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Seven Essential Considerations for Your Vehicle Development Process + Free Whitepaper

Siegfried Krammer

By the time an automotive project enters the concept phase, the main outlines of the future vehicle development process and production quantities are determined: A new entrant should at this point have a clear idea of the features, functions, and components of their vehicle.

In this article you will find out the seven essential considerations for your vehicle development process and what to consider when planing it.

Investors for the project should be firmly on board and ideally, the new entrant has also secured the support of an experienced production partner. And most importantly, they should have secured a production site as well as a strategy to start its operation.



With all the preparatory work done, the concept phase begins. The vehicle itself will finally be outlined in full detail and developed, tested, and validated – component by component and on complete vehicle level.

However, a automotive development strategy as well as a vehicle development process is necessary to ensure a seamless flow of operations.

The Basic Model of an Automotive Development Strategy

Simply put, a vehicle project is based on a V-model with the product specification level serving as the x-axis and time as the y-axis. As the project progresses, requirements for the vehicle become increasingly more detailed, with the initial product vision being converted into specific targets for the complete vehicle, specific systems, and then the individual components.

This path is reversed for the testing and the validation phase: The individual validated components are integrated, first into systems and later into the complete vehicle, before it is then approved by the client.

In other words, the automotive concept is first broken down into systems and components along the development process and then re-integrated into a complete vehicle.

The concept phase encompasses the upper left segment of the V-model. It starts with a finalized and technically validated business case. Complete vehicle targets are then derived based on the business case.

Once the product specifications book and the initial Bill of Material (BOM) have been approved, a target agreement (TA) can be formulated. The target agreement is the description of the entire product and its system-level components. The target agreement’s approval also marks the formal end of the concept phase, enabling development of the vehicle’s systems and components to begin.

How do you Ensure a Smooth Project Process?

Assume That Your Bom Needs Readjustments

The initial BOM is devised during the concept phase, and thus based on estimations. As the project progresses, the BOM will thus require adjustments to the initial estimates or the addition of parts missing in the original draft. Even minor alterations to the project can increase the size of the BOM drastically.

Keep Design and Engineering in Balance With Each Other

The main point of friction in vehicle development usually forms between the technical features of a vehicle and its design and styling concept. Technical requirements limit the creative freedom sometimes, whereas design choices demand compromises from the technical architecture. Close cooperation and mutual understanding between the technical teams and stylists helps find the best balance.

Execute Your Vehicle Testing Digitally

The benefits of virtual testing are clear. With virtual tools, a vehicle project can enter the testing phase earlier and with less time and costs attached. Testing can start almost immediately after the TA and reduces both time and dependency from suppliers, as there is no need to wait for commissioning, delivery, and assembly of components.

Inform Yourself About Relevant Quality and Security Standards

The vehicle industry consists of a myriad of different regulatory and quality standards for both production sites and the vehicles themselves. Depending on the region, not only do the certificates for quality and security differ, but also the way in which they are policed. To avoid last-minute changes, the regulatory framework of the automotive world should be considered as early as possible.

Make Sure That Your Schedule is Both Consistent and Flexible

Projects as large as vehicle development will naturally be subjected to numerous delays along the way, and there are many factors a manufacturer cannot control. Therefore, the most important quality of a schedule is not necessarily how well it can predict certain delays, but rather how it can be adapted to delays without major setbacks. Such adaptations also require quick decisions and sometimes even taking some risks.

Yellow, Pink and Blue paper which looks like stairs


Before an automotive vision can be made reality, its individual systems and components must be defined. During the concept phase a vehicle idea is translated into a catalogue of specific metrics, targets, and traits. Those key documents are the basis of the future vehicle.

The First Prerequisite: A Customer Market Profile

The first step of targeting is to create a customer market profile (CMP). The CMP is created during the feasibility phase and showcases the target market for the planned vehicle. It is important to determine what market segment the new entrant wants to enter.

Several questions need to be answered before creating a CMP:

  • Who are the existing market competitors?
  • What is the intended price for the vehicle?
  • What is the planned production volume?
  • What positioning strategy is used?

