Newsmaker: Lung-Chou Huang
To what factors do you attribute to Taiwan's success in gaining a substantial place in the global OEM and aftermarket auto market?
Taiwan's success is customer oriented. Taiwan enterprise can provide small batch production based on a customer's requests, quick mold opening technology and very competitive pricing in order to maintain long-term, trusting relationships with customers.
In the past, Taiwanese companies focused on the aftermarket; now, Taiwan firms capture the OEM market vigorously and successfully, particularly in China. The business faith of Taiwan enterprise is to fulfill the customer's thoughts and ideas and then meet the customer's needs.
How long has Taiwan been a leader in supplying automotive parts? How did this industry get started in Taiwan?
Taiwan has been a leader for 20 years, and its global market share has grown from five percent to more than 70 percent since the 1980s. During this period, we experienced the litigations of carmakers and State Farm, which led to a decrease in production value. However, Taiwan still has remained "high performance" because of its access to the European and Chinese markets.
In the beginning, there were many small- and medium-sized enterprises here. After merging to coordinate resources over the past few years, we now have some big companies that provide international competition and good quality. Taiwan also proves her best quality and technology by capturing the foreign market and is gradually superseding European companies.
Could you please describe Taiwan's auto industry and its relationship to mainland China? Is it true that Taiwan faces competition because wages are lower on the mainland? How tough is the competition between the two countries?
Taiwan and China help each other to develop the automotive industry. Both countries have joint ventures in their car production enterprises. Many Taiwanese auto parts suppliers also set up facilities in China to provide quick access to the local market. For Taiwan, working with China enlarges the scale of industry and technology. Meanwhile, China gains the advantage of better technology and management experience.
The lower labor cost has been the past. China's labor cost is rising recently, following their government's policy. Taiwan firms improve technology continuously to decrease the labor cost. Therefore, the gap in production has been reduced between Taiwan and China.
Taiwan doesn't compete with China, we choose to cooperate with them.
What steps has ARTC taken to ensure that high-quality parts are exported to the U.S.? How successful have these efforts been?
There are 12 testing labs and research and development (R&D) centers to assist companies in preliminary product development and design to meet quality standards. As for the product exported to America, we have a high degree of quality assurance. ARTC not only participates in the Certified Automotive Parts Association (CAPA), which approved our lamp test labs, but has also joined the LKQ (an association of parts recyclers). We also provide Taiwan's modified parts supplier the test based on federal motor vehicle safety standards (FMVSS), the Society of Automotive Engineers (SAE) and others, to make sure the parts meet OEM standards.
How easy is it for U.S. buyers of auto parts to do business in Taiwan? Are there English-speaking officials available to assist Americans wishing to do business with Taiwan?
U.S. buyers can search "Taiwantrade" on the Internet. Taiwanese auto parts suppliers all have salespeople in direct contact with U.S. buyers and set up booths at automotive OEM, aftermarket and modified parts exhibitions every year so that they can communicate with buyers face to face. In addition, most companies have representatives, offices or warehouses in U.S. This helps them serve their customers immediately. For Taiwan, international trade is very critical to industry development, so our government's Bureau of Foreign Trade has set up an international trade institute with English-speaking ability to be a bridge between Taiwanese companies and foreign customers.
How large is Taiwan's aftermarket industry. Do you expect it to expand in the near future?
The total amount of Taiwan internal market scale of aftermarket and OEM replacement parts is about $630 million (U.S.). Taiwan's consumers are free to choose the OEM product or the aftermarket product when they need to replace parts. Regardless of the consumer’s choice, the products are all provided by domestic large enterprises, and the quality is same between them.
Taiwan's internal market is not as big as U.S., and it also faces a saturation situation. Therefore, it won't experience huge changes in the near future.
Taiwan is making a push to provide more electronic automotive parts for export. What are some of the efforts being undertaken, and how effective do you think Taiwan will be at reaching the electronic auto parts marketplace?
There are some associations that hold the automotive electronics exhibitions to promote Taiwan's automotive electronics products. The fairs attract many customers from different countries and create commercial opportunities. Taiwan-related associations have also invited foreign customers to attend the purchasing meeting with Taiwanese firms to create the business directly. We also help firms to obtain the international product certification so that their products are qualified and sold in foreign market.
In order to accelerate industrial development, Taiwan focuses on technology development. Some associations co-develop new products with companies or help them implement technology transfer to get quicker access to the market.
We are seeing traditional electronics firms incorporating their electronics products into automotive parts creatively. Taiwan's high-tech industry strives to be a total system supplier, and also many foreign OEM companies release their order to Taiwan for outsourcing because Taiwan has mature environment for development of automotive electronics industry. Taiwan will be a global supplier of automotive electronics.