It Is the project feasibility report of Precision auto pistons. so in that report it is given that what needs to be done in order to open a auto mobile manufacturing company. how these analysis is to be done.

1. Project Feasibility Report
on
Precision Auto Pistons Pvt.Ltd.
By
Aniket K. Kulkarni
Roll No:- MT14IND003
Industrial Engineering (2014-15)
Mechanical Engg. Department
VNIT Nagpur

2. Introduction
The automotive industry is the key driver of any
growing economy. The automobile industry comprises
automobile and auto component sectors.
The component production range includes
• engine parts 31%,
• drive transmission and steering parts 19%,
• suspension and braking parts 12%,
• electrical parts 10%,
• equipment's 12%,
• body and chassis 9% and
• others7%.

3. This project report is mainly focussed on manufacture
of “automobile piston”, one of the most demanding
engine parts.
Auto piston is a part of automobile which reciprocates
in the engine cylinder to transmit power to the wheels. It
is generally made of Aluminium.

4. Raw material study
Aluminium Alloys are the preferred material for pistons
both in gasoline and diesel engines due to their specific
characteristics :- low density, high thermal conductivity,
easy machinability, high reliability and very good
recycling characteristics & Good corrosion resistance..
L M 13 Aluminium Alloy
Al-Si12Cu
(Al rest, Si 12, Cu 1.0, Fe 0.8, Mg 0.3, Mn 0.3 (wt.%))

5. Raw Material Supplier
1. Gold Star Alloys
Plot No. 276, Sector No. 7, Opposite Sahani Gas
Industrial P. C. N. D. T. A, Bhosari,
Pune - 411026, Maharashtra.
2. All Metal India Private Limited
No. 94, B/2, Rasta Peth, Opposite Swami Narayan
Mandir ,
Pune - 411011, Maharashtra.

6. 3. S. S. Enterprises, Chakan
Gate No. 347/1K, Behind Suvarna Fibrotech Company,
AT Post Mahalunge, MIDC, Chakan ,
Pune - 410501, Maharashtra.
4. Samrat Enterprises
Vitthal Nagar, Near Radex Company, Pimpri Road,
Landewadi, Bhosari, Pune-411039,
Maharashtra.

7. Demand Study
• The Indian automobile industry is growing at a very
high rate with sales of more than one million
passenger vehicles per annum. The overall growth
rate is 10-15 % for automobile industry and 28 % for
automobile component sector annually.
• Today’s competitive market has put all major
automobile companies upfront to design and
develop varieties of vehicles as per customer
demands. The replacement market is also likely to
expand. This indicates scintillating prospects for
much faster growth and development of new auto
component industry.

8. The Auto Component Manufacturers Association
(ACMA) has pegged domestic demand for auto
components of $ 20-25 billion in 2015 -16from current
demand of approximately $ 10 billion.

12. Technical study

13. Flow of Processes involved in Manufacture
of Piston by Casting Process :-
CASTING
X RAY INSPECTION
HEAT TREATMENT
MACHINING PROCESS
1) PIN HOLE BORING

14. 2) CNC TURNING
i) Open end bore machining
ii)Rough outer diameter turning
iii) Grooves forming
3) DRILLING AND GRINDING
4)DEBURRING AND TIN COATING

15. 5) REAMING
PIN FITTING AND FINAL INSPECTION
PACKEGING

16. Quality Controls & Standards
As per IS 7793 : 1975, Aluminium Alloys for I.C engine
pistons; basically four grades of the alloys have been
specified namely – 2285, 4658, 4928-A and 4928-B
with various alloying compositions like Si, Cu, Mg, Fe,
Mn, Ni, Zn, etc.
Hardness has been specified between 90 to 140 HB with
tensile strength ranging from 165 to 275 N/mm2 for
various grades.

17. Production Capacity :
Production Capacity (Per annum) = Production rate
per hour * Yield rate * Efficiency *Hours per shift * No.
of shift per day * No. of working days per month * No.
of months per annum.
Production rate per hour = 12
Yield rate =95%
Efficiency = 70%
Hours per shift = 8 hours
No. of shift per day = 1 shift
No. of working days per month = 25 days
No. of month per year = 12 months

18. Now,
Production Capacity (Per annum) = 12 *.95 *. 70 * 8
* 1 * 25 * 12
= 19152 Nos.
= 19000 Nos. (Say)
Production Capacity (Per annum) = 19000 Nos.

