Carmax and GAIG Tie Up in OE Auto Accessory Biz

Taipei, Dec. 25, 2012 (CENS)--Carmax Co., Ltd., a subsidiary of Taiwan's Hotai Motor Co. Ltd., to develop and sell original equipment (OE) Toyota accessories, recently formed a joint venture with Chinese carmaker Guangzhou Automobile Industry Group Co., Ltd. (GAIG) to develop and sell OE accessories for GAIG models, which produces more than 900,000 cars per year, with estimated annual revenue exceeding NT$45 billion (US$1.5 billion).

Toyota Group of Japan recently bought a 33.4% share in Carmax, through its Japanese subsidiary T-JACS Corp., aiming to jointly explore the auto-accessory business in China and globally, as well as planning to export more Taiwan-made auto accessories to Japan to raise revenue.

H.T. Lai, president of Carmax, said that the Carmax-GAIG venture is capitalized at 30 million renminbi, in which GAIG holds 55% stake, while Carmax 45%.

GAIG is the sixth-largest carmaker in China in ventures with international automakers such as Toyota, Honda, Mitsubishi, Fiat etc., also making own-branded cars.

According to Lai, the new venture will start by development of Toyota accessories, and gradually duplicate such business model to other brands. Carmax will develop related products in Taiwan, and find contract manufacturers on the both sides of the Taiwan Strait, he added.

Lai claims that Taiwan's auto-parts and -accessory industry has been globally renowned with its fast response, high quality, and the small-batch, large-variety production mode. With strong support from the world-class information and communication technology (ICT) industry, Taiwan-made auto parts and accessories, especially automotive-electronics, are very globally competitive.

A senior executive of Hotai said that T-JACS evaluated Carmax's product development capability and quality level before investing in the Taiwanese company. Carmax is scheduled to launch Toyota-approved MVA (Market Value Accessory) branded auto accessories in six Middle East nations, Southeast Asia and China. In addition, Carmax is expected to develop high-quality, reasonably-priced Toyota auto accessories for Japan.