6/30/2009 | 2 MINUTE READ

Taiwan Takes On The Global Slowdown

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A focus on electronics and the growth of indigenous manufacturers are occurring in this Asian country.


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The blinking LEDs, blinding xenon headlamps and shiny metal structural parts on display at the Taipei International Auto Parts & Accessories and Electronics show would make anyone think things here are going gangbusters. Not so fast. "The global financial crisis has severely impacted Taiwanese exports," says Sheng-Chung Lin, vice minister of Taiwan's Ministry of Economic Affairs, whose agency is charged with overseeing the government's recently announced $258-million plan to develop new marketing plans and investment opportunities centered around increasing foreign investment in Taiwan's auto electronics sector and obtaining additional investment from foreign governments, including the U.S. The goal is to boost Taiwan's 4% share of the global automobile electronics and accessories market.
Taiwan is trying to parlay its electronics expertise, developed for personal computing and mobile entertainment and communications systems, into automotive electronics applications, from navigation devices to advanced vehicle control systems. The country has even gone so far as to bury the hatchet and form a pact with China to become the preferred source for auto electronic components for Chinese-based auto manufacturers.
The focus on electronics growth is the result of a change in the manufacturing climate. Taiwan vehicle production fell 14.7% to $2.59-billion in the 2008 fiscal year, while the auto parts and electronics sector grew by 5% to $1.38-billion. The decline in vehicle manufacturing is expected to continue in the coming years, putting added pressure on the country to diversify its economy. A report in the Taiwan Economic News said several vehicle exporters, including Toyota, Mitsubishi and Nissan, recently sought additional markets for their Taiwan-assembled products, with few takers.
Still Hope?
The Ford Lio Ho Motor Co., located in the northeast section of the country in the city of Chung Li, is bucking the trend. The plant plans to export more than 2,000 completely built-up versions of its Escape SUV to Russia in the third quarter of 2009, making the company Taiwan's biggest exporter of automobiles.
Then there's Taiwan's Luxgen, the first home-grown auto brand, which launched its first vehicle—Luxgen MPV—in April 2009. Owned by Yulon Motor, which has joint ventures with both Nissan and GM in Taiwan, Luxgen is borrowing technology from some of its partners. For example, the platform is that of the previous-generation Renault Espace. But it is developing its own powertrain expertise: the MPV is powered by a Yulon-developed 2.2-liter turbocharged 4-cylinder engine. Luxgen plans to expand its product range to include an all-electric vehicle that it expects to put into production in late 2010, with the cooperation of AC Propulsion, High tech Computer Corp. and Everlight Electronics.
Holding Pattern
The problems plaguing the rest of the world are likely to continue to negatively impact the Taiwanese market for several more years, according to Carlos Ting, vice president of sales at lighting systems supplier TYC Brother Industrial Co. "Starting in 2012 the [Taiwan] economy will come back slowly, but the U.S. will be far ahead of that," Ting says. His company has seen a dramatic up-tick in the demand for motorcycle and scooter lighting components rather than passenger cars. "Our two-wheeled customers—Suzuki, Triumph, Ducati and MV Agusta—are growing above their original forecasts." However the company recently signed a contract with a medium- and heavy-duty U.S. truck manufacturer for a 2011 product launch. Like many other suppliers in the country, TYC is standing pat, waiting to see what happens with the U.S. auto industry and whether GM and Chrysler will survive. "Everything is on hold right now," he says.


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