1,Universal auto assembly plant---The most economical, effective and practical investment model



1-1.We are the international economic & technology investment company and our mission is to focus on investing in overseas car assembly plant projects.Our investments include automotive manufacturing technologies, brands, key equipment and financial support under effective guarantees.The shareholders of our group are composed of "automobile manufacturer group + financial investor group".We have both technical and financial advantages.The Chinese government's global strategy of "One Belt And One Road" and the layout of china-africa cooperation have promoted the joint "going out" of the Chinese national brand automobile manufacturing group and the financial investment company.With China's 40 years of reform and opening-up in the automotive industry and the successful experience of investing in overseas automotive projects, we firmly believe that we can help local developing countries achieve local industrialization.This is a completely win-win, multi-win situation.

Our investment = continuous investment in automobile manufacturing technology + investment in key equipment + working capital support under reliable guarantee conditions + production, supply and marketing resources through chain operation channels.



1-2 chain-car project investment principle: step by step, stage by stage, change from quantity to quality, realize the strategic goal of industrialization.


1-2-1, gradual investment principle: the "stair climbing" theory of automobile assembly plant

If we put the whole project 100 - meter - high building, we arrived at the top floor, there are several ways we can use the elevator or stairs, if we have a lot of money, like the developed countries, we may soon reach their destination as we use the elevator, but for developing countries, we are short of funds and technology, and this is why we chose the stairs, and then we can separate our goal into several stages, we can also use this way to reach the top.In China, we will provide technical support and financial input to help those who are eager to succeed in the auto industry achieve a win-win situation.Automobile manufacturing project is a technology intensive, capital intensive, labor intensive, policy is very strong project, there is very high threshold to enter this industry.

The stair climbing theory suggests that the goal of breaking a large project into multiple stages can also cross the threshold.


1-2-2, phased investment and step-by-step implementation make the assembly plant possible.The development of the factory ranges from assembling spare parts DKD, SKD II, SKD I to CKD, and finally localization of some parts.The investment in equipment has also increased over time.New models also gradually increase with the market requirements;


1-2-3, from quantitative change to qualitative change, realize the strategic goal of industrialization.

Realizing the strategic goal of industrialization is the dream of developing countries.With the support provided by the overseas chain auto assembly plant project platform, the strategic goal of the dream becomes possible.The strategy of industrialization requires capital, technology, talent and supporting industrial development policies.We invest in technology and key equipment, and the financing under guarantee is to make the best use of our strengths while avoiding our weaknesses. The local partner invests in the plant, and the general equipment and working capital complement each other's strengths.Created the condition for realizing the strategic goal of industrialization.



1-3. Sources of investment funds and ways to raise funds for project startup?

After all, the auto assembly project is capital intensive and technology intensive, and it is very important to raise funds effectively.With $2 million in its own capital, raise the rest.


1-3-1. Accumulate gradually.Observe the market, collect information, look for opportunities, accumulate funds, look for funds.From the perspective of trade, gradually accumulate funds.In particular, smart use of group purchase, government orders to obtain the first bucket of gold.


1-3-2. Leverage capital market forces and modern enterprise system financing: capital accumulation is faster than capital accumulation, shorter time and higher efficiency, which is also the main way for modern enterprises to raise capital.Joint-stock companies can invite more investors to join, raise funds, and raise contacts, which is in line with the popular modern business operation model and development direction.Some projects are not short of funds, but lack the means to raise funds and modern enterprise system.


1-3-3. For local enterprises that have accumulated and have a certain scale, it is easier for them to become our partners.The reason is obvious.



1-4. The shortcut to realize the dream of automobile manufacturing by investing in chain automobile assembly plants is also the most economical and effective path!


