Fixodent. said:
Norton will be paying for part of Ricardo's initial investment, plus a percentage, in their existing machine tools for any parts made in addition to purpose made cores and or dies for the cast components - crankcases, cylinders, cylinder head etc will have to be paid for as Ricardo will not have these on their shelves being bespoke items. If Ricardo are only making the 'core components' (not sure what you mean), then Norton or other manufacturers will be having to produce the 'non-core'? components at a cost inc. tooling etc - nothing is free. Ultimately it depends how many V4's Norton plan to make wether to invest in their own tooling or depend on a third party if they are still strapped for cash then the third party is the only option but they will pay through the nose. Cheapest option is to go with the Aprillia engine and have Norton engine cases cast up. Job done!
I'm not sure how else I can try and explain this, I'm not a wordsmith, but I'll have one last try:
'Tooling up' to produce a new engine is expensive. Tooling up to produce a high volume engine is even more expensive! Remember, by 'tooling' in this context we mean heavy cutting and turning and measuring and etc equipment capable of very tight tolerances. We are not talking about torque wrenches and socket sets.
Yes, you are right to point out that, with a high volume product 'economies of scale' work to your benefit in terms of the production costs. But that does not help you with your tooling costs, you still have to find the money (lots of it) up front to pay for tooling.
'Core components' in industry parlance are "the 5 'C's" which are Crank case, Crank shaft, Cylinder head, Camshaft and Con rods.
The most difficult of these in a motorcycle engine would be the Cylinder heads and Crank cases. Which, as you say, would most likely need moulds and cores making, but these are not the most expensive items on the tooling shopping list relatively speaking. And, depending on volume, they may not be needed as there are 'lost wax' and other 'rapid prototyping' methods that could be used for very low volumes. Yes they will increase the piece price cost, but they will reduce the investment costs. The ideal balance of which is based largely on volume.
Very simplistically, the higher the volume, the more dedicated (single operation) the machinery is required to be in order to achieve high volume / low cost production. The lower the volume, the more flexible (multi operation / quick change over) the machinery is required to be, so that it can be used for multiple operations and other products as well. Buying dedicated machinery for low volume would result in astronomical sales prices (as in it would make the entire project non-viable).
So, basically, to be commercially viable, low volume needs be made on highly flexible machinery. RICADO ALREADY HAVE such machinery. In fact, it is precisely what they specialise in doing. So Norton will not have to invest in large amounts of very expensive equipment. Some investment will be required of course, but nothing like the same magnitude as would be if buying everything, from scratch / doing it alone.
I hope that makes sense, cos I can't think of any different way to explain it?!
Regarding your point that they should use an Aprilia motor and stick Norton badges on it as the cheapest option... I'm sure you are right, but this is a topic that created huge emotional responses in the past when Norton used these motors in their race bikes, I think this would be re-ignited and magnified in the context of customer bikes. I would respectfully suggest it is a related, but different point and is a debate better served separately.