plant surface is necessary with the MDI concept 30% more workforce are employed with the MDI concept Only 1/5th of the investment is required with the MDI concept 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 - Total investment : 3 000 M 12 M 600 M

18. FROM AN ECOLOGICAL POINT OF VIEW FROM AN ECOLOGICAL POINT OF VIEW ADVANTAGES OF THE CONCEPT Only 1/3rd of the surface is necessary Only 1/3rd of the surface is necessary Better repartition of the energy needed for the production Better repartition of the energy needed for the production No emissions due to the transport of the finished cars No emissions due to the transport of the finished cars ECONOMICAL ASPECTS ECONOMICAL ASPECTS Money stays in the country no need for a strong currency Money stays in the country no need for a strong currency Local employment no population transfer Local employment no population transfer Distribution of knowledge and Know how Distribution of knowledge and Know how QUALITY QUALITY MARKETING MARKETING COSTS COSTS One car each ½ hour Careful production Quality One car each ½ hour Careful production Quality Use of best techniques non comparable with massive production Use of best techniques non comparable with massive production Customer buys locally manufactured cars ( government) Customer buys locally manufactured cars ( government) Less import taxes (very high in some countries). Less import taxes (very high in some countries). Small infrastructures to manage. Small infrastructures to manage. Logistic expenses drastically reduced Logistic expenses drastically reduced No spare parts stocks parts produced « after time » when needed No spare parts stocks parts produced « after time » when needed MDI production concept helps to decrease productions costs MDI production concept helps to decrease productions costs

19. ADVANTAGES OF THE CONCEPT CONVENTIONAL CARMDI CATs CAR CONVENTIONAL CARMDI CATs CAR SELLING PRICE / COST ANALYSIS

20. CONVENTIONAL CARMDI CATs CAR CONVENTIONAL CARMDI CATs CAR ADVANTAGES OF THE CONCEPT Amortization 4%Amortization2% Plant, machinery etc… SELLING PRICE / COST ANALYSIS

21. CONVENTIONAL CARMDI CATs CAR CONVENTIONAL CARMDI CATs CAR ADVANTAGES OF THE CONCEPT Amortization 4%Amortization2% Purchases 32%Purchases28% SELLING PRICE / COST ANALYSIS Through MDI purchasing centre Higher integration of internal production Through various dealers

22. CONVENTIONAL CARMDI CATs CAR ADVANTAGES OF THE CONCEPT Amortization 4%Amortization2% Purchases 32%Purchases28% Production costs 11%Production costs 6% Labour, Overheads, etc… Labour, Overheads, etc… Heavy production method Heavy production method Integrated services Integrated services Labour transport Labour transport Hospital Hospital Security services Security services Banks Banks SELLING PRICE / COST ANALYSIS Labour, Overheads, etc… Labour, Overheads, etc… Simple production techniques Simple production techniques Uses of existing public facilities Uses of existing public facilities

23. CONVENTIONAL CARMDI CATs CAR CONVENTIONAL CARMDI CATs CAR ADVANTAGES OF THE CONCEPT SELLING PRICE / COST ANALYSIS Amortization 4%Amortization2% Purchases 32%Purchases28% Production costs 11% Production costs 6% R & D 5%Licence fee10% R & D International Motor shows World wide advertising Commercial strategic offices Marketing resources Dividends

24. CONVENTIONAL CARMDI CATs CAR CONVENTIONAL CARMDI CATs CAR ADVANTAGES OF THE CONCEPT Amortization 4%Amortization2% Purchases 32%Purchases28% Production costs 11% Production costs 6% 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 SELLING PRICE / COST ANALYSIS

25. CONVENTIONAL CARMDI CATs CAR CONVENTIONAL CARMDI CATs CAR ADVANTAGES OF THE CONCEPT Amortization 4%Amortization2% Purchases 32%Purchases28% 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 SELLING PRICE / COST ANALYSIS

26. CONVENTIONAL CARMDI CATs CAR CONVENTIONAL CARMDI CATs CAR ADVANTAGES OF THE CONCEPT Amortization 4%Amortization2% Purchases 32%Purchases28% 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% SELLING PRICE / COST ANALYSIS

27. CONVENTIONAL CARMDI CATs CAR CONVENTIONAL CARMDI CATs CAR ADVANTAGES OF THE CONCEPT Amortization 4%Amortization2% Purchases 32%Purchases28% 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%Overheads8% SELLING PRICE / COST ANALYSIS

