Auto-parts Makers in Taiwan Cut Costs Amid Stagnated Demand

Taipei, Jan. 15, 2009 (CENS)--To cope with the teetering global auto industry, most OE auto-parts makers to local automakers in Taiwan are forced to cut costs.

Ta Yih Industrial Co., the largest OE auto-lamp supplier with an very high share in the domestic market, suffered monthly revenue decrease of 30% to 40% in the last two months of 2008, forcing it to lay off temporary workers and ask employees to take unpaid leave.

Tong Yang Industrial, the world's largest maker of aftermarket (AM) plastic body-parts and a major OE supplier to many local automakers, supplies about 60% of the domestic OE plastic body-parts market. The down-turning new-car sales in Taiwan drove its revenue down by about 20% in 2008, while sales in mainland China also faced stagnated growth.

Tong Yang operates over 10 production points in China and sluggish new-car sales there has caused losses in its third-quarter Chinese operations. So the company had been actively trying to settle accounts receivables in China and evaluating to rid of uncompetitive reinvestments there.

Hota Industrial Manufacturing Co., Ltd., a OE supplier of transmission gears to GM and major European first-tier parts brands Borg Warner, ZF etc., pointed out that GM's orders plummeted by about three-fifths in 2008, while orders from other European customers decreased by 20% to 30% due to diving new-car sales globally. So the company streamlined 5% of its workforce, reduced production, and tried to tap non-automotive new customers as John Deere, the world's largest agriculture-equipment maker.

Jui Li Enterprise, a major sheet-metal body parts supplier to local carmakers and global AM market, has been actively shifting its operation focus to mainland China in the past two years. Its major profit-making plant in Hainan Province has streamlined workforce by 20% to offset decreasing orders. In Taiwan, the company also laid off about 10% employees to cut costs.