Taiwan Tunes Up With High-end Performance Parts

For many international automotive performance tuning parts makers and exporters, 2005 was a low-powered year after seven to eight years of high sales growth, especially for those depending heavily on the U.S. market, where many big importers and chain stores filed for bankruptcy and dumped their products on the market for cash, according to Bruce Liu, president of Camco Auto Sangyo Co., Ltd., one of the biggest and most experienced traders of tuning parts and accessories in Taiwan.

On the other side of the Atlantic, Liu adds, the European market only generated minor growth due to sharp hikes in the price of oil. In Japan, another major tuning-parts market, sales grew at only a minor level mainly because of hikes in oil and steel prices.

Other emerging markets, however, such as Latin America and the BRIC nations (Brazil, Russia, India and China), were showing more promising sales, Liu comments.

Liu attributes the chaotic and disordered American tuning-parts market that began in late 2004 to the fierce price-cutting competition that makers and traders in the field have engaged in. He also worries that many tuning-parts distributors that received low-cost, Taiwan-made products from bankrupt importers or chain stores might sell them at a abnormally low prices, which would have a long-term impact on the sales prices of Taiwan-made tuning items.

Liu also worries that in the chaotic American tuning market, more and more buyers will turn to mainland China's low-priced suppliers, rather than purveyors of higher-quality performance products. This situation could be worsened by the sharp appreciation of the New Taiwan dollar (NT dollar), which would further drive up prices for performance auto parts made in Taiwan.

"Making successful tuning parts requires providing real functions, performance, design, and superior packaging, " Liu analyzes. "Every company in the business knows that the life-cycles of their products are short because rivals are continuously catching up, that quality is the most important thing, that they must offer real functions and performance, and that they shouldn't indulge in price-cutting too much because that might affect quality. So, for Taiwan and international makers in the line, the only way for sustainable survival is constant new-product development."

Liu urges that Taiwan's tuning-parts makers change their strategies to upgrade Taiwan's position in the global tuning market, as well as to escape competition from rivals in mainland China. "Tuning is tuning, " the president says, "rather than the aftermarket-parts or accessory businesses. Taiwan makers have to accelerate the collection of market information to further shorten their product-development period by at least half-to about six months after products are first seen in the market-or even try to lead the market through innovation. That is the way to deter rivals from catching up."

Tuning Specialist

About 14 years ago, Camco Auto Sangyo Co., Ltd. Became one of the first trading companies in Taiwan to specialize in auto parts and accessories for the performance-tuning market. Today tuning parts and accessories account for about 65% of the company's revenue, and Camco is one of the best-known suppliers of such products worldwide.

Camco president Bruce Liu is confident about the prospects of the auto-tuning parts and accessories business, noting that global demand for such items has been rising along with the growing appetite of car buyers for better engine performance, more aerodynamic design, and unique exterior and interior styling.

Liu also believes that his company has a number of advantages over rivals, including its ability to quickly grasp market trends and provide products in a timely manner to meet changing customer needs. The company has benefited, moreover, from its location in Taiwan, which Liu says has the best supply base for tuning parts and accessories.

Liu decided to turn the firm's focus to auto-tuning parts and accessories after discovering that mainland Chinese rivals were rapidly catching up with Taiwan in the market for traditional auto parts.

The decision has proven to be wise. Over the years the company has gained a lot of experience and know-how in the tuning-parts market, and its customer base has steadily expanded.

From its position as a small and minor segment in the early 1990s, the auto-tuning parts and accessories sector has grown into a huge and comprehensive market that encompasses everything from car renovation to interior and exterior styling and aerodynamic design.

The tuning parts market is also quickly evolving with the introduction of new products and new materials, such as high-precision aluminum and carbon rear spoilers, Liu says. Such items, once used purely for looks, now are designed to improve the aerodynamic performance of vehicles. Liu notes other examples of innovation in the segment, such as lightweight tuning mufflers made of pure carbon or titanium, and durable and lightweight engine compartment strut bars made of top-end magnesium alloy.

