Hi Hj,
From your error file it looks like your MATLAB installation is in a path with " " _spaces and that seems to trigger the error.
sim_sil_target.mk:173: E:/Program: No such file or directory
sim_sil_target.mk:173: Files: No such file or directory
sim_sil_target.mk:173: (x86)/MATLAB/R2013b\rtw\c\tools\lcctools.mak: No such file or directory
gmake: *** No rule to make target `(x86)/MATLAB/R2013b\rtw\c\tools\lcctools.mak'
What i suggest is to:
- reinstall MATLAB in a path without spaces: e.g. C:\MATLAB
- use Microsoft Software Development Kit (SDK) 7.1 to get the compiler: Download Microsoft Windows SDK for Windows 7 and .NET Framework 4 from Official Microsoft Download C...
With this setup it should work flawless:

My setup: Win7 + Matlab2013b + MSDK7.1
Hope it helps!
Daniel