How to Start a Car Company

by Mark Ivanko; Updated September 26, 2017

So you've been to all the showrooms, driven everything that every manufacture has to offer, and you just can't find the right vehicle to suit your needs. So why not start your own car company? It sounds easy enough, that is, until you put it all down on paper. Let's take a brief look at what is needed to start your own car company.

Items you will need

  • Startup capitol
  • Designers
  • Engineers
  • Office
  • Factory

How to start your own car company

Step 1

Find your niche for your new automobile. Think about why someone would want to drive your car rather than all the others that are available. What needs does it fill that other cars do not? Who would you be competing against? What are the advantages of buying your car compared to the others?

Step 2

Get your funding in order. Starting a car company is going to cost a lot of money in research and development. You can try to find either "angel" investors or government grants to help fund your company.

Step 3

Get a design team together to build your first prototype vehicle. You can hire designers who have worked on other car makes to help you with the design. Their industry experience can add credibility to your design and your company.

Step 4

Try to outsource as much of the production as possible to help keep manufacturing costs down. Outsourcing is a business staple for any new business. Buying milling machines and other equipment to manufacture you own parts is extremely costly, not to mention paying the engineers and machinists to design and create your parts.

Step 5

Buy a plant where the cars are going to be assemble. Once you have all the parts for your new car, you'll need a place for the workers to assemble everything into the finished product.

Step 6

Think about advertising methods. You will need to let buyers know about your new car company. Figure out what demographic you should focus on and target that market for advertising. It might be wise to hire an advertising agency to help.

Step 7

Get a business office to manage all of your suppliers, parts makers, and functions such as payroll and marketing (just to name a few). You will need to keep track of all of your spending and any income generated by your new car company.

Step 8

Give yourself a few years to actually make a profit. One of the newest car makers, Tesla Motors, spent approximately $180 million in start-up costs alone, so you shouldn't expect to see a real profit for at least 5 to 10 years.

Warnings

  • This article is just a brief overview on how a car company could be started. Do your own research and have a full business plan before starting any business.

References

About the Author

Mark Ivanko is an experienced automotive and technical writer. He has been working in the automotive industry since 2005. He specializes in European automakers, but keeps his ear to the ground on anything and everything automotive. Ivanko attended New York University, where he got a bachelor's degree in mathematics.

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