Fiat to procure auto parts from Taiwan suppliers

Taipei, June 23, 2004 (CENS)--The Fiat Group, Italy's largest automobile production conglomerate, has decided to procure auto parts from Taiwan, according to Taiwan External Trade Development Council (TAITRA).

TAITRA said that Fiat's procurement project from the island is one of the initial results of a TAITRA-led Taiwanese auto parts delegation visiting several auto makers and first-tier parts suppliers in Europe in May. The parts, comprising 18 local major auto parts and accessory makers, called on nine targeted customers in Europe.

TAITRA said that Fiat is expected to first procure automotive fasteners, die-casting parts and oil seals from Taiwan in the initial stage and gradually expand the outsourcing items.

According to TAITRA, the parts delegation visited Fiat's headquarters in Turin, Italy and meet Fiat's procurement department representatives, who explained the detail procurement policies to the delegation members and held one-by-one business negotiations with them.

TAITRA said that some Fiat procurement officials were very impressed with Taiwan's capability in making and supplying high-quality, competitive-price auto parts, totally erasing their past images that Taiwan companies are only specialized in supplying comprehensive-range aftermarket (AM) parts and accessory products.

TAITRA said that Fiat's procurement department has announced plans to further contact 13 Taiwanese companies for future's supply businesses, including Bcom Electronics Inc. (car-PC maker), National Aerospace Fastener Corp. (NAFCO, automotive fastener), Dainty Electric Co., Ltd. (electrical parts), Multiple Corp. (oil seals, rubber parts), Sumeeko Industries Co., Ltd. (hardware parts, fasteners), Safety Control Cable Industry Co., Ltd. (control cables), Spacious Industrial Co., Ltd. (aluminum casting parts), World Known Mfg. Co., Ltd. (machining parts), Chian Hsing Forging Industrial Co., Ltd. (forging parts), Whetron Industrial Co., Ltd. (vehicle security systems), Ton Rong Machinery Factory Co, Ltd. (machining parts) and Kaifa Industry Co., Ltd. (shock absorbers). Fiat plans to procure several product categories from the 13 Taiwan companies, including in-car speakers, oil seals, fasteners, forged parts, die-casting parts, car alarm systems, tool sets and shock absorbers etc.

TAITRA said that Fiat plans to start big-scale procurement projects from Taiwan suppliers this year and next, which are expected to further upgrade the island's global importance in original equipment (OE) auto parts supply business.

The Fiat Group produces about two million cars per year with around 16,000 employees worldwide. The conglomerate currently runs 192 automobile and parts plants as well as 109 R&D centers worldwide. In addition to Fiat, the group also owns the Lancia luxury car and Ferrari sport car brands. Last year, Fiat had total revenue of 47 billion euros.

With both the quality and cost advantages over most international counterparts, TAITRA said, Taiwan auto parts makers are expected to smoothly enter Fiat's first-tier supply chain and help the automobile conglomerate cut costs.

In addition, TAITRA said, a group of procurement officials from Decoma International Inc. of Canada, a leading first-tier auto parts manufacturer, would soon visit Taiwan to contacting local plastic auto body parts and mold/die developers on future cooperation ties.

TAITRA said that it would arrange the procurement group to tour the production plants of several such companies on the island.

Decoma's interest in contacting Taiwanese suppliers, according to TAITRA, resulted from the council's North America auto parts delegation visiting Decoma's headquarters in Canada, allowing 19 procurement officials to negotiate possible supply business with five Taiwanese companies in the delegation.

After the North American delegation came back to the island, TAITRA said, Decoma's Asia procurement chief Steve Ha agreed to find suppliers in Taiwan and promised to visit the island for inspecting possible suppliers' plant and production processes.

According to TAITRA, Decoma had revenue of over US$2.35 billion and the 14,000-employee enterprise is one of the most-famous OE auto parts conglomerates in Canada.