Automobile & Parts

 

1. Introduction to the Project
1.1 Project Background
1.1.1 Product Introduction
Car engine cylinder standard processing and high infrared static automatic spraying are important techniques during car engine cylinder processing. Powerful infrared radiation is used for heating to enable the power curing time of heavy parts to reduce by 20min, reducing half of the time compared with hot air circulation. This project is a transformation and extension project proposed by FAW Automobile Parts Co., Ltd. of Jilin Province in order to increase processing level and expand production capacity.
1.1.2 Market Prospects
As one of pillar industries of national economy, automobile industry plays a huge promotion role for the development of Chinese national economy. Chinese automobile production and sales scale has increased quickly in recent years. The growth speed was slow in 2015, but its production and sales volume reached 25.14 million and 25.63 million, a year-on-year increase of 0.87% and 2.45%, and the production and sales volume has ranked the first for 5 consecutive years in the world. Automobile parts industry is the foundation of the automobile industry's development, and necessary factor that supports automobile industry to constantly and healthy development, causing big influence on the automobile's technical level, quality, performance and price. In particular, nowadays automobile industry is vigorously developing proprietary research and development and innovation, a strong part system is badly needed as support. China encourages automobile parts enterprises to conduct independent innovation and make themselves bigger and stronger to meet domestic demand for high-tech products, and participate in the international competition.
In recent several years, automobile engine performance has advanced sharply. The core part of an automobile is engine. The most important parameters for distinguishing the automobile performance is the engine's displacement and functions. It can be considered that, the engine's development situation greatly decides the overall development of an automobile.
In the Twelfth Five-Year Plan for Chinese National Economy and Social Development, First Section of Chapter 9 Transformation and Improvement of Manufacturing Industry emphasizes: automobile industry should intensify finished automobile research and development ability, make key parts technology to be proprietary, increase energy conservation, environmental protection and safety technology level. The Third Section emphasizes to formulate policies for supporting the enterprise's technical transformation, accelerate the application of new technology, new materials, new processes, new equipment, transform and improve traditional industries, and increase market competitiveness. First Section of Chapter 10 Cultivation and Development of Strategic Emerging Industries: vigorously develop energy conservation and environmental protection, first generation of information technology, high-end equipment manufacturing, new energy, new material, new energy automobile and other strategic emerging industries.
1.1.4 Advantageous Conditions and Necessity of Project Construction
(1) Policy advantage
Main advantageous factors impacting the development of Chinese automobile industry are: first, steadily improved macro-economy provides good economic environment for the development of automobile industry; second, gradually adjusted automobile market structure, product diversification and energy conservation give more choices to consumers; third, national policies that encourage and expand internal demand, increase income of residents and expand social security coverage will increase automobile market consumption confidence; fourth, constant existence of rigid demand of automobile consumption will make Chinese automobile consumption enter a long-time stable growth period; fifth, gradually reinforced international competitiveness of Chinese automobiles and constant exploitation of the international market can guarantee the automobile export growth. In addition, Chinese government has obtained some achievements in management of traffic jam. Tax reduction for small enterprises, maintenance of farming benefiting policy and further acceleration of western development will promote the expansion of Chinese automobile market.
(2) Infrastructure advantage
The existing facilities can serve for this project construction and save the investment. This transformation will be implemented in the existing factory area. The company covers an area of 50,000m2, having the leeway for transformation and extension. The construction cost is relatively low.
(3) Location advantage
The factory area locates in Jilin Gongzhuling Economic Development Zone, where has complete public utilities at its surroundings, "six accesses and one leveling" (accesses to power supply, water supply, water drainage, heat supply, telecommunication, road and site leveling) infrastructure conditions and good external supporting facilities, laying a solid foundation for the project construction and saving construction investment. The factory area has convenient traffic and complete resources for production.
1.2 Content and Scale of Project Construction
1.2.1 Product Scale
Annual processing capacity is 2.5 million main bearing caps and 150,000-300,000 other foreign new products. The aim is to provide FAW-Volkswagen with engine assembly cylinder static spraying and standard processing, and export special standard processing products to the United Kingdom and the United States.
1.2.2 Construction Content
The project has floor area 50,000m2 and building area 50,000m2, which will newly build public facilities, pipeline network, roads, walls and greening belts in factory area. According to the demand for product production, it will introduce the world's most advanced professional production line from German MAG Company, and purchase 50 imported equipment.
1.3 Total Investment of the Project and Capital Raising
Total investment of the project is 1.25 billion yuan, and the construction investment is 975 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
97500
78
 