Camco's core competitiveness lies in its outstanding services, fast product development, quick delivery, and comprehensive product lines, Liu says. All of these strengths, he adds, result from the company's extensive experience, long-term relationships with suppliers, and sound financial backing.

Liu says that his management team constantly gathers information from customers, international auto-parts shows, and professional magazines in order to keep abreast of market changes. The more you know about what is happening in the industry, Liu says, the more business opportunities you have.

As a trading company, Camco does not have any production facilities, but it closely cooperates with about 200 local mold/die developers and manufacturers, passing new ideas to these partners, who in turn develop concepts into finished products. The company also provides financial support to key partners to help them with product development.

This hands-on approach has proven vital to the success of traders in the tuning-parts and accessories market, says Liu. He notes that the segment is becoming more technologically sophisticated and is incorporating new materials, forcing suppliers and traders to continually source new and better items.

Camco recently developed a new series of products to strengthen the company's competitiveness, including items made of high-level carbon fiber, such as engine hoods, racing pedals, lamp rims, rear panels, and other accessories. According to Liu, Taiwan is still several years ahead of the mainland in the carbon tuning parts and accessories field, thanks to better manufacturing techniques and stronger product development capabilities.

Camco also recently introduced a full series of chrome-plated decorative parts and accessories for the 2005 Toyota Hiace van, as well as older Hiace models.

According to Liu, Camco is the first Taiwan company to push top-quality decorative accessories for the 2005 Hiace. It now supplies chrome grills, door handle covers, side mirror covers, trunk lid covers, and corner covers for the van. All the chromed items meet original equipment (OE) quality standards.

Liu is confident about the competitiveness of Taiwan-made tuning parts and accessories due to their global reputation for high quality and reasonable prices. Taiwan's sound industrial infrastructure, including both the ample supply of high-quality materials and advanced manufacturing techniques, has helped local companies stay competitive in global markets, he says.

Shiniest Accessories

Another company in Taiwan that focuses on the constant development of newer and better tuning parts and accessories is Shiniest Industries Inc. Established in 1983, the company started its career as a supplier of truck decoration accessories, but today car tuning parts and accessories account for about 50% of the company's revenue.

In the past three years, Shiniest has developed many optoelectronics-related products such as color-changing side mirrors, windscreen washer nozzles, gear-shift knobs, and illuminated rear window spoilers.

Shiniest's innovative Dream Series contains a set of two side mirrors, an interior rearview mirror, a gearshift knob, and a pair of windscreen washer nozzles. The most notable thing about the series is that the lights on the parts are able to make synchronized color changes to create a dazzling, seven-color light show both inside and outside the car.

Shiniest's managing director, Rocky Lin, calls attention to the super-bright LEDs in the transparent bases of the side mirrors. As an option, Shiniest is also offering a pair of M3-type side mirrors with flashy electro-luminescent rims which, according to Lin, are totally waterproof and will last as long as the car that they are mounted on. The rim colors currently offered are blue, green, yellow, and purple. According to Lin, the heart of the Dream series is a patented control box that governs the illumination effects of up to four sets of terminal LED modules.

Another one of Shiniest's recent innovations is a series of illuminated clear rear wing spoilers. The spoilers are made of a 12mm acrylic plate and have sculpted curves and lines. With LEDs built into the spoiler's aluminum support brackets, LEDs project patterns onto the spoiler, creating a high-tech, flashy look.

Currently, Shiniest supplies four models of the spoiler, and can also custom-design other models for clients. With the company's patented LED control module, the spoiler can change colors under eight different modes. Shiniest provides three options to control the lights, including a remote control, a wired push-button control unit, and a mini microphone that can change the lights and colors according to the rhythms of songs and human voices inside the car.

Shinest has also developed support brackets that allow the spoiler to be used on hatchback car models.

Up-and-down Tuning

Another company representing Taiwan's performance in the global tuning-parts market is Joruch International Corp., the leading maker of performance-tuning shock absorbers in Taiwan. The company's tuning products are globally marketed under the DAIYMA brand.

