A Study On The Application Of Target Cost Management For P Company Transnational R&D Project

With the rapid growth of the Chinese Economy Development and Improvement of the People’s living conditions, passenger car is now part of a lot of families’ normal life. Chinese Automotive Market becomes one of the most important markets globally. On the one hand, global car manufacturers are investing new plants in China, providing more products adapted to Chinese Customer’s needs, localizing the products and increasing their Chinese market share. On the other hand, Chinese car manufacturers are entering other foreign markets, implementing their globalization strategy. All the manufacturers are facing the strong competitions from each other. One of the critical success factors is to reduce Life Cycle product cost. The Transnational Project Operating Model is bringing significant value in terms of reducing the duplicated investment from R&D side, shortening the R&D lead-time, pushing rapidly the product into the market.Target Cost Management, as one of the advanced cost management methods, is setup based on the acceptable market price and company’s long term profit target. The profit target can be realized by assuring the achievement of the Target Cost during the product life cycle.This thesis is started from the In-depth understanding of Target Cost Management Theories. By analyzing the Application of Target Cost Management practice on P Company’s Transnational R&D Project, key concerns are identified. Suggestions are provided on the optimizing the current Program Management flow as well as to develop effective IT applications in order to achieve the efficient management of the Cost Control which can support the further reduction of the total cost.