Automobile & Parts

1. Introduction to the Project

1.1 Project Background
1.1.1 P roduct Introduction
Both ends of the link gear are respectively hinged with driving and driven members to transmit moving and force rods. For example, in reciprocating piston power machinery and compressors, the connecting rod is used to connect piston and crank. Connecting rods are often made of steel. The section of its mainly body is mostly round or I-shape. It has holes on both ends, and the hole has bronze bushing or needle bearing inside for loading axle pin and hinging. The connecting rod is the important part in automobile engine, which connects piston and crank, change the piston's reciprocating movement into the crank's rotation movement, and transfer the force acted on the piston to crank for power output.
During operation, the connecting rod will bear the pressure generated from the fuel gas in combustion chamber as well as longitudinal and transverse inertial force. Therefore, the connecting rod is operated in a complicated stress state. It bears both alternating tension and compression stress and being stress.
Main damage forms of the connecting rod include fatigue fracture and excessive deformation. Generally, the position with fatigue fracture is in three high-stress regions on the connecting rod. The operation conditions of the connecting rod requests it to have very high strength and fatigue resistance, and enough rigidity and toughness.
1.1.2 Market Prospects
In 2015, Chinese automobile industry acquired good performance again: the national automobile production and sales 26.47 million and 25.67 million, a year-on-year growth of 4.6% and 4.3% respectively, increased by 3.8 and 1.9% over the same period of previous year, making progress steadily. The production and sales volume exceeded 26 million, hitting a new high and global record, and staying on the top position for 4 consecutive years.
Chinese automobile output has exceeded 19 million for 3 consecutive years, and Chinese automobile industry has entered the stable development stage with high gross.
The number of vehicles produced in China and sold was 23.7229 million and 23.4919 million in 2014, increase by 7.26% and 6.86% on year-on-year basis respectively. This increasing speed broke the record but failed to meet the expectation of 8% to 10% made by China Association of Automobile Manufactures (CAAM) at the beginning of last year.
Table 2-1 Chinese Automobile Production And Sales Volume during 2000-2013
Year
Output (10,000 Sets)
Sales Volume (10,000 Sets)
2000
206.8
207.8
2001
234.1
237.1
2002
325.3
324.8
2003
444.3
439.1
2004
507.1
507.1
2005
570.7
575.8
2006
728
721.6
2007
888.2
879.1
2008
934.5
938
2009
1379.1
1364.5
2010
1826.5
1806.2
2011
1841.89
1850.51
2012
1927.18
1930.64
2013
2211.68
2198.41
On the whole, in the coming several years, Chinese automobile output will still keep increasing; the growth rate is expected to be more than 5%. According to the China Automotive Industry Association, in 2015, Chinese automobile output reach 30 million, sales volume of mini-buses below 1.6L will increase by 1.6 million - 1.8 million, sales volume of cars below 1.6L will increase 3.2 million - 3.6 million, and total sales volume will rise by 4.8 million - 5.4 million, thus increasing the demand for connecting rod about 21.6 million.
As the demand for automobile market increases rapidly, the same industry in China are increasing the investment, reform the process, transform equipment, and update products to meet the present development of automobile market. However, main engine plants gradually completed switch of small-displacement products in 2009, and accomplished modular supply pattern of automobile parts. In particular, engine and OEMs are adjusting the parts supply though to enable the engine plants to become real assembly plants, and completely form modular supply. For example: Shenyang Aerospace Mitsubishi Motors Co., Ltd., JAC, Chongqing Chang'an, FAW Mazda and Guangzhou Honda have asked to provide finished connecting rods.
1.1.3 Technical Analysis
The production process of the finished connecting rod is mature. Baicheng City has domestic famous connecting rods production enterprises.
1.1.4 A dvantageous Conditions and Necessity of Project Construction
1.1.4 .1 Advantageous conditions
(1) Baicheng is the important energy enrichment region in the northeast region. In order to further consume the surplus electric power, National Energy Administration has officially approved Baicheng as the local comprehensive demonstration zone of wind power consumption. Jilin Province also issued relevant reward and subsidiary policies, and determined electricity price about 0.42 yuan/KW.
(2) Baicheng Industrial Park is located at the front edge of alluvial fan of Tao'er River, which is one of regions with the most abundant ground water in Jilin Province, having ground water reserves 2.05 billion m3. The water is good and easy for extracting. The port of Introducing Water of Nen River to Baicheng Project is in the park. The city will get water of nearly 90 million m3 every year, resulting in sufficient industrial water.
(3) The city has annual coal output 400,000t, and the coal storage of Taonan Wanbao is 96.014 million tons. Baicheng is close to eastern Mongolia; its annual coal output exceeds 40 million tons. Natural gas reserve of the city is more than 270 billion m3.
(4) The city has over 50,000 various professional technicians, including over 2,000 persons who have senior titles; as well as Academy of Agricultural Sciences, Academy of Forestry Sciences, Agricultural Machinery Research Institute, Livestock Research Institute and Scientific Research Institute. Baicheng Normal University recruits more than 3,500 students every year, and Engineering College recruits over 800 students. The city also has 20 vocational technical schools at all levels, including 87 majors. About 7,000 practical technical talents graduate and enter the society every year.
(5) The city has excellent market foundation and tremendous development potential. Jilin Province is the cradle of Chinese automobile industry, which has formed an automobile industry system with complete full-series development of medium and heavy trucks, medium and advanced cars, light vehicles and micro-vehicles, belonging to one of three major pillar industries of Jilin Province. In 2012, the production and sales volume of finished automobiles was 1.868 million and 1.858 million, ranking among the top group around China.
(6) The raw materials for this project are purchased in Dalian and Shanghai. The auxiliary material packing bags and packing cases are sufficiently supplied.
1.1.4 .2 Necessity of Construction
Social development and constant progress of people's living standard and science and technology have propelled the development of automobile industry, especially the light car industry. As the demand for automobile market increases rapidly, the same industry in China are increasing the investment, reform the process, transform equipment, and update products to meet the present development of automobile market.
Finished light car engine connecting rod project began its investment and construction under this background. The implementation of this project can provide high quality connecting rods for Volvo, Hawtai Hyundai and other automobile engine plants, meet the demand of domestic market, and relieve the contradiction of unbalanced supply and demand in domestic market; expand the production scale, accelerate localization of light car parts, promote the development of domestic light car, shorten the distance with the international advanced level, and accomplish economy of scale.
1.2 Content and Scale of Project Construction
1.2.1 P roduct Scheme and Scale
The project has annual production capacity of 2.3 million finished connecting rods.
1.2.2 Construction Content
The project has floor area 10,000m2 and building area 10,000m2.
1.3 Total Investment of the Project and Capital Raising
Total investment of the project is 135 million yuan, and construction investment is 100 million yuan.
Table 1: Summary Table of Total Investment of the Project   Unit: RMB10,000
No.
Expense Name
Amount of Investment
Proportion of Total Investment %
Remarks
1
Construction investment
10000
74
 