1-4-1, a shortcut to the dream of car manufacturing.To develop the automobile industry, large capital investment and continuous technical accumulation are one way, such as general motors of the United States and Honda of Japan, but the developing countries do not have such conditions, which is obviously not suitable.In 2015, China has become the world's largest automobile manufacturer, and we intend to share China's successful experience, technology and investment.We have created the global auto assembly plant business model to share our investment, car manufacturing technology and management experience with our counterparts in developing countries.In this business model, we will enable qualified developing countries to realize the dream of developing automobile manufacturing industry through investment in technology, talent and capital, and realize our value in the process of realizing your dreams.Universal automobile assembly plant is a shortcut to realize the dream of automobile manufacturing in developing countries. It is also the most economical investment plan and the most effective development path..


1-4-2, the chain auto assembly plant project has strong competitiveness.Our advantages include: technical advantages;Commodity advantages;The training advantage can save the necessary groping process such as opening the market with a "learning curve" that self-employment has to go through, and reduce the operation risk and brand advantage.Procurement advantage, reliable channel product performance price higher.In terms of operation, with the help and support of experienced authorizers, its operation quickly moves towards a virtuous circle.The goal of scale operation can be achieved, not only in the short term, but also make intangible assets rapidly improve.


1-4-3, improved overall value.For us, through the establishment of "global chain auto assembly plant", that is, "joint venture factory production-sales-after-sales network" * N Market =N country chain auto assembly plant

Through 1+1 > 2, the sum of 10 and N factories of the chain will be greater than N individual factories. If the market occupied by N factories is organically combined, its value in the international capital market will be qualitatively increased.

As each unit on the network, will increase with the overall value, and quality.




2,The use of financial instruments for automobile assembly plant project to add brick power

When the project is developed to a certain stage, especially when a large number of orders are received, sufficient working capital becomes a necessary condition for the healthy and sustainable development of the automobile assembly plant project.So make the right use of finance

Tools are very important.On the premise of providing effective guarantee, our company will provide the following financing methods for the project development:

2-1 export buyer credit


2-1-1  concept:

Export buyer's credit refers to the country to support its export products, through to provide insurance, finance or interest subsidies, encouraging financial institutions to the importer, the bank or the importer provide preferential government loans, it is mainly used for foreign importers to buy their own ships, planes, power stations, cars and other complete sets of equipment, and other mechanical and electrical products.


2-1-2 Conditions of use:

According to the bank of China's export buyer credit method, the commercial contract, the exporter and the borrower shall meet the relevant loan requirements. The main conditions are as follows:

1) the importer shall pay an advance payment of 20-30% under the business contract.


2) the loan amount shall not exceed 70-80% of the commercial contract price.


3) the borrower shall insure the export credit insurance with the insurance company.


4) sign the loan agreement as required by the lender.


5) loan guarantee issued by the central bank or the ministry of finance of the borrowing country.


6) determine the payment term according to the term of the commercial contract.


7) the business contract complies with the relevant provisions of both governments and has obtained the relevant approval of both governments.


8) the loan currency is usd.


9) the amount of the business contract shall not be less than $10 million.


10) the export settlement under the commercial contract shall be conducted in our bank.


11) the commercial contract shall take effect prior to the loan agreement.


2-1-3 Operation process:

Export buyer credit is a credit support provided by the exporter's bank directly to the importer or importer's bank for the importer to purchase the technology and equipment and pay the relevant fees.Export buyer's credit insurance is provided by export buyer's credit insurance institution.Export buyer's credit mainly comes in two forms: first, the exporter's bank extends the loan to the importer's bank, and then the importer's bank transfers the loan to the importer;Second, by the exporter's bank direct loan to the importer, by the importer's bank issued a guarantee.The loan is denominated in U.S. dollars or other currencies approved by the bank.The loan amount shall not exceed 70-80% of the contract amount.The term of the loan depends on the actual situation and generally does not exceed 10 years.Lending rates are set according to the level set by the organisation for economic co-operation and development.Buyer's credit usually involves four types: exporter, exporter bank, importer and importer bank.


There is now an international import and export trade in large production equipment to be carried out.

1,the exporter and importer will sit together to discuss the trade. The negotiation includes the use of buyer's credit.The trade contract will be signed when both parties agree on relevant issues and necessary preparations are made.The importer then pays a cash deposit of about 15%.This is necessary.That 15% is likely to end up as part of the payment.Buyer credit will be up to 85% of the total trade amount, so the importer is sure to pay part of the payment in advance.


