§1What this business is
Alloy-steel blanks are cut, forged, machined, then the teeth are cut on a gear hobbing machine, heat-treated and finished by grinding or lapping before inspection. It needs precise machine tools and gear-inspection equipment. Buyers are vehicle and machine makers and the replacement parts market.
Capacity: Not printed in units; the plan runs at 35% capacity in year 1 rising to 55% in year 5.
§2Is it right for you?
Who it is for
A mechanical engineer or experienced machinist with contacts among auto component buyers.
Who it is not for
Someone without engineering background or quality-control experience.
Advantages
- Gears are used in every vehicle and in most machines
- Precision work earns repeat orders once quality is proven
- Can supply both OEM vendors and the replacement market
- Machines can also make other machined parts
Drawbacks
- Needs skilled machinists and costly precision machines
- Raw material is about two-thirds of sales, so margins are thin early on
- Big buyers demand strict quality and audits
- Rent is a fixed monthly cost
Skills you need
- Gear hobbing, grinding and heat treatment
- Reading drawings and gear inspection
- Quality systems for OEM buyers
- Buying steel and forgings at good prices
Why difficulty 4/5: Precision machining, heat treatment and strict buyer quality needs make it technically demanding.
§3Market
Who buys
- Automobile and auto-component makers
- Machine, crane and construction equipment makers
- Replacement parts market
How it sells
- Direct supply to OEM vendors
- Auto-parts and transmission dealers
Good to know
- The report lists gear users from clocks and bicycles to vehicles, ships, cranes, wind turbines and railways.
§4Raw material & machinery
| Item | Qty | Cost |
|---|---|---|
| Blank / billet cutting machines | — | — |
| Induction heater for blanks | — | — |
| Pneumatic forging hammer and mechanical forging hammer | — | — |
| Gear hobbing machine | — | — |
| Gear grinding machine | — | — |
| Heavy-duty milling machine | — | — |
| Induction heat-treatment unit | — | — |
| Shot blasting machine | — | — |
| CNC lathe, lathe and vertical lathe | — | — |
| Cylindrical grinder and lapping machine | — | — |
| Radial and pillar drilling machines | — | — |
| CNC 5-axis measuring machine and gear profile inspection equipment | — | — |
| Total plant and machinery (no item-wise prices printed) | — | ₹16.00 lakh |
From: PMEGP sample project report — Automobile Gear (prepared by Udyami/Samadhan)
- Alloy steel bars, billets or forgingsthe most common gear material for its strength-to-weight ratio and low cost
- Non-ferrous alloys, cast iron, powder-metallurgy blanks and plasticsused for some gear types; blanks can be die cast, investment cast or sintered
From: PMEGP sample project report — Automobile Gear (prepared by Udyami/Samadhan)
§5Licences & registration
- GST
- Fire NOC
- Pollution control NOC (if applicable)
- Udyam registration
- BIS certification
- Labour licence
- Trademark (optional)
§6Schemes & subsidies
- PMEGPCentralActive15–35% subsidy
- CGTMSECentralActiveNo collateral, up to ₹10 crore
- MudraCentralActiveLoan up to ₹20 lakh, no collateral
PMEGP (the report was prepared for it), CGTMSE for a collateral-free loan, MUDRA up to ₹20 L.
§7Money
How the investment is worked out: Plant and machinery ₹16.00 L + furniture ₹0.50 L + other assets ₹1.00 L + working capital ₹7.22 L = ₹24.72 L; land and building rented (₹30,000–40,000 a month).
Working capital: Working capital ₹7.22 L (working capital loan ₹6.50 L).
Year not printed on the report — check current machinery and raw-material prices.
§8Export potential
Export council / board: EEPC India
- The project report prints no HS code; look up the 8-digit ITC(HS) line on the DGFT website or with a customs broker before exporting.
- You need an Import Export Code (IEC) from DGFT before the first shipment.
§9Risks — where people fail
- Rejections for tooth profile or hardness errors
- Steel price rise
- Dependence on a few large buyers
- Shift to electric vehicles changing gear demand
§1030 / 60 / 90-day plan
A general plan that applies to any business. A plan for this business will be added after research.
- Days 1–30: Visit a working automobile gear manufacturing unit, ask 10 buyers about price and quantity, and get quotations from 3 suppliers.
- Days 31–60: Udyam and the licences you need (GST, Fire NOC), a project report (DPR), and the scheme or loan file.
- Days 61–90: Space and machines, trial production, and first deliveries to 10 customers.
§11Who to connect with
Associations, clusters and training institutes — the directory is being built. Connect
§12Watch
There is no episode on this business yet. Shows are coming soon on the Podcast page.
Want to start Automobile Gear Manufacturing?
DPR, loan file or registration — ask us on WhatsApp.
¶Sources
Data review: 6 October 2026. Spotted a mistake? Report it. For information only — not legal or financial advice.