Taiwanese, Japanese Auto Parts Makers Rush to Guangzhou Cluster

A select group of Taiwanese and Japanese auto-parts suppliers have announced they are actively preparing to individually set up plants near a planned Toyota auto factory in Guangzhou, mainland China. The firms include Aisin Seiki Co. of Japan, Elite Sewing Machine Manufacturing Co. (Aisin's Taiwan subsidiary), and Taiwan's Kenjo Industrial Co.

Aisin Seiki plans to produce disk-brake calipers, clutch systems, and other chassis and brake parts in China. Kenjo is to build an NT$150 million (US$4.4 million at NT$33.9:US$1) integrated plant for the production of rubber automotive dashboards, armrests, and mudguards.

The proposed Toyota plant is expected to form the core of an auto-industry cluster, and the Japanese automaker's tier-one parts suppliers in Japan, including Toyoda Gosei Co. and Denso Corp, are planning to set up plants in Guangzhou to supply parts needed by the new factory.

Kenjo of Taiwan, a joint venture between Kenda Rubber Ind. Co. of Taiwan and Inoue Rubber Co. of Japan, will also begin building a plant in Guangzhou by the end of this year with mass production expected to commence in late 2005. In Taiwan, Kenjo mainly turns out instrument panels and mudguards.

Elite Sewing Machine, which cancelled a previously planned plant in China to supply auto-door frames to the Toyota facility when the Japanese company chose a Japanese parts maker instead, has now proposed a US$10 million door-frame plant in southern China to supply major auto manufacturers in the region, including Honda and South East. Elite says that the proposed plant will be built next year and have a monthly capacity of 8,000 door-frame sets.