All the material setup is done in Max with a plugin they provided. The only problem is this plugin only works with max 2012 so I had to download the student version of that just to do the exporting. My supervisor advised for me to get the car in the engine before I finish off all the texture work. So the only objects I had textured were the wheels and steering wheel. Its Pretty easy to setup the materials in max once you get used to it. I just had to change my wheels textures as the tyres need their own texture sheet. This is because the tyres have an animated texture that blurs when its spinning.
Here are a few pics of the material setups. Its pretty much the same setup for everything accept for things with alpha channels. cube maps or animated materials.
Then I just needed to apply the textures to each object. The tyres, rims, brake disks, interior etc all need to be separate and have a specified naming convention. For example for the wheels I have test_car_lr_tire
then just change the lr to lf, rr and lr. This is the same for the rims, brakes and calipers. Also the american spelling of tyre needs to be used which gave me some problems earlier. To export the objects I had to use the GMT file exporter which are the file types rfactor 2 uses. Here's what it looks like.