2,signing a loan agreement between the bank of the importing country and the bank of the exporting country.Before that, the two Banks should contact and negotiate with their respective buyers and sellers to understand and review the trade.Loan agreements will be based on trade contracts and will be independent.


3,the bank of the exporting country lends money to the bank of the importing country, and the bank of the importing country lends money to the importer, and the importer pays the cash payment to the exporter.To avoid unnecessary twists and turns, the money is actually handed directly to the exporter by the exporter's bank.Then the importer returns it.


4,the bank of the exporting country shall apply to the local authorities for the margin subsidy.This is because the interest rate of the bank of the exporting country under its own laws or policies will be lower than that of the commercial market.This spread is filled by the governments of exporting countries in the form of subsidies.The bank of the exporting country will also have to insure its export credit against recovery risk.The state establishes special agencies to handle export credit insurance business.All these measures are for the strategic purpose of promoting national exports.


5,  the importer repays the loan in installments to the local importing bank according to the loan agreement, and the importing bank repays the loan in installments to the exporting bank until the repayment is completed.


6,Sometimes there are only three parties to a buyer's credit, and there is a shortage of importing Banks.Although there are some operational differences, there is no significant difference between the basic legal relationship and the four-party structure.In fact, the buyer credit of the quartet structure is more common, and it can be seen from the above analysis that the intervention of importing bank is necessary.


2-1-4  Specific practice of export buyer credit

The specific practices of bank of China in major aspects such as amount and interest rate are as follows:


1) loan amount

The loan amount of complete sets of equipment and other mechanical and electrical products shall not exceed 85% of the total price of the commercial contract, and the ship shall not exceed 80% of the total price of the commercial contract.The loan amount may include an appropriate proportion of technical service fees, local costs and third-country procurement costs.


2) interest rates

The interest rate of the export buyer's credit is determined on the basis of the preferential principle by reference to the business reference rate (CIRR) published monthly by the oecd.Chinese Banks usually use the commercial reference rate for the month when the loan agreement is signed.The interest rate is fixed.In some cases, the bank of China has also adopted floating rates.


3) the deadline

The bank of China's export buyer credit rules stipulate that the maximum term of the loan shall be from the date of signing the loan agreement to the date of paying off the principal and interest of the loan, generally not exceeding ten years.


4) charge

There are two main costs under the bank of China's export buyer credit:

A. Payment fee: the fee shall be paid semi-annually according to the outstanding balance of the loan until all the solstice loans signed in the loan agreement are completed.

B. management fee: the fee shall be charged in a lump sum according to the loan amount and generally shall be paid within 30 days after the signing of the loan agreement.

C. depending on the terms of the business contract and the loan, the lender sometimes requires the borrower or the exporter to pay the legal fees and travel costs under the export credit.


2-2 Usance letter of credit


 2-2-1 conception

L/C at sight is symmetric. When the issuing bank or the paying bank receives the documents from the bank of the exporting party, it will not make the payment immediately even though the documents are in conformity with the documents examined. Instead, it will wait until the maturity date of the bill of exchange after the time of payment. It is a letter of credit based on a contract of exchange for d/p at sight and payment after sight. In the practical application of international trade, forward letters of credit are generally divided into the following types:


(1) bank acceptance forward letters of credit. The drawee who takes the issuing bank as the drawee of a time draft shall be liable to the drawer, the endorser and the holder of the bill of exchange when the bill of exchange is in conformity with the acceptance of the time draft upon examination;


(2) trade acceptance letter of credit. The applicant (the importer) shall be the drawee of the time draft. The issuing bank after receiving the draft document examination to the importer upon consistent examination of documents be acceptance, after acceptance of documentary draft is still retained in the issuing bank, deferred acceptance date importers to redeem


(3) the deferred payment by l/c payment. Open the l/c issuing in terms stipulated in the "several days from date of b/l payment", or "several days after the issuing bank to see a single payment", generally do not require the beneficiary (exporters) to open bill, even if the submitted order, the issuing bank will not be accepted, therefore not easy to discount, so the deferred payment l/c is also called no acceptance credit card. In the contemporary international trade, we still use sight letter of credit as the main method, supplemented by forward letter of credit, which is the same in China.


