KIT CAR DEVELOPMENT COSTS?
Discussion
It would be interesting to hear peoples views on a business plan for a kit car start up firm.
For a start lets say a 2 seat roadster was developed.
Please feel free to amend these figures, but for an opener;
1k to a stylist for an approved sketch.
£2k to have it drawn in CAD to scale .
£5k to an engineer to design chassis/suspension geometry.
£5k to a fabricator to provide jigs for chassis/suspension.
£10k to a pattern maker for the bucks of the various panels.
£10k to the laminater to produce moulds having prepped the bucks.
1k for specialists for ecu complications from a donor etc.
1k to engineer to design/turn hubs/uprights or other specialist parts.
1k for the first cast from the new moulds, plus any mods required.
1k for the first chassis produced plus any mods required.
1k for a decent donor.
1k for set of wheels/tyres/seats/instruments.
1k for exhaust/prop shaft etc.
1k labour for prototype assembly.
1k for IVA, registration fee, road tax and insurance.
1k for web site, leaflets, banners, letterheads, cards etc.
5k to exhibit at 5 shows inc fuel/hotel/food.
1k for a trailer to cart your show piece around.
2k for company set up/accountant/bank chargers/product liability insurance.
1k for 4 adverts in magazines.
4 kits sold in year one whilst establishing a name/reputation/brand.
2k gross profit per kit sold.
5k for small unit rent/rates/heating/electric/telephone.
10k directors salary whilst building up trade.
10k for desk/PC/van/office carpet/racks/tools/chair/coffee machine etc.
10k for start up stock of lights/suspension/chassis/ball joints, ect
WHAT HAVE I MISSED OUT?
Is this something you may help with Steffan?
For a start lets say a 2 seat roadster was developed.
Please feel free to amend these figures, but for an opener;
1k to a stylist for an approved sketch.
£2k to have it drawn in CAD to scale .
£5k to an engineer to design chassis/suspension geometry.
£5k to a fabricator to provide jigs for chassis/suspension.
£10k to a pattern maker for the bucks of the various panels.
£10k to the laminater to produce moulds having prepped the bucks.
1k for specialists for ecu complications from a donor etc.
1k to engineer to design/turn hubs/uprights or other specialist parts.
1k for the first cast from the new moulds, plus any mods required.
1k for the first chassis produced plus any mods required.
1k for a decent donor.
1k for set of wheels/tyres/seats/instruments.
1k for exhaust/prop shaft etc.
1k labour for prototype assembly.
1k for IVA, registration fee, road tax and insurance.
1k for web site, leaflets, banners, letterheads, cards etc.
5k to exhibit at 5 shows inc fuel/hotel/food.
1k for a trailer to cart your show piece around.
2k for company set up/accountant/bank chargers/product liability insurance.
1k for 4 adverts in magazines.
4 kits sold in year one whilst establishing a name/reputation/brand.
2k gross profit per kit sold.
5k for small unit rent/rates/heating/electric/telephone.
10k directors salary whilst building up trade.
10k for desk/PC/van/office carpet/racks/tools/chair/coffee machine etc.
10k for start up stock of lights/suspension/chassis/ball joints, ect
WHAT HAVE I MISSED OUT?
Is this something you may help with Steffan?
Yeah so don't any of you out there think you can do it OK?! 
Erm, why are you guessing? You know full well cos you've done it. several times.
What's the point of this thread?
Why don't you just cut to the chase and tell us how much you spent on one of your creations - and let's have tangible costs only, not the unquantifiable "pricelss" own labour...
ETA £1k for a website? f
k me if you paid that for your site you need your head checking.
Erm, why are you guessing? You know full well cos you've done it. several times.
What's the point of this thread?
Why don't you just cut to the chase and tell us how much you spent on one of your creations - and let's have tangible costs only, not the unquantifiable "pricelss" own labour...
ETA £1k for a website? f
k me if you paid that for your site you need your head checking.Edited by smash on Thursday 1st March 19:34
I have to agree that it seems a little odd that you are asking the question.
Surely you have a better idea than most of us on here? I assume for your own projects you have saved chunks of the money by doing your own chassis/buck development etc. for "free" in your spare time - I guess this is how most kit car projects get started.
