Many Taiwan-based Auto Tuning Parts Makers Stay Above Global Downturn
2009/04/20 | By Quincy LiangWith China's car sales volume having exceeded that in the U.S. earlier this year, and Toyota having taken over GM as the largest carmaker worldwide recently, and TATA Motors of India about to launch the Nano, the cheapest runabout in the modern era, nothing can be taken for granted in the global auto business, except that the global downturn is forcing many major automakers to run on virtually empty tanks.
A niche market of the auto industry is the tuner or performance parts segment, where products are designed to enhance the cosmetics and functions of vehicles. Such parts are generally seen as luxuries and hence assumed to be the hardest hit amid tightening credit and discretionary cash. After all forged mag wheels and ceramic-graphite brakes are not essentials and typically more expensive than serviceable, conventional counterparts. However and as in many other top-end product segments, patrons of such goods seem to be immune to economic cycles, recently proven by the amazing turnout and success at the recently held auction of YSL's collection of art objects.
The above anomaly has been substantiated by CENS journalists writing for the TTG: their interviews discovered that few Taiwanese tuner parts makers are actually battered by the global financial storm, and many of them are quite optimistic about this year's operations. Despite varying levels of optimism, the consensus and typical move taken among the segment is to invest more in new-product development or utilize the slowdown to further develop global sales.
Whether due to foresight or savvy strategy, most major suppliers of performance auto parts in Taiwan focus on the top-end segment, where affluent buyers are much less price sensitive but are willing to pay for innovative, functional products.
Camco Auto Sangyo Co., one of the largest suppliers of high-end performance auto parts and accessories in Taiwan, has been specialized in this segment for 15 years and claims to be among the world's best-known. Auto tuning parts and accessories account for about 65% of the company's revenues, and the maker supplies a wide range of mid- to top-end items.
Bruce Liu, Camco's chairman, states that 2008 operations saw ups and downs in different segments, with the overall revenue and profits remaining at encouraging levels, thanks mainly to comprehensive product mix, unmatched service quality, and correct strategies.
"Though demand for tuning parts for ordinary cars has declined, purchase willingness in the upper segment has not suffered much," Liu says. "That means, as I always tell others, the global demand for tuning parts and accessories is rising with car buyers' growing appetite for better engine performance, more aerodynamic design, and personalized styling."
According to Liu, the Japanese and European markets stayed stable in 2008, thanks to Camco's focus on mainly high-end and functional tuning items for luxury cars; while the American market saw clear growth driven by new customers' strong demand for chromed items such as grilles, lamp rings etc.
Liu believes Camco's competitive advantage lies in its ability to grasp market trends quickly to provide new products in time to meet changing needs. Its location in Taiwan also helps, he says, because the island is the best possible supply base for tuning products.
Another vital factor that helps Camco to achieve long-term successes and invulnerability from the global recession is, the chairman says, the company's policy to work with trustworthy buyers regardless of size. "We do not reject small-volume orders, and even welcome such customers because Camco can always grow with ambitious customers."
Camco's edge lies in outstanding service, rapid product development, quick delivery, and comprehensive product lines, Liu comments, adding that these advantages are built on extensive experience, long-term relationships with suppliers, and sound finance.
Without its own factories, Camco works with about 200 Taiwanese tooling developers and manufacturers who turns ideas passed to them into finished products. Camco also finances key partners in product development. Such partnerships, Liu stresses, are vital to success in the tuning parts and accessories market due to rising technological sophistication and adopting new materials.
The high-end tuning market is a niche that will always exist and grow steadily, Liu says, with strong players, like Camco, to continue becoming bigger and more powerful. The chairman says Camco is expected to grow in 2009 with more new customers coming onboard.
Taking interior ornamentation in cars a step further, Deco Car Dashboard Ent. Co., Ltd. adds the bling-bling factor in top-end steering wheels, which may be in wood and leather decorated with glittery Swarovski crystals that enhance looks and friction.
Deco Car Dashboard is a leading manufacturer of three-dimensional (3D) or form-fitting wooden dashboard kits, wood/leather steering wheels, and wood/leather shift knobs in Taiwan. With over 20 years of experience as an original equipment (OE) supplier of high-end wooden dashboard kits to automakers worldwide, Deco Car adopts the same trans-print film adopted by major carmakers in Japan, enabling the delivery of the same wood-grain quality in new car interiors launched by automakers every year.
Focusing on the high-end upgrading and tuning segments, Deco Car regularly develops newer and better products. After building a solid foothold in the 3D wood-dash business, the firm branched into developing high-end upgrading steering wheels, first for popular Japanese cars, and then luxury makes as Mercedes-Benz, BMW, Lexus etc.
