Across the world, governments are moving to accelerate the process of adopting electric vehicles (EV), such as banning sales of new gasoline-powered vehicles or pledging to achieve net-zero emissions. For instance, California, the largest auto market in the United States, is slated to phase out the sale of new gasoline-powered vehicles after the ambitious plan was passed in August. The move was eventually adopted by about a third of the American auto market. The New York Times reports that over a dozen other states often followed California's lead in setting regulations.
However, the push for fast deployment of EVs in recent years has not lived up to original forecasts. Supply chain disruptions, rising prices of raw materials, and inflation have made it difficult for EV makers to lower entry prices. This poses an opportunity for suppliers of traditional auto parts like LC Fuel Tank. Should regulations like California's become more commonplace, car owners would turn to auto parts and aftermarket options to keep their vehicles on the road.
Citing Toyota President Akio Toyoda's EV comments in 2020, where he urged caution against completely replacing ICE vehicles, General Manager Chan Yu-Peng continues to maintain a similar mindset and sees existing demand for ICE vehicles alongside EVs on the road in the future. Suppliers must be able to tap into the unmet demands, and LC Fuel Tank has positioned itself to do just that.
Classic Car AM Parts Expert
LC Fuel Tank is regarded as the top fuel tank maker in Taiwan. Thanks to its early entry into the industry in 1977, the company benefited from Chan's foresight as it maintained its lead ahead of the competition for at least a decade in supplying and designing fuel tanks.
However, an early entry does not always equate to success. The company furthered its competitiveness by investing in the die (tooling) and production equipment. Clients do not need to design and produce their own molds, as LC Fuel Tank amassed and maintains over 3,000 dies. For instance, the company tools and produces all the relevant auto parts — not just the fuel tank — during the developing process of a specific car model. The company's foundation allowed them to quickly became the one-stop supplier for fuel tank products among European and American market customers.
Chan believes another factor to their success is their consistent product quality, due to choosing to procure Japanese-manufactured machinery in considering quality, long-term preparedness over cutting back on costs, and short-term profits.
The strong product-mix background, expertise in fuel tanks, and tooling advantages eventually positioned LC Fuel Tank as the go-to shop for classic car enthusiasts. Chan says the classic car industry has a huge potential in developing new products and wishes to tap into that, especially with recent models becoming collectibles as well. With the ban on new sales of ICE vehicles, LC Fuel Tank has a considerable market advantage to cater to both more modern and classic gas-powered vehicles.
LC Fuel Tank Aims for Resiliency
With the just-in-time model disrupted and suppliers leaning towards sourcing by region, manufacturers are feeling the crunch. To mitigate the losses, companies must optimize production for efficiency and resiliency. While LC Fuel Tank's newest factory was originally intended to bolster production capacity and shorten delivery times, the advanced machinery newly fitted into the plant will strengthen the company's resiliency in the long term.
The new factory began full operations in 2022, equipped with robotic arms in half-automated production lines to increase production capacity. Chan says this will enable them to procure more materials and reduce costs. The bigger factory space will also allow the company to keep a more extensive inventory at hand and for faster shipping to timely meet client orders, which is especially crucial with clogged shipping ports. In addition, in light of inflation and rising costs, suppliers must prioritize optimization and reduce defective rates to the absolute minimum.
Prioritizing the BTS Model
LC Fuel Tank hopes to service its customers better with the new factory, Chan said. The company is in a better position to attempt the Build-to-Stock model by equipping the new factory grounds with production capabilities and space. Chan said the company would not only improve efficiency, but also enjoy better preparation with raw materials on hand and a consistent inventory.
Aside from a more spacious environment and production lines churning out products, the new factory will also upgrade existing processes. For example, they fitted an automatic overhead conveyor washing tunnel in the coating line to streamline the products' cleaning process and improve coating adhesion.
There are other considerations with the new factory, which Chan hopes will give the company a better edge in terms of soft power. There is a real talent retention challenge in traditional industries, where senior, experienced workers are retiring, and yet companies are struggling to attract and retain young talent. The new factory grounds were intended to provide better working conditions and an environment with ergonomic designs. Assembly lines are fitted with roller conveyors, easing the load on employees and reducing production time when they need to adjust the workpiece on the assembly line.
On the other hand, the company also outfitted the third and fourth floors of the factory with dormitories, primarily to provide better living accommodations for their international and domestic workers and a resting space during lunch breaks.