Taiwan players bet big on India

Taiwan, as is known, has been making big strides in the electronics field globally. However, its India presence is still relatively small. The India market has more or less remained an international sales junction for Japanese, Chinese and Korean products. But now Taiwanese electronics goods suppliers have recognised the considerable market potential in India for its products and is slowly penetrating into all sectors in India, automotive in particular.

According to Taiwan customs’ data 2013, the export of auto parts and automobile electronics stood at $ 11.2 billion, of which only $ 35 million was exported to India – a meagre 0.32 percent share in its total shipments which was much lower when compared its exports to USA, Japan, Germany, Korea and mainland China.

The Taipei Economic and Cultural Center in India (TECCI) feels there is a bigger scope for Taiwanese auto components in India. In a recent statement, it says, “Considering the quality of products from Taiwan and the market size in India, the prospect for future cooperation is very promising. India is a potential auto market for Taiwanese auto parts manufacturing companies.”

INDIA CONNECT
With the Narendra Modi government taking charge six months ago and announcing its Made-in-India programme, Taiwan has taken its Indian agenda to the next level. It deputed a delegation comprising 21 exporters and investors from the auto parts and automobile electronics manufacturing space to India in September 2014.

The delegation, organised by the Department of Investment Services (DIS), Ministry of Economic Affairs, Taiwan, visited a number of OEMs in Bangalore and Pune including Tata Motors, Mahindra & Mahindra, Suzuki, Volvo, Toyota Kirloskar Motor and Honda.

According to Amb Chung Kwang Tien, representative of TECCI, “In response to prime minister Narendra Modi’s vision of ‘Come and Make in India’ inviting manufacturers from across the world to invest in India, and help boost India’s industrial growth, Taiwanese auto parts and automobile electronics component makers are looking forward to exploring the possibilities of business cooperation in India.”

Citing Organisation Internationale des Constructeurs d’Automobiles (OICA) report, DIS says India became the world's sixth largest automobile manufacturer from 2010. Therefore, the demand for auto parts is huge. There are over 40 vehicle OEMs in India and the demand for high quality auto parts and auto electronics is increasing steadily. It is this potential demand that the Taiwanese companies are looking to tap.

A few Taiwanese companies have already bagged massive orders from Indian OEMs while many are in the pipeline of clinching deals, sources said.

KENDA TIRES BEGINS SUPPLIES TO INDIA
Taiwanese tyre major Kenda Tires has bagged a major order from Hero MotoCorp to supply 120,000 tyres a month. The supply, it is understood, has commenced from May this year. Sources have also disclosed that the company also supplies its two-wheeler tyres to Bajaj Auto in India and has been shipping 30,000 tyres to Bajaj every month since 2009. The tyres come to these two major two-wheeler OEMs in India through the Nhava Sheva port near Mumbai. Now it is learnt that Kenda Tires is negotiating with India Yamaha Motor and Honda Motorcycle & Scooter India to clinch supply deals from India, sources confirmed.

Kenda is also in the process of establishing a distribution network to popularise its products in the Indian aftermarket. However, Kenda will supply tyres directly to OEMs while it looks for a financially sound distributor for the aftermarket segment.

Kenda, which is one of the major tyre manufacturers in Taiwan, has manufacturing units in multiple locations in Taiwan, China and Vietnam. Its product portfolio includes tyres for two- wheelers and light motor vehicles including passenger cars and SUVs.

Automobile carbon brush manufacturer Fuyung Carbon is another Taiwanese company that won orders in the Indian auto sector.The company has bagged major orders to supply its product to Tier 1 component makers in India, who in turn supply their starter motors as a finished product to leading  two-wheeler manufacturers like Bajaj Auto, India Kawasaki Motors, Royal Enfield and Honda Motorcycle & Scooter India.

Fuyung is supplying 80,000 pieces of carbon brushes per month to the Varroc Group while it ships 200,000 pieces to Flash. The company has also bagged a few orders from some start-up Tier 1 and Tier 2 suppliers involved in making starter motors for the automotive industry in India. However, Fuyung company sources have not disclosed the specific two-wheeler customers of Varroc and Flash in India.

