Chien Hsiang Trading Co. was established back in 1958, and today engages in a range of product areas that makes it a microcosm of Taiwan's transportation-vehicle and parts industry--imports and exports of complete bicycles, motorcycles, and automobiles, as well as their parts.

Throughout its 45 years, Chien Hsiang has not only concentrated on its core business but has also engaged vigorously in diversification. It now has a total of 37 affiliates in such industries as textiles, construction, land development, fund management, and motorcycle-parts manufacturing, and its business operations span the United States, Singapore, Hong Kong, Japan, Vietnam, India, and mainland China as well as its homeland of Taiwan.

The second-generation president of Chien Hsiang, Tim Chen, claims that the group is still expanding rapidly, with a recent foray into the production of advanced personal digital assistant (PDA) products that are expected to attract large contract production orders from international buyers.

"In our core transportation-vehicle parts business," Chen comments, "our competitiveness lies in our business scope and our access to and utilization of the latest market information--the key to our constant transformation to keep abreast of market changes. We also benefit from the strong support of the group's sound financial structure, which permits us to trade in only the best-quality, high-margin parts instead of having to cope with price-slashing competition in low-quality, low-price products."

Expanding Abroad

A few years ago, the company acquired a local manufacturer of motorcycle alternators and immediately set up three alternator plants overseas, in Vietnam, India, and mainland China's Hainan Island.

Beyond items produced under its own auspices, the firm is the Taiwan and China sales agent for Keihin motorcycle carburetors from Japan (selling about 500,000 in 1999 alone). It is also a dealer for Yuasa batteries and Takasago products from Japan, F.C.C. clutch pads from Japan, Seiwa, YAC, and Autosol auto-racing parts and accessories from Japan, Kashimura petrochemical products from Japan, Polyglaze (Shellys) petrochemical products from Australia, Walbro carburetors from the United States, and Conoco lubricating oil from the U.S.

Chen says that with long-term and extensive outsourcing and distribution chains in Taiwan and mainland China, Chien Hsiang plays a vital role as a business bridge between the Greater China region and the rest of the world. Over the past several years it has set up branches in major Chinese cities, including Beijing, Shanghai, and Guangzhou. These mainland bases are almost identical in operation with those in Taiwan, but are growing at a much faster 50% annually.

In its export operations, Chien Hsiang ships products from about 200 local manufacturers to markets in Japan (which takes 30% of the total), the U.S. (40%), and over 30 other countries.

Changing Focus

While the company remains a major supplier of standard auto/motorcycle aftermarket parts to customers all over the world, Chen says that it has gradually shifted the focus of its auto-parts exports to higher-end accessories, especially performance-tuning and high-tech optoelectronic products. To assure quality, Chien Hsiang develops its own molds and dies for most of its new accessory products.

In fact, the president emphasizes, long-term ties with prominent international tuning parts and accessories brands such as Custom, J.P.N., Musashi, Original, and CrossRoad give it the power to control the development and sale of new and innovative accessories. This assures buyers of the latest and best-quality items, and local manufacturers of an assured volume of sales.

The company is using all of its resources and diversifying its overseas supply sources to meet growing demand from foreign buyers for traditional accessories. For example, Chen explains, his company currently absorbs 100% of the capacity of makers of wooden steering wheels and gearshift knobs in Thailand to fill orders from major customers. The president expects this kind of triangular trade to grow rapidly in the future, making his company an even more important supplier of high-quality parts and accessories. No matter where a producer is located, great care is taken to carry out quality inspections.

Its expanding supply base allows Chien Hsiang to acquire the latest information on innovative and competitive products, and to promote them on the global market. For example, a few years back the company cooperated with a local supplier in the joint development of a new airhorn, which sold 350,000 units within two years.

Chen notes that the auto-parts industry in Taiwan is undergoing fundamental changes, switching from general traditional products to niche items and the small-batch, large-variety crash parts (lamps, bumpers, sheet-metal body parts, etc.) in which Taiwan is still globally competitive. The island also has an export advantage in the new kinds of accessories that are made by incorporating the strengths of its strong optoelectronic and electronic industries.

As part of its effort to become stronger, more internationalized, and more diversified, Chien Hsiang moved its headquarters into a new building in Taipei's Neihu Technology Park to help celebrate its 45th anniversary early this year. "We'll never falter in our advancement," Chen says. "We expect the new premises to be our headquarters during Chien Hsiang's next 45 years of excellence."