In addition to market-related factors, a CMP also needs the vehicle’s technical product portfolio. This portfolio includes features ranging from a vehicle’s platform dimensions and engine type to structurally important components of the vehicle.

What's more important: The Product or the Market?

This raises an important question: Should a vehicle be adapted to fit its target market or vice versa? While key features of an automotive vision should not be changed to fit a market that it is not intended for, adapting the vehicle features to appeal to a larger market might be a good idea when done in time.

However, the later a vehicle concept is adapted, the more time-consuming and costly any changes will be.

The Second Prerequisite: Creating Benchmarks

Benchmarking gives new entrants an overview of what their target market currently offers. Based on the CMP, other vehicles in the same market are compared to create a tangible goal that the new entrant must reach.

Deciding on the exact conceptual cornerstones is not as straightforward as one might assume. Until a key feature can be implemented, it needs to be broken down and analyzed over multiple specification cycles.

Defining Top 100 Vehicle Performance Targets

With the vehicle benchmarks chosen, the next step is to determine the specific vehicle targets as the first “tangible” features established during the development process. They help set specific goals a vehicle must meet. Performance on these targets is influenced by many individual factors – for example, the acoustics of a vehicle are affected by exterior noises or idling and rolling noises of the engine and tires, or stutters caused by the chassis, engine, or powertrain of the vehicle, along with other factors.

A complete target list has several thousand targets (most of which are assigned to specific components), but only around 100 vehicle targets are decided upon initially. These initial targets consist of traits of the highest priority for the complete vehicle. Priority traits are then further categorized by how relevant they are to the benchmarks for the complete vehicle.

Defining targets consists of several testing rounds, executed by physical testing of benchmark vehicles and virtual simulations. The most important metrics are determined by the new entrant’s wishes, and they have top priority for the planned vehicle.

How to Define your Vehicle Performance Targets


The first 100 concrete vehicle targets are merely the starting point for the vehicle conceptualization. From here, the technical dimension of the project will grow exponentially – with each component bringing the project closer to the target agreement.

An Introduction to System-Level Complete Vehicle Development

Before talking about vehicle systems, it is important to define what exactly a system is, and why vehicle system development is such a complex and vital part of vehicle development.

Each system within a vehicle encompasses all the components that serve a specific task. The powertrain, E/E architecture, ADAS or brake system are all examples of vehicle systems. Each of those systems is overseen by a module group tasked with planning, simulating, testing, and later validating those systems.

The System-Function-Matrix

In addition to module-specific task forces, many vehicle manufacturers including Magna add an additional layer to the procedure: functional integration. This process is managed by Integrated Functional Teams.

They serve as intermediaries between the individual module groups in charge of specific complete vehicle functions, such as weight or aerodynamics. This way, updates and changes in one system can always be implemented with the complete vehicle targets in mind.

This network is overseen by a Complete Vehicle Coordinator. Keeping the individual module tasks and the overarching functional integration processes in balance with each other is necessary to create a useful target agreement.

The Road to the Target Agreement

Targets will be further extended and specified throughout the concept phase resulting in complete definition of the vehicle targets and the final and binding target agreement.

Specifying Material, the Schedule and Responsibilities

First, the requirement specifications for individual systems, aka the necessary tasks and resources, can be outlined. After that, the Bill of Materials (BOM) can be finalized, while scheduling plans for the entire project can be conceived. This also extends to defining the responsibilities of both individual internal teams and external partners involved in the project.

Assessing and Onboarding Suppliers

Key suppliers, and those providing long-lead time parts can then be determined and onboarded to ensure timely delivery of important parts as needed. The requirement specifications are formulated in specification booklets for individual suppliers.

Establishing the Basis for Serial Production

Lastly, serial production of the vehicle can also be planned. This process includes the evaluation of opportunities and risks as well as cost targets and finance planning before finalizing the formal contract for serial production. If a new entrant already cooperates with a partner for development and manufacturing, they will likely also extend this partnership to serial production as well.

Car blueprint on black background


Whereas features and practicality make up the “core” components of the overall vehicle project, it is equally as important that the vehicle looks good, too!

