Taiwan Trade Shows
Taiwan may be experiencing sluggish new automobile sales—like much of the world—but that does not mean its vehicle manufacturing industry is suffering a similar slowdown. In fact, local automakers are chalking up solid export numbers amid testing economic conditions at home and abroad as ROC government policymaking efforts aimed at stimulating the sector pay dividends.
One overseas firm interested in capitalizing on this healthy state of affairs is Wolfsburg-headquartered Volkswagen AG. According to the company’s local agent Taikoo Motors Ltd., the giant German outfit is considering setting up an assembly plant in Taiwan. And if the government greenlights the investment proposal and provides requested resources, the first Taiwan-made Passats and Sharans will begin driving off the line by 2015.
During a visit to Taiwan last month, Su Weiming, president of Volkswagen’s Greater China and Southeast Asian operations, met with Vice President Wu Den-yih, Minister without Portfolio Yang Chiu-hsing, Deputy Economics Minister Duh Tyzz-jiun and Industrial Development Bureau Director-General Shen Jong-chin.
Su pitched Volkswagen’s investment proposal and said the company would need preferential tariff treatment and assistance to acquire land. The first stage of the proposed investment, which would be in southern Taiwan, involves setting up a 165,000-square-meter facility for the assembly of 50,000 cars per year. A further 330,000 square meters is required to implement a three-year expansion plan.
Taiwan Volkswagen sales for 2011 saw the company finish seventh with 3.7 percent of the market. While the assembly plant proposal is expected to lift this number to 15 percent, trailing only Japan’s Toyota Motor Corp., the bulk of new vehicles will be earmarked for markets throughout Asia.
Volkswagen’s interest in Taiwan reflects rosy data released by government-backed think tank Industrial Economics and Knowledge Center. In the second quarter of 2012, Taiwan’s auto or transportation vehicle industry production value, including assembled vehicles, autoparts, powered two-wheelers and electric vehicles, grew 3.2 percent quarter on quarter and 11.7 percent year on year to NT$107.63 billion (US$3.62 billion).
The value of vehicles produced in Taiwan during this period, comprising mid-sized and compact passenger cars, large passenger cars, light trucks and heavy-duty trucks and buses, increased 10 percent quarter on quarter and 24 percent year on year to NT$49.3 billion. In addition, 18,000 locally assembled cars were exported, mainly through local automakers’ foreign technical partners in Japan, up 13 percent quarter on quarter.
But Volkswagen is not the only foreign firm to recognize the value of making vehicles in Taiwan. U.S.-based PACCAR Inc., which designs and manufactures light-, medium- and heavy-duty trucks under the DAF, Kenworth, Leyland and Peterbilt brands, signed an assembly agreement with Taipei City-headquartered Formosa Automobile Sales Corp. in 2005 to turn out DAF CF85 trucks at the latter’s facility in Dadu, Taichung.
FASC has produced, marketed and sold DAF trucks in Taiwan since 2006. On average, the company puts together 10 CF units per week using completely knocked down, or CKD, packages shipped from the Netherlands. Since purchasing the plant in 1999, FASC has upgraded the facility several times and installed an NT$50 million assembly line in late 2005, enabling it to turn out more than 50 trucks and cabins per month.
In December 2011, FASC produced its 1,000th Taiwan-made CF truck. Reaching this milestone augured well for the commencement of work in November last year on assembling two versions of the popular DAF LF series distribution truck. The 12-ton LF45 and 17-ton LF55—built using semi knocked down, or SKD, packages shipped from Leyland in the U.K.—are expected to be top sellers and should see the company roll out 200 units in 2013.
Although the PACCAR-FASC deal has worked out well for both parties, the long-term viability of the partnership has been bolstered by government policies aimed at improving Taipei-Beijing relations. The Cross-Straits Economic Cooperation Framework Agreement (ECFA), concluded in June 2010, helped put FASC in the driver’s seat by opening up the burgeoning mainland Chinese heavy transport market for Taiwan-made trucks.
The landmark pact, which enabled both sides to turn a new page in bilateral ties, is an essential step forward in Taiwan’s economic development. To date, the ECFA has paid handsome dividends in terms of inbound investment and employment opportunities, while further integrating the country into regional and global economies.
According to the latest government statistics, Taiwan attracted US$5.56 billion in foreign investment for 2012, up 12.18 percent year on year. And the manufacturing industry employed 2.66 million workers in December 2012, up 0.72 percent year on year.
Auto Parts
Taiwan’s business climate is increasingly attractive because the pact has eliminated tariffs on more than 500 kinds of exports from Taiwan to mainland China. The ECFA lowered customs duties on 72 types of Taiwan-made goods to zero at the beginning of 2011, with tariffs on an additional 437 commodities reduced at the start of last year. Tariff savings on exports across the strait total US$551 million to October 2012, ensuring Taiwan-based firms enjoy a competitive edge in that market.
This bevy of ECFA-generated benefits is attracting more overseas firms such as Volkswagen and PACCAR to Taiwan’s auto manufacturing industry. The country’s can-do approach to international business ventures, cross-strait transportation links, formidable manufacturing clout, leading-edge R&D capabilities, progressive intellectual property rights protection and strong rule of law are also playing their part, ensuring Taiwan’s transformation into a world-class manufacturing hub.
(Source:www.taiwantoday.tw)
Click “Industry News” to read more news.
Aftermarket World - Automotive and Motorcycle Blog 