AUTOMOBILE REPAIRING & SERVICING WORKSHOP

Transcription

1 AUTOMOBILE REPAIRING & SERVICING WORKSHOP SERVICE CAPACITY : 23,436 Nos. Passenger cars (Per Annum) Value : Rs. 1,50,78,000/- MONTH AND YEAR : May, 2014 OF PREPARATION PREPARED BY : Sh. Abhishek Singh Assistant Director (Mechanical) 1. INTRODUCTION The Automobile Repairing & Servicing Workshop business is a viable business provided that it is operated with a good business acumen that involves having a thorough knowledge and experience of the repair and service operations and also managing the jobs with the right type of skilled manpower. When these factors combine with good customer relationship management and effective business development skills, the business is expected to give considerable profits which are expected to grow over the years. 2. MARKET POTENTIAL The automotive industry in India is one of the larger markets in the world. India's passenger car and commercial vehicle manufacturing industry is the sixth largest in the world, with an annual production of more than 3.9 million units. According to recent reports, India overtook Brazil and became the sixth largest passenger vehicle producer in the world (beating such old and new auto makers as Belgium, United Kingdom, Italy, Canada, Mexico, Russia, Spain, France, Brazil), with impressive growth rate of 18 percent. In 2010 India emerged as Asia's third largest exporter of passenger cars, behind Japan and South Korea. India is home to 40 million passenger vehicles. More than 3.9 million automotive vehicles were produced in India making the country the second (after China) fastest growing automobile market in the world. According to the Society of Indian Automobile Manufacturers, annual vehicle sales are projected to increase to 4 million by The majority of India's car manufacturing industry is based around three clusters in the south, west and north. The southern cluster consisting of Chennai is the biggest with 35% of the revenue share. The western hub near Mumbai and Pune contributes to 33% of the market and the northern cluster around the National Capital Region contributes 32%. Chennai, houses the India operations of Ford, Hyundai, Renault, Mitsubishi, Nissan, BMW, Hindustan Motors, Daimler, Caparo, Mini, and Datsun. Chennai accounts for 60% of the country's automotive exports

2 Mechanical Division Gurgaon and Manesar in Haryana form the northern cluster where the country's largest car manufacturer, Maruti Suzuki, is based. The Chakan corridor near Pune, Maharashtra is the western cluster with companies like General Motors, Volkswagen, Skoda, Mahindra and Mahindra, Tata Motors, Mercedes Benz, Land Rover, Jaguar Cars, Fiat and Force Motors having assembly plants in the area. Nashik has a major base of Mahindra and Mahindra with a SUV assembly unit and an Engine assembly unit. Aurangabad with Audi, Skoda and Volkswagen also forms part of the western cluster. Another emerging cluster is in the state of Gujarat with manufacturing facility of General Motors in Halol and Tata Nano at their plant in Sanand. Ford, Maruti Suzuki and Peugeot-Citroen plants are also set to come up in Gujarat, are some of the other automotive manufacturing regions around the country. In 2011, there were 3,695 factories producing automotive parts in all of India. The average firm made US$6 million in annual revenue with profits close to US$400 thousand. Furthermore, a consistent growth rate of Indian GDP during the last decades and increasing competition between leasing companies have caused the lease rates to decline considerably which have made car an affordable commodity for a majority of the middle-income class. These factors coupled together reflect on the growing need for quality repair and service facilities. Once the car comes on the road it is expected to run for an indefinite period requiring major repair and maintenance services throughout its operational life. Moreover there is a considerable demand for wheel alignment and wheel balancing services, which is required by almost every car, whether new or old. The roughness of the roads and continuous friction causes a continuous disruption to the alignment and balancing of the wheels which require adjusting at least once every two weeks for proper upkeep and maintenance. Conclusively it can be said that there exists an ample demand for quality repair and service workshops and also that the existing scenario provides conducive opportunities for entry into this business venture. 3. BASIS AND PRESUMPTIONS i. The unit is expected to work at 75% efficiency on 8 hrs. Single shift basis for full capacity utilizations. ii. iii. iv. The full capacity utilisation will be achieved in three years. 70% in the first year followed by 85% in the next year and the 100% in subsequent years. Labour and wages mentioned as per prescribed minimum wages and the proprietor is considered as a manager. Interest 12.5% in the project provide for recurring and nonrecurring investment. v. The cost of land, construction charges, cost of machinery and equipment, raw materials and consumables other expenses etc. initiated in the profile are based on the prices prevailing at the time of project preparation. Therefore, they are subject to necessary changes from time to time based on local conditions

