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   Part One. Our KD Project Business Mode            


We have learned from China’s automotive history and make it become a systematic theory. The key point is: be practical and believe the most suitable way is the best way for you. We need to find the most suitable markets, the most suitable partners, the most suitable cooperation mode and the most suitable business mode to take it gradually to success. We break our theory down to a few parts: 

1. “Take the stairs, not the elevator”. We divide the project into a few small sections and take it from the lowest step. 

2. Different conditions and situations require diversified reactions. We would take government taxes, social resources, and local resources etc. into consideration. 

3. Standing on the Shoulders of Giants: China will provide technical support and all the necessary support to smoothen the way. 

4. Local partners taking majority of the share holds (say no less than 65%) would get investors and local government more involved.


The Convenient, Simple, Small Scale Oversea Auto Assembly Plant Chain Business Mode

The chain operation mode of Car KD assembly plant project, with technical support from China auto manufacturers, has the following obvious advantages:

• Standardized management: beneficial to the expansion of enterprise scale and the regional influence; 

• Quick to start: helpful for gathering capital to start quickly, capture the market opportunities; 

• Quickly realize industrialization;

• Strengthen the market competition ability; 

• Mature experience: reducing business investment risk; 

• Enjoy the brand effect of the enterprise's headquarters; 

• Get a larger economic benefits with less investment. 

• Obtain products from headquarters at lower prices; 

• Speed up the development with introduction of advanced technology and scientific management mode;

• Local shareholders have more high business enthusiasm, more advantageous to the plant development.



   Part Two. Our Cooperation Mode            


According to our many years of oversea investment and cooperation practice, we have explored the following modes of cooperation. Once you have any other cooperation ideas, it is highly appreciated to contact with us.


A.Trade Agency

At first stage, we can do exporting & importing trade business, gradually build the mutual trust and favorable business relationship, and then develop to project cooperation. If our partner hasn’t gathered enough capital to do the project, this cooperation way is recommended to accumulate funds and experience for the project start later.


B.Turnkey Project/ Technology Transfer Mode

In this project, our oversea partners take 100% shareholdings, and our Group assists you with technology and all necessary equipment of the factory, all in "turn-key project" mode. You pay for the technology transfer, while we help you to establish the assembly factory and provide you automobile parts in SKD or CKD status for assembling in order to cut your cost and simplify the production process. We provide you with all the necessary technology assistance and auto parts till you can master all required technologies and be capable to assemble vehicles on your own completely.


C.Joint Venture Mode

This is our key cooperation mode, we have the following basic ways:


1st way: we take 15% of the shareholding and being responsible for offering the Business Plan Assistance, Production Line Layout & Plant Design, Equipment Installation & Debugging, Technology Support, Worker Training, Manufacturing, Production & Quality Control Management, Advice & Guidance for Sales & After-Sales, Development Plan & Solution, etc.

2nd way: we take 35% of the shareholding and being responsible for offering the Key Equipments, Business Plan Assistance, Production Line Layout & Plant Design, Equipment Installation & Debugging, Technology Support, Worker Training, Manufacturing, Production & Quality Control Management, Advice & Guidance for Sales & After-Sales, Development Plan & Solution, etc.

3rd way: we take more than 35% of the shareholding and being responsible for offering the Capital, some Credit based on reliable guarantee, Key Equipments, Business Plan Assistance Production Line Layout & Plant Design, Equipment Installation & Debugging, Technology Support, Worker Training, Manufacturing, Production & Quality Control Management, Advice & Guidance for Sales & After-Sales, Development Plan & Solution, etc. 


Requirements on Our Cooperation Partners

If you start with trade business, a necessary amount of funds for vehicle cycle purchase, a decent showroom for auto exhibition and a kind of repair shop, enough. However, if you want to start the auto assembly plant project, you have to reach the following subjective and objective requirements:

• Workshop / Factory: 5000-8000 square meters to start, and a piece of an industrial land around 20000-25000 square meters for expansion in future.

• Fund: You need to have necessary economic strength & investment capacity, specifically, two million USD at least, excluding land and workshop. 

• Market channel: You’d better have your own car sales channel & network, automobile related business. 

• Auto import tariff policy: The import tariff policy in your country is very important, the difference of import tariff between CKD (completely knocked down) and CBU (complete built unit) shall be at least 30-35%; for example, if the import tariff on CBU is 35%, so it must be 5% or free on CKD. It is the key factor to set up an assembly plant in local overseas, however, if the import tariff on CKD is almost the same with that on CBU, the auto plant will have not any profit space and it makes no sense to start it.

 


   Part Three. Process of KD Project


STAGES OF OVERSEAS AUTO KD PROJECT 

According to the development process, we would divide overseas auto KD project into the following 5 stages: 

(1) Demonstration & Preparation Stage of Auto KD Project; 

(2) Transition Stage of SKD II & SKD I Assembly; 

(3) Implementation Stage of CKD Assembly; 

(4) Localization Stage of Auto Parts; 

(5) Independent Innovation Stage of Automobile Research & Development.


What is CKD, SKD I, SKD II, CBU?


Each stage stating as follows:

Part One: Demonstration & Preparation Stage of Auto KD Project

The main task of this stage is to complete the relevant procedures before the start of the project, including market research, demonstration and argument of project feasibility, collection of recourses and a series of preparatory work.

Part Two: Transition Stage of SKD II & SKD I Assembly

According to the MOU, we move into the implementation stage. We would start from SKD-II and SKD-I before we move further to CKD, even bringing in local parts and designing your own automobiles. This would be good for developing countries and would be a more feasible plan for investors, government and financial institutions.


2-1 Plans for factory construction and production line building in period of SKD-II, SKD-I assembly

2-2 Team building and staff recruitment of the joint venture assembly factory

2-3 Each party would come up with its own share of equipment investment and carry the project forward according to the MOU. A timetable would be made to make sure that plant construction, equipment purchase, manufacture and delivery can be smoothly carried out. 

2-4 China party lead the installation and debugging of production lines with necessary assistance from local party. Sample SKD or CKD cars need to be ordered along with the purchase of equipment. Production line debugging and preliminary staff training would be done by assembling the sample cars.

2-5 Transition stage from SKD-II and SKD-I to CKD


Part Three: Implementation Stage of CKD Assembly


Necessary explanations and solutions

3-1 CKD assembly requires more investment and is more technology intensive. Taking it slowly would lower the risk;

3-2 Keeping the SKD II and or SKD I assembly would make sure the factory can still bring kinds of products to market, and it can still be profitable for factory;

3-3 CKD assembly equipment to be increased partially by several periods would lower the financial stress;

3-4 CKD assembly equipment to be increased partially by several periods would also lower the risk. Staff training and technical skill mastery and technology transfer would also take time.

Part Four: Localization Stage of Auto Parts

When the project is further enhanced, according to the factory itself and the local government’s requirements, some auto parts can be purchased or produced in local.

Part Five: Independent Innovation Stage of Automobile Research & Development

On the basis of localization of parts and components, independent research and development of new automotive products is becoming a new but higher goal of the company's development.


  Part Four: Our Advantages of KD Project 

Why join us in this KD assembly plant project?

1. Best cost performance of Chinese automobile.

2. You can save more tariffs and freight cost by importing auto CKD than CBU term.

3. When you develop market, with 4S shop and technology supply which we provide, you can supply very nice after sale service.

4. The key to make this project succeed is "to proceed from reality in everything, seeking truth from facts". 

5. You can use your own brand for the auto, which is an intangible assets.6. We provide technology support and credit.China's reform and opening up to 40 years development experience, rapid development of economy, you should believe that we can cooperate successfully.