executive director of napak mr. mikhail blokhin

Национальная Ассоциация Производителей Автомобильных КомпонентовЧлен Европейской Ассоциации Поставщиков Автомобильных Компонентов

www.napak.ru E-mail: [email protected]

Program of Modernization and development of vehicle components manufacturing in Russia for 2005 – 2010.

Executive Director of NAPAKMr. Mikhail Blokhin

November 23-th, 2005



The structure of vehicle components manufacturing before the middle of 1990-th

Russian automotive plants

Components manufacturing

90% 10%



R&D

Independent suppliers

2









Nowadays state at the Russian market of vehicle components

Russian automotive plants

Componentsmanufacturing





60% 40%

R&D

Independent suppliers

3



Nowadays situation at Russian vehicle components market

Low quality of production (from 250 up to 1000 ppm, required 60-100 ppm). Declared quality policy is formal.Low value of R&D products and big term of engineering and production tooling.Outdated technologies and equipment (basis assets are on average worn out for 70-100%)Low qualification and large number of a staff.Supply system does not corresponded with “just-in-time” system.Clear strategy for development of production is absent.Independent engineering companies are absent.

4



445 556 640 523 650 628 729 658 693 698

227 191 229 241251 239 213 188

190179

20 33 69 72 46 47 79 112 216408

0%10%20%30%40%50%60%70%80%90%

100%

1995 год 1996 год 1997 год 1998 год 1999 год 2000 год 2001 год 2002 год 2003 год 2004 год

Lada Other Russian Foreign

Sales of new passenger vehicles in Russia from 1995 to 2004,in thousand items

5



The program of modernization and development of vehicle components manufacturing in Russian Federation

6

National market capacity is not equal to minimum necessary volume of effective production.

When the call and export possibilities are limited only realization of one project in respective arias becomes possible.



Manufacturing assembly

THE GOVERNMENT OF RUSSIAN FEDERATION

REGULATION №16629-th of March, 2005

ABOUT MAKING ABOUT MAKING OF CHANGES IN CUSTOMS-TARIFF REGARDING TO VEHICLE

COMPONENTS, IMPORTING FOR MANUFACTURING ASSEMBLY

7



Import of components (goods), classified by commodity items

of foreign-economic activity (CIFEA) for “manufactuting

assembly” of motor vehicles, is realizing in accordance with

Agreement between the Ministry for Economic Development

and Trade of Russian Federation and Russian Legal Entity

and a statement for enter of production facilities.

Manufacturing assembly 8



Production facilities must meet next requirements:

Issue program – 25 000 vehicles per year, Welding and painting of body, Assembly operations (mounting of interior equipment, power plant,

steering unit, front and rear suspension, exhaust system, mounting of electric equipment, exterior parts, testing)

Number of importing materials and components (relating to their cost) to custom territory of Russia, regarding to commodity items of foreign-economic activity for “manufacturing assembly”, must be less then 70% from the whole volume of ones necessary for manufacturing of a finish product.




The list of manufacturing operations can be reduced during development of manufacturing facilities.

Organization of body welding and painting:-for working enterprises – during 18 months,-For creating enterprises – during 30 months.




Stage I – welding, painting, assemblingNot later than 18 months after a date of Agreement validation

100

86

75

80

85

90

95

100

% 0-1818-42

0-18 10018-42 86

месяцы

Stages of reduction of importing goods list 11



Stage II – reducing of the list on 10%

10086

76

0

20

40

60

80

100

% 0-1818-4242-60

0-18 10018-42 8642-60 76

месяцы

Not later than 24 months after Stage I




10086

7666

0

20

40

60

80

100

% 0-1818-4242-6060-72

0-18 10018-42 8642-60 7660-72 66

месяцы

Stage III – reducing of the list on 10%

Not later than 42 months after Stage I




10086

7666

56

0

20

40

60

80

100

%0-1818-4242-6060-7272-82

0-18 10018-42 8642-60 7660-72 6672-82 56

месяцы

Stage IV – reducing of the list on 10% Not later than 54 months after Stage I




Requirements of “Manufacturing assembly” concept for next goods:1.1. Engine: work volume not less than 2,5 l:- manufacturing facilities – not less than 25 000 items per year,- machining – not less then 4 basic parts work volume more than 2,5 l: - manufacturing facilities – not less than 15 000 items per year,- machining – not less then 2 basic parts - assembling and check operations, engine ass. testing