Yet another Taiwanese diesel engine component maker Benlivan Co Ltd is also understood have been negotiating with various companies in India. It manufactures parts for diesel engines used in construction equipment and tractors. Already in the international market, the company has been providing its products to Komatsu, Cummins and Mitsubishi.

Sheng Teng Electron International (STEI) is also discussing with various Tier 1s in India to supply its sensor products. The company's extensive product portfolio includes  relays, flashers, pressure switches, solenoid switches, cranksaft position sensors, camshaft position sensors, blower power regulators, coolant fan controllers and power steering switches.

EMMA EXPO INDIA HELPS DRIVE INTEREST

Taiwan’s interest on India seems to have started paying dividends as its annual fair christened Emma Expo India has been witnessing a good success rate in recent years.

Taiwan has been organising the Emma Expo since 2007 in India. The expo is jointly organised by Taipei World Trade Centre (TWTC), Taiwan Electrical and Electronic Manufacturers Association (TEEMA), Taiwan Association of Machinery Industry (TAMI) and Taiwan Transportation Vehicle Manufacturers Association (TTVMA).

More than 200 Taiwanese companies from various industrial sectors including automotive showcased their products at the last expo, which was held in  Bangalore in September, and turned out to be a major draw, sources in TWTC said.

Among others, Core Tech System, Cub Elecparts,  Kenda Rubber, Yih Shan New Tech, Shiniest Industries, Hu Lane Associate, Top Quality Auto Electric Products, Simphope Industrial, Fuyung Carbon and Hu Lane Associate are a few leading Taiwan-based auto parts makers that participated in the expo and attracted the attention of Indian OEM and Tier 1s.

Addressing the Emma Expo, Walter Yeh, executive vice-president, TWTC, had said the number of booths at the expo increased by more than 20 percent this year. Taiwantrade, the website run by TWTC, is a powerful B2B portal for identifying potential Taiwan partners to do business with Taiwan in multiple industries including automotive. In terms of online enquiries, India stood second next only to the USA. This shows that Indian buyers are actively using the Taiwantrade website to source Taiwan products.

TWTC says it is committed to expand the bilateral trade between India and Taiwan. There are three TWTC liaison offices in India viz Mumbai, Chennai and Kolkata.

Talking to Autocar Professional, Rocky Yi-Ping Lin, managing director of Shiniest Industries, the Taiwan-based car interior and exterior fitment specialist that displayed its products at Emma Expo, says his company has many offerings for the Indian OEMs and aftermarket.

It is understood that Tata Motors has taken samples of Shiniest’s tablet holder model – DM-700V Dashboard Mount – for exploratory R&D work for OEM fitments in its cars. If the product passes through its R&D evaluation, then the company is expected to place huge orders to Shiniest, helping the Taiwan interior giant to open its account in India.

Shiniest is one among the many interior and exterior product makers in Taiwan which have a wide supply network globally. It has more than 100 interior and exterior products and its portfolio include car mirrors, lights, wheel covers, shift knobs, pedal pads, internal gear locks and in-car laptop stand. It currently exports its products to the US, Europe and a few countries in the ASEAN region. Now the company, which exports products worth US$8 million each year, is exploring business in the Indian market. A majority of its product goes to the aftermarket segment.

According to figures available with the Taiwan Ministry of Economy Affairs, vehicle demand has been increasing rapidly in emerging markets like China, India  and the ASEAN countries. As a result the demand for auto parts is also increasing.

In 2012, Taiwan produced new Taiwan dollar NT$188.76 billion worth of auto parts. Of this, auto electrical parts accounted for 21.05 percent while transmission and suspension parts covered 13.35 percent followed by powertrain and parts at 7.11 percent and brake systems 3.76 percent. Boosted by strong demand in North America, Japan, and emerging nations, Taiwan’s auto parts sales have substantially grown in the past couple of years. Now it has turned its attention to the Indian market, and how.