Auto-parts manufacturers in Taiwan are so optimistic about the global market that they are busily expanding their production capacity both at home and overseas.

TYC Brothers Industrial Co., the island's largest exporter of auto lamps, is setting up its global operations headquarters in a combined office/factory building in the Tainan Science-based Industrial Park in southern Taiwan. The first stage of construction, the building of a delivery-preparation center, will be completed in January 2003, the second stage (installation of plastic-injection lines) in March, and the third and final stage (manual and automatic assembly lines) in the second half of the year.

The company is projecting a final revenue tally of more than NT$5 billion (US$143.7 million at NT$34.8:US$1) for 2002, thanks to increased demand from North America and Southeast Asia. To meet the burgeoning overseas demand, the company is planning expansion projects at its plants in Thailand and mainland China (in Changzhou, Jiangsu Province).

With sales in Europe steadily rising, TYC is gradually changing its marketing strategy there. Instead of selling auto lamps through local agents in different European countries as it used to, the company has decided to set up a warehouse in the Netherlands--its first in Europe--and develop direct sales by drawing on its experience in the American market. The warehouse will begin operating in the second quarter of 2003, and three or four more will be set up in other locations in the future.



A senior TYC official reports that more than half of the company's auto lamps are shipped to North America but only 16% to Europe, even though the two markets are similar in size. This makes it obvious that Europe has great potential for further development, the official says; if European demand increases enough, TYC might set up a factory there.

TYC is an affiliate within Taiwan's largest auto/motorcycle lamp-manufacturing conglomerate, the Ta Yih Group, which currently operates two plants in mainland China--Fuzhou Ta Yih Co. in Fujian Province, and Changzhou Tamao Lighting Co. in Jiangsu Province (mentioned above). The group began building another auto-lamp plant in northeast China in mid-2002 to supply lamps to Harbin Hafei Auto Manufacturing Co.

Group officials say that in the years ahead they will continue expanding capacity at their existing plants in the mainland and will also set up four or five new factories there. The goal is to become the largest original equipment (OE) supplier of auto lamps in the mainland.


More Capacity, More Business Opportunities


The Tong Yang group's flagship firm is Tong Yang Industrial Co., which is Taiwan's largest maker of plastic auto-body parts, especially bumpers. The company expects to record revenues of over NT$5.1 billion (US$146.55 million) for the full year 2002, and expects an increase of more than 10% in 2003.

Tong Yang has bought a plant site near Bangkok for the construction of a second bumper plant in Thailand, which it expects to complete around July 2003. The new facility will supply large international car brands, including Ford, Toyota, General Motors, and Honda, that have auto-assembly plants in the area.

The firm's first Thai plant currently turns out about 600,000 plastic bumpers a month. The installation of new equipment, including a coating machine, eight plastic-injection machines, and a set of electroplating equipment, will boost monthly output to about one million units early in 2003. Company officials are confident that this capacity expansion will bring more business opportunities in both the OE market and aftermarket.

Tong Yang was one of the first Taiwanese companies in the line to deploy in Europe, setting up a plant in Italy several years ago and establishing sales and delivery channels there. Early in 2002 the company began developing the Eastern European and Russian markets, which together have an annual demand of about 25 million cars. Replacement parts are in short supply there, according to Tong Yang.

Tong Yang operates seven factories in mainland China: three plastic-parts plants, three coating plants, and one automobile-belt plant. The company says that it has invested about NT$730 million (US$21.35 million) in the mainland, and that it now supplies products to 12 of the top 30 automakers there.


Mainland Ho!


Jui Li Enterprise Co., a major supplier of OE sheet-metal body parts to local automakers, has had a highly profitable year in 2002 and also plans to expand its overseas production.. It currently operates a plant in Hainan Province of mainland China, and is evaluating the feasibility of setting up another plant somewhere else in the mainland to supply the rapidly growing demand there.