1.2. Gearbox: manufacturing facilities:- torque less than 30 kg*m – not less than 25 000 items per year,- torque more than 30 kg*m – not less than 5 000 items per year case machining assembling and check operations




Addition for Regulation №166, spreading “manufacturing assembly” conception, is preparing for next assemblies and units: clutch ass. steering units brake sysrems telescopic legs and shock absorbers driving axles with differentials ass. and non-driving axles seats, exhaust systems door closing mechanisms seat belts with pre-tensions air bags other components




Example reduction of components List importing for manufacturing assembly

A vehicle cost is $ A vehicle cost is $ 60006000

17



Example of calculation

Assembly set (% of cost)Group name Share in car set

Engine 15-17%

Manual gearbox 5%

Automatic gearbox 14%

Components recommended for list reduction

47-49%

including a set of body welding details 14%

Other components, inexpedient for manufacturing in Russia

19-22%

18



Example of calculationAssembly set, USD

Group name Cost

Engine 900Manual gearbox 300Automatic gearbox 900Components recommended for the list

reduction2760

including a set of body welding details 840

Other components, inexpedient for manufacturing in Russia

1140

19



Example of calculationComponents recommended for decreasing

Item name Cost in $

Set for body welding 840Brake drums 30Rear wheel hub and bearing assembly 44Rear brake 30Front wheel hub 23Front brake assembly 45Brake disc 48Steering knuckle 20Vacuum brake booster assembly 27

20




Item name Cost in $

Parking brake lever 3

Telescopic shock-absorbers and struts

60

Telescopic struts mounts 7

Rear axle rail 34

CV joint (set: left/right) 91

Steering column 26

Front wheel hub bearing 28

Sub frame assembled with steering and levers

149

Main muffler 31

21




Item name Cost in $

Additional muffler 32Exhaust pipes 18Catalytic converter 103Radiator 22Electric fan 16Fuel tank 83Fuel hoses 8Air filter assembly 34Seat set 256

22




Item name Cost in $

Glass set 68

Head-rest set 17

Head lights 46

Tail lights 28

Fog lights 8

Door and trunk locks 26

Doors, trunk and roof mats and covers 70

Carpets 30

Dashboard 180

23




Item name Cost in $

Seat belts 61

Mirrors 26

Airbag module 89

Assembled bumpers (set: front/rear) 74

Tires set 111

Wheel set 51

Harness 145

Instrument cluster 33

Battery 18

Starter 21

24




List of decreasing items (stage II)

Quantity of details in the List must be reduced so that their cost should be more than 10 % of car set cost (without body)

25




That is:6000-840 (body cost) =516010% from $ 5160 is $ 516

So, it is necessary to decrease the List to achieve whole cost of decreased items more then $ 516

26



Example of calculationExample*:

Item name Cost in $

Body details set for welding 840

Brake drums 30

Rear wheel hub with bearing 44

Rear brake 30

Front wheel hub 23

Front brake assembly 45

Brake disc 48

Steering knuckle 20

Vacuum brake booster assembly 27

* red marked items must be excluded

27




Item name Cost in $

Parking brake lever 3

Shock absorbers, telescopic struts 60

Telescopic struts mounts 7

Rear axle rail 34

CV joint (set: left/right) 91

Steering column 26

Front hub bearing 28

Sub frame assembled with steering and levers

149

Main muffler 31

28




Item name Cost in $

Additional muffler 32

Exhaust pipes 18

Catalytic converter 103

Radiator 22

Electric fan 16

Fuel tank 83

Fuel hoses 8

Air filter assembly 34

Seat set 256

29




Total:The total cost of 15 deleted elements is $ 521 – the condition of reduction of the List on 10 % on the 2nd stage of the Agreement is executed

Other details in the List must be similarly deleted according to stages of the List reduction. Thus, at each stage car set cost is constant.

30




After executing Agreement conditions:

In the List there are details with total cost $ 660

The list is reduced on $ 1712

Agreement conditions are executed

31



Thanks for Your attention!

executive director of napak mr. mikhail blokhin

Documents

development of production

production tooling

daewoo lacetti

daewoo nexia

low qualification

quality policy

supply system

time system