2-2-2 premise: 30% of the opening capital + reliable bank + citic insurance

Financing plan of 2-2-3 taxi and bus:

Taxi, bus trade association + forward letter of credit financing + local bank finance leasing companies

(see A taxi financing case for details)


2-3 financing arrangement under the guarantee conditions of citic insurance


2-3-1 use the guarantee conditions of citic insurance financing: if it has reliable assets;A good credit history;Importers have good market prospects and can obtain credit lines.


2-3-2 can effectively enlarge the credit limit by using citic insurance financing.

For more information, please visit our website:http://www.sinosure.com.cn/en/



2-4 establish strategic cooperation with local Banks or financial leasing companies

In developing countries, there is not much money to be paid for car sales.For large orders, the bank is needed to support.For a company with a banking background, try to invite a shareholder or strategic partner.


2-4-1, prerequisites for establishing strategic cooperation with local Banks or financial leasing companies:

A. There is A local auto assembly plant, which can give relevant parties confidence.

B, a perfect after-sales service system.Give consumers confidence.


2-4-2, what is auto financing lease and how to finance it?

Financial leasing is a way of payment by cash installment. On this basis, it introduces the characteristics of the separation of ownership and right of use in the rental service, and transfers the ownership to the lessee after the lease ends. Through the integration of funds with Banks and franchisees, purchase customers' designated cars from auto manufacturers, cooperate with insurance companies, meet customers' demand for cars, and collect rent to repay the Banks and franchisees.



2-4-3 Description of auto financing leasing business process


By the leasing company (lessor)

Purchase the car from the supplier and lease it to the lessee in accordance with the lessee's requirements.After the signing of the lease contract, the lessee shall pay in accordance with the provisions of the lease contract

20% - 30% lease deposit and related charges.During the lease term, usually

1 ~ 3 years, in principle no more than 3 years, the lessee shall pay the rent to the leasing company in installments (usually once a month) as stipulated in the leasing contract, while the lessor shall transfer the rights and obligations such as the use and management of the leased car

To the lessee, that is, the lessee has the right to use the leased property, and the ownership is owned by the lessor.During the lease term, the car supplier shall provide the buyback guarantee for the vehicles. Once the lessee breaches the contract and refuses to pay the rent,

The leasing company shall initiate the vehicle repurchase process together with the supplier, take back the leased vehicle and dispose of it.The lessee is responsible for the maintenance of the car.Upon the expiration of the lease term, the lessee shall release the ownership of the lease item by the lessor after fully paying the rent agreed in the lease contract, and the lessee shall acquire the ownership of the equipment at nominal cost.

Auto financing leasing business process:


1. The lessee shall apply to the leasing company for automobile finance lease business and provide relevant information;


2. The leasing company reviews and passes the project to the lessee;


3. The lessee shall provide the leasing guarantee (property mortgage or personal unlimited liability guarantee) to the leasing company;


4. The leasing company shall notarize and put on record the lessee's guarantee;


5. The leasing company and the lessee sign the sales contract and the vehicle repurchase guarantee contract with the automobile supplier;


6. The leasing company signs the financing lease contract with the lessee;


7. The contract shall become effective after the lessee pays the security deposit.


8. The leasing company pays to the supplier;


9. The supplier submits the vehicle invoice and bill of lading to the leasing company;


10. The leasing company shall handle the registration and registration procedures with the supplier's valid invoices and documents to the vehicle management department;


11. The leasing company shall deliver the vehicles to the lessee as agreed in the contract;


12. The lessee shall, in the favor of the leasing company, insure the vehicles with the insurance company according to the contract:


13. The lessee shall pay rent to the leasing company in accordance with the provisions of the contract;


14. The company and the lessee shall deal with the residual values as agreed;


15. At the end of the contract, the leasing company shall issue a certificate of transfer of ownership of the leased items to the lessee.

