Taiwan Companies Poised to Win More Automotive Electronics Opportunities

Taipei, April 7, 2006 (CENS)--Qualified Taiwan companies are expected to win business opportunities in the rising global automotive electronics market as the trend toward globalization continues to accelerate with European and American automakers shifting their parts chains to lower-cost suppliers in Asia, according to Industrial Technology Intelligence Services (IT IS), a government program managed by the Department of Industrial Technology of the Ministry of Economic Affairs and executed by the Industrial Economics & Knowledge Center (IEK) of the Industrial Technology Research Institute (IEK-IT IS).

According to IEK researcher Hsiao Zui-sheng, the global value of the automotive electronics market is expected to reach US$185.3 billion in 2012, with the European, U.S., and Japanese markets together accounting for more than 80%, while mainland China will be a emerging market.

Hsiao recently gave a speech at an IT IS industry seminar activity focusing on the topic of automotive electronics technology development and the business opportunities it offers. He pointed out that automotive electronics have become a strong factor behind auto-parts development. Some automotive electronics systems that enjoyed a 50% sales growth in last year's global automobile market included lane-department warning systems, adaptive front lighting systems, and distance warning systems. Other systems that enjoyed more than 30% sales growth included heads-up display (HUD) systems, tire pressure monitoring systems (TPMS), and electrical power systems.

Hsiao forecasted that the global automotive electronics market would enjoy a compound growth of more than 20% over the next five years.

The researcher further explained that demands for better comfort, safety, energy savings, and real-time information have been rapidly increasing. In the future, each car could require 100 to 150 different electronic systems, making it increasingly intelligent.

Hsiao observed that the focus of global auto-parts procurement is turning to Asia, and qualified Taiwan companies are expected to win increasing opportunities to supply automotive electronics products. With the well-established supply chain already on the island, Hsiao said, Taiwan companies might have the chance to become major tier-one suppliers to big international carmakers if they can set up strategic alliances with the global brands.

During the industry seminar, Lee Chun-chong, vice president of Yulon Motor Co., the local maker of Nissan and GM car models, said that the product with the most potential for local automotive electronics makers is the telematics system. In Taiwan alone, Lee said, the market value of telematics systems is expected to outstrip NT$30 billion (US$923.08 million at US$1: NT$32.5) by 2008.

Taiwan is cultivating a sound environment to develop telematics products, Lee said, including the national M (mobile)-Taiwan and Intelligent Transportation System (ITS) projects. In addition, mainland China's huge market is also offers a good chance for local companies to develop such products.

Automotive electronics parts and sub-systems now account for about 20% of the value of a new car, Lee said, and the ratio is expected to climb to about 40% over next 10 years.

Yulon is actively developing telematics systems and related services, Lee said, and will gradually extend its successful business model in Taiwan to the huge market in mainland China and elsewhere.