Cross-industry collaboration is now the norm

Learn from successful a case study between machinery and auto parts suppliers

The arrival of new technologies in the automotive-related industries has challenged traditional production models, especially those commonly seen among auto parts suppliers. Suppliers can no longer expect to handle increasingly complex client needs independently, leading to the rise of industry alliances formed and MOUs inked in recent years. For example, an alliance focusing on automotive chips, smart cabins in electric vehicles and self-driving cars, and display panels was formed in Taiwan earlier this year. 

Collaboration among suppliers in different industries can also bolster their competitiveness in the market and reduce operational risks. In an article published by Taiwan-based media outlet CommonWealth Magazine, companies from sectors that do not usually team up had raised eyebrows initially. However, with one of the companies becoming a shareholder in the other, they have now reported successful results due to complementary assets and know-how.

The companies in question are Turvo International and Zeng Hsing; the former specializes in precision metal parts production, including automotive components commonly used in vehicle engines. Zeng Hsing, a notable household sewing machine maker, became Turvo's biggest shareholder after seeing potential risks arise in its biggest client in the sewing machine sector. 

Zeng Hsing specializes in die casting and mid-end precision processing. In contrast, Turvo's high-end precision manufacturing capabilities enable the former to expand its business operations into other areas, such as cycling products. For Turvo, Zeng Hsing's die-casting experience is equally useful, as many of its existing clients in the medical and automotive industries already require such services. This know-how set smooths out Turvo's plans to transition from automotive part production to even more component-focused operations in the future, which holds more value and boasts a longer product lifespan than fully specializing in specific parts, such as parts for engine spray nozzles, transmissions, and high-pressure pumps.

Turvo Chairman Liu Chun-chang was quoted by the magazine saying that companies cannot do business on their own in modern society and would require engaging in collaborative partnerships with other companies to complement areas outside their expertise and specialties. 

Suppliers must think out of the box to fulfill clients' increasingly diverse product, and service needs to maintain competitiveness in this economy.