Model diagram of auto financing lease business process


Of course, in order to obtain sufficient working capital for the project and take into account various possible coping situations in the project, the above tools can be used in combination, in two or in all, to achieve the best financing effect and financing purpose.




3,Successful cases


3-1 African country A taxi replacement program combined with A series of financial instruments.


Background: a Chinese taxi in Africa is almost 10 to 25 years old, used and in urgent need of 1,000 new taxis, with government support.The problem is lack of money.

Financing process: our company has A joint venture automobile factory in A, and we cooperate with A national public passenger transport industry association to contact the taxi operation company to complete the joint venture.It costs about $10,000.


Step 1: raise 15-20% of the price of a car from a driver, 10-15% from a taxi operator, and 10% from a public passenger transport industry association.(between 30 and 40 percent in total)


Step 2: the public passenger transport industry association, entrusted by taxi companies, signs the 30-month taxi financing lease contract with the bank's financing leasing company.


Step 3: the bank's finance leasing company, after receiving the deposit from the public passenger transport industry association, entrusts the local "sino-african joint venture car assembly plant" to produce taxis.To get a win-win situation, double

Both parties signed a win-win cooperation agreement.Key point 1 is that the bank's finance leasing company paid the deposit three months in advance, "sino-africa joint venture car assembly plant" at the same time,

For the remaining 70% of the payment, the bank's finance lease company is given credit for 10-12 months.Key point 2 is that Chinese suppliers accept irrevocable long-term letters of credit under reliable guarantee conditions.


Step 4: "sino-africa joint venture auto assembly plant" to open a 12 month long letter of credit to the Chinese factory.The Chinese factory delivers the goods, the car assembly plant of sino-africa joint venture completes the assembly, delivers the goods on time, and provides after-sales service.

Ensure the smooth implementation of the finance lease contract.


Key notes:


1) as the difference of duty between spare parts and complete vehicles is about 30%, the factory can offer very competitive prices.


2) the jv plant can provide critical credit support as the Chinese supplier supports the acceptance of usance letters of credit.The remaining 70% of the purchase price can be granted a grace period of 10-12 months.


3) the joint venture factory and provide after-sales service to guarantee the smooth implementation of the financing lease contract.


4) the finance lease has received a deposit of 30-40%, and the leasing cost in the first year has been added, and the leasing company has received 70% of the total cost, so the risk is very low.


5) the local bank interest in Africa is 20-35%, and the interest of forward letter of credit is below 12%.The profits are clear.


3-2  M city bus replacement plan and export buyer credit financing cases.


Background information: M national public transit bus replacement program, M national public transit bus is almost 15 to 25 years old, the old diesel bus of euro II is in urgent need of replacing 1,000 new energy public transit buses. The government has a strong demand but lacks funds.

A local bus refurbishment plant has set up a joint venture with our company, which has partnered with the public passenger transport industry association to submit the new energy public transport bus replacement business plan to the local central government for a positive response.


Financing process:


1) collect generally accepted local appearance and modeling information, design new energy buses customized by Chinese factories in accordance with local requirements, export spare parts to joint-venture factories in m. complete the assembly in joint-venture factories in m. and shoot videos of the assembly process, invite government officials to visit the factories and make public opinions.


2) testing, road test and government acceptance.


3) the government arranged the central bank to provide guarantee, and signed the export buyer credit contract with the export-import bank of China.20% deposit + 80% payment will be completed within 3 years.


4) the Chinese factory provides the spare parts and assembles them in country M according to the contract.Partial delivery to government bus carrier.


Key points of successful financing:


1) channels, bus assembly plants and the connections between bus transportation companies and the government.


2) guarantee, the sovereign credit guarantee of the central government, or the guarantee provided by the central bank, or the bank guarantee of a well-known local bank + a third-party multinational company, effective guarantee is the key.


