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Taiwan`s Engine Parts Makers Cope With Changing Times
2007/10/29
With efforts invested in quality improvement paying off, Taiwanese makers of engine parts for motorcycles, all-terrain vehicles (ATVs) and scooters are rapidly emerging as reputable suppliers in the global market, helping to prop up the entire motorcycle manufacturing industry on the island.
In only a few years after refocusing promotions overseas instead of concentrating only on the domestic market, Taiwanese makers of motor parts have effectively built a presence in the global market, with more and more world-class suppliers and brands in the segment trying to set up partnerships with them.
At the 3rd Taiwan International Motorcycle Industry Show, held in April 9-12, 2007 in Taipei, for example, there were 708 foreign buyers, including some from big-name brands like Germany`s BMW Motorrad, Magura, and Paaschburg & Wunderlich GmbH, U.S.`s Polaris Industrial Inc., Italy`s LAMPA S.p.A., France`s Top Saddlery, Japan`s Red Baron Co., Ltd., Canada`s Motorvan Corporation, and India`s SpeedoMax.
What`s more, the Austria-based Kista, a world-caliber designer of motorcycles, also sent representatives to Taiwan to outsource motor parts from makers on the island. Such well-known brands as Bimota, Piaggio and J-Motors, were also invited to attend the show. Such developments show that Taiwan has a promising future in making motorcycles.
In 2006, Taiwanese makers exported motorcycle parts worth NT$38.7 billion (US$1.191 billion at US$1: NT$32.5), mainly to the U.S., Germany, Italy, mainland China and the Netherlands, its major five export markets. These figures are expected to gradually increase as the local suppliers are underway to significantly expand production capacities and capability.
Furthermore, as more motorcycles are being used for leisure activities, the increased demand is driving some Taiwan makers to try engaging in original design manufacturing (ODM) with the help of domestic motorcycle makers, hoping to get a head start to carve out a niche. It seems that the motorbike parts makers in Taiwan are honing their market sensitivity, trying to foresee global trends as they sprout.
Production Upgrade as Coping Mechanism
One Taiwanese maker who has sharpened its machine tools to a fine point is Chuen Jaang Precision Industry Co., Ltd., who started with turning out automotive and motor parts in 1980 in Kaohsiung County, southern Taiwan.
 | | Chuen Jaang shows its production competency by turning out high-performance motor parts. |
Fortuity and good timing meant that Chuen Jaang sailed through the auspicious years when the domestic market for scooters prospered, so the company has managed to accumulate ample expertise and resources, hence having built a solid reputation in the market.
However, foreseeing an imminent decline in the domestic market for low-end motor parts, the company decided to invest its resources to upgrade production capability through introducing advanced manufacturing equipment and reinforcing quality control, according to M.S. Hsieh, general manager of the company.
 | | Chuen Jaang`s president, Hsieh Ming-sheng. |
"To meet the requirements for high-precision motor parts demanded by Japanese and German clients, we procured computer numeric control (CNC) lathes, millers and grinders," he says. The company`s camshafts and oil pumps, which are die cast and with sophisticated metalworking processes, are highly regarded by foreign buyers. Also, the company exports such high-precision parts at reasonable prices to Honda in the U.S.
Noteworthy is that the company once received orders for transmission parts used on ATVs, which called for uncompromising production capability to ensure that gears work properly, when most domestic makers in the sector were incapable of turning out such parts at the time. "We spent lots of time and money developing the parts, which feature reinforced structure and perfect gear-shifting mechanisms," Hsieh mentions. "Ultimately, the client was really satisfied with our work," which reflects the company`s obvious competency in production capability.
Quality Control at Every Stage
Also, such manufacturing prowess results from the company`s commitment to quality. "That is necessary. We employ the newest quality control devices, such as projectors, to hammer out standard operation procedures," he says. "We first inspect the quality of raw materials and then ask each operator of a production line to conduct quality control on semi-finished goods. Meanwhile, we also have a quality inspection team to walk around the plant for random quality checks."
He emphasizes that the safety of motorcycle parts hinges on their quality, which depends on the amount of work makers put into it. Hence, the company, despite the additional costs of quality control, will not cut corners. "For example, our push rollers, priced at NT$220 per pair, less than half of the NT$480 Japan-made versions, have been tested and proven able to stand 300kg of pressure and 1,200kg of drag forces during reciprocating movements of 6,000 times a minute."
"In contrast, such parts made by Chinese suppliers, however, are incredibly cheap, priced at only NT$20 per pair, but break down easily due to poor quality," Hsieh says. "I don`t think we can compromise on motorbike riders` safety by sacrificing quality for the sake of more profits or orders."
To diversify its business to open more windows of opportunity, Chuen Jaang has made a move to try ODM, developing an entire set of motorcycle engine parts with the help of larger makers of scooters and cars in Taiwan, at the same time continuing to improve its production capability and capacity.
