After 20 years of development, Taiwan's powered two-wheeler (PTW) industry has confidently entered the global spotlight with products that can compete with the best on both quality and price.

The industry's transformation has been particularly marked in the last five or so years. This period has seen the diversification of domestic PTW makers to the all-terrain vehicle (ATV) line, boosting the number of ATV makers from one in 1997 to 27 today, and sales of both own-brand and contract-produced items are soaring. Industry insiders say that Taiwan is poised to boost its share of the global ATV market to over 30%, putting it just behind the U.S. and Japan.

The rapid development of their PTW and ATV markets has not, however, been without problems. Many of the new producers turn out nearly identical products using many of the same basic components. With the exception of a few bigger players that have the R&D muscle to turn out new and innovative models, local producers are forced to compete on price, putting intense downward pressure on profit margins.

Seeking to escape this downward spiral, most local PTW and ATV makers are turning their attention to developing unique competitive edges and tapping niche markets with a more diverse product offering. Such specialization is also helping local producers distinguish their products from the lower-end items turned out by mainland China and other developing nations.

ATV Pioneer

One company that has successfully pursued this strategy is Ji-Ee Industry Co., Ltd., a leading maker of automobile/motorcycle engine parts and motorcycle/scooter engines, and Taiwan's first producer of ATVs.

In 2003, Ji-Ee combined with its affiliate E-Ton Dynamics Tech Ind. Co., Ltd. To integrate group resources. The company has since used E-Ton Dynamics' engine and vehicle plant to expand into new markets, while retaining the latter's well-known "E-Ton" brand for the group's scooter, ATV, and electric-vehicle products.

According to company sales manager Leslie Wu, Ji-Ee's key competitive edges in the PTW and ATV lines lie in the company's manufacturing and development capability, aftermarket (AM) parts logistics capability, and strong brand recognition. "E-Ton ATVs are considered the best and most trustworthy models in terms of framing, overall structures and engines," he says.

E-Ton is currently the No. 2 brand in the youth-ATV segment of the U.S. market, trailing only Polaris and ahead of Arctic Cat. Last year, Ji-Ee exported about 30,000 ATVs to the U.S. and Europe, making it the No. 1 own-brand ATV exporter in Taiwan.

Ji-Ee sells 10 ATV models based on four chassis configurations and engine displacements of 40cc, 50cc, 70cc, 90cc, 100cc, and 150cc.


Wu says that Ji-Ee has an edge in the ATV production business due to its expertise in technical integration and production techniques. He also states that Ji-Ee is a world-class supplier of such precision engine parts as water pumps, oil pumps, fuel pumps, and transmission pumps for many big international auto and engine brands, including Volvo Truck, Ford, Renault, Mack, and Cummins Diesel, as well as for over 75% car makes in its local market. "Our extensive know-how and capability in producing auto/motorcycle engine parts," says Wu, "enables us to make high precision and difficult-to-produce parts for ATVs."

Ji-Ee currently assembles its scooters and ATVs, as well as engines, at a plant in the Southern Taiwan Science Park with key parts and components sourced from another of its plants, also located in Tainan.

Logistics capability and after-sales services are other Ji-Ee strong cards in the ATV competition, according to Wu. He says that his company can promptly get high-quality spare parts to drivers around the world through its comprehensive support network.

With the debut of its 150cc ATV model in July this year, Ji-Ee will hone its focus on the youth ATV market, where it enjoys strong positioning. The company also plans to turn out bigger models depending on market demand.

In the past few years, the company has also diversified into new product segments, including electric scooters, bicycles, and scooters for the handicapped. The company is also working on low-emission gas-electricity hybrid scooter.

According to Wu, the hybrid-power scooter, which is scheduled to enter volume production by the end of the year, will be equipped with both a 100cc gasoline-scooter engine and an electric motor. The motor will used for startup and propulsion at speeds under 15 kilometers per hour, the period when gasoline engines consume the most fuel and generate the most emissions.

Ji-Ee has ISO9001, ISO14000, ISO13485 and ISO/TS16949 approval.

Motivated for Growth

Another local company that has successfully tapped overseas markets for PTWs and ATVs is Motive Power Industry Co. Ltd., which has marketed its various product lines under the PGO brand for about 40 years.

A spinoff from a local automaker, Motive Power maintained technical cooperation ties with Piaggio of Italy between 1972 and 1982 for the production of metal-body scooter products. The company became technically independent of the Italian partner and has since developed in new directions.

