Scania to purchase truck parts from Taiwan

Taipei, July 26, 2004 (CENS)--Scania of Sweden, the world's No. 4 truck and bus maker, is expected to begin placing auto parts orders with Taiwan suppliers in mid-2005 at the earliest, according to Taiwan External Trade Development Council (TAITRA).

TAITRA organized a Taiwanese auto parts delegation to visit leading auto makers and parts suppliers in Europe in April this year to explore the original equipment (OE) parts supply business opportunities.

Scania recently informed TAITRA that it has sent requests for quotation (RFQs) to five Taiwan companies earlier this month, including Hota Industrial Manufacturing Co., Ltd. (maker of high-precision gears, transmission gears etc.), Chian Hsing Forging Industrial Co., Ltd. (forging parts), World Known Mfg. Co., Ltd. (machining parts), Sumeeko Industries Co., Ltd. (hardware parts, fasteners), and Spacious Industrial Co., Ltd. (aluminum casting parts).

A senior TAITRA official said Scania has taken a conservative attitude toward operation and never purchased auto parts from suppliers in Asia before. The official stressed that the RFQs had major implication for Taiwan's auto-parts line, especially in the OE supply business.

The official added that Scania's move showed that the quality level of Taiwan's auto parts have been accepted by big international auto makers, attracting more and more big companies to purchase parts from the island. In addition to Scania, the official added, many European truck makers including Volvo Truck and DaimlerChrysler Truck etc. have made firm decisions to purchase parts from Asia.

In addition to Scania, the Fiat Group of Italy, the No. 1 carmaker in the nation, has also decided to begin purchasing OE auto parts from Taiwan this year.

TAITRA plans to set up a strategic marketing alliance among local automobile suspension parts makers, which is expected to provide one-stop-shopping services to interested foreign buyers and stimulate their willingness to purchase more parts from Taiwan. In addition, the council said, members in such alliances are expected to cut costs by jointly selecting logistic partners through joint price-negotiation mechanisms.

According to TAITRA, Scania was established in 1981 and currently produces about 50,000 trucks and buses per year. The company employs about 29,000 people worldwide and 95% of its products are exported.