Vehicle Development Budgets

[malazn mafia]

What is the typical development budget for a typical mass produced vehicle? Always thought Aussies were the kings at creating cars on shoestring budgets.

So, it took Holden $1 Billion to create the low-tech, uninspiring VE Sedan, and Ford $500 million to create the fantastic BA Falcon, and another $500 million for the amazing Ford Territory. But then over in south korea, they manage to produce this for just $520 million??

http://www.caradvice.com.au/266228/h...-to-australia/

[Dave R]

Originally Posted by malazn mafia

So, it took Holden $1 Billion to create the low-tech, uninspiring VE Sedan, and Ford $500 million to create the fantastic BA Falcon, and another $500 million for the amazing Ford Territory.

Before you imply that Holden wasted money, you should understand that the VE was an all new car on an all new global RWD chassis designed for LHD & RHD applications. The BA, by comparison, was a heavily refreshed AU (the AU itself cost something like $700 million I believe). The Territory used major chassis, interior and drivetrain elements from the BA. It's much cheaper when you're not developing a truly all-new car. Ford just tends to evolve the Falcon chassis, which is a whole lot easier than what Holden did with VE and the Zeta program (which underpins Camaro as well). Before the global economy took a dive, Zeta was slated for big things, so the investment was justified in the GM world at the time.

[Nikked]

String, how long...

[Nikked]

Originally Posted by malazn mafia

So, it took Holden $1 Billion to create the low-tech, uninspiring VE Sedan, and Ford $500 million to create the fantastic BA Falcon, and another $500 million for the amazing Ford Territory. But then over in south korea, they manage to produce this for just $520 million??

Holden went from a cut and shut Opel platform to a 100% clean sheet design that introduced a number of firsts for Australian cars, the development also gave repairers a comprehensive guide to the various procedures on repairing the car, this meant destructive testing to determine the safest, most secure way to perform structural panel replacements.

[Yellow_Festiva]

Koreans also are very tech savvy so they will be simply be developing on existing knowledge and know how.

Having said that, 500mil for the Genesis in today's money is an amazing feat. Not surprising really, they are as efficient and resourceful as the Japanese when it comes to vehicle mass production, I would argue that they are even better than the Japanese.

When you hear some of the development figures being thrown around locally (was it falcon that spent 50 mil just on door development?) I wonder where that money goes... billion for a commodore? Huge money!

The Genesis is a great car, seen the old one and ridden in one, world class motoring. The new one
should be winning awards here soon like the old model did in NA.

[DFB FGXR6]

You will find VE was much more than $1 Billion once you add Statesman/Caprice, Ute and Wagon variants.

[XR Martin]

Colorado was $2Billion, Ranger was half that...

The orginal Genesis cost $500m to develop, not this new one...

[XR Martin]

Originally Posted by DFB FGXR6

You will find VE was much more than $1 Billion once you add Statesman/Caprice, Ute and Wagon variants.

Wagon, Ute and LWB models are included in the 1billion amount.


Oh according to Wiki, Genesis had 1.3million kms of testing, VE 3.4 million...

[Yellow_Festiva]

Originally Posted by XR6 Martin

Wagon, Ute and LWB models are included in the 1billion amount.


Oh according to Wiki, Genesis had 1.3million kms of testing, VE 3.4 million...

Seen how small Korea is, there is only so many times you can drive around the peninsula before you think... OK, that's enough

[Bossxr8]

Originally Posted by XR6 Martin

Colorado was $2Billion, Ranger was half that...

True. GM Brazil was responsible for spending double the amount on a ute half as good as the Ranger, which was vastly superior for half the cost.

What a total screw up.

[mik]

500 million in korea probably goes a lot further than 500 million Australian.

[Dr Smith]

Originally Posted by mik

500 million in korea probably goes a lot further than 500 million Australian.

Hard to really know but I would say Australian engineers are brilliant at making their dollar go further then just about any other R&D team around the world.

[Dr Smith]

Originally Posted by malazn mafia

What is the typical development budget for a typical mass produced vehicle? Always thought Aussies were the kings at creating cars on shoestring budgets.

So, it took Holden $1 Billion to create the low-tech, uninspiring VE Sedan, and Ford $500 million to create the fantastic BA Falcon, and another $500 million for the amazing Ford Territory. But then over in south korea, they manage to produce this for just $520 million??

http://www.caradvice.com.au/266228/h...-to-australia/

Although Holden's marketing blitz made is seem the car alone cost $1billion, they spent a lot of that on new plant and equipment upgrades so the billion was car R&D, new presses for single side panels, paint, etc...

[malazn mafia]

Originally Posted by Dr Smith

Although Holden's marketing blitz made is seem the car alone cost $1billion, they spent a lot of that on new plant and equipment upgrades so the billion was car R&D, new presses for single side panels, paint, etc...

I wonder how much of that billion was spent on that big red Blimp that's probably sitting in a junkyard somewhere now

[malazn mafia]

Originally Posted by Bossxr8

True. GM Brazil was responsible for spending double the amount on a ute half as good as the Ranger, which was vastly superior for half the cost.

What a total screw up.

Wonder what the development budget for Hilux is? Toyota never seem to disclose these things.