Are you trying to put together some pricing information for somebody else?
Surely you have a better idea than most of us on here? I assume for your own projects you have saved chunks of the money by doing your own chassis/buck development etc. for "free" in your spare time - I guess this is how most kit car projects get started.
Are you trying to put together some pricing information for somebody else?
Slightly strange post, especially as you already have setup such a company. Not very motivational to people thinking of entering the industry even if it is almost realistic.
Which it's not in my opinion - it sounds like the rough costs for someone starting a low volume sports car manufacturing company, not a kit car. I would imagine that many kit car firms would start with an individual coming up with an idea, producing a rough prototype with the help of a few friends and some outside companies where absolutely necessary, utilising friends and family if they have useful skills like web design, fabrication etc, then gaugung interest at a show or two before finally getting finances together to go serious if demand is there. You wouldn't go straight out and hire designers, engineers, etc etc.
Which it's not in my opinion - it sounds like the rough costs for someone starting a low volume sports car manufacturing company, not a kit car. I would imagine that many kit car firms would start with an individual coming up with an idea, producing a rough prototype with the help of a few friends and some outside companies where absolutely necessary, utilising friends and family if they have useful skills like web design, fabrication etc, then gaugung interest at a show or two before finally getting finances together to go serious if demand is there. You wouldn't go straight out and hire designers, engineers, etc etc.
Stuart Mills said:
It would be interesting to hear peoples views on a business plan for a kit car start up firm.
For a start lets say a 2 seat roadster was developed.
Please feel free to amend these figures, but for an opener;
1k to a stylist for an approved sketch.
£2k to have it drawn in CAD to scale .
£5k to an engineer to design chassis/suspension geometry.
£5k to a fabricator to provide jigs for chassis/suspension.
£10k to a pattern maker for the bucks of the various panels.
£10k to the laminater to produce moulds having prepped the bucks.
1k for specialists for ecu complications from a donor etc.
1k to engineer to design/turn hubs/uprights or other specialist parts.
1k for the first cast from the new moulds, plus any mods required.
1k for the first chassis produced plus any mods required.
1k for a decent donor.
1k for set of wheels/tyres/seats/instruments.
1k for exhaust/prop shaft etc.
1k labour for prototype assembly.
1k for IVA, registration fee, road tax and insurance.
1k for web site, leaflets, banners, letterheads, cards etc.
5k to exhibit at 5 shows inc fuel/hotel/food.
1k for a trailer to cart your show piece around.
2k for company set up/accountant/bank chargers/product liability insurance.
1k for 4 adverts in magazines.
4 kits sold in year one whilst establishing a name/reputation/brand.
2k gross profit per kit sold.
5k for small unit rent/rates/heating/electric/telephone.
10k directors salary whilst building up trade.
10k for desk/PC/van/office carpet/racks/tools/chair/coffee machine etc.
10k for start up stock of lights/suspension/chassis/ball joints, ect
WHAT HAVE I MISSED OUT?
Is this something you may help with Steffan?
Happy to do so Stuart. For a start lets say a 2 seat roadster was developed.
Please feel free to amend these figures, but for an opener;
1k to a stylist for an approved sketch.
£2k to have it drawn in CAD to scale .
£5k to an engineer to design chassis/suspension geometry.
£5k to a fabricator to provide jigs for chassis/suspension.
£10k to a pattern maker for the bucks of the various panels.
£10k to the laminater to produce moulds having prepped the bucks.
1k for specialists for ecu complications from a donor etc.
1k to engineer to design/turn hubs/uprights or other specialist parts.
1k for the first cast from the new moulds, plus any mods required.
1k for the first chassis produced plus any mods required.
1k for a decent donor.
1k for set of wheels/tyres/seats/instruments.
1k for exhaust/prop shaft etc.
1k labour for prototype assembly.
1k for IVA, registration fee, road tax and insurance.
1k for web site, leaflets, banners, letterheads, cards etc.
5k to exhibit at 5 shows inc fuel/hotel/food.
1k for a trailer to cart your show piece around.
