Target Cost Management For New Car Development At H Company

In recent years, Chinese auto production and sales has been the largest country for many years with its rapid development. Along with the domestic and foreign automakers have in built new factory and the expansion of production capacity in China. China's auto market has appeared problem of excess production capacity and becoming more and more serious. Thus market competition is becoming increasingly fierce. Among automobile enterprises not only technical, quality competition faces heavy competition but also automotive products price. It related to the enterprise's survival and development how to control cost and enable enterprises to stabilize earnings in the condition of decline in auto prices. And target cost management is a cost control method established on the basis of the market price.The focus of this paper is to explore target cost management method in new car development process. The principle, development situation, the using methods in the automotive industry and etc of target cost management has been studied. Combing with concrete examples of H company's target cost management in the development of new car, we studied the process of determination of target cost, decomposition, control, sum up, etc in the process of new automobile developing. As well as focus and methods in target cost management. The results show that:(1)Target cost management was a kind of management method to achieve its goal by adopting various methods in order to determine the cost as the goal. The implementation of target cost management usually contains four steps: the first step, conducting market research to determine the market price. According to the vision of the company planning determine the target profit. Then Push down the target cost. The second step, breaking down the target cost on the basis of function. The third step, reduce costs by conducting value engineering activity to control total cost under the target cost. And achieving target costs. Last step, summarizing the process of target cost management. Among them, it was foundation to determinate a reasonable and feasible target, while carrying out the value engineering activity to realize the target cost is the key.(2)In the process of new automobile developing, the basic of target cost management was an accurate estimation of cost. we can adopt different methods to estimate cost for new parts and similar components parts.if we Establish a mathematical relationship between parts characteristic and the price,then we can estimate parts cost quickly.(3)A cost control process is build according to the characteristics of the new car development and the difference between products comparison and value analysis. Optimize the H company supplier evaluation index according to analytic hierarchy process and weight those index, which price 10%, measure to reduce cost 10%, develop velocity 8%, emergency response 10%, three guarantees of after-sales 5%, transport and packaging 7%, on time delivery 15%, comprehensive quality 30%, tooling and samples 5%.(4)The target cost management of H automobile enterprises had a significant effect in the process of new automobile developing. In terms of technology and procurement reduced material cost, to decrease the development of engineering costs by reducing the number of test vehicle, through rate to improve the platform with the common parts to reduce tooling and manufacturing equipment investment. Reduce cost more than ten thousand finaly.