Maybe not a full-scale brand like Toyota or Honda but a “boutique” sports car manufacturer such as Pagani, TVR, Rimac, etc. Some processes can probably be performed by hand (assembly, welding, painting, etc.) and not need expensive ABB, Fanuc, Dürr, Samsung, Kuka, etc. robots. Also: things like engine, transmission, differential, brakes, steering/suspension, airbags, sensors, lights/reflectors such as Hella 4169 etc. can probably be purchased instead of manufacturing yourself.
Expenses I can think of:
- Establishing the actual corporation, LLC, etc
- Buying/renting a large warehouse
- Sheet metal stamp/press for body parts
- Metal forge for suspension components
- Mold for polypropylene bumpers
- Mold for ABS parts (mirror caps, handles, etc)
- Machine to create all the glass
- Fiberglass station
- Welding equipment
- Paint line, paint booth and oven/curing
- Interior/upholstery department
- Storage aka parts department
- Lifts/dollies/conveyor belts for assembly line
- Crash testing 7 or more cars to legalize them
- Getting the cars federalized/legalized/homologated
- Getting the factory certified, similar as above
- Payroll for managers, marketing, laborers, janitors, maintenance, etc.
- Insurance and lawyers
- Upfront capital for purchasing raw materials
Obviously the starting price would be several million dollars even in a country like Vietnam, India or Mexico - but does anybody have a more specific answer? Can it be done for under $10m? Under $50m? Under $100m? Under $250m?
It would probably be low volume production due the cost effective nature, but the number still interests me.
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Honestly? I don’t think a billion would be enough. If you want to compete with the top 30-50 worldwide manufacturers, you’re going to need so many lawyers, accountants and paper pushers, your head would spin.
Assuming you formed a legitimate company that sold fully assembled vehicles, I’d guess a minimum of $1 Billion USD in starting capital is necessary.
For starters, you will need a proper place to manufacture the cars. That’s going to cost at least 3 or 4 million before you buy equipment, which is probably around $1 million. Most of the money will go to wages for the employees. You’ll need enough to cover the first 3 or 4 years of expenses while you develop the first car. Then you’ll also need enough leftover for materials and production costs of the first car.
The startup cost is one of the big hurdles and most companies have a line of investors who help cover it.
It would probably be low volume production due the cost effective nature,
This is determined by a lot of variables, but the main one being how many cars you can sell. GMA and Pagani are smart and try to secure buyers before the car even enters production. But they can do that because they are lead by legendary car designers who are trusted and have fans.
The easiest way to start a car company is to work up to it. Start by manufacturing and engineering specific parts and then eventually grow the network and talent pool until building a whole car from scratch is feasible. You also wouldn’t jump to stand-alone models, but do conversion kits and kit cars first. Those don’t require as many resources and are less of a financial risk.