Top Speed in innovation, braking power on costs
An automotive manufacturer ensures cost transparency and control with EFESO
With a new sports car available in three model variants, an OEM is reviving its motorsport heritage: the vehicle is designed to excite customers with innovations in design and driving experience. Together with EFESO, the automotive group established a neutral and transparent view of the cost dimension. In doing so, the joint project team unlocked significant cost reduction potential, and laid a solid foundation for a comprehensive cost optimization program in a future project phase.
Challenge
An automotive manufacturer expands its sports car portfolio with a new vehicle offered in three model variants. As multiple development programs for other models were already underway, the project was subject to significant time and cost pressure.
MoreEFESO approach
A comprehensive cost validation revealed substantial cost reduction potential, including through an outside-in comparison with other sports car manufacturers. The project team leveraged detailed automotive benchmarks from previous model and product developments.
MoreLessons learned
Intensive and continuous support from senior management is essential for project success. In addition, the recommendations of external consultants should be closely integrated into the operational steering of the project.
MoreEFESO success model
The project team focused on approximately 30 key vehicle components identified as major cost drivers. For each component, it developed a cost model, defined request scenarios, and proposed technical cost optimization measures.
MoreA cost assurance framework for a new sports car
For the launch of a new sports car, a renowned OEM set ambitious targets: within just two and a half years, the vehicle was to go from the initial concept to series production, expanding the sports car portfolio with three model variants (a two-seater with combustion engine, an electric version, and a four-seater). As several other development projects were running in parallel, the program was under exceptional time and cost pressure.
Already at the start of the project, internal cost calculations exceeded the originally planned budget in the high triple-digit million range. One key reason was the significant increase in platform complexity caused by the new models, particularly as they were not simply based on existing powertrains and features, but aimed to deliver meaningful innovations in both technology and design. In addition, the four-seater required different technical concepts and battery solutions compared to the other two variants.
While the company identified the wide range of technical requirements and adjustments in the production process needed to realize the three models as key cost drivers, the original assumptions regarding vehicle sales in the business case were also critically questioned within the group. To establish clarity and reliability, rather than facing further cost increases, the automotive manufacturer engaged the EFESO team. The key objectives of the project were:
- Creating transparency: The goal was to identify the root causes of cost drivers through a detailed analysis and support the company’s project management in regaining control over the cost dimension of the program. This particularly affected the functions of procurement, product development, and manufacturing.
- Securing the business case: At the same time, EFESO consultants were tasked with analyzing the complex technical aspects of product development and validating the economic viability of each vehicle model through realistic cost calculations.
The benefit for the company: within a project duration of just five months, the company received a professional cost validation from an external consulting perspective, supported by extensive industry expertise from comparable projects.
Within just five months, the OEM received a robust cost validation from an external perspective.
Pit stop with a focus on cost validation
Building on successful previous projects, the OEM’s Head of Procurement and platform owners initiated a renewed collaboration with EFESO. The project team consisted of a total of 28 members, with functional expertise in chassis, powertrain, interior, and exterior. The objective was to rigorously assess investments through detailed analyses, covering not only product costs, but also supplier development costs and tooling expenses. The team also included four procurement experts, whose role was to support optimal outcomes in supplier negotiations. Overall responsibility for cost optimization was assigned to the EFESO team, closely aligned with the overall vehicle development program.
The project focused on two main workstreams:
Cost validation & identification of savings potential
The team first created full transparency across all cost positions of the project and conducted a thorough plausibility check. This included an outside-in comparison with leading sports car manufacturers, identifying realistic development cost levels for comparable OEMs.
For this benchmarking, the project team leveraged detailed automotive benchmarks from previous product developments of international OEMs and suppliers. Industry experts analyzed key areas such as vehicle development, prototyping, production preparation, and logistics to identify cost-saving opportunities. In addition, technical concepts were reviewed about cost optimization, for example through standardization of components, optimized production processes, and a reduction in product complexity.
Based on these analyses, the team identified savings potential of up to 500 million euros, achievable within the existing cost framework and distributed across different project phases and functional responsibilities. Concrete measures included supplier re-selection, the adjustment of certain development stages, and a streamlining of the Product portfolio. The feasibility of these measures was discussed in workshops with the respective departments.
Bundling supplier and procurement topics
The parent group provided only limited support to the OEM’s procurement activities. Unlike in other corporations, there was no strong central procurement mandate that could be leveraged as an effective tool for cost reduction in supplier management. As a result, requests for quotations from large suppliers for small production volumes were rare, and when they did occur, suppliers often responded with defensive pricing. While alternative suppliers for small series were available, they proved too costly for the targeted price level.
With the results achieved across both workstreams, the OEM gained a strong foundation for the next project phase focused on cost optimization.
As early as the analysis phase, the team identified potential savings of 500 million euros.
Reaching pole position with strong leadership support
During the implementation of the project, the following lessons learned proved to be particularly critical to success:
Ensure strong top management commitment!
Intensive and continuous support from senior leadership is essential for project success from the very beginning. In particular, the CEO must act as the project sponsor and clearly communicate the objectives to ensure that necessary changes are embedded within the organization and resistance is minimized.
Leverage the external perspective!
It is equally important to closely integrate the analyses and recommendations of external consultants into the operational steering of the project. Ideally, proposed measures should not be perceived merely as recommendations but should be actively tested and implemented in the day-to-day activities of procurement and product development.
Turn technical expertise into negotiation strength!
During the project, the OEM’s procurement team recognized the critical value of technical expertise in negotiations, particularly in supporting well-founded arguments for price adjustments. In this context, procurement can leverage its strengths both as a moderator and as a negotiation lead.
For around 30 key vehicle components, a solid benchmark was established against existing supplier quotations.
Optimal “Lap Time” through clear target costs
Within the scope of this project, the team focused on approximately 30 key components and modules of the vehicle that had been identified as major cost drivers. For each of these components, the team first developed a detailed understanding of the technical factors and underlying cost drivers. Based on this, it created its own cost calculations to establish a solid benchmark against existing supplier quotations. The gaps between calculated target costs and supplier offers were then systematically analyzed.
This resulted in validated technical optimization proposals, including both design adjustments and alternative solution approaches. The objective was not only to achieve better pricing in negotiations, but above all to establish full product cost transparency while identifying concrete technical optimization potential.
Best Practice: The value of technical analysis
A compelling example of this in-depth technical analysis was the evaluation of the overall vehicle concept based on key performance parameters, particularly acceleration. A project expert analyzed the planned specifications and benchmarked them against international competitor vehicles. The analysis revealed that the planned vehicle would not achieve a top-10 position in global performance rankings—the targeted 0–100 km/h acceleration significantly lagged behind competitor benchmarks. This highlighted a clear mismatch between the vehicle’s technical specifications and the performance claims defined in marketing.
The OEM also evaluated the collaboration with EFESO in this project as highly results-driven and impactful. In particular, the Head of Procurement repeatedly emphasized the team’s exceptional technical cost expertise as well as the constructive and goal-oriented collaboration throughout the project.