With strong support from the island's advanced-electronics industry and a firmly established parts-supply network, Taiwan's manufacturers of car alarms have gained what at first sight seems an unassailable foothold in the international market. In fact, the 200 or so producers in the line fill about 70% of global demand.

This commanding lead is expected to disappear soon, however, as rivals in mainland China and South Korea are rapidly catching up by offering lower-priced products. This trend has forced Taiwan's car-alarm makers into more strenuous efforts to strengthen their development capability and diversify their product lines into related areas such as in-car entertainment.

One of the leaders in the line is Tesor Plus Corp., which is strongly oriented toward research and development. The firm's president, Lobo Chen, notes that after many years of effort Taiwan replaced Italy to become the world's largest car-alarm supplier in the mid-1990s, but that he is afraid mainland China will catch up within another two or three years—and not only in the low-end remote-control segment, but also in the advanced field of global positioning system (GPS) products.

Local producers are being pressed even harder by competitors from South Korea, which took the lead in developing two-way (remote control and receiving) alarm systems featuring remote controllers with liquid crystal display (LCD) screens showing the real-time status of a car while in protection mode. These systems debuted about three years ago and have become a mainstay in the upper end of the market, as most local manufacturers have jumped onto the two-way bandwagon because of the higher profit margins available.

The monitor of a two-way controller is a full-time inspection window for the car owner, giving details of just about everything that can happen to a car—if a collision has occurred and from which direction, whether the car is being towed, whether or not the engine is running, and whether or not windows are open. The controller is an interactive device that can receive signals from a car up to one kilometer away (two with a few models).

Keeping Car Thieves at Bay

"Any car-alarm system can be defeated with time," Chen comments. "The key factor is the length of time this takes. The technical know-how of thieves has become more and more mature, and some car thieves can disable even the most difficult original-manufacturer alarm systems by getting information from the car's technical manual. The problem comes down to two main issues: how to prevent thieves from finding an alarm system's main kit, and how to maintain the protective function even if a thief breaks into the alarm system and cuts the power supply. This is the direction local makers will have to take, in my opinion, if they want to survive."

As for his own company, Chen says, "We protect our future business in two ways: the development of new anti-theft concepts, and of new products with 'real' functions." Among these "real" functions is the ability to continue protecting a car even when the power is cut off and the main kit is destroyed. This is accomplished with an advanced wireless relay containing both a high-precision wireless module and an integrated circuit in a plastic case only about three cubic centimeters in size, which can work independently when the power is off and the system is defeated. In combination with Tesor's other alarm features, such as remote control or engine immobilization, it continues providing anti-theft protection.

Mike Chung, Tesor's sales manager, claims that his company is one of the first to develop a two-way alarm system with an LCD screen on its remote controller. Chung says that the company has also provided a wider range of options through the recent development of a two-way alarm system with a specially designed interface that matches the original alarm-system platforms of different cars and offers the same two-way functions at lower cost. The company also offers three communication distances, which entail different prices, to choose from; these are an FM device, which operates on an FM frequency and has a range of four to five kilometers; an FSK model, good for about two kilometers; and an AM model, which can reach about one kilometer.

Tesor also recently introduced an innovative "cigar immobilizer." This patented cigar-shaped device acts as an electronic ignition key, and there is no way for the engine to be started without it. No wiring or installation is required, and it operates only in conjunction with one of Tesor's alarm systems.

All of the firm's products are ISO9001 approved and are also certified under the CE and FCC safety standards. They are turned out at two plants, one in Taipei and the other in Ningbo, Jiangsu Province, in mainland China.

The president reports that the Taiwan plant employs about 60 workers and produces mainly small-volume, varied-specification alarm systems at a monthly volume of about 70,000 units. The mainland plant has 200 workers who produce about 200,000 sets a month.

Chen is proud of Tesor's development capability, the result of an average annual injection of 7% of the company's revenue into R&D, and of its dedication to quality, which has led to a defect rate of only 1/10,000.

