Taiwanese Motorcycle Parts

Suppliers Exhibit Competiveness in Niche Markets

Taiwan has been making motorcycles for more than half a century, and has developed advanced techniques and a complete supply chain for the industry. The island is also one of the world's major producers of motorcycle parts and components, including braking systems, engine systems, transmission systems, exterior accessories, suspension systems, and lighting systems.

Domestic sales of motorcycles hit a peak of 1.62 million units in 1995 but then went into a gradual decline, falling to 640,000 units in 2011 due to improved public transportation, according to statistics released by Taiwan Transportation Vehicle Manufacturers Association (TVMA). To escape from the saturated domestic market, motorcycle makers began to tap overseas markets and set up plants in China and Southeast Asia. In Taiwan, the weakening market has encouraged them to focus on high-value-added products and to deepen and broaden their business scope.

The transition has not been an easy one. Motorcycle-parts makers on the island today face competitors in countries that enjoy low manufacturing costs, especially mainland China. Luckily, that threat is somewhat offset by the vast variety of products that Taiwanese suppliers turn out to meet the special requirements of buyers.

Most producers in the line concentrate on the development of unique technologies to boost product quality, and so are able to turn out a variety of high-end products that sell steadily in industrialized markets such as Europe, North America, and Japan. In the first quarter of 2012, exports of Taiwan-made motorcycle accounted for 41% of total sales, according to TVMA.

Sheng-E Insists on Quality
Founded in Tainan, southern Taiwan in 1980, the Sheng-E Enterprise Development Co. is now one of the island's leading manufacturers in the line. King Hsieh, chairman of the company, noted that years ago his company expanded its business to encompass a variety of motorcycles parts, including engines, transmissions and components, cylinders and components, pistons, piston pins, piston rings, connecting rods, gaskets and seals, nickel silicon carbide cylinders, and ceramic cylinders.

Despite the uncertainties in the global economy, Hsieh said, his company has kept investing in upgraded production equipment from the industrialized countries for its plants in Taiwan and China, including computer numerical control (CNC) facilities. These efforts have effectively shortened the time needed for production, cut manufacturing costs, and enhanced the precision of products.

Hsieh emphasized that his technicians ensure 100% quality by thoroughly inspecting all products before shipment. This insistence on quality has helped Sheng-E build up a solid reputation in Europe, the U.S.A., and Japan.

Though markets in western countries are suffering from a dismal economic climate, Sheng-E remains confident that its business will continue to grow this year, partly because of efforts to enhance its competitive edge and partly because of the emergence of Southeast Asian markets. Hsieh reported that the company has also moved into the market for F1 motorcycle racers, which are subject to stricter quality requirements but can generate high margins. The chairman expects the company's revenue to reach NT$500 million (US$16.67 million) this year.

Yung Wann Long Eyes Production of Ceramic Cylinders
With more than 20 years of experience in manufacturing motorcycle cylinders and cylinder heads, the Yung Wann Long (YWL) Enterprise Co. has won a significant presence in the global market with its ability to provide products meeting a variety of diverse specifications.

The company attributes its success to excellent product quality, thanks largely to strict quality control policies. According to Yong-Nan Wann, chairman of the company, almost all YWL employees have more than 10 years of quality control experience. With its integrated in-house R&D capability, the company is capable of providing customers worldwide with a diverse range of products to meet their needs.

Wann said that manufacturers in Taiwan have an advantage over their rivals in neighboring countries in term of quality; as a result, their products are more welcome in areas with high purchasing power for high-end products, such as Europe, the U.S.A, and Japan. The company is currently challenged by the rising cost of raw materials, energy, and labor; nevertheless, stable market demand has kept annual revenues at an average of around NT$50~60 million (US$1.67~2 million) in recent years.

In the future, YWL intends to target the production of ceramic cylinders, as competitors in China are not yet able to reach the necessary technology and quality levels for such products. The company also plans to expand its product range by supplying modified cylinders for starters, agricultural machineries, and lawnmowers.

Forsa Offers Full Range of Shock Absorbers
Established in 1987, the Forsa Enterprises Co. specializes in the production of shock absorbers for motorcycles and special vehicles in both the aftermarket (AM) replacement and OEM (original equipment manufacturing) markets.

The company supplies a full range of shock-absorber products--over 4,000 types in all--making it the world's most comprehensive supplier of its kind. “Only a few rivals can compete with Forsa's production model of small-batch, large-variety production,” claimed Min-San Lu, president of the company.

