TYC Brothers Industrial Co., the largest automobile-lamp exporter in Taiwan, has mapped out a comprehensive deployment plan for mainland China that, the company hopes, will make it the biggest auto-lamp supplier in the Greater China area.

TYC chairman Wu Jun-ji says that his firm will set up at least one production base each in northeastern, northern, central, and southeastern China in a division-of-labor manufacturing scheme. These locations have been chosen because auto-industry clusters are expected to form in each of them.

These planned facilities will join others already operating or under construction in the mainland. TYC's second plant in Changzhou, Hunan Province, is scheduled to start mass production in late September, and a plant in Harbin, Heilongjiang Province, is being expanded. In addition, the company plans to set up a new venture in Changchun, Jilin Province, with the China FAW Group, the largest automaker there.

With the mainland government pinpointing auto manufacturing as one of its key industries for priority development, Wu says, auto sales there are expected to soar in the years ahead. The chairman notes that about three million autos were sold there last year, and that the figure is expected to top four million this year. "Mainland China's booming auto market has greatly stimulated the development of the auto-parts industry there," Wu says, "and that huge market has become one of the most promising in the region, attracting parts makers from all over the world to set up operations there."

Wu reports that his company's Changzhou venture, Changzhou Tamao Lighting Co., which concentrates on the production of directional-signal lights, tail lights, and headlamps, has grown into one of the largest original-equipment auto-lamp suppliers in the mainland. The company is pouring another US$8.5 million into the second-stage plant expansion there; when completed, the company's production capacity will be doubled. Its revenues are projected to reach about one billion renminbi (US$120 million at US$1:RMB8.28)in 2007.



In the south of the country, TYC has chosen Guangzhou in Guangdong Province as the site of its plant, which may be built in cooperation with Aeolus Motor Corp., a joint-venture carmaker run by the mainland's Dong Fong Automobile Group and Taiwan's Yulon Motor Co. The southwestern plant may be located in Chengdu or Chongqing, and the northern one perhaps in Beijing or Tianjin.

The cooperative arrangement with the FAW Group in Changchun will be a 50-50 joint venture to produce lamps for Toyota and Mazda plants in the mainland. The proposed company is expected to begin mass production in the second quarter of 2004.

TYC is not limiting its ambitions to the Greater China area; it is deploying globally, especially in Europe, the United States, the Middle East, and India. Wu reports that the firm's global-deployment scheme got started in North America, and that it will be completed with the establishment of a plant in Europe. "From now on," the chairman comments, "we will strive to integrate all of our production, distribution, and transportation resources around the world, and to set up beachheads in new areas as well."

A TYC warehouse in the Netherlands will begin operating in July, and four or five similar facilities will be built in Europe soon.

The company already operates five delivery warehouses in North America--one each in Los Angeles, Atlanta, Chicago, Dallas, and New Jersey--each of which holds a maximum three-month inventory. The company is working hard to tap the huge American original-equipment market, and is in intensive talks with the Big Three automakers there about the supply of auto lamps for new models beginning in 2005.

India is also in the firm's sights. Wu reports that his company has already set up a joint venture with a local automaker there, to which the Taiwanese company is first licensing technology for royalty fees; in the future, TYC may invest in the Indian company directly.

In the Middle East, the company has a joint-venture auto-lamp factory in Iran which, Wu notes, is a major supplier of original-equipment lamps to the two biggest carmakers there (Peugeot and Daewoo), each of which turns out over 200,000 cars and year and which together control 85% of the Iranian domestic market. Plans are under way to expand the Iranian plant.

The company's Thai subsidiary, T.I.T. International Co., started production near Bangkok in the second half of 2001. This venture now supplies auto lamps to all of the ASEAN member countries, and TYC has invested NT$100 billion (US$2.9 million at NT$34.6:US$1) in the construction of a second plant in Thailand.

At home in Taiwan, TYC's new global operations headquarters in the Tainan Science-based Industrial Park (HSIP) is to be opened in October this year. The production lines at this integrated office/factory will at least double the company's local production value.

TYC's New Production Basesin Mainland China
Region	Location	Partner	Mass Production Date	Investment Amount
Central China	Changzhou (Hunan Province), the second plant of Changzhou Tamao	100%-own		US$8.5 million
Northern China	Harbin	Harbin Hafei Auto Manufacturing Co., Ltd.	May 2003	US$2.5 million
	Changchun (Jilin Province)	FAW Group	2Q 2004	Undecided
	Tianjin	Tianjin Hwali Auto (possible)	Undecided	Undecided
	Shenyang (Liaoning Province), Beijing etc.	Undecided	Undecided	Undecided
Southern China	Guangzhou (Guangdong Province)	Aeolus or South East Motor Corp.	The project will be decided by 2003-end.
Southeast China	Chengdu, Chongqing	Undecided	Undecided	Undecided
Source: TYC