Taiwan Auto Part Exports Grow 7.9 % to Record High in 2011
2012/04/10 | By Quincy Liang
Auto parts export sales have grown every year in the past eleven years except for 2009 when the impact of the global recession caused an 8.5% drop.
| Taiwan's Automotive Component Export Value (2001-2012) Unit: NT$100 million | |||||||||||
| Year | 2001 | 2002 | 2003 | 2004 | 2005 | 2006 | 2007 | 2008 | 2009 | 2010 | 2011 |
| Value | 790 | 912 | 1,078 | 1,274 | 1,280 | 1,329 | 1,479 | 1,526 | 1,397 | 1,713 | 1,848 |
| YoY | 5.88% | 15.44% | 18.20% | 18.09% | 0.48% | 3.83% | 11.29% | 3.18% | -8.45% | 22.62% | 7.88% |
| Source: Taiwan Transportation Vehicle Manufacturers' Association (TTVMA). | |||||||||||
Taiwan is a relatively small island with a total population of some 23 million people. All local vehicle assemblers cooperate with a few international car brands. And the island's domestic automobile market did not have its own car assembly industry until a few years ago, when a local automotive conglomerate started to develop car models for markets in Taiwan and China.
The situation is much different in the auto parts industry where small to medium-sized enterprises (SME) comprise the island's edge in global competition, manufacturing a large variety of products in small batches.
According to the most informed observers and buyers, the efficient subcontract supply network in Taiwan enables individual makers to specialize in certain lines, which helps Taiwan's auto parts suppliers manufacture a broad range of products flexibly at low production costs and achieve a rapid development time.
And the island's auto parts suppliers have another advantage: dividing the labor between Taiwan and China that allows plants on both sides of the Taiwan Strait to meet the wide range of pricing, quality, quantity and lead times customer needs.
Due to its extensive subcontractor network, Taiwan can accept a large variety of orders in small batches for performance parts buyers.
In 2012, Taiwan's auto parts makers continue to focus on manufacturing products with a maximum cost/performance (C/P) value.
Recession Proof
The production value of assembled automobiles climbed about 13% from the previous year to NT$187.3 billion (US$6.24 billion), due to the return of key auto parts supplies from Japan that increased the local manufacturing of assembled cars.
Thanks to stable export sales and increased demand from local automakers, the production value of auto parts in 2011 reached NT$185.3 billion (US$6.18 billion), up about 6% year-on-year (YoY).
| Export Value of Taiwan Automotive Components by Country (2011) Unit: NT$1,000 | |||||||
| Rank | Country | December | January - December | ||||
| Sales | Share | Growth | Sales | Share | Growth | ||
| 1 | U.S.A | 5,846,886 | 35.30% | 3.08% | 66,040,079 | 35.74% | 5.28% |
| 2 | JAPAN | 1,055,825 | 6.37% | 29.05% | 12,669,576 | 6.86% | 6.77% |
| 3 | MAINLAND | 1,003,907 | 6.06% | 63.92% | 9,704,325 | 5.25% | 19.78% |
| 4 | GERMANY | 445,729 | 2.69% | -17.80% | 5,824,587 | 3.15% | 7.16% |
| 5 | AUSTRALIA | 469,176 | 2.83% | 24.64% | 5,549,937 | 3.00% | 7.63% |
| 6 | CANADA | 428,455 | 2.59% | 8.68% | 4,696,009 | 2.54% | 17.95% |
| 7 | ITALY | 381,958 | 2.31% | 5.02% | 4,320,617 | 2.34% | 4.53% |
| 8 | U KINGDOM | 373,901 | 2.26% | 18.15% | 4,314,237 | 2.33% | 3.48% |
| 9 | MEXICO | 257,267 | 1.55% | 3.54% | 3,442,234 | 1.86% | 5.21% |
| 10 | THAILAND | 273,227 | 1.65% | -1.15% | 3,412,367 | 1.85% | 4.05% |
| 11 | NETHERLANDS | 275,394 | 1.66% | -5.27% | 3,115,744 | 1.69% | -3.45% |
| 12 | BRAZIL | 266,684 | 1.61% | 22.39% | 3,072,250 | 1.66% | 37.56% |
| 13 | SAUDI ARABIA | 243,698 | 1.47% | 21.61% | 3,021,752 | 1.64% | 24.55% |
| 14 | UAE | 270,164 | 1.63% | 29.80% | 2,913,338 | 1.58% | 18.12% |
| 15 | INDONESIA | 197,102 | 1.19% | 14.39% | 2,523,673 | 1.37% | 21.49% |
| 16 | RUSSIA | 261,500 | 1.58% | 156.16% | 2,515,342 | 1.36% | 35.72% |
| 17 | SOUTH AFRICA | 185,010 | 1.12% | -9.74% | 2,430,599 | 1.32% | -11.26% |
| 18 | MALAYSIA | 227,230 | 1.37% | 20.91% | 2,410,025 | 1.30% | 3.06% |
| 19 | PHILIPPINES | 152,803 | 0.92% | -14.02% | 2,364,492 | 1.28% | -9.09% |
| 20 | SPAIN | 152,928 | 0.92% | 14.07% | 1,851,191 | 1.00% | 2.02% |
| 21 | HONGKONG | 245,452 | 1.48% | 68.38% | 1,825,431 | 0.99% | 27.58% |
| 22 | TURKEY | 158,276 | 0.96% | 28.27% | 1,769,263 | 0.96% | 8.75% |
| 23 | INDIA | 227,332 | 1.37% | 93.92% | 1,651,400 | 0.89% | 33.64% |
| 24 | BELGIUM | 131,942 | 0.80% | -7.28% | 1,650,947 | 0.89% | 9.38% |
| 25 | EGYPT | 214,933 | 1.30% | 120.63% | 1,557,014 | 0.84% | 4.52% |
| OTHERS | 2,817,283 | 17.01% | 10.34% | 30,133,337 | 16.31% | 7.36% | |
| TOTAL | 16,564,062 | 100.00% | 12.71% | 184,779,766 | 100.00% | 7.89% | |
| Source: Taiwan Transportation Vehicle Manufacturers' Association (TTVMA). | |||||||
| Value of Transportation Vehicle Production in Taiwan Unit: NT$ million | ||||||||||
| Period | Q310 | Q410 | Q111 | Q211 | Q311 | Q411 | QoQ | YoY | 2010 | 2011(e) |
| Assembled Vehicles | NT$ 39.4 B. | NT$ 49.7 B. | NT$ 46.8 B. | NT$ 39.4 B. | NT$ 50.2 B. | NT$ 50.9 B. | 1.3% | 2.3% | NT$ 165.1 B. | NT$ 187.3 B. |