To create a positive first and lasting impression, the look and feel must connect with customers, investors, and the new entrant themself. The discipline encompassing the look and feel of an automotive vision is called design. Styling covers the visual and aesthetic aspects whereas design respects form and function.

An Introduction to Automotive Styling

The styling process itself starts and runs in tandem with the product vision phase. The vehicle’s styling can gradually be implemented at the beginning of the concept phase once the initial targets have been clearly defined.

From the first sketches on paper through to renderings on the computer, the level of detail in the design process increases gradually, from the overall proportions to the vehicle’s exterior and interior through to the tiniest details of the individual vehicle modules. Systematic, detailed solutions are essential to achieve a satisfying overall design experience.

The “end” of the general styling phase is reached at the milestone referred to as the “styling freeze.” At this point, only changes that are essential or that do not impact the design in any significant way should be made.

Design VS. Styling - What's the Difference

Vehicle styling is often confused with vehicle design. In practice, vehicle design is an interdisciplinary term that overlaps with different aspects of vehicle development. The term “design” also covers engineering-related tasks, such as the vehicle’s construction. Styling, however, is largely limited to one part of the overall vehicle design process that is focused on aesthetics.

Thus, styling is the art of capturing the “spirit” of a vehicle from an aesthetic perspective.
The two things most associated with styling are the core elements of the vehicle’s design language: the interior and exterior surfaces as well as the overall look and feel.

Who is Responsible for Styling?

Established OEMs generally perform styling in-house, whereas new entrants often work with partners like design studios. If new entrants plan to set up an internal styling department from the get-go, they should hire people with skills in drafting, 3D modeling, surfacing, coloring, and UI/UX design. Along with that, they should have extensive project experience.

Styling Visions VS. Technical Realities

As important as vehicle styling is for buying decisions, it often conflicts with function. From the show car to the production vehicle, every vehicle will undergo major, far-reaching changes and often lose some of its original character to meet legal standards, manufacturing conventions, and technical requirements.

On the other hand, vehicle stylists seek to stick as closely as possible to the key sketch. This means that engineers and stylists must discuss every inch of the vehicle to bring vision and reality together.

The Secret Ingredient is Systematic Decision-Making

The key to reaching a good balance and a convincing final vehicle is mutual understanding. Good styling teams have excellent knowledge of vehicle development and the requirements and challenges associated with it. On the other side, skilled vehicle developers have a keen eye – or at least an open ear – for design conventions and aesthetics. Ideally, there will be a studio engineer acting as a go-between between the styling and development teams. 

Futuristic Car



The term “AME” needs to be clearly defined before discussing its importance in vehicle projects.

There are several misconceptions about the exact meaning of the term “manufacturing.” In the automotive world, it tends to be mixed up with similar words, for example, “production.” Generally, “manufacturing” describes the creation of products from raw materials with physical tools.

“Production” encompasses all processes involved in turning resources into products, including the finances or manual labor used to create a vehicle.

For our intents and purposes, we will use the term “manufacturing” strictly in the context of assembling vehicle components and systems into a physical complete vehicle using physical tools (robots, machinery, etc.).

“Production” will be used to describe the general process of making physical vehicles. Manufacturing is a specific category that falls under production.

“Advanced manufacturing” describes the use of modern technologies in the manufacturing process. In our example, this applies to multiple applications, such as rapid prototyping, robotics/AI, or a powerful IT data management network.

Advanced manufacturing technologies provide several benefits – from lower costs to higher product quality. But most importantly, they allow the production process to be far more adaptable to the many changes of a project flow.

Lastly, Advanced Manufacturing Engineering (AME) describes the discipline of planning and implementing production sites. AME concerns how technologies, tools, and processes can be used and optimized so vehicles can be manufactured as efficiently as possible.

Establishing and Adjusting the Manufacturing Line

Manufacturing engineering follows the general order in which a vehicle is assembled. Each phase comes with specific issues to take into consideration when planning a manufacturing facility. From press and body shop to paint shop and general assembly, right through to tolerance management, each step is reviewed and optimized for maximum efficiency.

