Cheetah Automotive Diversifying Into High-end Truck Electronic Parts

Already a leading supplier of car and truck switches, Cheetah Automotive Products Co., Ltd. has found a niche in electronic parts for trucks, which it is aggressively trying to fill by investing increasing resources in R&D.

Aiming to become a major player in the segment, Cheetah has set up a strong R&D department so it can design more sophisticated aftermarket truck electronic parts, such as advanced sensors for pressure, temperature, speed, and combination pressure/temperature sensor, controller modules for sub-systems as power window switches etc.

Peipei Chang, chairman of Cheetah, justifies focusing on such niche, claiming that Taiwan is internationally famous for its electronics and semi-conductor industries but very few world-class truck electronic-parts makers are set up to develop and manufacture products with high technical thresholds.

Clear Target

"We have a very clear target as we diversify into high-end aftermarket truck electronic parts," Chang claims. "We will develop key, niche electronic parts-ones with less competitors in the market-first for a few targeted popular truck makes and models, and then do our best to repeat the process. That's the most efficient way to expand our product lines in the shortest period and at the lowest cost. For example, we will target Japanese trucks for they use more common parts than European and American models."

Chang is confident about Cheetah's decision to aim for the truck-parts aftermarket: "Our products will be less expensive but as durable and functional as OE (original equipment) parts; but our core advantage is that we can develop better parts with more advanced designs faster than OE parts suppliers or before truck makers change designs. In other words, much-faster response time than OE makers."

Another reason for Chang's optimism is that very few competitors are in the aftermarket truck parts than passenger car parts business. "Production of truck electronic parts is more sophisticated, assembly greatly affects product quality, so such business requires sizable investment and, of course, ample ambition and self-confidence," Chang says. "Cheetah has accumulated over 20 years of experience and know-how in car/truck electronic parts and we will set up a new plant by investing between NT$200 million to NT$300 million (US$5.7 million to US$8.6 million at US$1: NT$35), which is a very high threshold for competitors or newcomers."

Key Challenges

"Many challenges must be overcome as we diversify," Chang says, "especially in redesigning the printed circuit board (PCB) layout and finding substitute ICs."

Chen Chin-shun, Cheetah's technical manager and the head of the firm's R&D team, claims that the biggest challenge is integrating expertise for "people who know key parts do not know automotive standards and vice versa. For us, the major obstacle is to access complete know-how or to overcome integration problems because, after all, Cheetah is not yet a world-class OE parts developer with hundreds or thousands of R&D staff."

Cheetah, while working on its diversification, still steadily develops its original business of supplying a wide range of quality automotive electronic parts as turn-signal switches, ignition switches, headlamp switches, sensors, relays, flashers etc. for both passengers and heavy-duty trucks. The firm, however, is gradually stocking more high-end truck electronic items. "Many foreign orders are backlogged," Chang says, "eagerly looking for high-quality, reasonably-priced products from us."

Buoyed with confidence, Chang says that companies in Taiwan have many advantages over newcomers in the truck electronic-parts aftermarket. "Tested by market approval, made-in-Taiwan aftermarket truck parts are very popular with international buyers due to quality and price competitiveness," Chang explains. "Cheetah is in the high-end segment for insisting on in-house development and manufacturing, which we deem as critical to effectively build brand image and reputation in the long run. We are also gradually venturing into micro-electromechanical systems (MEMS), as well as tapping our strong technical strength to always look for new opportunities."