Given that time is the main reason we have for the whole 2 tier system in the first place.
It depends on what you mean by "time." And I'm going to reiterate a bunch of stuff here because it seems memories run short with many of us.
Kaz basically had GT PSP pushed on him by SONY. He had to put the entire team to work on it at one point because it was so much trouble. I sincerely doubt it took less than a year to take GT4, make it larger, get the essence of the Prologue physics engine to fit into the limited ram of the PSP, and have the whole package reduced to
one GB in size. Plus run reliably.
The Polyphony crew has been increased to 140 some odd people at some point. More than likely, most of those are modelers. "Why didn't they do this before, or hire twice as many people?" Well, Polyphony is first party, essentially a subsidiary to SONY Computer Entertainment. This means SONY writes the checks. Just with 130 people, the budget for GT5 had already reached $60 million in late 2008 or early 2009. This could include the cost to make GT PSP, but generally it's assumed it's GT5's budget alone. And the main cost of any project is almost always employee payroll and benefits, if you took any economic classes. You can never guess what a project like this will involve, not completely, especially if you flip the table over in the middle like SONY did with GT PSP.
"So why not outsource modeling work?" This is easily said when you have no idea how business works. First, you have to buy a shop's services, and this is much of the cost. And it's not cheap. And then there's the cost of the work, obviously additional cost. Remember, it's always MUCH cheaper to make a steak dinner than to go to a restaurant. Besides the fact that SONY would probably go ballistic over the added expense, Kaz is pretty protective of his game, and wants to do it all in-house. Considering that GT5 is most likely going to make a tidy fortune for SONY, maybe they could pony up the cash to enlarge Polyphony to the numbers Kaz needs for Gran Turismo.
Some of you would rather have much simpler car models for a lot of just Premium cars. I think Kaz made the right decision. Do you want to face this situation again in GT6? On top of that, if you can get over seeing a polygon facet and loosing an interior now and then, you'll have 1000 some odd cars to play with, not 200. If you can't, oh well.
On the types of cars available in the Premium list, Kaz has to have a few cars from each class for you malcontents who won't touch a Standard with a 10 foot USB cable. Yes, this means you'll be seeing what I referred to for years as "dinkmobiles." I don't like the Prius. I haven't touched it in GT4. But if there's a Prius race in GT5, I'll do it because it meant enough for Kaz to put it into the game, so I'm going to honor him enough to race it. The same with the Fiat 500. And it's going to be much more fun in GT5 because of the very authentic physics we'll get to play with. But the main reason for having a few of each performance range from puny to full bore race cars is, otherwise you'll have a ton of one make races, or you'd be forced to touch those Standard cars.
In fact, the new physics is going to have me racing mostly with the Standard cars, because I want to race them all with the new physics code. The Time Trial demo amazed me, and the code has been tweaked even more. When the preliminary gameshow builds even impress PC sim journalists, you know something special is coming.
On the car count, dave mentioned that Kaz likes big numbers, which is true. But you forget, he always understates them. Remember, GT4 is still mentioned as a game which has more than 650 cars. The actual number is approximately 730.
Oh, one more tidbit: Forza 3 has three generations of car models in it. Even has the same bugs from Forza 1. Never fixed as far as I know, haven't touched it since Christmas.