Page 35 - TTG-Taiwan Transportation Equipment Guide (TTG) 2022-09 Edition

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Industry Trends

high, making it difficult for suppliers to meet demand parts must undergo certification, and due to the lack
on both sides. Shortages of power components of standardization across the industry, many parts
and auto chips are expected to ease between mid- cannot be used across different brands. Together
2023 and early 2024, as the supply for new vehicle with scaling up difficulties and lack of investment in
assembly and sales stabilizes. certifications, Taiwanese suppliers are still focusing
on the AM market, but specific suppliers have also
How do the events of the past years — the entered global auto brand supply chains.
pandemic, the supply chain disruptions, ze-
ro-carbon policies, the maturing products The EV market is an emerging industry, ripe
and technologies for EV and self-driving for Taiwan’s automotive electronics and ICT
cars, and the Russian invasion of Ukraine suppliers to invest in. Coupled with how the world’s
— impact the auto parts industry? How semiconductor production hub is based in Taiwan,
Taiwanese suppliers have a greater advantage
should Taiwanese suppliers react? in entering the EV industry over the traditional
auto parts sector. Notable areas in the EV vehicle
Estimates show that due to the auto chip and EV parts industry where Taiwanese suppliers
shortage, and the lockdowns in auto parts have a distinct advantage include e-scooters and
production areas in 2022, the global production government policy-sponsored electric buses.
output of cars dropped by around 80 million units
compared to 2021, while the Ukraine-Russian The integration of the auto parts industry
conflict primarily impacted auto brands backed by
Russian investment, such as VW, Renault, and and smart manufacturing is an unavoidable
Hyundai’s local investments. trend; please share the recent status and
future state of the industry, and how Tai-
While Russia and Ukraine do produce and wanese suppliers can bridge the demand
export certain key materials for EV batteries and EV in smart manufacturing?
motors, the volume and scale are still significantly
smaller than the output from the world’s main Taiwanese auto parts suppliers have built up
exporting country, South Africa, therefore, the years of high-mix, low-volume manufacturing
potential impacts of the conflict on EV production capabilities, and made a significant stake in global
are limited. markets through managing various distribution
channels. On the other hand, suppliers partook
On the other hand, Taiwan’s auto parts are in the government-led New Southbound Policy
predominately export-oriented — focusing on initiative, seeing the auto parts demand in
Central and North America, Japan, West Europe, the region maintaining consistent growth and
and China’s AM markets — and suppliers are more anticipating global procurement trends. To meet
OEM capable than experienced in managing self- global demands, Taiwanese auto parts suppliers
owned auto brands. This is largely due to the closed have proactively invested in new technologies,
nature of the traditional auto parts supply chain. obtained roles in global auto supply chains, and
procured automated manufacturing equipment to
While Taiwan has a comprehensive ICT industry improve production efficiency, increase capacity
hub, many auto electronics, and self-driving vehicle utilization, optimize product competitiveness, and
added product value.