Currently, Motive Power is one of the top five PTW brands in Taiwan, selling about 60,000 PTWs and ATVs as well as about 6,000 PTW engines last year, not including about 20,000 sets of engines, parts and components exported to its Malaysian partner Motosikal Dan Enjin Nasional Sdn. Bhd. (Modenas). About 70% of Motive Power's products are exported to Europe, Asia and other major markets.

"Our main advantages lie in our strong and comprehensive development capability, production flexibility, and customer-oriented product-development strategy," claims Steven Teng, Motive Power's export sales manager.

According to Teng, Motive Power currently has 55 experienced R&D professionals with expertise in a broad range of fields, from styling and parts development to engine development and testing. The R&D team represents a very high ratio of the company's 230 or so employees.

With the help of its strong R&D team, Motive Power develops several new PTW models and at least one PTW engine per year. The company has been intensively developing an electronic fuel-injection (EFI) scooter engine, and it introduced a 125cc EFI engine last year, making PGO one of the few make of EFI-engine scooters in Taiwan, says Teng.

According to Teng, Motive Power is the first and currently the only PTW maker in Taiwan to adopt a close-loop engine management system (EMS) developed by Kehin of Japan. The close-loop EMS, with multiple oxygen sensors, delivers superior precision control and higher stability over an engine's overall performance than the more-common open-loop counterparts. Such EMS is also used on some BMW PTW models.

Technology aside, Motive Power has been turning heads with eye-catching designs that distinguish its products from rival models, says Teng. "We design our new PTWs based on input from our customers in Europe to guarantee state-of-the-art results. We can also quickly bring a customer's design concept to the production stage in a very short time."

Flexible production is another key part of Motive Power's success. "Compared with big-volume PTW makers," Teng explains, "Motive Power is more flexible when it comes to modifying engines and styling to meet customer specifications for different regional markets, road conditions and climates. It sounds simple, but it requires long-term experience in production planning, production-line design and a group of experts with a service-oriented work attitude. Few if any of the big PTW brands can match Motive Power in providing such customized services."

Motive Power is also playing an increasingly important role as a technical partner for overseas firms, says Teng. The company not only supplies engines, parts and accessories, but also provides known-how to help foreign partners localize their PTW production. The company expects such cooperation to help the company set up a comprehensive global PTW parts procurement network that will greatly enhance its cost competitiveness and global logistic capability, he says.

Teng notes that Motive Power will continue to concentrate on the scooter segment at least in the near term.

Bringing It All Together

For Standard Motor Corp. (SMC), an original design manufacturing (ODM) supplier to Kasea Motorsports of the U.S. and Kreidler of Germany, variety rather than specialization has been the strategy of choice. The company boasts a broad product line, including scooters (50cc, 90cc and 100cc), motorcycles (125cc to 250cc), dune buggies, fun-karts, and 10 ATV models (50cc, 90cc, 100cc, 125cc, 150cc, 170cc, and, most recently, 250cc).

The company was established in 1992 and currently operates an integrated PTW/ATV plant in southern Taiwan's Tainan, where it employs about 200 workers.

SMC shipped about 36,000 PTWs and ATVs, with the latter accounting for about 70% of its production last year. About 75% of its output was exported to Europe and the remainder was shipped to the U.S. SMC claims it is the No. 2 Taiwan PTW/ATV brand in Europe, trailing only Kwang Yang Motor Co., Ltd.

"SMC's competitive edges lie mainly in our quality level, business-development strategy, and strong capability in systems integration," claims company managing director Henry Kuo.

SMC attributes its high quality level to the high self-content ratio of its products. Most of the key parts and components are developed internally at considerable cost in order to ensure the best performance results, Kuo says.

SMC also makes intensive preparations to smooth its entry into new markets. Market trends, relevant technical development in auto and PTW industries, the company's technical capabilities, and costs are all considered in this process.

"SMC is often not the first to market," Kuo says. Rather, the company aims to introduce new products that are more technically mature and highly reliable than rival models. "Slower market entry does not mean less business," Kuo claims. "On the contrary, our more mature products often win us a steady stream of large orders from customers."

Another advantage of SMC is the company's flexible and integrated operations, which helps the company reduce costs and quickly get new designs into production. "We developed our new 250cc model in just two years, while many of our competitors have been trying for three or four years and still have problems to overcome," Kuo says.

SMC's strong system integration capability is evident in the company's three-in-one engine models, which can be used on both dune buggies and fun-karts. According to Kuo, a three-in-one engine consists of a continuous variable transmission (CVT) gearbox, a differential gearbox, and a reverse-gear set. SMC developed the technically complex engine based on the advanced techniques and design concepts used in the automobile industry. And such three-in-one techniques are expected to further strengthen SMC's competitiveness in future's applications on other vehicle products.