ZAP is using the ‘modular method’ of production. This is cost efficient to ZAP and translates into profit. The ‘modular method’ method means that the suppliers assemble the vehicles for Obvio ! at the Obvio ! premises in Brazil. The Obvio ! is produced in Brazil and ZAP has a twenty-one year agreement with Obvio ! to distribute Obvio ! s in North America and a duty free agreement to import them. In September 2005, ZAP bought a 20 percent stake in Obvio ! .
What is the Modular Assembly Method?
“We have zero Obvio ! workers at the assembly line. The Obvio ! staff consists of engineers and sales. We pay suppliers to do the assembly for Obvio ! . We assemble vehicles only when there is a guarantee the product will be sold,” Schneider said.
“The modular method makes tremendous economic sense for ZAP . Cost-wise, it makes the break-even lower and exposure is lower so we can keep our overhead low.”
Volkswagen’s Brazilian light truck line has employed the ‘modular method’ of manufacturing. Their share of the market for trucks over 7 tons in Brazil has more than doubled in the past few years to 32.5 percent.
Schneider explains that fully outsourced manufacturing is the direction profitability models are taking in the automotive industry. ZAP has implemented a unique manufacturing facility and production agreement for the Obvio ! in Brazil which is a profit driven relationship.
“We believe this new model of production will be extremely profitable. It started with the complete cooperation of the Brazilian government at the highest levels which has supported and facilitated our Obvio ! production.”
Obvio ! will use a Build-to-Order (BTO) system. This means that the unit will not be built unless there is a buyer and the unit is sold.
Brazilian Obvio ! has received ZAP ’s order for 50,000 units of the new flex-fuel urban car. “It’s time to payback this old investment to the USA people now, but with zero air pollution cars,” says Sergio Raposo, Technical Director of Obvio ! . Schneider, ZAP CEO adds, “And we are here to facilitate the process with Obvio ! “
“We believe our chief design partner, Anisio Campos, the premier car designer in Brasil and a former racing driver, Obvio ! has created an incredibly appealing car and we have an incredibly appealing business plan that is innovative in the automotive industry.”
http://www.ZAPworld.com Sources:
Business News
ZAP and ZAP CEO Steven Schneider
501 4th St.
Santa Rosa, CA 95401
Phone: 707-525-8658
Fax: 707-525-8692
Forward Looking Statements Statements in this press release that relate to future plans or projected results of ZAP are ‘forward-looking statements’ within the meaning of Section 27A of the Securities Act of 1933, as amended by the Private Securities Litigation Reform Act of 1995 (the “PSLRA”), and Section 21E of the Securities Exchange Act of 1934, as amended by the PSLRA, and all such statements fall under the ’safe harbor’ provisions of the PSLRA. ZAP’s actual results may vary materially from those described in any ‘forward-looking statement’ due to, among other possible reasons, the continued acceptance of ZAP’s products, increased levels of competition, new products and technological changes, ZAP’s dependence on third-party suppliers, intellectual property rights, and the realization of any of the other risks described in ZAP’s Annual Report on Form 10-KSB, or in any of ZAP’s other filings with the Securities and Exchange Commission. Readers of this press release are cautioned not to put undue reliance on forward looking statements.
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