3 Automobile Repairing & Servicing Workshop 4. IMPLEMENTATION SCHEDULE Activity Survey for collection of data in respect of demand, raw material, including power and fuel, availability of technology, pollution control etc Period Starting to Completion 0 1 st Month Arrangement for margin money 0 1 st Month Preparation of project document and registration and other clearance 1 st 2 nd Month Financial assistance 2 nd 3 rd Month Selection of site and development of land 3 rd 4 th month Make shift office 3 rd 4 th Month Purchasing of machines & recruitment of staff 4 th 5 th Month Construction of building & selection of machinery 5 th 6 th Month Installation of machinery & purchase of raw materials 6 th 7 th Month Trial production 7 th 8 th Month 5. TECHNICAL ASPECTS The three main critical factors that affect the decision to invest in the proposed business setup are: i) Hands on Experience Having a thorough knowledge and hands on experience of all the relevant technical details is a must for entry into this business. Relevant work experience is the most important pre-requisite because it has a direct impact on the successful management of the business. ii) Marketing Skill Another critical factor is that the entrepreneur must have effective PR & marketing skills. These marketing skills should enable the entrepreneur to carryout business development activities to target his potential customers and also to maintain his existing client base. iii) Technical Skill The third critical factor relates mostly to technical skills required especially for operating computerized Wheel Alignment & Balancing machines and equipments. The machine operators should be properly trained in order to completely inspect steering and suspension systems, take computer measurements, make factory adjustments to restore alignment specifications. In case of unskilled workers handling these equipment, there will be loss of time, equipment and most important of all unsatisfactory service leading to customer dissatisfaction

4 Mechanical Division Repairs and Servicing of Passenger cars: It is assumed that cars coming into the workshop soliciting repairs and servicing would subscribe to the following main services: (i) Maintenance Services which mostly constitute running repairs / services like Gear oil / Engine Oil / Break Oil change, Oil Filter change, spark plugs / point repair, lubricant replenishment / replacement, tuning, break shoe repairs, minor suspension repairs etc. These maintenance services are usually characterized by their very little job turnaround time and are usually disposed of within a half a day s work. (ii) Major Repairs mainly related to repair and replacement services that require comparatively greater job turnaround time and include activities like engine overhaul (3 weeks), gearbox repair & replacement, steering box repair & replacement, suspension replacement (3 5 days) etc. Wheel Alignment & Balancing (i) Wheel Alignment which consists of adjusting the angles of the wheels so that they are perpendicular to the ground and parallel to each other. The purpose of these adjustments is to maximize tires life and ensure a vehicle that tracks straight and true when driving along a straight and level road. (ii) Wheel Balancing refers to the proper distribution of weight around a revolving tire and wheel assembly. Poor wheel balance can have a marked impact on both the car and safety. Proper wheel balance ensures that the wheels, while spinning, do not have a heavy spot that can cause vibration and premature wear of tires, struts, shocks and other steering and suspension components. When combined with proper wheel alignment, balanced wheels ensure smooth and enjoyable driving. High Pressure Cleaning and polishing High Pressure Cleaning mainly involves the cleaning of the outer body of the car through high pressure water spray which contains a car body detergent and then a little wax to smoothen the car paint. Sublet Services Sublet services are those ancillary services that are outsourced to other specialized workshops / personnel that are not a part of the service mix offered by the Auto Repair workshop. These sublet services include items like Air Conditioner Repair, Machine Shop Items, Radiator Repairs, Silencer Repairs, Shoker Repairs, Upholstery Items (seats, bumpers, plastic repairs etc.). These sublet services usually form a part of the total job order of the Auto Repair Workshop and are usually a portion of the lump sum amount charged to the customer by the Auto Repair Workshop