3) the local bus assembly factory completed the assembly. The difference between CBU and CKD tariff makes the bus price competitive and can provide reliable after-sales service.This is a prerequisite for getting large orders.




4. Investment philosophy, strategic objectives and strategic interests of the global chain auto assembly plant project

Our investment philosophy:



4-1, Advantage complement each other, draw on each other's strengths to make up for each other's weaknesses.In the design of project investment structure, attention should be paid to make full use of their advantages.

China's advantages: mature automobile manufacturing technology, experience in developing automobile industry, key equipment manufacturing capacity, strong capital advantages.Advantages of local partner: land plant, general equipment, local market and government network resources, available funds available locally (lack of means and projects to collect funds).The combination of the two, exactly drawing on each other's strengths and complementing each other's strengths, will greatly enhance the value of the reconstructed resource combination, and all stakeholders can benefit, forming a huge resultant force.

"Common interests are friends and brothers!"

A swarm of small fish has become big enough to resist market risks.


4-2, our strategic objectives:

Our strategic goal is to build a network of global auto plants.Through the factory and established sales network channels as well as the extended after-sales service system, cover the world's major automotive markets.

Make strategic goals possible.Through a chain of car assembly plants and established sales network channels as well as extended after-sales service system, cover the world's major car markets.


4-3, our strategic interests:

Our investment focuses on the long-term development of the project.Within a certain period of time, the dividends of joint venture factories of chain cars will be mainly used to expand reproduction, invest in related projects of automobile industry and achieve strategic goals.

Build a multinational company that meets the requirements of the capital market, and realize its value through listing in the capital market and acquisition.

Our secret: by completing the layout of "global chain auto factory", we will strengthen and make large projects, and take a long-term plan to realize the value through listing in the capital market


4-4, our investment and chain operation:


4-4-1, the chain platform where car assembly becomes possible in developing countries:

4-4-2, who are our preferred and unacceptable collaborators?


4-4-3, basic conditions investment partners should have:

After all, automobile manufacturing project is a technology-intensive, capital-intensive, labor-intensive and highly policy-oriented project. There is a certain threshold to join the industry partner.How do we select target markets, potential investment partners, and the basic conditions that partners should have:


l  Self-built plants: there are at least 5,000-8,000 square meters of plants, and more than 15,000-25,000 square meters of industrial land.


l  Self-prepared cash: with certain economic strength, the investment capacity must be above $2 million.(excluding land, plant value)


l  Marketing channels: automobile sales channels (sales network) or garage remanufacturing used cars, or related businesses.


l  Your import tariff policy: your import tariff policy is very important. The difference of import tariff between the CKD(complete failure) clause of auto parts and CBU.(complete equipment) at least 30-35%;For example, the import tariff of CBU is 35%, and the import tariff of CKD must be 5% or free.This term is the most important element in building assembly.The plants are local.If CBU is almost the same as CKD, the car factory will have no profit margin.


l  The joint venture should have the interest in industry and broad ideal, rather than the "landlord profit" model of land rent.


4-4-4, we prefer to cooperate with capitalists, industrialists and entrepreneurs with lofty ideals, rather than with "landlords".The so-called "cooperative mode of landlords", in which landlords own land and live by expropriating rents or exploiting peasants.Those who provide only land or plants, do not work, do not provide any working capital, and rely solely on exploitation of tenants, known as landlords.The main way landlords exploit is by collecting rent.Therefore, we will never accept the "landlord cooperation model".As a local partner, if you only provide the land, plant and/or production license, the rest of the funds, equipment, management, etc., are provided by the Chinese, just as local landlords charge profits without any other investment.So, sorry, you're not our partner.We like to work with industrialists, capitalists and entrepreneurs, and those who are already or are working in industry are more suitable partners for us.Our principle of cooperation is "" work together, grow bigger and stronger, and achieve win-win results" ".


Note: our investment principle: the characteristics of capital determine the investment principle, only do the icing on the cake.For partners with nothing, and projects that do not meet the basic requirements, this is not our choice.