Jui Li Enterprise Co. Ltd., one of Taiwan's largest original equipment (OE) sheet-metal auto-body parts makers, is aggressively expanding its operations in the huge mainland China market through alliances with major partners there.

The company plans to complete the first-stage of a new sheet-metal body-parts plant in Hainan Province, mainland China by the end of the year. The plant will supply parts to FAW Hainan Motor Co., Ltd. (FHC), which is scheduled to set up a production facility dedicated to the automobile industry on Hainan Island. FHC is a subsidiary of the FAW Group, mainland's No. 1 auto-manufacturing conglomerate.

According to industry sources, FHC is planning to order sheet-metal body parts from Jui Li's Hainan plant for a remodeled multi-purpose van (MPV) model, instead of importing these parts from Japan as in the past.

In addition to its business with FHC, Jui Li is optimistic about its future sales in the huge and growing mainland market. Last year, according to the Taiwan company, over three million cars were sold there and the volume is expected to surpass four million units this year. Jui Li says it will try to win more original equipment (OE) orders from the big international automakers that have set up auto-production facilities in the mainland.



Jui Li invested about US$2.5 million to set up Jui Li Hainan Co., which produces car fenders, engine hoods and door panels. Jui Li Hainan currently supplies about 5,000 to 6,000 sets of these products to FHC for production of Mazda cars.

As part of its expansion project, Jui Li said, FHC is planning to set up an industrial zone in Hainan as a base for major auto-parts suppliers. Jui Li Hainan has acquired the needed land, the Taiwan parent says, and will set up a new facility there in three stages.

Jui Li's Hainan subsidiary also hopes to supply sheet-metal body parts for Lioncel sedans scheduled to be produced by South East Automobile Corp. in Fujian Province. South East is a 50:50 auto-production venture between Taiwan's China Motor Corp. (in cooperation with Mitsubishi of Japan) and an automaker owned by the Fujian provincial government. The company produces commercial-vehicle and car models redesigned by China Motor. The Lioncel, the first sedan to be made by South East, is an older version of China Motor's Lancer model, for which Jui Li supplied the sheet-metal body parts in the past.

Jui Li says that it will modify its original dies and ship them to Jui Li Hainan soon.


Honeying Up Across the Strait
Jui Li's westward expansion mimics a general trend in Taiwan's auto-parts industry. Companies on the island have been lured across the Taiwan Strait by the huge potential of the mainland market, where they are teaming up with local partners to expedite their business-expansion plans.

One of the most successful examples is the Yulon Group, the largest auto-making conglomerate in Taiwan and the local producer of Mitsubishi and Nissan cars. The group has two auto-production ventures in the mainland, including South East and Aeolus Motor Corp. (a venture between group flagship company Yulon Motor Co. and Dong Fong Automobile Group), and its auto parts-production affiliate Kian Shen Metal Works Co., Ltd. Has gained a solid foothold in mainland China.

Last year, Kian Shen set up a new constant-velocity (CV) joint manufacturing subsidiary, Guangzhou NTN-Yulon Drivetrain Co., Ltd. (NTN-Yulon), in cooperation with its Japanese technical partner NTN in Guangdong Province, mainland China.

According to Kian Shen, NTN-Yulon is scheduled to begin supplying about 10,000 crankshafts per month to South East and Beijing Jeep in October.

The Tong Yang Group of Taiwan, one of the world's largest plastic auto body parts conglomerates, has set up eight production bases in mainland China. The eight subsidiaries and affiliates have a total of 43 plastic-parts plants, three coating facilities and one engine-belt plant.

Late last year, Tong Yang set up a plastic aut- parts joint venture in Northeast China with Mainland China's Chang-Chun FAW-Sihuan Automobile Co., Ltd. The venture is scheduled to start mass production next year and expects to have annual revenue of RMB179 million in 2005, when it reaches maximum capacity.

FAW-Sihuan is a subsidiary of the China FAW (First Automotive Works) Group Corp., the largest automaker in mainland China. China FAW Group recently set up an RMB22 billion car-production venture with Toyota Motor Corp. of Japan through its recently acquired Tianjin Faw Xiali Automobile Co.

Tong Yang plans to set up several coating and mold/die development plants in various auto-production citadels in mainland China in the future.

Tong Yang president Raymond Wu says that his company supplies parts to 12 of the top 30 automakers in mainland China. He estimates that in the coming few years the group's mainland revenue will outpace its revenue in Taiwan.

High Beams on Greater China
TYC Brothers Industrial Co., Ltd., the largest auto-lamp exporter in Taiwan, says it aims to become the largest auto lamp supplier in the greater China region in the coming five years.

TYC chairman Wu Jun-ji says that his company has mapped out a plan to set up five plants in northeast, north, central, south, and southeast China, respectively, in the coming few years.

According to Wu, TYC will soon finalize an auto-lamp joint-venture project with the FAW Group. The 50:50 venture will be set up in Changchun, Jilin Province, and is scheduled to start mass production in the second quarter next year to supply auto lamps to Toyota and Mazda's car plants in mainland China.

In south China, Wu says, TYC plans to set up a new facility in Guangzhou and has not excluded the possibility of cooperating with Aeolus in setting up a joint venture.