5 Automobile Repairing & Servicing Workshop INSPECTION AND QUALITY CONTROL In house detailed inspection for the serviced / repaired item is required before delivery the vehicle to the customer, as this is the main factor to attract and maintain a loyal customer base through a customer-oriented focus on business rather than concentrating on volume and losing out old customers. All the workers at the workshop need to be trained and held responsible for providing superior service and developing long lasting trust bond with the customers. This is very important in this industry, where trust and honesty reflect on the image of repair and service facilities. This would help in maintaining a consistent revenue base, to ensure stability of business on the long run. POLLUTION CONTROL No Special pollution control measures are needed for the servicing and repairing of vehicle, however arrangement for proper ventilation should be ensured in the engine testing areas and waste oils / fluids from the vehicles should be collected separately before sending to recycling / treatment facility. ENERGY CONSERVATION NEEDS General awareness is to be created for economic use of electricity at all points. Justifiable use of the energy sources and timely checks of contact points will facilitate the smooth working and energy saving. SERVICE TARGET (Per Annum): Annual servicing of Passenger cars 23,436 Nos Value Rs 1,50,78,

6 Mechanical Division 6. FINANCIAL ASPECT 6.1. Fixed Capital Land & Building: Working Shed, Store and Parking 500 Sq Mtrs, Office and Customer louge 100 Sq Mtrs on monthly rent basis Machinery and Equipments Sl. No. Description Qty. (Nos.) Value (Rs.) Total (Rs.) 1 Complete Mechanical Toolbox 3 12,000 36,000 2 Complete Computerized Alignment Equipment with all accessories and sensors, printer etc 3 Computerised wheel balancing machine for all type of wheels up to 65 kg. Weight and maximum 850 mm of external wheel diameter with all standard accessories 1 3,80,000 3,80, ,50,000 1,50,000 4 Semi-Automatic tyre changer 1 20,000 20,000 5 Construction of 5 ½ feet deep Pit for vehicle Inspection and precision wheel alignment jobs 3 10,000 30,000 6 Work Bench 2 3,500 7,000 7 Vices & fixtures LS 7,000 7,000 8 Voltmeter / Ammeter 1 5,000 5,000 9 Two post vehicle lift suitable for lifting Cars and LCVs upto 3 Tons capacity. 1 40,000 40, Hydraulic Puller Jack 4 2,000 8, Air Compressor (2 HP; 1k lbs) 2 15,000 30, Piston Pump with piping and nozzle 1 12,000 12, Water tank, oil collection tanks and bins LS 25,000 25, Battery Charger 1 7,000 7, Drill Machine (Hand) 1 3,500 3, Buffing Machine (Hand) 1 3,000 3, Electrifications and 5% of M/c Cost 18 Office Furniture, Sofa and Chairs for customer, interior decorations for customer lounge TOTAL OF PLANT & MACHINE 7,63,500 38,175 LS 70, Pre-operative % 15,270 TOTAL FIXED CAPITAL Rs.8,86,

