The auto-parts industry has long been a major player in the manufacturing sector in Taiwan, with especially robust development in the last decade as local producers make steady qualitative and technical advances to command increasing shares in both original equipment manufacturing (OEM) and aftermarket (AM) auto-parts markets globally.

More and more global automakers and tier-ones in Europe and the U.S. are outsourcing auto parts from Asia to cut costs.

According to statistics compiled by the Taiwan Transportation Vehicle Manufacturers` Association (TTVMA), the export value of Taiwan-made auto parts has been rising in recent years, reaching NT$132.9 billion (US$4.03 billion at US$1: NT$33) in 2006. In the first four months of this year, the value was NT$47.08 billion (US$1.43 billion), up 11.78% from the same period of last year. The 2007 value is expected to continue growing for the 10th consecutive year as favorable signs appear in the major North America and European markets.

With the limited and maturing automobile market on the island, in which around 350,000 to 400,000 new cars are sold per year, over 70% of locally made auto parts are exported, of which AM products account for about 80%; but the ratio of OEM orders has been increasing especially in recent years due to the rapidly upgraded quality, competitive prices of Taiwan-made parts, as well as increasing outsourcing from automakers and tier-one parts suppliers in Europe and the U.S. to cut costs.

Taiwan`s Auto-parts Exports

(1999-2006)

Taiwan`s Auto-parts Exports (1999-2006) Unit: NT$1 billion

Source: TTVMA

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CENS, September 17, 2007