Getting Advanced Manufacturing Engineering Right

Advanced Manufacturing Engineering is one of the most comprehensive, expensive, and overall difficult tasks required for a new entrant planning to enter the market. Overcoming this challenge could seem impossible unless they have some support or an experienced team behind the project.

Fortunately, new entrants have the option of teaming up with a manufacturing engineering partner that can take over the planning and implementation of the vehicle’s production site.

Magna has the distinct advantage of offering AME support as part of our one-stop-shop service for vehicle production. Teaming up with Magna provides new entrants with a partner that has long-standing expertise in automotive planning, development, and production, as well as drafting and realizing the manufacturing infrastructure to match.

Business Man and Woman discussing something on the wall


Suppliers have a vital role in the automotive manufacturing process. Usually, only a small number of vehicle components is produced directly in-house, with most systems and individual components delivered by suppliers. An average vehicle is composed of systems delivered from hundreds of different supply sites. As such, the quality of a vehicle’s supply network greatly affects the quality and development of the vehicle itself.

Automotive suppliers are grouped into three categories:

  • Tier 1 suppliers produce system-level components for the vehicle, such as its software or battery.
  • Tier 2 suppliers produce components based on detailed guidelines. They are also known as “build-to-print” suppliers.
  • Tier 3 suppliers provide standardized components, such as screws or small electronic elements.

As new entrants usually interact directly only with tier 1 and to a lesser degree with tier 2 suppliers, let’s focus on tier 1 suppliers for now.

Für Artikel 6 CC4Illustriation: Tier N structure

Establishing a Supply Network

When establishing a supply network, one of the most important factors to consider is the transportation distance. If a new entrant plans to establish a greenfield site, they should choose a location within the vicinity of as many key suppliers as possible to lower time and cost demands as well as the vehicle’s environmental footprint.

Which Automotive Suppliers are the Most Important?

The most important factor to consider is the complexity of the supplied parts. A very complex system like engines, batteries, or ADAS systems comes with a long development timeline.

To ensure an efficient development and production process, these suppliers should be onboarded as early as possible. Ideally, they should be brought into the project as soon as the targets related to their system are clear.

Additionally, the supplier’s own supply network must also be taken into consideration. For example, if a supplier has longer wait times for their own tools or supply parts, the vehicle manufacturing process will have an even longer wait time.

How Much Should be Produced In-House?

Although new entrants might be concerned about giving up control, the benefits of outsourcing usually outweigh the risks:

  • Suppliers themselves are specialized manufacturers and thus have the experience, skill, and infrastructure necessary to manufacture these systems as efficiently as possible.

  • Good suppliers also want to differentiate themselves from their competition; thus it is in their best interest to develop new and unique solutions for the market.

The Challenges of Establishing a Supply Network

Building and maintaining an automotive supply network is arguably one of the most comprehensive and arduous tasks of the vehicle development process. The sheer size of an automotive supply network alone can be very impressive. Building a network requires precise coordination and an extremely condensed schedule that leaves very little room for mistakes.

Onboarding Automotive Suppliers

New entrants could have difficulty securing suppliers for their project. They have not built a reputation yet, so suppliers might be reluctant to take the risk and then initially produce in lower volumes than OEMs, driving up production costs.

Ensuring Supplier Quality

Once suppliers are brought on board, it is their client’s responsibility to ensure that quality standards are met. Client and supplier stay in constant contact through the Supply Quality Assurance (SQA) department, whose responsibility is ensuring that the supplier produces the parts at the agreed pace and that everything goes according to the client’s wishes.

Coordinating the Supply Network

One of the main challenges for the new entrant lies in assembling the individual systems into the complete vehicle. To succeed, new entrants need the ability to conceptualize, coordinate, and integrate hundreds of systems and components as well as their respective manufacturers within one large organizational network. Furthermore, the coordination work needs a lot of time.

How to Meet Those Challenges?

Many of the challenges can be traced back to communication related issues. Unclear terms of an agreement between parties could lead to misinterpretation of the agreement. Or another issue may be that communication within the network lacks efficiency. The best way to prevent these issues is solid communication. This is achieved by two means:

  • Clearly defined guidelines and contracts that specify responsibilities for both parties.

