Tong Yang Prepares for Post-ECFA Biz Expansion

Taipei, May 24, 2010 (CENS)--Taiwan's quality, cost-competitive auto-parts products are expected to see explosive growth after the signing of the Economic Cooperation Framework Agreement (ECFA) with China, says Y.M. Wu, president of Tong Yang Group.

Tong Yang Industrial Co., Ltd., the world's largest maker of aftermarket (AM) plastic body-parts and a major original equipment (OE) body parts supplier to most local and many Chinese automakers, has been expanding production capacity by 30% at its Tainan factory in southern Taiwan.

Tong Yang Industrial's affiliate Taiwan Kai Yih Industrial Co., Ltd. also expects to soon complete a capacity-expansion project to raise its local sheet-metal parts production capacity by 75%.

Tong Yang Industrial and Taiwan Kai Yih have announced a merger to be completed by September 2010 through share swap (one Tong Yang share for 1.55 of Kai Yih's), making the merger the first on the TWSE between two auto-parts companies.

Also, says Wu, Tong Yang Group recently rented 15,000 ping (1 ping is 36 square feet or 3.3 square meters) of land to start construction of a new facility, expected to be completed by year-end, with the new plant to effectively raise his group's capacity and production efficiency.

Tong Yang Group's earlier OE/AM production ratio was 3:7 or 4:6, which has been in the past few years close to 1:1 due to partnerships with many major automakers in China.

Besides being optimistic towards the global AM market, Tong Yang is also preparing for the expanding car-making segment in Taiwan after signing the ECFA with China. Taiwanese automakers expect to tap into foreign automakers' division-of-labor to produce cars for sale in Taiwan and China in the post-ECFA era, resulting in higher demand for OE parts on the island.