General Motors aims to start mass producing a hydrogen-powered fuel cell vehicle in 2015.
How should that breakthrough vehicle be launched? What customer base should be targeted? More than 100 MBA students in the University at Buffalo’s School of Management are answering those types of questions in a semester-long project with marketing research professor Arun Jain.
Twenty teams of students are developing marketing plans for rolling out the fuel cell vehicle, and GM is an active partner in their work. The plans chosen as the three best will be presented to a panel of judges in late April to select a winner.
Students said they relish the chance to possibly influence how GM’s vehicle is launched through their research.
“We feel that our opinion matters, we are working on a real thing,” said Marta Nyeso. “We could really contribute. Who knows, maybe if we come up with very good ideas, we’re going to see them implemented in a couple of years.”
Part of their challenge is to envision the new-car market of a few years from now and how GM will fit into it, said Ingmar Haffke.
“Thinking four years ahead is not easy,” Haffke said.
Last year, UB MBA students tackled a similar effort with the tiny Smart car. Interest then turned to doing a project with impact on the local auto industry and economy, and GM was approached, Jain said.
Jain credited Steve Finch, the GM Town of Tonawanda engine plant’s manager, with the idea to focus on the hydrogen fuel cell vehicle. Its technology produces no emissions, aside from water vapor, and does not use gasoline.
Jain sees potential for Western New York to play a role in fuel cell vehicle growth, whether by supplying hydrogen from local sources, or the GM Tonawanda plant producing the propulsion systems. Another nearby tie: GM is developing the technology in Honeoye Falls, near Rochester.
In January, GM brought in an Equinox equipped with a hydrogen fuel cell system for the students to try out. Friday, the students test-drove several new GM products, along with the fuel cell vehicle, on the UB North Campus, to get a flavor of the automaker’s new direction. (The student line for the flashy red Camaro was the longest.)
Finch briefed the students on GM’s newest models and business outlook, saying he believes the automaker has turned the corner after a tumultuous 2009.
A student asked Finch what the rise of fuel cell technology could mean for the Tonawanda engine plant’s future production.
Finch said it will take some time for the fuel cell vehicles to hit the market and become widely used, the way internal combustion engines are today.
“I still think there’s going to be ample opportunities for us to build very efficient internal-combustion engines going forward, as we begin to improve the other aspects of our fuel-delivery systems, like hybrids and electric vehicles,” he said.
The vehicles the students test-drove were from GM’s “Vehicle Advocate Program,” which allows employees to borrow some new vehicles overnight or for a weekend and become “ambassadors” for them, said Nina Price, a GM spokeswoman. Locally, the vehicles were also taken to some community organizations for test drives.
Jain said the MBA students were given specific objectives for their fuel cell vehicle marketing plans: sales of 100,000 units in its first year, rising to sales of 250,000 units in its third year.
“So the challenge is to identify where they should be selling it, what should be the market segment they should focus on, and how should they position the car,” Jain said. The plans they create will begin with the year 2013, to lay the groundwork for a successful launch, he said.
Jain has urged the students to use their imaginations about the vehicle’s look and features, just as the iPhone was a departure from the typical cell phone.
“We believe the type of customers for this car will be like our students,” Jain said. “So we think, and GM thought, that they will be the best people to tell them what the car should look like, what benefits it will deliver.”
In late April, the three marketing plans picked as the best of the 20 will go before a panel with non-GM judges from venture capital, banking, advertising and manufacturing, along with two GM representatives. The winning team will receive a cash prize of about $500, and a reception for the students will be held.
Jain says the project has value beyond the competition element. “We want our students to have real-world experience. We want them to hit the ground running, instead of just having book knowledge and so on.”
Jain also sees a broader payoff. “This is a way that UB is increasingly partnering with the local Western New York business community,” he said. “We are here to serve the needs of the community.”
mglynn@buffnews.com
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