| Auto Parts | NT$ 43.7 B. | NT$ 48.9 B. | NT$ 45.8 B. | NT$ 44.7 B. | NT$ 47.5 B. | NT$ 47.3 B. | -0.4% | -3.2% | NT$ 175.8 B. | NT$ 185.3 B. |
| PTWs | NT$ 11.6 B. | NT$ 9.5 B. | NT$ 10.1 B. | NT$ 12.6 B. | NT$ 13.7 B. | NT$ 10.4 B. | -24.2% | 10.1% | NT$ 41.8 B. | NT$ 46.8 B. |
| E-scooters | NT$ 58 M. | NT$ 65 M. | NT$ 93.9 M. | NT$ 163.6 M. | NT$ 212.1 M. | NT$ 152 M. | -28.2% | 132% | NT$ 305.6 M. | NT$ 614.6 M. |
| Total | NT$ 91.7 B. | NT$ 91.7 B. | NT$ 102.6 B. | NT$ 96.8 B. | NT$ 111.45 B. | NT$ 108.59 B. | -2.6% | 0.5% | NT$ 101.48 B. | NT$ 419.45 B. |
| Source: IEK-IT IS | ||||||||||
OE Business
As one of the world's most important supply bases of aftermarket (AM) auto parts, Taiwan commands between 70 and 80% of the American market, the world's largest in collision replacement components, due largely to the island's capability and expertise in manufacturing a variety of products in small batches.
A growing group of original equipment (OE) auto parts suppliers in Taiwan has benefited from both the global increase in new car sales and the efforts of local automakers to cut costs.
About 20% of auto parts made in Taiwan reach the OE market, and this figure has grown in recent years as producers have improved quality without raising prices, which has won the approval of cost-cutting automakers and tier-one parts suppliers in Europe and the United States.
And even in difficult economic conditions, local OE parts makers have profited through manufacturing a large variety of products in small batches and winning orders of relatively small-volume production from foreign automakers.
Taiwanese auto parts companies hope to win growing shares of OE orders through tapping into the supply chains market of automakers and tier-one parts suppliers and benefiting from the inevitable changes that happen in the automotive industry yearly due to factors such as carmakers having new owners and natural disasters like the March tsunami in Japan last year that disrupted the provision of components to Japanese carmakers. In the past few years changing market trends have forced increasing numbers of first-tier parts suppliers to file for bankruptcy, which has created more opportunities for local companies to compete both in quality and price.
Taiwanese auto parts suppliers have also boosted exports of OE parts, especially to Japanese automakers of the Association of Southeast Asian Nations (ASEAN) area and China. The tier-one companies that outsource production to Taiwan or cooperate with local partners to cut costs include some of the biggest names in the industry, such as Visteon, Dana, Delphi and Magna.
Local partners such as TYC Brothers Industrial Co., Fine Blanking & Tool Co. (FBT), Hota Industrial Manufacturing Co., Chian Hsing Forging Industrial Co., Macauto Industrial Co., Tung Thih Enterprise Co. (TTE) and China Metal Products Co. have been shipping increasing amounts of parts to carmakers and tier-one customers worldwide after a period of joint product development.
EV Excitement
The global electric vehicle (EV) market has been another aspect of Taiwan's auto parts industry growth. Many Taiwanese companies have become parts manufacturers of lithium-ion battery packs, electric motors and key components of power control units for international EV products such as the BMW Mini-E, Tesla Roadster and top-end Fisker sports cars.
The Taiwanese government has also been promoting the rapid development of EV-related industries on the island through R&D-subsidy programs in the last few years. It has commissioned domestic research institutions to help develop newer, better technologies that can be used in the private sector and aims to build not only a local EV market with a solid recharging infrastructure, but also an important supply base for EV key systems and parts.
Some Taiwanese carmakers have introduced their own battery electric vehicles (BEV), and some plan to promote other types of EVs that as plug-in hybrid electric vehicles (PHEVs) and hybrid electric vehicles (HEVs) can help the island's auto parts industry develop this new niche market.
Automotive Electronics
With the help of Taiwan's world-class electronics and information and communication technology (ICT) industries, Taiwan's auto parts manufacturers have been producing advanced automotive-electronic systems and components for global customers at reasonable prices. And increasing numbers of these manufacturers have been focusing on the large market in China.
In the past year local companies have improved their positions in both the OE and AM segments of the auto-electronics market, developing tire pressure monitoring systems (TPMS), telematics on-board units (OBUs), charge-coupled device (CCD)/complementary metal-oxide semiconductor (CMOS) cameras, thin film transistor-liquid crystal displays (TFT-LCDs), engine control units (ECUs), AC/DC converters, light-emitting diode (LED) lamps, portable navigation devices (PNDs) and night-vision systems.