Automotive R&D Means Not So Very Much
One of the theories explaining GM’s downfall is that they did not invest enough in R&D. Wrong! Booz & Co.’s latest report on Global R&D spending says: bar Toyota, GM was tops. Here’s the 2007 ranking:
Company R&D expenditures in $m
Toyota 8,386
GM 8,100
Ford 7,500
Honda 5,142
VW 4,757
Daimler 4,321
Nissan 4,001
BMW 3,995
Peugeot 2,835
Renault 2,531
Booz says in comparison to 2006, R&D expenditures in the auto industry grew by about 10 percent. European “champs” pale, with the European primo (VW) being only around half as research-intensive as the biggest spender. Here are some other findings…
* Automotive R&D is global. The study found that the average global multi-national corporation spends just 45% of its total corporate R&D dollars in its home country, while the majority is invested in other countries in order to benefit from specialized R&D skills and to
better understand local markets. While 83% of the automotive industry’s 2007 R&D spending came from three countries ―the U.S., Germany and Japan― just 60% of total R&D spending took place in those three home countries.
* Scanning the report, you get an “opposite-of-deja vu” feeling: Somehow, I think I’ll never see anything like this again. For 2009, I see Renault-Nissan in the number two position, followed by Honda and VW. GM, Ford: I don’t want to speculate.
* Did GM waste a whole lot of its money, or what?
More by Martin Schwoerer
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@joeEgo: *looking again, these numbers are global while the model counts are (I believe) USDM. I am not sure how much that affects the overall ratios. That's definitely something to take into account. Honda has pushed and pulled the Accord and Civic platforms into many different types of cars and price points. In Japan, there might be MPVs based off of stretched Civic platforms. We already have the Pilot/Accord/Acura TL/Acura CL platform sharing. It's not badge engineering, because there is a fair bit of difference between a TL and an Accord. But, as mentioned earlier. GM does a few one-off platforms that are only used for a single car, like the XLR. Or as TTAC well knows, go to the trouble of introducing/importing a new model, like the Pontiac G8, and then decide it's not worth introducing a second generation. And as far as platforms that should be updated, where is the second generation Cobalt?
Since research expenditures are tax deductible companies in the US have every reason to make this number as large as possible, including such things as market research. The rules for what counts as a research expenditure are arcane and vary from country to country. The report is basically useless because it is based on poor data. Garbage in, garbage out.
Whoa, Morea, hold it. Expenditures per se are deductible -- in just about any tax regime I know of. Not only R&D expenditures, and not only in the US. What evidence do you have that the data is not comparable? Have you looked at the data? Are you an expert on GAAP?