2k for company set up/accountant/bank chargers/product liability insurance.
1k for 4 adverts in magazines.
4 kits sold in year one whilst establishing a name/reputation/brand.
2k gross profit per kit sold.
5k for small unit rent/rates/heating/electric/telephone.
10k directors salary whilst building up trade.
10k for desk/PC/van/office carpet/racks/tools/chair/coffee machine etc.
10k for start up stock of lights/suspension/chassis/ball joints, ect
WHAT HAVE I MISSED OUT?
Is this something you may help with Steffan?
Frankly I think the cost may well be far beyond the break even point of any Kit Car project. My natural no risk approach
But I will run the numbers and get a result.
I am always cautious with any sales extrapolations.
Assessing the costs are a doddle: I can guarantee accuracy on costs.
The real questions are can the car sell at a price which will allow a gradual return over a reasonable production and sales run. And could that level of sales be achieved with the marketing budget you are suggesting at the volume you anticipate.
That is the entrepreneurs gambit. You are really the man to answer that.
A braver man than me. I will run the numbers with pleasure.
I'd revise these a bit.
But here I'd triple the expense:
Some years back a company brought out a replica of the original Lotus Elite. An Internet search revealed just one picture, which was posted on PH. Apparently having hawked it around classic car shows it didn't sell, which doesn't surprise me as classic car types would only want the original.
More recently someone posted the Beattie from Beattieracing. Gorgeous little car with lovely videos on its website but very few pics on the Internet in general for a car that's been around for decades.
Stuart Mills said:
1k to a stylist for an approved sketch - or hold a competition or do it yourself
£2k to have it drawn in CAD to scale - or draw it full scale on the garage wall
£5k to an engineer to design chassis/suspension geometry - or buy Staniforth's and Herb Adams's books for a tenner each
Getting a proper CAD styling job done might be a good idea but actually creating a full size 3D rough model might be a better idea still. This will have the advantage that you can actually see the shape and try ideas for size before you hand it over for a final surface finishing at which point it would become the buck.£2k to have it drawn in CAD to scale - or draw it full scale on the garage wall
£5k to an engineer to design chassis/suspension geometry - or buy Staniforth's and Herb Adams's books for a tenner each
But here I'd triple the expense:
Stuart Mills said:
5k to exhibit at 5 shows inc fuel/hotel/food.
2k for company set up/accountant/bank chargers/product liability insurance.
1k for 4 adverts in magazines.
Choose a kit car company. How many people have never heard of it? Nearly everyone?2k for company set up/accountant/bank chargers/product liability insurance.
1k for 4 adverts in magazines.
Some years back a company brought out a replica of the original Lotus Elite. An Internet search revealed just one picture, which was posted on PH. Apparently having hawked it around classic car shows it didn't sell, which doesn't surprise me as classic car types would only want the original.
More recently someone posted the Beattie from Beattieracing. Gorgeous little car with lovely videos on its website but very few pics on the Internet in general for a car that's been around for decades.
Stuart
I'd say your figures are broadly correct, tho' you have a very expensive exhaust/propshaft & a fantastically cheap prototype builder, if you can build a prototype for a grand you should be able to knock a production version together for about £500, I know my car is a bit more complex than yours, but perhaps you'd like to build mine for a grand each!!!
I also like your insurance figure, I wish my insurance cost me £1k a year.
The only place I'd say you're significantly off the mark is the £20k for the initial moulds/pattern making, I believe if you have CAD drawings you can get foam cut on a 5 axis cutter & moulds made from that for around £10k all up (obviously depending on just how complex the body is).
But, as has already been pointed out, you know all this, so are you just trying to put anyone else off from starting out as a kit manufacturer? (had I ever realised what I was getting into I doubt I'd have come to play, but I actually don't regret getting involved with the industry now I've got to where I am now). I have to say, getting into the kit car manufacturing business from scratch now you'd probably need to be certifiable!
TBH I don't think, unless someone can come up with a product that's going to sell like kitcars did 20+ years ago, (which isn't going to happen as we have a completely different market place now) that you could ever justify those costs. I would have to say, my own project & I suspect many, many others started out a lot more like Nikolai describes above (except I couldn't find any friends/family either capable enough or daft enough, to help, hence I did everything myself, from designing the chassis & suspension, to deciding on, purchasing & fitting the engines, to making all the original bodywork, bucks etc.)