28. CONVENTIONAL CARMDI CATs CAR CONVENTIONAL CARMDI CATs CAR ADVANTAGES OF THE CONCEPT Amortization 4%Amortization2% Purchases 32%Purchases28% 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%Overheads8% Gross margin 2%Gross margin SELLING PRICE / COST ANALYSIS 38%

29. ADVANTAGES OF THE CONCEPT Gross margin 38% THIS RESULT IS POSSIBLE BECAUSE OF THE EXISTING MARKET PRICES SELLING PRICE / COST ANALYSIS

30. HOW DOES THE CONCEPT WORK ? NUMBER OF TURNKEY UNITS PER COUNTRY Each turnkey unit is planed to fit in a specific area that will absorb the production Each turnkey unit is planed to fit in a specific area that will absorb the production Factors taken into account: Factors taken into account: The actual market (number of new and used cars) The actual market (number of new and used cars) A targeted potential market for MDI (around 1%) A targeted potential market for MDI (around 1%) The number of people in urban area The number of people in urban area The GDP of the country The GDP of the country

31. For example: France HOW DOES THE CONCEPT WORK ? NUMBER OF TURNKEY UNITS PER COUNTRY 21 production plants can be owned by various « Dealers/Manufacturers/Partners » « Dealers/Manufacturers/Partners » (For example 7 partners) 1 – 2 – 3 – 4 – 5 – 6 – 7 1 – 2 – 3 – 4 – 5 – 6 – 7 whom together with MDI are shareholders of the company «MDI France» Managed by MDI

32. HOW DOES THE CONCEPT WORK ? The MDI Country company The MDI Country company If several « Dealers/Manufacturers/Partners » own the various production plants of a country, the « MDI country » company will: This company does not earn any profit This company does not earn any profit Manage the relationship and competition between the plants inside the country and with foreign « Dealers/Manufacturers/Partners » through a share holders agreement Manage the relationship and competition between the plants inside the country and with foreign « Dealers/Manufacturers/Partners » through a share holders agreement Coordinate huge fleet contracts from big companies or administration of the country, for a fair distribution of special orders amongst the various factories. 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 Own license(s) and the know how Make the link with the MDI centre of purchases Make the link with the MDI centre of purchases Manage solidarity between its share holders in case of a « force majeure » Manage solidarity between its share holders in case of a « force majeure »

33. HOW DOES THE CONCEPT WORK ? A PURCHASING CENTRE 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. 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 participate to finance the development of MDI products give the possibility to the « Dealers/Manufacturers/Partners » to earn very interesting financial margins give the possibility to the « Dealers/Manufacturers/Partners » to earn very interesting financial margins helps to fight against pollution helps to fight against pollution The acquisition is made through four steps

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. 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 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). 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. This proportion will change to MDIs advantage for the contract signed after the beginning of car production. 1) Execution of the « option and cooperation » agreement

36. HOW DOES THE CONCEPT WORK ? FOUR STEPS TO ACQUIRE THE LICENCE On the execution date a payment of 8.3% of the total investment is required 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 This step will occur as soon as the cars fit the specifications defined by MDI and is ready to be produced 2) Execution of the « Licence agreement »

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 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 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 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 A training period for the foremen is organized in Carros A training period for the foremen is organized in Carros The plant is built up The plant is built up The tooling system and the machinery are delivered The tooling system and the machinery are delivered

39. WHICH PRODUCTS ARE CONCERNED BY MDIS WHICH PRODUCTS ARE CONCERNED BY MDIS PRODUCTION CONCEPT ? PRODUCTION CONCEPT ? Others MDI products can be licensed on the basis of one unique license for a country (i.e. Tow tractors, generators etc…) in countries with less than 100.000.000 peoples. MiniCATs and CityCATs, OneCATs, MultiCATs MiniCATs and CityCATs, OneCATs, MultiCATs

40. MDI IN INDIA TATA MOTORS TATA MOTORS IS THE EXCLUSIVE LICENCED FOR INDIA IS THE EXCLUSIVE LICENCED FOR INDIA

41. MDI IN INDIA TATA MOTORS TATA MOTORS IS THE EXCLUSIVE LICENCEE FOR INDIA IS THE EXCLUSIVE LICENCEE FOR INDIA « Tata Motors, in keeping with its role as the leading company in India for automotive R&D, 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 25 th January 2007

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