19. BASIS AND PRESUMPTIONS
1. The production capacity of the unit has been worked
out on the basis of single shift of 8 hours a day for
300 working days a year ( i.e.25 days a month ).
2. The unit is expected to work at 70% efficiency of
installed capacity with yield rate of 95%.
3. Wages for labour, etc. have been considered as per
the prevailing market rates in accordance with the
Minimum Wages Act.

20. 4. The unit is assumed to run in a rented/leased
building.
5. The cost of machinery and equipment's have been
taken as per the rates quoted by
manufacturers/suppliers.
6. The cost of raw material and other inputs are based
on current prices prevailing in local market.
7. Interest rate for fixed and working capital investment
have been calculated on an average rate of 16%.

21. Location study
Availability of land Rented 4000 sq. feet land is available in the industrial
region of Pimpri Chichwad.
Approach to Site Good network of Rail and Road transport. Near the
National Highway NH 4.
Transportation Rented vehicles for transportation and supply are
easily available near the working site.
Water Personal Bore water of land Owner is available for
drinking water and daily needs. Municipal Corporation
taps are also available.
Power Electricity is easily available with 24 hrs.
Other facilities The amenities like Post office, Banks, Police station,
Petrol Pumps, Canteen, Bus services etc. are available
in this area.

22. Implementation schedule
Sr No. Activity Estimated
period
1. Preparation of the project report 1 month
a. Calling quotations 2 weeks
b. Preparation of Report 1 week
2. Provisional registration as SSI Unit 3 months
3. Clearance from Pollution Control Board 3 months
4. Financial Arrangements 1 month
5. Purchase and Procurement of Machinery and Equipment 1 month
6. Installation of Machines and Equipment 1 month
7. Electrification etc. 1 month
8. Recruitment of staff 1 month
9. Commencement of production 9 month’s
onwards

23. Financial aspects
1. FIXED CAPITAL
(i) Machines & Equipment's :
Sr.No. particulars Qty. Rate per unit
(In Rs.)
Amount
(In Rs.)
1 Crucible tpye Tilting Furnace (Electrical), 250 kg 4 70000/- 280000/-
2 Boring Machine 1 50000/- 50000/-
3 Lathe Machine, Bed length 4’6”, swing
dia 350 mm, 1.5 KW / 2 H.P
4 60000/- 240000/-
4 Precision Lathe Machine 2 80000/- 160000/-
5 Pillar type Drilling Machine, 0.5 H.P 1 35000/- 35000/-
6 Bench Grinder double ended, 0.25 H.P 1 15000/- 15000/-
7 Tempering Furnace, 400°C 1 70000/- 70000/-
8 Laboratory comprising chemical and physical testing 1 200000/- 200000/-
9 Bench-Vice, Table, Fixtures, Measuring Instruments, Moulding
box, Die, Guages, etc.
L.S. 100000/- 100000/-
10 Generator and Other Electrical Accessories 1 100000/- 100000/-
Total = 1250000/-

24. (ii) Pre-Operative Expenses : Rs. 70000/-
(iii) Electrical and Mechanical installation @ 10% of Plant
and Machinery cost: Rs. 125000/-
(iv)Office/Lab. Furniture & Equipment's: Rs.100000/-
Total Fixed Capital = 1545000/-

25. 2. WORKING CAPITAL (PER MONTH)
(i) Salary & Wages :
Sr.No.Salary & wages Nos. Salary Amount
1 Production Manager 1 22000/- 22000/-
2 Supervisor 2 12000/- 24000/-
3 Storekeeper 1 7000/- 7000/-
4 Office Assistant 1 9000/- 9000/-
5 Skilled Worker 4 10000/- 40000/-
6 Semi-skilled Worker 5 8000/- 40000/-
7 Unskilled Worker 3 6500/- 19500/-
8 Maintenance Fitter 1 9000/- 9000/-
170500/-
25575
196075
Total =
Perquisites (i.e. Bonus, Incentives, Allowances ) @ 15% =
Grand Total

26. (ii) Raw Materials :
Sr.No. Raw/InputMaterial Qty. Rateper
unit (InRs.)
Amount
(InRs.)
1 AluminiumAlloy,Al-12%Si 480Kg(Considering
pistonweight300gm)
110/- 52800/-
2 PackingMaterial(Moulded
hardpapercartoon)
1600 10/- 16000/-
68800/-Total=