Keep putting new ideas out there - somebody needs to!
Cheers Russ
I'd say your figures are broadly correct, tho' you have a very expensive exhaust/propshaft & a fantastically cheap prototype builder, if you can build a prototype for a grand you should be able to knock a production version together for about £500, I know my car is a bit more complex than yours, but perhaps you'd like to build mine for a grand each!!!
I also like your insurance figure, I wish my insurance cost me £1k a year.The only place I'd say you're significantly off the mark is the £20k for the initial moulds/pattern making, I believe if you have CAD drawings you can get foam cut on a 5 axis cutter & moulds made from that for around £10k all up (obviously depending on just how complex the body is).
But, as has already been pointed out, you know all this, so are you just trying to put anyone else off from starting out as a kit manufacturer? (had I ever realised what I was getting into I doubt I'd have come to play, but I actually don't regret getting involved with the industry now I've got to where I am now). I have to say, getting into the kit car manufacturing business from scratch now you'd probably need to be certifiable!
TBH I don't think, unless someone can come up with a product that's going to sell like kitcars did 20+ years ago, (which isn't going to happen as we have a completely different market place now) that you could ever justify those costs. I would have to say, my own project & I suspect many, many others started out a lot more like Nikolai describes above (except I couldn't find any friends/family either capable enough or daft enough, to help, hence I did everything myself, from designing the chassis & suspension, to deciding on, purchasing & fitting the engines, to making all the original bodywork, bucks etc.)
Keep putting new ideas out there - somebody needs to!
Cheers Russ
Russ Boost is pretty well spot on with his suggestions.
He is also probably correct for the foam/mould costs being high, but there are the inevitable additional costs that will occur to allow for overall.
A ballpark figure for overall costs on this project cost basis is around £100,000. I think that is a reasonable ball park figure and underlines the difficulties of Kit Car manufacturing.
Insurance is definitely light and I need to know at what price you anticipate selling the cars. A £2000 Gross Profit may be reasonable but what is the overall selling price?
I also need to confirm all the costs are included for FOUR kits. I presume you are anticipating the buyers finding their own donors and so on.
I would also need to ascertain that finishing costs, (never seen a prefect fibreglass body yet), are allowed for, but you may have a method of obviating flash faults and so on.
There would be some bits left over but the cost of removal would probably exceed their value.
In principle you would need a lengthy production run and significant sales in numbers to stand any chance of recovery of the initial costs. Not a surprise to you, I would think.
Such a production run would obviously extend many of the costs since an entity would need to be continued to manage the sales and production of the kits.
He is also probably correct for the foam/mould costs being high, but there are the inevitable additional costs that will occur to allow for overall.
A ballpark figure for overall costs on this project cost basis is around £100,000. I think that is a reasonable ball park figure and underlines the difficulties of Kit Car manufacturing.
Insurance is definitely light and I need to know at what price you anticipate selling the cars. A £2000 Gross Profit may be reasonable but what is the overall selling price?
I also need to confirm all the costs are included for FOUR kits. I presume you are anticipating the buyers finding their own donors and so on.
I would also need to ascertain that finishing costs, (never seen a prefect fibreglass body yet), are allowed for, but you may have a method of obviating flash faults and so on.
There would be some bits left over but the cost of removal would probably exceed their value.
In principle you would need a lengthy production run and significant sales in numbers to stand any chance of recovery of the initial costs. Not a surprise to you, I would think.
Such a production run would obviously extend many of the costs since an entity would need to be continued to manage the sales and production of the kits.
The numbers I put in are not facts and are intended as a start point only.
MEV development costs are kept much lower by keeping them in house and are done in my spare time, a mate does my website and another does my CAD.
If forinstance a team was set up comprising of say a welder a carpenter and a salesman then the figures change enormously.
So as I said, please feel free to amend the numbers, hypothetically build your own website, work from your home garage, spend say £300 on a mig set and a chop saw at Machine Mart, do not use a pro to style it, buy books on chassis design and GRP, estimate costs and sales and let us know what the return could be. Is 20k returned in a year possible?
