TSE-listed Auto-parts Makers Report Record Results for First 9 Months

Several Taiwan-listed auto-parts companies announce three-quarter earnings.

Cub Elecparts Inc., a major automotive electronics manufacturer, chalked up revenues of NT$196 million (US$6.5 million) in September, 61.6% more than a year earlier. The company's January-September revenues were NT$2.28 billion (US$75.97 million), a 15.7% increase. The improvement was attributed to increasing demand for higher-end automotive-electronics products.

The Tong Yang Industrial Co., the world's largest maker of aftermarket (AM) plastic body-parts, an Original Equipment (OE) supplier to international automakers, and the largest auto-parts maker in Taiwan, accumulated nine-month revenues of NT$15.6 billion (US$519.9 million), up 9% and a record high for the period. September revenues were NT$1.67 billion (US$55.7 million), up 9%. A company official pointed out that in the first nine months its OE and AM parts operations reported YoY revenue growths of 10% and 9%, respectively. Tong Yang added that it is aggressively preparing for booming demand in the fourth quarter, the traditional peak season for the industry.

Tong Yang's AM parts operation scored revenues of NT$1.04 billion (US$34.7 million) in September this year, up 12% YoY, and NT$10.12 billion (US$337.3 million) in the first nine months, a 10% YoY increase. Both figures were record highs for the company.

Industry sources pointed out that Taiwan has long been an important supply base for AM auto parts, and that in the past most local companies opted to produce differentiated items that allowed them to avoid direct competition with local counterparts. However, they added, there has been a major changs in this situation in recent years as the operating scale of major players in the industry has expanded.

The re4sults of this change are seen in the fierce competition that has developed between the top two auto-lamp makers on the island, the TYC Brothers Industrial Co. and Depo Auto Parts Ind. Co., both of which have been pouring investment into new product development and capacity expansion projects in recent years.

Depo recently announced an ambitious NT$10 billion (US$333.3 million) investment in the further upgrading of its production and logistics capacity in Taiwan and China. while TYC has also announced plans for expansion of mold/die development and capacity.

After intensive investment in plant restructuring, capacity expansion, and mold/die development in the past three years, Tong Yang has moved its focus to AM auto-parts production in Taiwan. Its aggressive expansion plans are expected to compress the survival space and profit margins of local suppliers of AM bumpers, sheet-metal body parts, and related accessories.