Auto Conference Explores Cross-strait Synergies

Taiwan's automotive industry has relied on foreign partners, especially from Japan, for technical support over the past 50 or more years. Originally, the industry focused on styling and equipment modification of assembled cars to meet domestic tastes. A few players tried to introduce homegrown models with locally developed engines and chassis techniques, but success was elusive.

Today, Taiwan's auto industry is making a second stab at core technological self-sufficiency with the aid of government support. Carmakers and key-part suppliers are also working hard to develop real indigenous automotive technical capability, from powertrain development to other key systems.

In China, Taiwan automakers have been slow to enter the market relative to the big international auto brands. But they are quickly making up ground with competitive cost, good quality, and innovative products. Gains have accelerated with government support, the warming of relations between Taiwan and China, and the backing of strong local information and communication technology (ICT) and electronic industries.

In order to foster closer cooperation ties in the cross-strait auto industry, Taiwan's Ministry of Economic Affairs (MOEA) commissioned the Taiwan Transportation Vehicle Manufacturers' Association (TTVMA) and the Taiwan Automotive Research Consortium (TARC) to organize the Conference on Cross-strait Cooperation and Exchange in the Automobile (including Battery Energy Storage) Industry on November 23 to 25, 2009.

At the conference, over 500 senior executives of major automotive-related enterprises in Taiwan and China (over 100 people) discussed future cooperation opportunities after the signing of the Economic Cooperation Framework Agreement (ECFA) between Taiwan and mainland China. Major automotive-electronic companies and automotive research institutes, including the Industrial Technology Research Institute (ITRI), Automotive Research and Testing Center (ARTC), Chung-Shan Institute of Science and Technology (CSIST), and Metal Industries Research and Development Center (MIRDC), showcased their latest R&D achievements to major players in the Chinese automotive industry.

The conference was the biggest-scale event for promoting cooperation and exchange between Taiwan and China's automotive sectors. Among the heavy-weight representatives invited to the event were Chinese delegation leader Dong Yang, vice chairman of the China Association of Automobile Manufacturers (CAAM), and high-ranking representatives of the China Automotive Technology and Research Center (CATARC), FAW, SAIC, Dongfeng, Changan, Geely, and Chery. Participants from Taiwan included the heads of local automakers Yulon, China Motor, Kuozui, Ford Lio Ho, and most major first-tier parts suppliers.

Chances for Taiwan, China

In his opening speech, Cheng Kuo-rong, chairman of the TTVMA, stressed that Taiwan could play a major role in helping Chinese automakers expand in the global market quickly and efficiently, since "Made in Taiwan" represents higher added-value. With the development of intelligent transportation vehicles worldwide, he said, more and more advanced automotive-electronics technologies are adopted to enhance steering, fuel efficiency, and comfort. With the strong support from Taiwan's world-leading IT industry, more and more local auto-parts makers have developed advanced products with improved functionality and lower cost.

China has become one of the world's largest automobile markets and is likely to replace the United States as the top nation, creating huge demand for quality auto parts and vehicle products, the chairman said. Closer cross-strait cooperation will further lead to a win-win outcome for both sides.

Joe Huang, president of ARTC, the top vehicle testing and automotive-electronic system R&D center in Taiwan, pointed out that the core advantage of Taiwan's automotive industry lies in its superior quality and strong manufacturing capability in the auto-parts sector. In recent years, he added, these advantages have grown with increased production flexibility, government R&D support, and backing from the local ICT industry. These combined forces have positioned Taiwan to become a major player in the global automotive-electronics and EV businesses.

China, Huang continued, is the world's third-largest automobile producer, accounting for one-sixth of global production. Most local independent automakers in China are in the fast-growth stage, while carmakers with foreign partners are still dependent on imported technology. That means China still has a long way to transform from a big auto market into a big and independent auto producer, Huang said. Taiwan is also facing many challenges ahead, which, however, also present great opportunities for cross-strait cooperation.

The two-day conference addressed two major themes, including the development of indigenous brands for the global market and development of alternative power sources and complementary supply-chain relations in the global market.

Speakers on the first day touched on several issues related to auto industry prospects, homegrown technology development, branding, testing and certification techniques on both sides of the Taiwan Strait, as well as the practical ways for the two sides to cooperate, specialize and develop mutually complementary relations.

On the second day of the conference, speakers discussed the future of alternative fuels and various new-energy propulsion solutions. Representatives from private makers and research institutes in Taiwan and China also exchanged views and explored possible niches for EV supply-chain cooperation.

Wu Ming-gi, general director of Department of Industrial Technology (DoIT) under the MOEA, said the goal of the automotive conference was to enhance exchanges between Taiwan and China and create a win-win outcome for automotive companies on the both sides. He said that recent developments have shown there is great potential in for cooperation in both the Chinese and international markets.

Fruitful Results

On the last day afternoon of the two-day conference, auto industry groups from the two sides, including the TTVMA and TARC of Taiwan and CAAM and CATARC of China, jointly signed three cooperation letters of intent (LOIs) to accelerate cross-strait interaction in the automotive industry. The agreements also pave the way for further integration of cross-strait resources to develop in the global automotive market.

The three LOIs concerned cooperation between automakers associations, research institutes, and private companies in Taiwan and China. The first was signed between CAAM and TTVMA to strengthen research, exchange, and cooperation in key industry sectors. The second was signed by TARC and CATARC to expand exchanges relating to market information, regulations, and testing/certification techniques. The third LOI was signed between lithium-ion battery makers Power Source Energy Co., Ltd. of Taiwan and CITIC Guoan Mengguli (MGL) of China to jointly develop power cells.

Future Rounds

At the closing ceremony of the highly productive conference, ARTC president Huang said that the conference would continue to develop in three directions with support from the DoIT. The first is to develop mutually complementary R&D by integrating available resources in Taiwan and China's green-energy and intelligent-vehicle sectors, and thereby form a technology platform for developing alternative energy vehicles and value-added products.

The second direction is to develop a cross-strait division-of-labor system, integrating Taiwan's high-quality products in the supply chains of independent Chinese automakers, as well as helping Taiwanese motor, battery, propulsion system and ICT makers link up with China's thriving automotive industry.

Thirdly, Taiwan and China will jointly explore the global market through cooperation in technology, branding, marketing, and product value-added fields.

In addition to more than 500 senior executives and experts at the conference, the conference attracted over 1,000 visitors, ARTC said.