You may show readers how low start up costs can be and encourage them to take the plunge.
MEV development costs are kept much lower by keeping them in house and are done in my spare time, a mate does my website and another does my CAD.
If forinstance a team was set up comprising of say a welder a carpenter and a salesman then the figures change enormously.
So as I said, please feel free to amend the numbers, hypothetically build your own website, work from your home garage, spend say £300 on a mig set and a chop saw at Machine Mart, do not use a pro to style it, buy books on chassis design and GRP, estimate costs and sales and let us know what the return could be. Is 20k returned in a year possible?
You may show readers how low start up costs can be and encourage them to take the plunge.
Russ Bost said:
TBH I don't think, unless someone can come up with a product that's going to sell like kitcars did 20+ years ago, (which isn't going to happen as we have a completely different market place now) that you could ever justify those costs.
What has changed in the market over the last twenty years?1point7bar said:
cymtriks said:
What has changed in the market over the last twenty years?
One reason is customers can get so much more bang for their buck buying production cars like Skylines, Scoobies, Lancers etc.
), so if it's not something specialist I think consumers are prepared to put up with less. The MX-5, Elise, Z3, & Boxster et al have all been introduced in the last twenty years - latest issue of Car points out batting now starts at £6k for Boxsters. Stuart: Ta for this. Would it be fair to say your costs assume that everything's been bought in? Whereas in truth you're likely to be execute at least one of major tasks yourself - though this is valid in discussing costs of all aspects of the process.
Would I be correct in thinking the pattern and laminating costs are for a full body (but still fairly simple) design? Does you example have doors - which I imagine take up a fair of development time & resources to get right. I know it's not strictly pro rata, but one can see the particular attraction of exos from the mfrs side if there's a concomitant reduction in pattern & laminating costs.
This is why I asked if CKC would be capturing & sharing this kind of info, which isn't easy to come by. Just the itemisation is of use: down the years I wonder how many ventures started with a wing and a prayer instead...
Give Potenza Sportscars a ring, they own Westfield and GTM. About 5 years ago I chatted to one of their guys at AUTOSPORT on their stand. They were debuting their 40TR ( basically a Libra Spyder with some pig ugly body parts designed to emulate a Lotus 340R ). He told me WITH A STRAIGHT FACE they had invested £500,000 in the project...
He obviously did not recognise me as I had met him several times during my 3 year ownership of a Libra. It looked like they had taken a Spyder and mocked it up for a laugh after hours. Maybe £5k of filler?? And don't mention the Ballista...
Russ and Stiggy, might be worth giving them a ring and offering your services, looks like the last guy there had their pants down and is probably paid his mortgage off in less than a week!! :-)
He obviously did not recognise me as I had met him several times during my 3 year ownership of a Libra. It looked like they had taken a Spyder and mocked it up for a laugh after hours. Maybe £5k of filler?? And don't mention the Ballista...
Russ and Stiggy, might be worth giving them a ring and offering your services, looks like the last guy there had their pants down and is probably paid his mortgage off in less than a week!! :-)
The figures I posted were to spark debate but the vast majority on here are not manufacturers, and can only guess true costs. The fact is that if fictitious Fred in his shed who was good at welding and woodwork had a go he may succeed. He could buy books re chassis design and grp, get a free website then exhibit his product in the show car parks were you get in free in a kit. A little sad if that is the only way to make it pay though. So your right, if Fred possessed some or all of the prerequisite skills then my figures are completely out.
Please feel free to post a more attractive set of figures based on more conservative estimates and increased sales income. The number of years it takes to see the initial investment returned is the bottom line.
What do we think would be a reasonable % return in other industries?
5 years = 20%, 2 years = 50%?
Please feel free to post a more attractive set of figures based on more conservative estimates and increased sales income. The number of years it takes to see the initial investment returned is the bottom line.
What do we think would be a reasonable % return in other industries?
5 years = 20%, 2 years = 50%?
Gassing Station | Kit Cars | Top of Page | What's New | My Stuff