R & D

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There are two effects of the R&D.

First R&D allows to unlock a technology earlier (like disc brakes, forced induction, more modern safety features, etc.), giving you direct access to some newer component or a body, for which otherwise you would need to wait longer.

Secondly as the time progress, some of the components are getting better over time. For example there will be a less valve float, engine will knock less, exhaust will be less restrictive, etc. You can see this effect by improved base stats after creating a new facelift of your car or engine. The stats will improve simply because the technology got better after a couple of years. If you invest into the R&D, you will increase the effective design year of that part. An engine designed in 1965 with +5 R&D in all technologies will have the same performance and stats as the same engine designed in 1970 without any R&D. You can use this either to have a better engine/car for the same engineering time and production units. Alternatively you can combine increased R&D spendings with decreasing the quality sliders, to have the same components cheaper, faster to produce and faster to engineer.

R&D vs Quality sliders

As opposed to increasing the quality sliders, R&D bonuses do not increase neither the required production units nor the engineering time. However increasing a quality slider by one, is a much stronger effect than increasing R&D by one. Quality slider is changing the effective design year of the parts (the same way the R&D is doing), but on top of that the quality slider also adds flat bonuses to certain stats. This was explained and shown in much greater detail on the discourse.