TAITRA helping makers seek more OEM auto parts supply contracts from Europe

Taipei, March 3, 2004 (CENS)--The government-funded Taiwan External Trade Development Council (TAITRA) is organizing a group of major local auto parts suppliers to visit nine leading automakers in Europe in April in a bid to help them win more OEM (original equipment manufacturing) orders from the European carmakers.

On another front, TAITRA will help Germany automaker BMW arrange a procurement seminar in Taiwan in October to negotiate contract supply business with local suppliers of auto parts.

Meanwhile, Taiwan Transportation Vehicle Manufacturers' Association (TTVMA) recently also successfully helped Delphi Technology Inc., an auto parts production affiliate of the world's No. 1 auto maker General Motors (GM) of the U.S., visit Taiwan suppliers this year to seek suppliers of auto parts and accessories.

Industry sources said that most local auto parts makers used to concentrate on exporting their products to the U.S. market, but they have gradually switched their sales focus to the European market in recent years thus to diversify risks.

Statistics compiled by TTVMA showed that the island's auto parts exports to Europe has been on the rise in recent years, soaring from NT$5.81 billion (US$175 million at US$1: NT$33.2) in 2001 to NT$11.37 billion (US$342.53 million) in 2002 and to a record high level in the first 11 months of last year.

Taiwan's auto parts exports to the European market, however, TTVMA said, were mostly composed of the aftermaket (AM) replacement products rather than the higher-margin OEM parts.

Adopting a different strategy, TAITRA said that this year it would work harder to help local auto parts makers win OEM parts supply business from European automakers. The planned April delegation would comprise over 10 local major auto parts suppliers and would visit nine car and truck makers in Europe, including Mercedes-Benz, Volvo Truck, Scania, Ford Europe, Opel, Fiat, MG Rover and Honda U.K.

Under its arrangement, TAITRA claimed, several foreign auto makers have contacted local auto parts and begun procuring products from Taiwan, including MG Rover of the U.K., Renault of France and Audi of Germany.

TTVMA also said Delphi's Asia-Pacific parts procurement division in India contacted several local auto parts makers boasting OEM supply capability early this month. The Delphi division is expected to visit Taiwan again for further contacts with local possible suppliers and finalize orders this year.

Huang Wen-fang, chief of TTVMA's business affairs section, said that the international automobile industry is witnessing a trend that different auto-production groups are actively integrating their auto parts R&D resources. As an important global supply base of high-quality, reasonably-priced auto parts, the chief said, local parts suppliers are expected to play an increasingly vital role in the second-tier supply chains of gigantic global auto makers in the future.