Wheel Makers in Taiwan Roll Into Global Market

The wheel is arguably the most important part of a vehicle. Safety, comfort, performance, and function are all qualities that wheels must meet. And with powered two-wheelers (PTWs, including both motorcycles and scooters), all terrain vehicles (ATVs), or utility vehicles (UTVs), style is another factor when choosing wheels and wheel rims.

The PTW wheel-rim sector in Taiwan, like many other segments of the PTW parts market, has been steadily growing and moving up the technical chain with the help of strong domestic demand (around 800,000 units sold per year) and increasing exports. Taiwan also has become an important global production base of ATVs, and more and more local firms are taking aim at the increasingly popular UTV market.

Quality and design improvements have also contributed to the upward trajectory of the local PTW wheel-rim sector. This trend has been driven by market saturation at home, which is forcing players to differentiate their products with increasingly luxurious equipment. On the other hand, statistics compiled by the Taiwan Transportation Vehicle Manufacturers' Association (TTVMA) showed that the export volume of Taiwan-made PTWs outstripped domestic sales for the first time in 2005. The increasing exports of the vehicles, most of which go to North America and Europe, have spurred demand for higher-end rims.

PTW wheel-rim makers in Taiwan are also drawing on flexible operation strategies, strong manufacturing capability, and superior cost-control ability to compete successfully on the world stage.

Strategic Flexibility

One example is the ISO 9001- and QS 9000-certified Rolling Tech International Co., Ltd. The company has leveraged its expertise in logistics, manufacturing, flexible operations, branding, and product positioning to become a very competitive player in the PTW, ATV, golf-cart, and other light-vehicle (such as the increasingly popular utility vehicles, or UTV, go-cart etc.) wheel-rim business.

Rolling Tech is Taiwan's largest suppliers of aluminum wheel rims for ATVs and golf carts. The firm now supplies rims to almost all major ATV manufacturers in Taiwan, giving it about 80% of the market. It also exports quality products to many big customers in Europe, America, Australia and New Zealand.

A flexible market strategy has played a considerable role in Rolling Tech's industry dominance. According to chairman Johnsun Chiang, Rolling Tech has a well-deployed division-of-labor scheme in Taiwan and mainland China that can provide the most efficient and satisfactory services to customers based on quality, price, delivery, and assembly options.

Rolling Tech now operates an integrated plant in Ningbo, Jiangsu Province of mainland China. The plant produces gravity-cast and forged aluminum wheel rims with a monthly capacity of 60,000 units. In Xiamen of Fujian Province, the firm also runs a joint venture with Cheng Shin Rubber Ind. Co. Ltd. (Maxxis). At the company's headquarter in Taiwan, there is a rim/tire assembly line for handling small-batch, large-variety products. Quality wheel rims produced by the Ningbo plant can be directly shipped to customers worldwide; transported to the Xiamen affiliate for bundling with Maxxis tires (and then sold in China or exported); or delivered to Taiwan for assembling with tires (supplied by all major tire brands on the island including Maxxis, Federal, Kenda, and Innova) according to customers' various quality and specification requirements.

"Rolling Tech's operation mode is very flexible and dynamic, so we can easily meet customers' different requirements for volume, quality, price, delivery, customization, assembly services etc.," Chiang claims. "I developed this operation mode based on my experience working as the chief of the supplier-quality assurance team for a local automaker. The company had to closely cooperate with an extensive group of parts suppliers to jointly assure the overall quality."

Chiang is optimistic about his firm's future business development because "the core value of Taiwan companies lies in the world-class quality, cost, and delivery, or 'QCD'," Chiang says. "In addition, Taiwan has strong development and innovation capability and can effectively integrate with lower-cost manufacturers in China to gain a very strong competitive position."

Rolling Tech now supplies products under three brands: TOPRIMS for the upper market, Good Wheel for midstream market, and CST (assembled with Maxxis tires).

Leading PTW-Rim Supplier in Taiwan

The ISO 9001-certified King Hwa Sin Industrial Co., Ltd. is one of the largest original equipment (OE) wheel-rim suppliers to PTW and ATV manufacturers in Taiwan. The firm globally markets its high-end wheels under the Krico brand.

