automobile body building

7/27/2019 Automobile Body Building

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AUTOMOBILE BODY BUILDING

Introduction :Automobile body (Bus Body) building is an important activity. The chasis are supplied byAutomobile manufacturers, and body is built by automobile body builders as per the

requirements of the customer and specifications of the different State TransportUndertakings.

About Services

Bus/Truck is used as the most common public transport vehicle in our country. DifferentState Transport Undertakings are plying their buses for commuting public from one placeto another and from one State to another. Apart from these Undertakings, Private BusOperators, travel agencies etc. are also operating buses on permit basis.

Market Potential

With rapid changes in the society, now a days it has become necessary to provide goodand efficient transport service to the public. Also with the rapid industrialization, publicand goods are moving very frequently from one place to another using public transport.Since more and more development in the coming years, it is expected that demand ofpublic transport, private transport and luxury transport in the form of buses/Trucks willincrease in the coming years.

Suggested Capacity (per annum):

The automobile body building per annum will be as follows:

A. Quantity Bus Body Building (complete) : 75 Nos.Value of each bus body building : Rs. 4,00,000Turnover (Rs. in Lakhs) : Rs. 300.00

B. Quantity Bus/Truck Body Building (minor) : 200 Nos.Avg.Value for each bus/truck body building : Rs. 20,000Turnover (Rs. in Lakhs) : Rs. 40.00Total Turnover (A+B) : Rs. 420.00

Basis:-

No. of working days = 300 days per yearNo. of Shifts = 1 per day.

One shift = 10 hoursInfrastructure Requirement:

The main Infrastructure facilities required are:

Required area 800 Sq.ft.

Power requirement 25 kW.Water (required in every working day) 2000 Ltrs.

Raw Materials and its availability:

The typical unit being a service industry, the amount required for working materials is calculatedat Rs.249.00 lakh. All material & consumable items can be procured from local agencies in theopen market.

Suggested Location:Automobile Bus/Truck Body Building units can be located near big cities, big towns and as well asin large urban areas preferably near National High way in the region, including Sikkim.


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Process of Manufacture:Metal sheets are cleaned and derusted for grease/oil if any. Then sheets are cut to size forforming different parts and these parts are formed on press brake. Now different parts and theirsubassemblies are fabricated as per their design and size. These parts and subassemblies arefabricated together to make them a complete bus body. The complete body is painted as per the

requirements of the customer. Shower test is carried out for leakage etc.PROJECT ECONOMICS

Thetotal capital requirement estimated as under : -.Fixed Capital (Amount Rs. in lakhs)Land &Building Own/Lease

Civil Worksi.) Factory Shed 600 sq.ft.@ Rs. 700/sq.ft. 4.20ii.) Office building/ Godown 200 sq.ft.

@ Rs.800/sq.ft. 1.60

Plant & Equipments 20.75

Other misc. Fixed Assets(Water arrangement, Electrical fittings& Other Equipments) 0.75Preliminary & Pre-operative Expenses 0.50

Sub Total (A) Rs. 27.80B. Working Capital

(Norms) (Amount Rs. in lakhs)Raw Materials/Consumables 15 days 12.45Working Expenses 1 month 1.20Finished Goods 10 days 9.60Receivable 7 days 7.90

Sub Total (B) Rs. 31.15Note: Working Capital to be financed as:

Margin Money Rs. 10.20Bank Finance: Rs. 20.95Rs. 31.15

Capital Cost of Project:1. Fixed Cost .. Rs 27.80 Lakhs2. Margin money for W.C. .. Rs 10.20 Lakhs

Rs 38.00 lakhs

Means of Finance (Rs. in Lakhs)Promoters Equity(25%) 9.50Term Loan(75%) 28.50

38.00

Production Expenses (Rs. in Lakhs)

Raw materials 249.00Wages & Salaries 11.22Utilities 2.90Repair & Maintenance 0.50

Administrative Overhead 0.80Depreciation 2.44Selling expenses 5% on sales 17.00Interest 6.94

290.80Profitability:

Based on the sales turnover and the operating expenses, the profit would be Rs. 49.2 lakhsper year. This works out to a return on capital investment of 84%. The unit would break-even at about 27% of the rated capacity.


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Break Even Analysis

A. Variable Cost: (Rs. in Lakhs)Raw Materials 249.00Utilities 2.90

Selling Expenses 17.00268.90

B. Semi-Variable Cost: (Rs. in Lakhs)Wages & Salaries 11.22Repair & Maintenance 0.50

Administrative Overhead 0.80Depreciation 2.44Interest 6.95

19.01C. Sales Turnover: Rs. 340.00 LakhsD. Contribution: Rs. 71.1 LakhsE. Break Even Point B/D X !00% 27 %

Manpower:

Category No. ofPerson

Salary PerPerson PerMonth(Rs)

Monthly SalaryBill

(Rs.)

Production manager, 1 10,000 10,000

Maintenance engineers 2 8,000 16,000

Technical (Skilled Worker) 3 7,000 21,000

Technical (Semi-skilledWorker)

5 6,000 30,000

Chowkidar/Watchman 2 4.000 8,000

85,000

Salary Bill Rs 10.20 Lakhs + Benefits @10% annually i.e. Rs 1.02

Total Annual Salary Bill : Rs. 11.22Highlights:The major highlights of the project are as follows:Total Capital requirement Rs. 58.33 lakhsPromoters contribution Rs. 9.50 lakhs

Annual Sales realization Rs. 340.00 lakhsAnnual Operating Expenses Rs. 290.80 lakhsAnnual Profit Rs. 49.20 lakhsReturn on sales 14%Break-even point 27%No. of person employed 13

automobile body building

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