Complex Made Simple

Taiwan targets UAE for export of its innovative, high value-added auto parts

Taiwan brands are constantly working to strengthen their global presence by attending world class trade fairs such as Automechanika Dubai 2015.

The United Arab Emirates forms of the most vital markets for trade development set by the Taiwan government, with auto parts and hand tools representing two of the top industries for increased cooperation.

With its longstanding IT credentials and reputation for high value-added products, Taiwan offers an exceptional range of innovative solutions to Middle East buyers.

Taiwan’s auto parts and hand tool industries continue to enjoy sustainable growth in world markets such as the Middle East thanks to its expertise and focus on creating new products through synergy with other strong sectors in the country.

Taiwan is particularly strong in aftermarket products and solutions, especially those spare parts needed after auto accidents. The industry is also developing the relatively new fields of telematics and smart tools, taking advantage of Taiwan’s highly developed electronics sector.

Export-oriented
After several decades, Taiwan’s auto parts industry has acquired the ability to produce varied products in small quantities as well as considerable product development capabilities. Most manufacturers, especially those focused on lamps, bumpers or rubber & plastic parts, develop products mainly for the aftermarket, which accounts for the 80 to 90 per cent of global aftermarket supplies. Collision parts, auto metal plates and back mirrors made in Taiwan have also captured 90 per cent of world market. Furthermore, Taiwan is world number 1 in mold manufacturing technology, as well as in mold quantity and quality.

The small size of the domestic market has pushed local manufacturers into global competition where Taiwanese companies are even entering the OEM and IC design sectors. The great majority of makers have adopted partial process automation and developed FMS (flexible manufacturing systems) that allow the production of small batches of all kind of products that meet international quality standards.

Trade between Taiwan and the UAE is burgeoning and grew about 7.4 per cent to $7.2 billion (Dh26.42 billion) in 2014 compared to $6.7 billion (Dh24.6 billion) the previous year.

Taiwan’s auto components industry total output in 2014 amounted to $6.6 billion USD, which marks a nearly 5 per cent growth from 2013. Meanwhile, Taiwan’s auto parts exports to the United Arab Emirates (UAE) are on the rise amid growing recognition of their advantages in the Middle East Market, exceeding USD $115 million in 2014, a 12.16 per cent increase YoY.

Fully realized supply chain
Taiwan possesses a complete auto parts supply chain; most of the firms are small and medium size enterprises (SMEs) that have created a highly integrated supply network. The industry is characterized by its extensive center-satellite systems and seamless cooperation between central and satellite factories. This system, enhanced by a wide network of clusters scattered throughout the island, enables production flexibility, a diversified product range and low production costs. There are currently around 2,800 auto parts and accessories makers in Taiwan, with around 300 of them providing original equipment.

The new world of telematics
Telematics is the integration of telecommunications, informatics, and automotive electronics to satisfy such needs as convenience, traffic information, communication, entertainment, safety, and business. This promising new sector is linked with the so-called Intelligent Transportation System (ITS), which is playing a big role in government plans for enhancing the traffic control around Taiwan.

The unbeatable ICT credentials of Taiwan continue to play a major role in enhancing auto parts and innovation in interactive automobile systems, thus boosting cooperation between traditional auto parts makers and the giants of electronic and computer technologies, who see an opportunity for diversifying their business in the new era of smart vehicles.

Though lamps and auto sheet metal after collision parts are still the kings of Taiwanese auto parts in the world market, the outstanding R&D capabilities of the electronics industry are making themselves felt in global markets with the introduction of all kind of telematics devices, from traditional GPS systems to TFT displays, Front Collision Warning Systems, CMOS cameras, Engine Control Units (ECU), Personal Navigation Devices (PNDs) or Head-up displays (HUDs).

It is expected that in 2016, about 90 per cent of all new cars will be equipped with wireless-communication equipment or V2V (vehicle to vehicle) communication devices, and Taiwan is already working in this direction thanks to strong government support and collaboration between manufacturers and research institutes.

Taiwan hand tools see growing exports, new business platforms
In line with their counterparts in the auto components industry, Taiwan’s hand tool makers are also witnesses increasing global acceptance. In 2014, Taiwanese hand tool makers saw export volume of USD $2.82 billion, which represents a 9 per cent growth from 2013. These figures point to Taiwan’s sustained development in recent years.

Around 80 per cent of Taiwan’s 600 hand-tool manufacturers are gathered in Central Taiwan, providing a collaborative and fast supply chain for the whole industry, all falling within a 10 km radius. The flexibility of its supply chain allows Taiwanese hand tool companies to meet any demand of the manufacturing process, such as molds, heat treatment, surface treatment, and plating and packaging. Their quality-oriented work processes leads to high value products and continuous innovations, creating novel materials as well as multifunctional and digital tools to carve out new product paths while meeting the demands of the market.

Other types of Taiwan products gaining notice are explosion-proof and digital tools, taking advantage of Taiwan’s strong electronic industry and government-backed research institutions like Taiwan’s Metal Industries Research & Development Centre (MIRDC). Taiwan-made digital tools contributed an estimated US$16.67 million to the industry’s total output in 2014.

Participation in global trade fairs
Taiwan brands are constantly working to strengthen their global presence by attending world class trade fairs such as Automechanika Dubai 2015. At this year’s show, buyers will view a range of Taiwan-based companies in fields ranging from auto lamps, tires, digital torque wrench, pneumatic tools and smart TPMS (tire pressure monitor systems).