A senior Deco Car manager points out that its core competitiveness lies in its technical partnership with the same material supplier to all major Japanese automakers. So, Deco Car can offer 1,600 color and surface-treatment choices, with all the colors and patterns fully matching OE interiors.
Deco Car is also creative-developing innovative parts with its trans-printing techniques to realize more ideas with luxurious, appealing features. In addition to Swarovski-crystal studded steering wheels, the company also offers ones with hand-drawn patterns.
Tapping innovation to escape underselling rivalry is not an easy task. According to the senior executive, Deco Car develops new items only after comprehensive market investigations, including studying the price segment of a car model, sales, major markets, and purchase willingness etc. Only after acquiring ample market data, the firm starts to develop new items according to customers' requirements and will offer detailed technical suggestions.
Targeting the high-end segment has helped Deco Car to grow rapidly, especially in the upper markets in Japan, the Middle East, Europe and the U.S. The executive concludes to say: "We have the strongest capacity to custom-develop products with OE techniques and materials. Besides finding niches among our existing product lines, we do our best to improve products for the upgrading and tuning market."
Dynamik Exhaust Industry Co. Ltd., with about 20 years of experience in high-end tuning parts, specializes in developing and manufacturing high-performance exhaust system products and top-end tuning parts and accessories. After laying down a solid base in the exhaust-system market, the firm has diversified into a versatile supplier of turbo hardware meeting the highest demand for quality and durability.
Jerry Huang, president of Dynamik, claims that his company now focuses mainly on OEM/ODM manufacturing for foreign part-conversion customers, including car dealers or distributors that promote special, or limited edition models to promote automakers and tuning-parts brands, as well as providing technical and manufacturing support to turbo- conversion customers.
"We are very optimistic about the high-end tuning sector, even during the global economic downturn," Huang says, "because more people want to pay less than a new car and want to upgrade their older cars. So we have been moving toward becoming a supplier of packaged or total tuning-solutions, because we find that most drivers who install high-end exhaust systems would not only replace the pipes, but also add other functional and cosmetic parts."
With a clear focus, Dynamik now works with customers to build packaged, integrated kits, whereby the firm helps to develop various high-end tuning kits designed specifically for a model from both inside and out. For example, Dynamik offers top-end titanium exhaust systems in a package with aerodynamic body kits, decorative LED items, and many others.
"Products for vehicle styling will never disappear," Huang says, "and Taiwanese companies always stand good opportunities, but they have to find viable niches. Dynamik, for example, is focusing on supplying packaged-tuning services and workshop-friendly products for select models, a new concept in the local tuning industry because most companies on the island resort to the shotgun approach in product and market development."
"Dynamik is also eyeing another segment-cosmetic products to meet high-end, personalized tastes, fashion, market trends etc. rather than exhaust systems or over-the-top exterior parts and accessories. We are developing a high-end taste based in Taiwan, which differs from major players in the international market. Meanwhile we fully realize that whoever supplies products to ride trendy waves will always succeed."
The high-end tuning-parts supplier has been working on more packaged kits for various upmarket cars, including BMW E46, E92/M3, Skyline R35, Nissan GTR, BMW E46/M5 etc. "It's just a start, we are evaluating to develop other kits for Porsches and even Lamborghinis," Huang says confidently.
Trendsetting Product
Being able to develop new, innovative products can often help a company to achieve higher revenues and margins, and Shiniest Industries Inc. proves it with its latest On-Wheel Lighting (OWL) product, which may even be a trendsetter.
In recent years, Shiniest Industries has been wholeheartedly developing optoelectronics-related products such as color-changing side mirrors, windscreen washer nozzles, gear-shift knobs, and illuminated rear-window spoilers, and the latest OWL, all of which buoy the company's revenues to buffer it from the global downturn.
The OWL range is a programmable messaging and animated imaging system that can generate catchy, bright images on a vehicle wheel. So far Shiniest Industries offers OWLs for 15- to 17-inch wheels.
As the wheels rotate, the OWL with programmable LED lights create fantastic, animated full-color images or characters. This unique and innovative product mounted on a moving vehicle not only allows a vehicle owner to show a personalized statement, but also serves as a great advertising platform. Users can design their own images, or transfer up to about 200 photos from a computer, with programmable display mode and speed.
The OWL is easily installed on a wheel center with a specially-developed installation kit without affecting the original bolts. Three AAA batteries power the OWL for up to three hours, but likely for much longer because highway driving will see the OWL turned off. Although simple in styling, the OWL in fact contains many high-tech features as the magnetic positioner to keep images upright, the remote-control function etc.
Managing director, Rocky Lin, claims that the OWL has long been anticipated by many global customers for no similar product has come on the market for some time. The innovative accessory is expected to be multi-functional and create ample buzz among young car buffs worldwide too.