[XR Martin]

I seem to recall when the melted Taurus came out, it cost over $2billion. The EF Falcon came out at around the same time and it cost a 1/4 of that, and was nearly a better car in every respect.

[Yellow_Festiva]

Originally Posted by mik

500 million in korea probably goes a lot further than 500 million Australian.

Didn't think of that, and you would be absolutely correct. Korean wages are pretty good, would be up there on the list compared to a lot of Europe and most of Asia but their work ethic is what makes them excel, depending on what list you find they will be near the top for most hours worked a year.

If you want to see how wasteful we can be look at how many hundreds of millions were spent to get Sydney's Opel travel card off the ground! Was always scratching my head as to why they didn't just use Korean technology and know how as Seoul has had a similar system in place for over a decade and it seamlessly works on their transport systems quite brilliantly actually.

500mil there would be 8-900mil here...

[mik]

Originally Posted by malazn mafia

Wonder what the development budget for Hilux is? Toyota never seem to disclose these things.

i don't know mate , but i would imagine whatever Toyota does would be very focused and well planned down to the last screw, and judging by the Quality of Toyota brand in general , they are not afraid to spend a big dollar on quality first.

[FPV GTHO]

I recall the Mercedes Benz E Class that was launched in the mid 2000's hads budget of 3.5B. I thought at the time how can they spend 7X what Ford had just done on BA, but does an E Class have the same laundry list of issues that can occur like BA's do?

[Archilino]

Wheels magazine 12/2013 had an article from automotive analyst Mark Warburton in whitch he compiled a list of the European car industries biggest losers from the last 15 years.

Smart Fortwo: Total loss $4.7bn, loss per car $6385
Fiat stilo: Total loss $3.0bn, loss per car $3900
VW Phaeton: Total loss $2.84bn, loss per car $40,140
Peugeot 1007: Total loss $2.71bn, loss per car $21,928
Mercedes A-class: Total loss $2.44bn, loss per car $2057
Jaguar X-type: Total loss $2.42bn, loss per car $6700
Renault Laguna 3: total loss $2.2nn, loss per car $5071
Audi A2: Total loss $1.9bn, loss per car $10,757
Renault Val Satis: Total loss $1.71bn, loss per car $26,728
Bugatti Veyron: total loss $2.42bn, loss per car $6,596,428

Educated guesses some of them may be, but this shows when they get wrong...

[Adamz Ghia]

I don't think VW ever planned to make money from the Veyron, they just did it because they could. Although don't know if they expected to lose that much...

[NX74205]

Originally Posted by XR6 Martin

I seem to recall when the melted Taurus came out, it cost over $2billion. The EF Falcon came out at around the same time and it cost a 1/4 of that, and was nearly a better car in every respect.

Closer to 1/10th of that, actually. According to Wheels, EF cost Ford $220 million, and if I recall, EL was another $50 million on top of that.

[2011G6E]

How much does it cost to swap the steering wheel from one side to the other (don't get me started...) on an Impala, Fusion, Taurus, etc, etc...? Lot less than a half a billion to a billion bucks I would wager...

No wonder it's so attractive to just bring the things over from the home market instead of building them here.

[XR Martin]

Originally Posted by FPV GTHO

I recall the Mercedes Benz E Class that was launched in the mid 2000's hads budget of 3.5B. I thought at the time how can they spend 7X what Ford had just done on BA, but does an E Class have the same laundry list of issues that can occur like BA's do?

Early E class's rust pretty bad, atleast as bad as a B-series

[Archilino]

From Wikipedia:

Ford announced the end of the Edsel program on Thursday, November 19, 1959. However, production continued until late in November, with the final tally of 2,846 1960 models. Total Edsel sales were approximately 116,000, less than half the company's projected break-even point. The company lost $350 million, or the equivalent of $2,802,796,804 in 2014 dollars[7], on the venture.[8] Only 118,287 Edsels were built, including 7,440 produced in Ontario, Canada. By U.S. auto industry standards, these production figures were dismal, particularly when spread across a run of three model years.

Big $$$ considering it was the '50s

[bobthebilda]

Remember the cruze cost $600 million ($450 million from holden and $150 million from fed and state governments), even tho it was already being produced in other places in the world. Things dont cost more in Australia, its just that to get more of the $1 for $3 from a gullible government, you have to say you spent alot more than you actually did.

[Davehoos]

taurus station wagon had a big budget for the rear suspension with retooling, and difficult pressings to enable it to carry a load.--whats wrong with a beam axle. its a truck with zero handling.

P76 1973 $ 20 million.--break even 45000 cars. 19 000 built.
P76 force 7 $40 million--50 cars built no car sold.
called tax loss, handed over real estate and the company made big profits in the 1980's.

[Archilino]

The original Ford Mondeo is 1993 cost $6bn

[jpd80]

By comparison, Mazda developed CD3 Mazda 6 for $1 billion and developed around 10 vehicle variations off it,
Including the previous product cycle Fusion/Milan/MKZ. A thoroughly affordable platform that still had future potential.......

[malazn mafia]

Originally Posted by NX74205

Closer to 1/10th of that, actually. According to Wheels, EF cost Ford $220 million, and if I recall, EL was another $50 million on top of that.

Only 220 mil and they managed to make a car completely different from its EA father. Wonder how much profit Ford made with the EF falcon?