Rafale deal in last lap, may cost Rs 60,000 crore for 36 fighters

[PARIKRAMA]

Meteors will be procured on a need-basis seperately from the Rafale deal, this is what I have heard.

Its better that way, clubbing meteors now could be counter productive.
Secondly i would like to let Astra Mk2 be considered more bcz even if it achieves 50% of meteor at say 1/4 th of the price, the war economics and common weapons pool make it far more attractive anyday

 

[Manas]

Lets buy 300 of it . LOL

 

[Abingdonboy]

Its better that way, clubbing meteors now could be counter productive.
Secondly i would like to let Astra Mk2 be considered more bcz even if it achieves 50% of meteor at say 1/4 th of the price, the war economics and common weapons pool make it far more attractive anyday

Indeed, it makes economic sense to have a limited stockpile of Meteors should combat operations begin but investing in large inventory of this type would be a collossal waste of resources that would b e better off spent on homegrown efforts (Astra). Should the need arise, more Meteors can always be procured.

 

[egodoc222]

i Don doubt that but then again if cost considerations are being done then its something i cannot comment upon.

Ideally i would have liked at least 5-6 meteors per Rafale too..

Anyways its source based so i would wait a bit more to see the details

BTW here is a small trivia
The cost of procuring Meteor is hard to come by. Limited figures came to light in Germany in 2013. The Luftwaffe will acquire 150 missiles at a cost of around $323 million, plus a further $175 million for integration.
thats approx $3.32 Mn per Missile.. But its a price worth it
Qatar i think has bought close to 150 meteors at an avg of 6 meteors a rafale jet for 24

If cost was taken into consideration we shouldn't have gone for rafale in first place!!
Now costing cutting...when going for armaments....Is absurd!!

Meteors will be procured on a need-basis seperately from the Rafale deal, this is what I have heard.

Need basis?
Like just before war??

 

[Abingdonboy]

Need basis?
Like just before war??

A small intial inventory (2-4 per plane perhaps) that can be replenished as needed or in a time of war larger orders made on an emergency basis as you saw during Kargil with PGM kits from Israel.

 

[cerberus]

Lets buy 300 of it . LOL

Follow on Orders will be Made As Our Budget will grow every Year Hopefully After IAF.IN will also has Keen Interest on Rafale M For IAC-1,2

 

[knight11]

Its better that way, clubbing meteors now could be counter productive.
Secondly i would like to let Astra Mk2 be considered more bcz even if it achieves 50% of meteor at say 1/4 th of the price, the war economics and common weapons pool make it far more attractive anyday

Astra is our key to our strategic and aerial doctrine.

Remember during cope India, USaf was shocked during friendly exercise in India.
It was not due to the Mig-21, or Su 30MK but the tactics IAF applied. The same tactics which USAF used using its F-15 and F-16. They were shocked to see that India developed these tactics, and were not following the Soviet tactics and aerial doctrine, nor they had frequent western friendly exercise. Just a hint Buddy BVR targeting with superior and bigger target.

 

[PARIKRAMA]

Astra is our key to our strategic and aerial doctrine.

Remember during cope India, USaf was shocked during friendly exercise in India.
It was not due to the Mig-21, or Su 30MK but the tactics IAF applied. The same tactics which USAF used using its F-15 and F-16. They were shocked to see that India developed these tactics, and were not following the Soviet tactics and aerial doctrine, nor they had frequent western friendly exercise. Just a hint Buddy BVR targeting with superior and bigger target.

Oh yeah the awacs .. mini awacs safely from distance passing infor to other operators who are in passive mode and use that input to lock on and engage..

 

[PARIKRAMA]

All Clear: India To Sign Deal For 36 Rafales This Month!!!!!!!! | Page 7

NDTV news and my sources point the same 90% clause

 

[Grevion]

You hit the nail but with one small difference.
Imagine the production line in 2 places
1. In Merignac
2. In say an Aerospace SEZ in Maharastra or Andhra Pradesh - INDIA

In Merignac, the productivity rate and fixed assets already setup, depreciated and running on book value investment cost along with 600+ local OEMs with whom Dassault has build a value chain with over avg relationship age of 15 years

Over to India - A fresh setup, costs at market value of real time investments going to books and slow depreciation initiated for plant and machinery coupled with local ecosystem creation for Dassault value chain OEMs implies minimum of 30% higher cost than whats the cost in Merignac up till break even is achieved and economies of scale kicks in.


Now lets use Finance 101 analogy here,

Define few terms here
Selling Price per Unit
Fixed Cost per Unit
Variable Cost per Unit

We get Contribution per unit = Selling price per unit - variable cost per unit
PV Ratio =( Contribution per unit / Selling price per unit) x 100

Break even point = Fixed Cost / Contribution per Unit
Break even (in value) = Fixed Cost / PV Ratio


If Dassault does setup the local unit and supply chain OEMs, the variable cost would be a bit higher than Merignac thus Selling price per unit would also be higher per unit

The only way we can achieve the lowering of cost per unit or selling price per unit and decrease in variable cost is when we apply economies of scale or higher numbers beyond Break even units

Thus, we cannot fix the value of Indian made Rafales right now as variable cost is undetermined.

A simple rule like a 10-15 years tax holiday for all OEMs to setup shop can significantly bring down setup cost for individual OEMs and thereby decrease the variable cost angle of Dassault production line

If the Land is say government alloted the cost of acquisition may be minimal thereby reducing Fixed Cost aspect implying again it lowers the cost of production and finally decreases the selling price per unit along with tax holiday consideration

For this they require a far more clarity under Make In India scheme and the tax sops and other support government may give for the entire value chain and Dassault together.

I hope you are getting what i am trying to point here why its so difficult to lock in future rafale prices right now.. especially if its not Merignac production line..



Meteor is far costly bro, Astra 2 may come in sooner now with success of dual pulse motor in another missile (Barak8). We may buy meteor later or may be we may buy very limited quantity.

Having Astra 1 and 2 makes more sense for maintaining a common pool of armaments and also increasing the local produced missile numbers and requirements.

Man I suck at costing in accounts.
You just reminded me why.