GT5P outsold Forza 2 fairly easily, Forza 3 atm is still behind Shift in terms of total sales(GT5P is ahead of both F3 and both platforms Shift combined). In terms of market penetration, Need For Speed is a much stronger competitor then Forza. This isn't me speaking, this is the millions of people who buy the games. Forza hasn't gained anything resembling the mass market appeal that GT has, in terms of market presence it isn't much of a threat at all.
The 360s market penetration will likely have far less of an impact on GT then it would on most other frachises, GT sells 2:1 outside of NA versus inside, that ratio is reversed for Forza. The 360's strongest market is the relative weakest one for GT.
But that is exactly what the development budget includes. GT5P has now cleared 4 Million units sold, GT5 has already made a larger profit then Forza 3 and it hasn't even been released yet. That is just to put things in context when people start balking at the cost of developing the game.