Recreational Segment Has Potential
Another Taiwan supplier who sets sights towards the future, favoring the recreational market for motor scooters, is Huang Liang Precision Enterprise Co., Ltd., which has been specialized in manufacturing motor parts since its establishment in 1986 in Taiwan`s southern industrial county of Kaohsiung.
 | | Huang Liang is one of the most active believers in the recreational segment of the motorcycle market in Taiwan. |
Huang Liang takes pride in its sound production lines and equipment, with 13 computer-aided manufacturing (CAM) lathes and 82 CNC lathes, which precisely turn out not only motor parts but also shapes, trims valves and electronic parts. The company has a wide range of product lines, including shafts, oil pump shafts, auto by-starters, pressure valves, adapters, pressure switch gear systems and computer accessories.
Also, the company has successfully joined the supply chain for KYMCO, a top-three scooter brand in Taiwan, shipping carburetor parts and piston pins. The company has become one of the most reliable motor parts suppliers for KYMCO, with YAMAHA and SYM also on its client list.
In terms of a jet engine, the revolutionary, gasoline-burning engine of the next generation that is environmentally-friendly and fuel-efficient, Huang Liang is also capable of producing oxygen sensors and engine control units (EUC) parts for such an innovative motor, according to C.C. Hsueh, manager of the company.
 | | Huang Liang has gone to extremes to upgrade production ability to deliver customized engine parts. |
However, facing dwindling demand for scooters in the domestic market, Hsueh comments "with public transportation becoming increasingly accessible and popular in Taiwan, demand for scooters has declined to only 30,000 units a month. Although a few motor parts suppliers returning to the domestic market from China have reenergized the industry, we are eager to make changes to cope with slower times."
Huang Liang is taking aim at the recreational segment of the motor scooter market. "I think there is a strong business potential in the recreational segment, especially considering that motorcycles or scooters used for recreation fetch higher gross profits than commuter models," Hsueh says. "In the near future, sizable demand in the recreational segment will realize considerable production value for the industry making motor parts."
Adapt Production for More Flexibility
"But a motor parts maker will have to adapt its production process for more flexibility or customization because motor parts for recreation are likely to be supplied with more variety but less quantity," he indicates. "Thus, we continue to work on making our production processes more flexible, introducing more CNC lathes, and integrating production systems to turn out parts with high added-value."
In addition, Huang Liang has been certified to ISO 9000, 14000, 16949 and 18000 standards and built a sound, expanding organizational structure as its basis to keep up with market trends. In other words, the company adheres to working with established standards while brainstorming to come up with ways to divert from the beaten path.
Backed by its efforts to upgrade production processes, Huang Liang plans to develop engine parts for ATVs, agricultural machinery and, even, military vehicles, as well as motor parts with titanium alloy housings, which are popular in Europe due to lightweight, attractive color, and corrosion resistance. "Such parts are high-end and high-priced, requiring highly advanced production technologies to produce," Hsueh says. "But they also command higher margins that can enhance corporate profit, helping us to reinforce sustainability."
Size Does Not Matter
A living example that small size is not necessarily a hindrance, Shih Yi Industrial Co., Ltd. is a relatively modest-sized maker of engine parts in Taiwan who has fared well in terms of product quality through alliances with larger suppliers in the line.
 | | Shih Yi does its utmost to sharpen competitiveness by working with peers. |
Shih Yi, founded in 1993 in northern Taiwan, specializes in turning out motor parts and hardware, including timing KT parts, bearings, washer sets, gears, connecting rods and related fasteners, on original equipment manufacturing (OEM) basis, with 70% of its output going to the domestic market and 30% for the European market.
In fact, Shih Yi is also a seasoned maker of ATV parts, being a part of the supply chain for leading domestic ATV makers, such as Taiwan Golden Bee Co., Ltd. and Dinli Metal Industrial Co., Ltd. Such success is attributable to its efforts made toward quality, according to P.K. Hung, owner of the company.
"To achieve sustainability, we have to stick to delivering good quality at reasonable prices," Hung says. "At the same time, we manage to develop high-precision, high-end parts, which depends on how we work with other makers in the line when resources are lacking in-house."
 | | Shih Yi`s engine parts. |
Believing in such a philosophy means that Shih Yi has worked with its peers, including the aforementioned Huang Liang. "We have 70-80% of our products made jointly with other makers, which allows us to keep improving product quality and production technologies with outside help," Hung says. "It is just like a strategic alliance between us and other medium-sized makers." This allows the company to learn from them, and share more resources, which is unavailable when working alone.
"I don`t think a small-sized maker like Shih Yi should be restricted to being a contract supplier due to its size. Instead, we can team up with peers to jointly produce and develop new products, which allows for mutual growth," Hung comments. "Indeed, this is the way Taiwan`s small and medium enterprise successfully stay competitive, flexible in the global market."
(by Steve Chuang)
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