Joruch started its tuning shock-absorber business in 1997 by first recruiting a group of German experts in the line. Now, the company is technically independent and has grown into a very famous global supplier of high-end tuning shock absorbers with superior quality, functionality, and durability.

"In Taiwan, " claims Chiao Shui-chuan, Joruch's president, "Joruch is the largest, most experienced, and most comprehensive maker of automotive tuning shock absorbers. In addition, Chiao stresses, all the major managers at Joruch are specialized and experienced technical experts in the shock-absorber line, helping the company's development and manufacturing abilities. With these strong in-house capabilities, Joruch self-designs and produces all kinds of shock absorbers for popular Japanese, American, and European car models.

Chiao is very proud of his company's high self-content ratio of almost 85%. Almost all of Joruch's parts are made in-house, with the exception of outsourced springs and metal tubes.

At Joruch, a group of talented professionals constantly researches newer and better materials, manufacturing techniques, and structural designs for high-end tuning shock absorbers. For example, Joruch is the only company in Taiwan that has won certification from KYB of Japan, one of the world's leading shock absorber makers, for its special technique of nickel-electroplating shock-absorber piston rods for smoother movement without harming oil seals. According to Chiao, production of the inverted-type shock absorbers requires a higher technical level to ensure that all of the shock's many details correctly function together. Joruch also adopts inner-tube oil imported from industrially advanced nations for use in its shocks.

"We have developed the most comprehensive range of products on the island, and each model is specially developed for a target car, rather than using universal main bodies attached with different supports and brackets, " Chiao claims. Every detail and performance feature of a shock-absorber model is specially developed for a certain car, including the base, the tube length, the damper index, and the brackets.

"Joruch has never entered price-cutting competitions, " Chiao stresses, "because we deem that reasonable profits can assure the highest quality level."

Joruch started its tuning shock-absorber business by exporting products to buyers in Europe. Now, the company's DAIYAMA-branded products account for about 60% to 70% of the tuning market in Taiwan, while more than 10, 000 sets are exported.

The company currently runs a plant in Taiwan (with more 70 workers), one in mainland China (for production of OE shock absorber parts, more than 30 workers), a plant in Malaysia (OE, more than 30 workers), and a branch in Thailand.

Spring Tiger

The Tiger Steel Co., a veteran supplier of vehicle suspension springs, is using its strong capabilities in product development and top-end manufacturing to diversify into new fields, including supplying performance-tuning parts.

The company is a first-tier supplier of both leaf and coil springs for many of Taiwan's domestic carmakers. It claims to be the only local company with the 100% home-grown technology needed to compete with Japanese rivals. Tiger Steel currently controls about 35% of Taiwan's OE market for leaf and coil springs.

Tiger Steel is the only auto suspension spring maker in Taiwan to have won all four of the key certifications for the industry: ISO 9001, QS-9000, ISO 14001, and OHSAS-18001 (an occupational health and safety certification for health and safety management systems).

The company's plant in the northern Taiwan county of Taoyuan employs about 70 people, who operate advanced and highly automated equipment. All production tasks are carried out in-house, including everything from material selection and processing through manufacturing, heat-treatment, and final testing.

A strong R&D capability has also contributed greatly to the company's success, helping it to diversify from automotive leaf and coil springs in its early years to torsion bars and stabilizers.

Tiger Steel has also developed ultra-high-end coil springs for both the racing and tuning markets. These products have quickly found a hot welcome in the U.S., Japan, and Europe.

The company claims that all of its high-end coil spring models are specifically designed and tested to assure the best dampening performance. Tiger Steel also notes that it is the coil springs that do the real work in absorbing shock, while shock absorbers serve only as buffering devices.

The firm's professional coil spring products for the racing/tuning market now account for more than 30% of its total export sales. The company also supplies a wide range of standard replacement auto springs for the aftermarket. (January 2006)