Estimating the cost of a new technology intensive automotive product: A case study approach

Estimating cost of new technology intensive products is very ad hoc within the automotive industry. There is a need to develop a systematic approach to the cost estimating, which will make the estimates more realistic. This research proposes a methodology that uses parametric, analogy and detailed estimating techniques to enable a cost to be built for an automotive powertrain product with a high content of new technology. The research defines a process for segregating new or emerging technologies from current technologies to enable the various costing techniques to be utilised. The cost drivers from an internal combustion engine's characteristics to facilitate a cost estimate for high‐volume production are also presented. A process to enable a costing expert to either build an estimate for the new technology under analysis or use a comparator and then develop a variant for the new system is also discussed. Due to the open nature of the statement ‘new technology’, research is also conducted to provide a meaningful definition applicable to the automotive industry and this project.