Taiwanese makers of machine tools are benefiting from mainland China's booming automobile and motorcycle market by filling orders from mainland manufacturers for the machinery they need to support production there.

For example, Chin Fong Machine Industrial Co., Taiwan's No. 1 maker of large-sized pressing and stamping machines, reports the recent receipt of NT$300 million (US$8.87 million at NT$33.8:US$1) worth of orders from two mainland auto manufacturers: NT$100 million (US$2.95 million) worth from the Chang Feng Motor Co. of Hunan, and up to NT$200 million (US$5.91 million) worth from the Ford Motor (Changan) Co., which both plan to set up new steel-plate stamping lines.

Chin Fong spokesman Hsiao Kai-feng says that booming sales in the mainland have led to a pressing demand for auto-body-part stamping machines during the past several months.



Shieh Yih Machinery Indsutry Co., a listed enterprise that specializes in pneumatic and high-speed pressing machines, will soon boost its production of machines for the processing of auto body parts to meet increased demand from the mainland. Such machines accounted for only 10% of its total production value early this year, but the ratio will reach 15-18% within the next few months.

"Sales of automobiles in the mainland are still on the rise," comments Shieh Yih's export manager, Hsu Yu-po. "Over the past few months, we've seen a substantial increase in orders for large pressing machines from mainland automakers and their satellite plants."

To meet this growing demand, the company is thinking about setting up an assembly plant on the other side of the Taiwan Strait.

Tong-Tai Machine & Tool Co., a maker of special-purpose machine tools, says that it is being kept busy with the delivery of machines to auto-parts makers in the mainland. The company reports that the value of orders for such machinery from the mainland grew at an annual rate of 59% in the first eight months of 2003.

The company's president, Yen Jui-hsiung, notes that he has recently taken big-ticker orders from mainland carmakers, including those with investment from Taiwan, Hong Kong, and Japan in addition to the mainland itself. "These orders are for equipment for the production of auto braking systems," the president reports. "We'll deliver the orders in the form of whole production lines made up of several computerized numerically controlled machining centers."

The company claims to have received NT$210 million (US$6.21 million) worth of orders from mainland automakers in the first eight months of this year, accounting for a third of its whole-line and whole-plant production.

The mainland market boom is also bringing in more orders from Taiwan's makers of machinery for the production of steel wheel discs. Victor Taichung Machinery Works Co. and You Ji Machine Industrial Co. are already making machines to fill this need, and they will soon be joined by the Taiwan Takisawa Machinery Co.

Lin Chun-chang, president of Taiwan Takisawa, comments that "The mainland's demand for machines for making auto wheel discs is increasing, because many makers of wheel discs have set up new production facilities to meet the burgeoning demand there. We'll send some experts to collect information in Europe at the end of this month before deciding what kind of machinery to produce, but I think we'll give priority to the production of powerful vertical lathes equipped with robotic arms because those machines are easy to operate. We'll target sales of 50 such machines to the mainland in the first year after we start making them.

"I believe that we'll be able to beat out the manufacturers from Europe and Japan who currently dominate the mainland's market for these machines, because we have the same culture as the mainland buyers as well as geographical proximity. The European company IMT, for example, cannot compete with us in the provision of prompt after-sales service in the mainland."