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1. How to start and realize the auto industry in developing country?

We would 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 (65%) would get investors and local government more involved.

2. What are the CKD/SKD-II/SKD-I, and CBU(FUB)?

CKD: Completely knocked down parts. All materials supplied loose for final welding and final assembly, or raw body shell and all other parts loose and not assembled.

SKD I: Semi knocked down parts I. Car body and trucks cabin are unpainted. The engine, gearbox, axles, suspension, driveshaft, steering, seats, tires, batteries, exhaust system, electrical parts are supplied as individual units for assembly.

SKD II: Semi knocked down parts II. Car body is fully painted and glazed. Truck cabin is fully painted. The engine, gearbox, axles, suspension, driveshaft, steering, seats, tires, batteries, exhaust system, electrical parts are supplied as individual units for assembly.

CBU(FUB): full Complete Built Unit, i.e. finished automobile.

3. What are the stages of overseas KD project:

We would divide overseas KD project into following stages: 1. Initial stage for market research and resources preparation. 2. Implementation of project including construction and production line building. 3. Transitions among SKD-II, SKD-I, CKD stages. 4. Full CKD production. 5. Parts localization. 6. Design center localization.

4. Why the $10000 is required to pay before signing the MOU? 

Note: To compensate the work party B would put in or avoid the possibility of breaching the MOU by party A, $10,000 is required to pay in advance upon the signing of the MOU. We hope party A would appreciate the work party B would do to prepare for the implementation of the MOU and understand the necessity of such an arrangement. 

5. How much money in total do we need? How many workers do we need? How much energy do we need? How about the profit? 

It is kind of hard to answer all those questions without assuming a bunch of undetermined factors: the size of the factory, possible future expansion, vehicle models, output, investment plan and timeline, factory area, robotic/machinery/physical labor input proportion, labor cost, local taxes, transportation cost, even politics and other social factors etc. 

6. What are the requirements of factory construction. 

Factory needs to be strictly constructed as designed. Construction company would be appointed by contract. 

A, If there were existing factory, we would only need to adapt the design to the existing factory with some probably minor refits to the house. B, If there were no existing factory, we would construct the factory the way our production line design wants it to be. 

Plant requirements:  

A, Standard: 8000-15000㎡, Height: 8M. (For painting line, 10M is the minimum)

Illumination is a must. Power supply, water supply, and sewer are required and should meet the requirements that come with the design. 

B, Easy access to transportation: We need only 2000-3000㎡ for SKD, the rest are for future expansion to CKD, including plants and warehouses. The whole factory would take up 25000-30000 ㎡

Note: steel structure plant would cost the least according to our previous experience. We can order materials from China and finish the installation locally to further minimize the cost to $100 per square meter (design +materials + delivery =$65-70; foundation construction +installation =$30) 

7. Why the transition stages from SKD-II, SKD-I to CKD are needed?

We have to go through different stages from CBU to SKD-II, then to SKD-I and CKD before we can bring the project up to speed. The arrangements of starting from SKD-II, SKD-I has a few advantages as follows:

Starting from SKD-II, SKD-I minimizes the initial investment;

Technology transfer, as well as staff training, will be easily achieved starting from the simpler end of the spectrum. Quality will be more controllable too.

Quick response, which is the feature of starting from SKD-II, SKD-I, will be good for marketing and outreach.

Starting from SKD-II, SKD-I means we can import already-existed productivity directly, while we keep building CKD production lines using extra investment. The confidence of investors, Banks and government will be boosted if we have all at the same time.

SKD and CKD would coexist for 1-2 years or even more.

8. How to localize the production of several auto parts 

The factory has already built the stable sales channel, management reached the international level and the team mastered the professional skill. And it’s time to consider the localization of the production.

1. Co-work with local factory to produce according parts.

2. Built new joint venture of production factory on auto parts.

9. What is the time frame of the investment on the equipment 

If there is extra funding, we could accomplish building of the basic painting line, general assembly line and the test line during the SKD period, or we could finish the whole process of SKD with quite simple assembly line, we will finish the painting line, general assembly line and the test line when we have enough money. We could divide the investment into several stages and finish the project step by step.

10. Why the questionnaire with serious feedback is needed.

Every question in the questionnaire is very important to our value of the future cooperate plan and model.

You may miss some questions in some specific area, please try to offer more detailed information so that we can draw a much clearer picture of our cooperation based on your situation.