Huge Aiming for Big Things

Another leader in the line, Huge Technology Co., uses a different product-development strategy. Established in 1989, it has grown into one of the largest car-alarm makers in Taiwan by offering a wide range of products--from budget devices to high-end, technologically advanced models.

"Expensive alarm systems are not necessarily the best," insists Ammon Chiang, manager of the company's export department. "Being 'best' means that function and price are best suited to a specific market. Basically, most car-alarm systems have similar functions and only small differences in circuit design, and this makes quality and convenience the top concerns of our customers."

"Our competitiveness lies mainly in our consistent quality," Chiang explains, "which is the most stable in the industry, and our comprehensive, constantly refined functions. A good product can have a very long market life if there are no new technological breakthroughs or if the market for high-end, high-cost new products is still immature. Our M-10 alarm system, for example, has enjoyed smooth sales for the past 10 years, and there are no signs that its popularity will come to an end soon."

The M-10 is a multi-function basic alarm system with a remote control that has all of what Chiang says are the "really necessary" functions, such as door lock/unlock, car search, engine immobilization, passive arming, built-in lock relay, and pager output. "The M-10 is a name that has become synonymous with Huge," he says. "It's 10 years old, but it still accounts for about half of our revenue. You can see M-10s everywhere in the world; however, note that most are counterfeits, with the same packaging and even the same 'Sun-I,' 'Sun-II,' or 'Sun-III' logos as ours."

To counter this problem, Huge recently switched its logo to "HugeSun-I."

"With our more than 10 years of experience," the export manager says, "we have come to realize that we should concentrate more on the mid-end sector of the market while continuing our development in line with the latest technologies. In my opinion, the most popular models are those, like the M-10, that provide protection with simple operation, durability, and reasonable price—the ones that have the best cost/performance characteristics. The basic concept of car-alarm systems is to scare and hamper car thieves, not to use high-precision circuit designs and costly equipment to provide total protection, which is unachievable." In pursuit of this strategy, Huge recently developed the S-4602 alarm, an all-in-one remote-control model featuring competitive pricing. This new model has an impressive range of functions including a self-learning code, shock-sensor bypass, audible-intrusion alert, audible and visible defective-zone bypass, and engine disabler.

Huge products come from three plants, one each in Taiwan, mainland China, and Malaysia, in an international division-of-labor operation that, along with a robust R&D capability, further strengthens the company's competitiveness. The company currently offers over 20 car-alarm models (the most advanced of which is the S-300, a two-way LCD-screen model) and over 40 types of remote controllers.

All of these products are now marketed under the HughSun-I trademark throughout the world, especially in the Middle East, Latin America, New Zealand, Australia, and North Africa. The company recently diversified into in-car audio/video entertainment systems that incorporate thin film transistor-liquid crystal display (TFT-LCD) monitors, DVD/CD players, subwoofers, and auto speakers.

Argus-eyed About Security Argus Security Corp., established in 1991 by a team of security-industry experts with over 15 years of experience, also boasts strong expertise in the design and manufacturing of car-alarm products including complete systems, transmitters, and immobilizers.

The company has established its market niche in higher-end products. With strong development capability and ISO9002 certification, it produces on both an OEM/ODM (original equipment manufacturing/design) basis, which accounts for about 30% of total production, and on an own-brand basis (the remaining 70%) under the "Argus" name.

"Our competitiveness lies in our strong development and electronic-design capabilities," comments the company's international sales manager, Sunny Shiao. "This allows us to turn out products that fully match the needs of customers worldwide." Each of the major markets—the United States, Europe, Australia, and Japan—has its own product specifications and safety requirements.

The firm recently developed a two-way car alarm that has won FCC approval in the U.S. It has also introduced the ASC 1100 and 1200 integrated-alarm systems, which contain all siren, circuit board, and other necessary devices in a single case. The latter model features voice warnings, including declarations such as "system armed," "system disarmed," and "protected by security system."

Argus is making use of its strong development capability to diversify its product line into radio frequency (RF) products and advanced GPS car alarms. The firm's high-end market positioning and concentration on value-added products has enabled it to keep all of its production in Taiwan instead of moving to other areas in search of lower costs.