Re: What Constitutes the Development Cost and time of a Car? 1. Design of the car
2. Building prototypes
3. Commissioning the production
4. Installing a sales and service network
5. Running a marketing campaign
Broadly these would be the phases for any new model being designed. Each phase is like a mammoth project. For e.g.
Designing a car:
You need to have a concept for the new model to be launched. There will be boardroom debates, brainstorming sessions, independent market studies to gauge the market needs and so on.
Once a concept has been finalized, you would hire designers and engineers (or use them from the existing staff) and commission them to draw up various designs to bring the concept into something tangible.
Once there are a few tangible models to look at, you may want to manufacture a few prototypes to test the effectiveness of the model in real life.
After the prototypes have been tested you would finalize on a particular model for mass production.
For each activity, you are looking at several people at various levels working several hundred hours, so the salaries, perquisites, allowances, expenses of all those people have to be added to the project cost.
Then there are materials required. For modelling if you are using any software tools (I guess everyone uses it), the cost of the IT infrastructure goes into the project. Cost of the design (in case the design is outsourced) goes into the project.
Cost of building the prototypes and testing the same goes into the project. This includes all the parts of the car which have to be manufactured fresh.
There are R&D teams working on innovation all the time. In today's market this is a never ending activity. These teams have to be paid for their time. These teams may use specialized equipment (take wind tunnell testing for example) which costs a few bombs. The teams may go through several trial and error phases where if a course of action fails, all the material used in it may have to be scrapped. This too goes into the cost of the project. In fact I think there are many ideas discarded before a single idea is taken into production.
Last edited by honeybee : 27th October 2011 at 17:55.
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