Huang Ching-chi, president of Tsurn Hwai Transportation Equipment Ltd., is striving to develop his company into a comprehensive manufacturer of aftermarket automobile relays featuring competitive quality and sold at competitive prices.

Established in 1997 as a spin-off from a prominent maker of wiper water tanks and motors, Tsurn Hwai offers flasher relays, wiper relays, power relays, pump relays, and air-conditioning relay switches. Although relatively new to the line, the company has developed over 200 relay models to meet a comprehensive range of the replacement needs for mainstream Japanese cars and light trucks. Exports began in 2000, and the firm's products have since become popular in such markets as the United States, Latin America, and Malaysia.

In its quest to become a major player, the company invests intensively in the development of 20 to 30 relay models a year so as to maximize its product coverage. It currently concentrates primarily on Japanese brands, including Toyota, Nissan, Mitsubishi, Isuzu, and Hino, as well as Ford of the U.S. and Volvo, Scania, and Man of Europe. The company is working hard to expand its product line to serve more European truck and luxury-car brands, which demand higher technical standards but also offer higher profit margins.

"We have several advantages which have brought us rapid success and expansion in the international market," comments Huang.

The first of these advantages is Taiwan's sound electronics-industry infrastructure and well-established central-satellite plant division-of-labor system. Tsurn Hwai itself cooperates with 10 to 20 satellite plants, including mold and die developers, printed-circuit board (PCB) producers, electronic-parts suppliers, and device-plugging manufacturers, and has its own in-house R&D and quality-inspection department.

Flexible, Streamlined Operation

This mode of cooperation provides Tsurn Hwai with a flexible and streamlined operation that permits it to devote its efforts to integration and the setting up of long-term, stable ties upstream and downstream. This, Huang says, "greatly cuts our operating costs and lets us utilize our resources in product development and marketing & sales more effectively." Thanks to ties with satellite plants, he continues, quality control is carried out at each step in the production process and with each batch of materials, instead of being done at the central plant on the finished product alone.

A second advantage for the company is its market-sensitive development strategy, which is realized through intensive market observation and rapid-response development capability.

The way for a manufacturer to strengthen competitiveness in the aftermarket, Huang explains, is to constantly develop new products and to do so faster than rivals. A comprehensive product range also helps bring in orders. Tsurn Hwai itself concentrates on the car and light-truck relays that break down most frequently, which are pinpointed through intensive market surveys and the frequency of orders to its stable of customers.

The company may shorten development time and keep costs down by modifying the circuit design of original equipment (OE) parts, and by adopting common-use components, such as coils and pins, that achieve the same results. Despite such economizing measures, in terms of both size and function Tsurn Hwai's relays are in 100% conformity with OE products. Taiwan's comprehensive supply of integrated circuits (Ics), Huang says, enables his company to use fewer parts and more cost-effective Ics to turn out products that he says equal or even improve on the performance of their OE counterparts.

Countering Piracy

In fact, Huang claims, more and more local and foreign companies are copying Tsurn Hwai's improved circuit designs for some popular relay models in order to cut their own development time and costs. To counter this piracy, the company has begun to erase the numbers of Ics used in some of its newly developed relays, and to warn customers throughout the world not to buy pirated products with no guarantee of quality.

The company's specialized concentration on relays also bolsters its position with customers, Huang says. While most other relay suppliers also offer other electrical auto parts, Tsurn Hwai is a "pure" specialized supplier of relays and nothing else.

The company is now striving to enter the market for heavy-truck and bus relays, and Huang says confidently, "We expect to become a major supplier of 24V truck and bus relays in the international aftermarket within a few years. As one of the most specialized relay makers anywhere, we're building up increasing competitiveness thanks to our small-batch, large-variety mode of production, our rapid development capability, and a quality that is much higher than that of our low-cost rivals in Asia, especially mainland China." He says, in fact, that he has noticed a flow of orders back to Taiwan by customers that have switched to the mainland and then came to regret the decision.

Tsurn Hwai currently has no plans to set up production facilities in the mainland, but intends to set up a sales office there to tap that fast-growing market. The company's relays are very competitive there, Huang claims, not only because they are made in Taiwan but also because their cost/performance ratio is the best in the market.

"As long as there are cars," Huang concludes, "there will be an aftermarket and the demand for relays in the global market will only increase. And we are fully prepared to promote Tsurn Hwai relays for all kinds of automobiles throughout the world, guided by precise marketing positioning: OE quality, aftermarket pricing, and a comprehensive product range."