The company supplies a comprehensive range of high-grade wheels in all sizes made of steel and aluminum. In addition, the firm offers integrated services to customers worldwide, from die development, manufacturing (die casting, rolling, pressing etc.), welding, and computer numeric control (CNC) processing to surface treatment and coating/plating.

Already a leader on the island in terms of volume, quality, and technical level, King Hwa Sin is now taking aim at further upgrading into a world-class player, drawing on its core competitiveness and strong R&D capability.

The firm is proud of its ability to supply the best-quality products priced at the most reasonable level. This combination has enabled the company to grow robustly in the global upper market and extend its lead over counterparts focusing on low-cost and low-quality products.

By supplying wheels to all PTW and ATV manufacturers in Taiwan, one of the world's most important production bases of high-level PTWs and ATVs, King Hwa Sin claims that it has achieved an economy of scale that has helped it to cut costs. Size has also enabled it to partner with PTW/ATV makers on product development.

In addition to its industry-leading production techniques, King Hwa Sin has been closely cooperating with high-level research units in Taiwan with expertise in advanced production techniques, materials, and testing so as to further develop its core strengths.

Recently, for instance, King Hwa Sin demonstrated a series of patented production techniques jointly developed with Metal Industries Research & Development Centre (MIRDC) in Taiwan. The patented new technique includes key forming and welding techniques for aluminum plates, as well as more advanced die-casting techniques.

After having gained a very solid foothold in the PTW and ATV wheel-rim market, as well as an integrated capability from die development to various manufacturing methods, King Hwa Sin has successfully diversified into other vehicle parts, such as sprockets, drum brakes, continuous variable transmission (CVT) parts, cold- and hot-forging parts, agricultural equipment parts, gardening equipment parts, and furniture parts.

King Hwa Sin is confident of its ability to provide excellent design, development, and manufacturing services supported by its strong in-house capability and a well-established central-satellite plant system.

Business Expansion

The global PTW and ATV wheel-rim business has been joined by a newcomer from Taiwan, one that other players would do well to watch, especially in the high-end segment.

Alex Global Technology Inc. is already the world's largest maker of aluminum-alloy wheel rims for bicycles in terms of shipment volume. But now the ambitious firm is developing as a world-class maker of forged wheel rims for a wide variety of transportation vehicles, including trucks, passenger cars, PTWs, ATVs, and UTVs.

Alex Technology has completed a comprehensive and vertically integrated production network, including Taiwan's first aluminum extrusion plant to ensure a stable supply of high-quality material; a large aluminum furnace (completed in 2007), and the first integrated cold-forged production line on the island. Total investment amount in the business expansion/product diversification project, according to Alex Technology's assistant vice president, Max Huang, is "big enough." Just the cold-forging production line set the company back about US$100 million, he says.

Alex Technology's short-term goal, according to Huang, is to build up an annual production capacity of five million rims for various applications.

Huang recalls that his company began planning its new production line back in 2002 following extensive evaluation and close collaboration with industry experts, research institutes, and educational institutions.

Forged aluminum wheel rims offer a number of advantages, Huang says, making them worth the extra cost compared with steel or die-cast products. And their prices are expected to drop as increasing demand paves the way for greater economies of scale.

The first advantage is lightweight, which can lead to fuel savings. A second advantage is safety, because forged rims offer much better heat dissipation, which can results in less tire fatigue and better braking.

Cold-forged rims are also the hardest, Huang says, because the die-casting process generates microscopic air holes that weaken die-cast rims and make them more subject to failure. To achieve the same hardness, Huang claims, a die-cast rim has to be 30% heavier than its cold-forged counterpart.

Although Alex Technology is new to the forged wheel rim line, it intends to become a total-solution provider backed by a stable supply of high-grade materials, advanced production equipment and technology, and outstanding design capability.

As a newcomer, the firm seeks to position its products as the best quality solution with state-of-the-art design. In Taiwan, some leading PTW and ATV makers have commissioned Alex Technology to supply top-end forged wheel-rims to add value to their high-level (often large engine-displacement) models.