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Chassis & Frames Co. - Coggle Diagram
Chassis & Frames Co.
The Company
Expectations
Mexican Bajío area, is an area that has had a great development thanks to the consolidation of the automotive industry.
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Proposal
An investment to be made during 2020, but with Covid-19 we should consider financial and operation factors on the industry.
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Opportunity
Establish a new plant for the manufacture of the chassis and bodywork for SUV-type vehicles in San Luis Potosí, Mexico, to sell to GM.
Financial Plan
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Initial Investment
Industrial equipment for $65 million dollars, Transportation equipment for $8 million dollars, Installation costs of $1 million dollars, and Building will cost $12 million dollars.
Production
10 thousand units of chassis or bodies which would represent 5% of the company's total production in the first year. Annual growth of 5% is estimated.
Suppliers of materials, supplies, and raw materials be from Mexico. Guaranteeing the regional content defined in the new trade agreement USMCA.
Finance
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40% of the production will go to the GM complex in San Luis Potosí, and 60% to Detroit.
Sales forecast -adjusted under COVID-19 scenario- estimates that 8,500 units +/- 10% will be sold during the first year.
The financing will be through a bank loan for 40% of the initial investment at a rate of 8%. The rest will be a contribution from the parent company that requests a 25% return.
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Construction
Construction of the plant, including permitting and response time for the Environmental Impact Manifesto, is estimated to take around 12 months.
The land for the construction of the plant can be rented for the first 10 years. The required land facility has 3 hectares. The price per square meter on rent is $60 dollars, and $4,000 Mexican peso if purchased.
Project in San Luis Potosí, Mexico
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