2
Interest incurred during construction
 
 
 
3
Circulating capital
27500
22
 
 
Total investment of the project (1+2+3)
125000
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 1.98 billion yuan, total profit 23,800 yuan, payback period 6.25 years (after tax, including 1 year of construction period) and FIRR 12%.
Table 2: List of Major Indexes for Forecast of Economic Benefits
No.
Name
Unit
Index
Remarks
1
Sales income
RMB10,000/a
198000
Normal year
2
Total profit
RMB10,000/a
23809
Normal year
3
FIRR of all investments
%
12
After income tax
4
FNPV (Ic=10%)
RMB10,000
11081
After income tax (operation period 10 years)
5
Period for recovery of all investments (after tax)
a
6.25
Including 1 year of construction period
6
ROI
%
19
 
Note: "RMB10,000" in the Table shall be RMB.
1.4.2 Social Evaluation
According to analysis and demonstration, the new-type car engine cylinder rough processing project of FAW Automobile Parts Co., Ltd. of Jilin Province (factory area of Gongzhuling Economic Development Zone) has clear product market target, mature process, advanced technical equipment, orderly production, reasonable project investment and good economic indexes. The completion of the project construction can fully exert the enterprise's own advantages and realize the goal of getting better varieties, quality and level.
After the project is completed, it will plays a prominent role in revitalizing the northeast old industrial base, optimizing the industrial arrangement of automobile parts industry in Jilin Province, promote Chinese automobile industry to realize localization, environmental protection, rapid development of light weight, and lay a solid foundation for building automobile industry into a pillar industry of Chinese national economy. In addition, the completion of this project can increase national and local financial income, regional total economy and job opportunities, and relieve the social employment pressure.
1.5 Cooperative Ways of the Project
Joint venture, and other ways can be discussed in person.
1.6 What to be Invested by Foreign Party
Capital, some foreign investments, and other ways can be discussed in person.
1.7 Construction Site of the Project
Jilin Gongzhuling Economic Development Zone, with factory area 50,000m2.
1.8 The On-going Condition of Project
The project has been approved by Development and Reform Bureau of Gongzhuling City.
2. Introduction to Partner
2.1 Basic Conditions
Name of Project Undertaker: FAW Automobile Parts Co., Ltd. of Jilin Province
Legal Address: Jilin Gongzhuling Economic Development Zone
Legal Representative: Qi Xiuli
Ownership Form of the Enterprise: limited company
2.2 Introduction to Project Undertaker
FAW Automobile Parts Co., Ltd. of Jilin Province was established on June 1, 1988, and moved to the new factory address - Jilin Gongzhuling Economic Development Zone on July 1, 2009. The new address is located in the center of automobile industry development zone, having convenient traffic and smooth information. It covers an area of 50000m2, factory area 7000m2, office building and station building area 3178m2. It has 108 employees, including 37 employees with education background above college degree, accounting for 34% of total employees; 7 persons with senior professional title, 6% of total number; 44 professional technicians, 41% of total number. The company has engaged in car engine cylinder standard processing and high infrared static automatic spraying, which is the only manufacturer of engine assembly cylinder standard processing for FAW-Volkswagen, and the only engine static spraying manufacturer for FAW-Volkswagen and Volkswagen FAW (Dalian). Moreover, it processes nearly 60 kinds of products including JCB, supports and other supporting products and supports for America and United Kingdom. As the above-mentioned manufacturers expand their output and the national industrial policy and industrial development plan provide power promotion, the products will have broad market space. The enterprise will gradually expand the market share on the basis of the existing supply enterprises.
2.3 Contact Method
Postal Code: 136100
Contact Person of Project Unit: Ma Yuqi
Tel: 0434-6771107    15843449811
Fax: 0434-6771107
Website of Development Zone: http://www.jlgzljk.gov.cn/
 
Contact Method of Project City (Prefecture):
Contact Unit: Gongzhuling Economic and Technical Cooperation Bureau
Contact Person: Zhou Kemin
Tel: 0434-6219312   13504441655
E-mail: gzl1655@163.com
 
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