2
Interest incurred during construction
 
 
 
3
Circulating capital
3500
26
 
 
Total investment of the project (1+2+3)
13500
100.00
 
1.4 Financial Analysis and Social Evaluation
1.4.1 Main Financial Indexes
After the project reaches the production capacity, it will realize annual sales income 168 million yuan, total profit 33.75 million yuan, payback period 5 years (after tax, including 1 year of construction period) and FIRR 20%.
Table 2: List of Major Indexes for Forecast of Economic Benefits
 
No.
Name
Unit
Index
Remarks
1
Sales income
RMB10,000/a
16800
Normal year
2
Total profit
RMB10,000/a
3375
Normal year
3
FIRR of all investments
%
20
After income tax
4
FNPV (Ic=10%)
RMB10,000
5397
After income tax (operation period 10 years)
5
Period for recovery of all investments (after tax)
a
5
Including 1 year of construction period
6
ROI
%
25
 
Note: "RMB10,000" in the Table shall be RMB.
1.4.2 Social Benefit Analysis
During construction and operation, the project can promote local cultural education level, drive the development of relevant industries, increase local consumption level due to the increase of job opportunities and working persons, drive economic development, and promote social stability and unity.
The implementation of the project influences the income and living standard of local residents, which can drive the development of relevant industries, increase local financial income, enable the national economic entity of Baicheng City to improve to some extent, and greatly change the living conditions and quality of the residents in Baicheng City.
The influence of implementation of the project for the employment of local residents
After the project is completed, it can provide the society with new job opportunities and drive the development of relevant industries. According to the primary estimate, it can directly create jobs for 50 persons, and indirectly create jobs for nearly 100 persons, having important significance for the development of local economy.
1.5 Cooperative Ways of the Project
Joint venture (or sole proprietorship), and other ways can be discussed in person.
1.6 Construction Site of the Project
Jilin Baicheng Industrial Park
1.7 The On-going Condition of Project
The feasibility report has been prepared.
2. Introduction to Partner
2.1 Basic Conditions
Name of Project Undertaker: Jilin Baicheng Industrial Park
Address: No. 1, Tao'erhe Road, Industry Park
Legal Representative: Liang Zijun
2.2 Overview
Baicheng Industrial Park was developed and constructed in the beginning of 2005, formally promoted to a provincial-level development zone with the approval of the provincial government in December 2011, and renamed as Jilin Baicheng Industrial Park. It has jurisdiction over 1 street office, owns permanent resident population of 20,000 persons, and plans area for control zone 118km2, and starting zone 2km2. Starting zone will be constructed in 3 phases, including Phase I project 5.1km2; Phase II project 5.9km2; and Phase III project 11km2. In recent several years, Baicheng Municipal Party Committee and Municipal Government has take full advantage of the city to boost development and construction, and make the industrial park rapidly become the first-rate platform for its investment attraction, the best carrier of project construction, and important engine for economic and social development.
2.3 Contact Method
Contact Unit: Investment Promotion Bureau of Jilin Baicheng Industrial Park
Contact Person: Lin Ximeng
Tel: 0436-3677229 3687011
Fax: 0436-3677231
Postal Code: 137000
E-mail: bclxm2012@163.com
Website: www.bcgyyq.gov.cn
 
Contact Method of Project City (Prefecture):
Contact Unit: Baicheng Economic and Technical Cooperation Bureau
Contact Person: Liu Lin
Tel: 0436-5081011   13943687990
Fax: 0436-5081011
E-mail: bclyj01@126.com
 
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