  • A solid and efficient digital infrastructure connecting the new entrant’s organization with their partners.

Obtaining a Supply Network With Contract Manufacturing

The process of building a supply network can be made considerably easier for new entrants if they partner up with an established manufacturer. These manufacturers are often OEMs or tier 1 suppliers themselves, so they already have an established network of suppliers. Furthermore, with an established name backing their project, new entrants also have a much easier job in onboarding new suppliers into their network. Contract manufacturing is a great way to quickly establish connections.

Icons on city background


Although not much in the spotlight, IT is one of the most important and most versatile tools a vehicle manufacturer has at their disposal, and when used smartly it will significantly increase its user’s performance in the market. IT cannot be viewed as a single unit of a given organization. It is a vital part of the entire project’s infrastructure and is a necessary and beneficial precondition for vehicle manufacturing in the 21st century.

How it Can Increase a Business's Market Success

IT encompasses far more than just saving paper. A well-developed and connected IT infrastructure optimizes communication and data transfers and increases an organization’s adaptability. It also reduces engineering and production costs of a vehicle as well as facility costs to a fraction of their non-digital counterparts. All of this can be accomplished while allowing for pinpointed accuracy in developing, simulating, and testing.

The Challenges of Establishing an Efficient IT Landscape

There are several different challenges that must be addressed before an IT landscape can be set up.

Planning Your IT System Layout

Automotive IT systems can be generally grouped into engineering or manufacturing systems on the top level. Each group, however, encompasses an enormous number of individual systems and processes. The best way to combat this large degree of complexity is good strategic planning.

IT should not be viewed as a single task but rather a gradually developing subsystem of the business. IT processes will continuously be expanded, patched, and optimized in tandem with the business’s development.

Finding Software Solutions That Fit

Every facility has different requirements for its IT landscape. As there is no one-size-fits-all solution for an automotive IT, each business will require different software solutions depending on the vehicle properties in terms of features, size, design, variants, and production scope.

When deciding between buying and adapting existing software or developing own solutions, it makes sense to follow the principle of “buy-before-build.” Although developing individual system solutions is highly beneficial, and sometimes necessary for ensuring full function coverage, it is also a costly and time-consuming task.

Unless developing an individual software solution does not provide a definitive benefit for the new entrant, it is always smarter to purchase existing software.

Connecting Individual Systems Into One Large Landscape

Integration is the key to every functioning IT landscape. Systems are chosen based on the requirements of their respective field of application but taken together must form one coherent system. IT has the gargantuan task of optimizing and connecting all these tasks into one greater system.

When systems are planned, there is one doctrine a new entrant should always follow: organize based on data. Regardless of their exact application, the best way to organize this kind of network is as follows. Keep data separated from its application but organize it around a centralized hub.

Ideally, the numerous data flows are managed with one master data system that serves as the central focal point of the entire IT organizational landscape. Like a conductor directs a musical ensemble, a master data system directs data in a way that keeps things synchronized and running smoothly together as a whole.

Ensuring Data Security

An efficient IT landscape brings with it several potential security concerns. A lack of verifiable data security standards and measures is a major risk for all parties involved , regardless of whether data is stored on-premises, through a partner or via cloud-based services.

Fortunately, ensuring secure data storage and distribution networks can be accomplished according to clear criteria, as there are numerous regional guidelines in terms of privacy and security that software must fulfill. For example, Magna has the internationally valid ISO2700x certificate as well as TISAX, a certificate specifically required for German OEMs.

IT Landscape; Business Man holding an futuristic tablet

Developing a Vehicle Is a Massive Task - Let’s Get Started!

The challenges of bringing a vehicle to the road are considerable. But with lots of dedication, thorough preparation, and the right partner it can be done.

Magna Steyr can be your partner in realizing your automotive vision. Magna is an established name in the automotive world. We have a global presence, long-standing quality, and over a century of manufacturing experience. Our one-stop-shop service enables new entrants to realize their automotive vision from planning to production – all from the same source.

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Siegfried Krammer

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