27. (iii) Utilities :
Sr.No. Utilities Consumption Rate per unit
(In Rs.)
Amount
(In Rs.)
1 Electricity 4000Units 5/- 20000/-
2 Fuel 200Litre 55/- 10000/-
3 Water 100KL 10/- 1000/-
31000/-Total =

28. (iv) Other Contingent Expenses :
Sr.No. Particulars Amount
(In Rs.)
1 Land &Buildingrent 95000/-
2 Insurance 10000/-
3 Office stationary and postage 3000/-
4 Publicity and advertisement 10000/-
5 Travellingand conveyance 12000/-
6 Legal and otherexpenses 8000/-
7 Repairand Maintenance 8000/-
8 Consumable stores 6000/-
Total = 152000/-

29. • Total Working Capital, i.e. Recurring Expenditure
(For 1 Month) = 447875/-
• Total Working Capital, i.e. Recurring Expenditure
(For 3 Months) = 1343625/-
• Total Capital Investment (Fixed + Working) =
28,88,625/-

30. Source of Finance
Bank Name- HDFC Bank
Principal amount – Rs. 23,00,000 /-
Rate of interest – 16 % p.a.
Loan Tenure : 8 years

31. TAXATION
1. Corporate Tax in India :
= 30% Total Income
= 30% of Gross Profit
= 0.30 * 3293320
= 9,87,996/- INR

32. 2. DDT( Director Dividend Tax)
= 15% (Gross Profit/Anum – Corporate Tax)
= 15% (3293320 – 987996)
= 15% 2305324/-
= 3,45,799/-
Total Tax payable = 9,87,996 + 3,45,799 = 1333795/-

33. FINANCIAL ANALYSIS
1. Cost of Production (Per annum)
Sr. No. Particulars Amount (In Rs.)
1 Total annual Recurring Cost 5374500/-
2 Depreciation on Machines & Equipment's
@10%
(Excluding furnace)
90000/-
3 Depreciation on Furnace @20% 70000/-
4 Depreciation on Office/Lab Furniture &
Equipment's @20%
20000/-
5 Interest on total Capital Investment @16% 462180
Total 60,16,680/-

34. 2. Turn-over (Per annum)
3. Gross Profit (Per annum)
Gross Profit (Per annum) =
Total turn over (Per annum) – Total cost of production(Per
annum)
Sr.No. Item Qty. to be
sold/Anum
Rate perunit
includingVAT @
13%
Amount (In
Rs.)
1 Automobile Piston 19000 480 9310000/-

35. Gross Profit/Anum = 9310000 – 6016680
= 32,93,320/-
4. Net Profit
= Gross profit – Tax payable
= 3293320 – 1333795
= 19,59,526/-

36. 4. Profit Ratio
Net Profit Ratio = (Net profit per annum / Total
turnover per annum) * 100
= (19,59,526 / 9310000)x100
= 0.2104
= 21.04%
5. Rate of Return (On Investment)
Rate of Return = (Net profit per annum / Total capital
investment) * 100
= (1959526 / 28,88,625) * 100
= 0.6783
= 67.83%

37. 6. Break Even Point (B.E.P)
Fixed Cost
Sr.No. Particulars Amount (In Rs)
1 Interest on total capital investment 462180/-
2 Total depreciation 90000/-
3 Building rent 1140000/-
4 Insurance 120000/-
Total 18,12,180/-

38. Production cost per annum: Rs. 60,16,680/-
Turnover : Rs. 93,10,000/-
Quantity produce per annum: 19000
Fixed cost: Rs 18,12,180/-
Fixed cost+ production cost per unit*x=sales cost per
unit* x
BEP :
• Volume(x) : 11050 pistons
• Pay back period : 7 months
• Sales : Rs. 53,04,000 (sales cost per unit*x)

39. ADDRESSES OF MACHINE & EQUIPMENT
SUPPLIERS
For lathe, boring, drilling and grinding m/c,
1. Precision Machine Tools 16/1, Gopi Nath Estate, Part –
II, Swami Narayan Chamber, NH-8 Ahmedabad – 382 415.
2. J.P Machine Tools Private Ltd. 1575, G.T Road,
Dholewal Chowk Ludhiana – 141 003.
3. Simplex Engg. Works, G.T Road, ASR Bypass Chowk,
Batala, Punjab.

40. For crucible furnaces
1. Steel Fast Engg. (P) Ltd.,16/2, Mathura Road,
Karkhana Bagh, Faridabad – 121 002.
2. D.G Enterprise, J.N Bose Road, Subhash Park,
Kolkata – 700 147.

41. Thank you