September 19, 2002

Air-powered Autos

Continued from page 1

By John Harney

So far MDI has produced prototypes of four different models: the taxi, van, family car, and pickup. A fifth model, a compact version of the car called a mini, is being introduced at the Paris Auto Show this fall. Commercial versions of all models will start production in the first half of 2003.

According to Vencat, the company is private and has more than 300 investors. Nevertheless, he adds, capitalization is largely bootstrapped-Negre himself funded about 75% of the company.

Rather than building a large centralized facility to manufacture hundreds of thousands of cars, MDI franchises will build hundreds of smaller plants that will produce thousands of cars and sell them locally.

The plants are modeled on the first plant now under construction in Carros. For their $10 million investment, licensees get a turnkey plant package. "Everything is included" for a franchise, says Vencat. "It's a little bit like running a McDonalds. You get all your equipment, all your raw materials, you do your thing, and you sell it." Negre estimates that each plant can produce from 2,500 to 5,000 cars a year.

The concept has proven quite appealing, especially to countries outside the United States. Thus far, Negre says MDI has issued 32 licenses in 12 countries such as South Africa, Mexico, Spain and Australia. He says 28 more licenses are pending; the licensees have been signed and now have 30 days to come through with payment.

Enrique Koppel, who owns a chain of apparel stores in Mexico, has purchased licenses to produce the car for the entire country. The prospect of selling an air-powered car appeals to him, he says, because "it's supposed to be very low cost, easy to build, and you can charge it in three minutes." Koppel says he will "open as many factories as we can if the demand is there" and plans to sell the cars for use as taxis and delivery vehicles.

As to distribution in the United States, Baltierra observes that, "the car seems ideal for urban environments-it's small and does not go very fast." But, he adds, "it's unclear if this would appeal to major markets like the U.S." Vencat, however, is negotiating with interested parties in both Florida and California.

Though some CAT models are meant for individual consumers, don't expect to see many in your neighbors' driveways right away. Vencat says most of the early adopters will be businesses like taxi services that want to replace their combustion-based fleets of cars with low-cost, non-polluting vehicles. With the compressed air station, explains Vencat, "fleet owners can quickly fill the cars up. It can service 8 to 10 cars an hour."

While it's a safe bet that the CAT line of cars will not be setting any land speed records, they may promise to be a viable and environmentally correct means of mass transportation, especially in urban areas with high pollution. What remains to be seen is whether they can compete with gas-powered vehicles for the consumer market. For this to happen, Baltierra believes, "the automotive industry has to get behind this car, and it seems that right now it is not." If traditional carmakers do decide to distribute the car, however, it would really help what is now a maverick automotive movement in its infancy quickly get up to speed.