The company moved to its present factory site in Tainan, southern Taiwan, in 1997, and has constantly added inspection equipment and CNC machines to ensure product quality ever since. All the shock absorbers that Forsa manufactures comply with ISO9001 SGS quality certification, which is reviewed every half-year.

Forsa exports its shock absorbers to over 50 countries, especially the U.S.A, Japan, and Europe. In the face of the low-cost challenge from mainland Chinese manufacturers, Forsa's strategy of focusing on high-margin products has helped it successfully differentiate itself from its Chinese rivals in target markets.

Forsa's shipments have usually maintained an annual growth of 2~3% in recent years. Last year's sales were sluggish, due to the impact of the European debt crisis; but shipments and revenues have bounced back this year, said Lu.

Royal Formosa Tiger Versed in Connecting Rods
Founded in 1987, the Royal Formosa Tiger Co. has accumulated more than 20 years of experience in manufacturing connecting rods for motorcycles, water scooters, snowmobiles, and lawnmowers. Unlike most of its mainland Chinese rivals, which focus on mass production, Royal Formosa Tiger provides small-quantity, high-quality products to meet differing customer requirements, said Chi-Lieh Tsai, the company's president.

The company's high-quality products are made using equipment imported from Japan, the U.S.A, and Germany, including profile projectors, Rockwell scale machines, surface testers, trimos micro-hite gauges, scanning machines, and roundness testers. Tsai stated that thanks to the company's quality control efforts, the roundness of products is controlled to within an error of 0.003m/m.

Royal Formosa Tiger delivers its products promptly, taking only two weeks--much less than the average 45 days of its rivals. Most of the company's aftermarket (AM) products go to Japan and Europe, and Tsai is optimistic about sales growth in the U.K and German markets.

A new factory that the company is constructing near its current site is expected to begin operating within the next few months. Tsai said that it is not necessary for him to move production to low-cost nations such as mainland China, at least not for now; because the company's unrivaled manufacturing capability and cost competitiveness make it profitable enough.

Autostate Expands Product Portfolio
Established in 1994, the Autostate Industrial Co. is one of Taiwan's leading manufacturers of kick starters and gear-changing levers for motorcycles. A strong R&D team enables the company to offer 20~30 new products every month, all with beautiful styling and made of steel, ultra- light aluminum, or other metals.

The company attributes its success largely to the constant improvement of its manufacturing capabilities. Allen Tsai, Autostate's founder, said that he invests constantly in automated production equipment, such as CNC machining centers and graphic software, to boost production efficiency, increase capacity, and develop innovative products. Growing orders prompted the company to expand into a new plant in Taichung this year.

“In addition to product quality, flexible delivery is also one of the biggest competitive advantages of Taiwanese small and middle-sized manufacturers,” Tsai commented. His company ships over 50% of its products by air, making it more competitive in the global market. In order to enhance brand visibility, the company has attended motorcycle exhibitions in Taipei, Mexico, and Brazil, and will participate in the upcoming 2012 Intermot Cologne in German this October.

Autostate now plans to expand its business scope by providing products for the cross-motorcycle and heavy-motorcycle segments in the expectation of higher profit margins. Thanks to robust growth in recent years, the company's revenues topped NT$60 million (US$2 million) in the first half of this year, up 20% year on year.

Aerox Keeps all Its Production in Taiwan
The Aerox International Corp. is a versatile supplier of a wide range of motorcycle parts, including engine parts, gear transmission parts, carburetors, valves, connecting rods, crankcase covers, pistons, piston rings, piston pins, starter motors, kick starters, air cylinders, lamps, and rearview mirrors.

The company started out as a trading firm, which has given it a sharp market sense and the ability to act as a bridge between overseas buyers and Taiwanese manufacturers. “I prefer communicating directly with overseas buyers so that I can understand their exact needs, identify their product features, and start brainstorming with local makers about developing products with high added-value, creating a win-win situation for both buyers and producers,” said Shu-Yi Huang, Aerox's founder.

Unlike most other local producers, Huang has a fluency in English and French that helps her communicate properly with international buyers. But that is far from being her only advantage. “Taiwan's manufacturers lead all neighboring countries in technology for producing motorcycle parts,” Huang explained, “and I think that this will help our industry survive by developing products with a high market value.

Also, she commented, Aerox has kept all of its production facilities in Taiwan, where it hones its competitive edge by using a high ratio of locally-made standardized components.