7 Automobile Repairing & Servicing Workshop 6.2. Working Capital (per month) Personnel S.No. Staff and Labour Nos. Rate (Rs.) Amount (Rs.) 1. Manager 1 20,000 20, Supervisor 1 12,000 12, Clerk/Accountant/ sales staff 2 9,500 19, Skilled Workers 4 10,000 40, Semi-skilled Workers 5 9,000 45, Helpers / Un skilled Worker 8 8,500 68, Peon/Chowkidar 1 8,500 8, Sweeper 1 8,500 8,500 Total 2,21,000 15% of Salary 33,150 Total Rs. 2,54, Raw Material S.No. Raw Materials Qty. 1. Bush, break shoes, filter, points, clutch plates, spark plugs, nuts / bolts, rubber lining, adhesive, etc. Amount (Rs.) LS 2,00, lubricants, brake oil, coolant, battery water, etc. LS 4,00, Cleaning detergent, Wax polish, dashboard cleaner etc LS 50, Other Misc Items LS 25,000 Total Rs. 6,75, Utilities a) Power 1600 Rs. 6 Per Unit Rs. 9,600 b) Water Charges (L.S.) Rs. 5,000 Total Rs. 14, Other Contingent Expenses S.No Contingent expenses Amount (Rs.) 1. Rent 40, Postage and Stationery Telephone expense for customer care and PR 6, Repair and maintenance 1, Transport charges 3, Advertisement and publicity 2, Insurance 2, Sales expenses 6, Misc Expenses 2,500 Total 64,

8 Mechanical Division Total Recurring Expenditure (per month) 1. Staff and labour Rs. 2,54, Raw material Rs. 6,75, Utilities Rs. 14, Other contingent expenses Rs. 64,500 Total Rs. 10,08, Total Capital Investment Total Fixed Capital Rs. 8,86,945 Total Recurring Expenditure (for 3 months) Rs. 30,24,750 Total Rs. 39,11,695/- 7. FINANCIAL ANALYSIS 7.1. Cost of Servicing (per annum) 1. Total recurring cost per year Rs. 1,20,99, Depreciation on plant and 10% Rs. 23, Depreciation on Computerized 20% Rs. 1,06, Depreciation of office 20% Rs. 14, Interest on Capital 12.5% Rs. 4,88,962 Total Rs. 1,27,31,312/ Turnover (per annum) S.No Total Sales (per annum) 1 Normal Maintenance Servicing with change of lubricnats 2 Major Repairing work & Engine Overhaul Qty. (Nos.) Service rate (Rs) Approximate Cost of bought out items Amount (Rs.) 3, ,800 86,40, , % margin an avg cost of i.e 1,000 4,68,000 3 Wheel Allignment 6, ,40,000 4 Wheel Balancing 4, ,50,000 5 Car wash and polishing 6, ,20,000 6 Subletting services % margin on avg. cost of 2000 i.e 400 9,60,000 Total 1,50,78,

9 Automobile Repairing & Servicing Workshop 7.3. Net Profit (per annum) Turnover Cost of Production Rs. 1,50,78,000 1,27,31,312 Rs. 23,46, Net Profit Ratio Net profit per year Turnover per year X ,46,688 1,50,78,000 X % 7.5. Rate of Return Net profit per year Total Capital Investment 23,46,688 X ,11,695 X % 7.6. Break-even Point Fixed Cost (per annum) (Rs.) 1. Rent per Annum 4,80, Interst on total capital 12 % 4,88, Depreciation of machinery & 10% 23, Depriciation on Computerised 20% 1,06, Depreciation of office 20% 14, Insurance 30, % of salaries and wages 12,19, % of other expenses including utilities and excluding rent & insurance 1,75,680 Total Fixed Cost (Rs.) 25,37,912 B.E.P Fixed Cost Fixed Cost + Net Profit X ,37,912 25,37, ,46,688 X % -111-

10 Mechanical Division ADDRESSES OF MACHINERY & EQUIPMENT SUPPLIERS: 1. M/s. Manatec Electronics C-22 & 30, Industrial Estate, Thattanchavady, Pondicherry. 2. M/s. Mani Kam Engineers Samaipur Sohna Road, Rajiv Colony, Ballabhgarh, Faridabad M/s. Nepture Equipment Pvt. Ltd. 2, Zoroastrian Building, 16, Hornimiman Circle, Fort, Mumbai. 4. M/s. Countech Engineers A-1/2, Guru Nanak Street, Moujpur, Delhi NAMES AND ADDRESSES OF RAW MATERIALS SUPPLIERS: Raw material can be purchased from the items authorized distributors & original equipment manufacturers