Taiwan's Machine Tool Industry Fretted by Growing Rivalry of Koreans
2012/05/28 | By Steve ChuangTaipei, May 28, 2012 (CENS)--The Taiwan Association of Machinery Industry (TAMI) authorized its latest report warning that local suppliers of machine tools have been increasingly racked by growing rivalry of their Korean counterparts in the global market for a variety of reasons, which has led to export downturns in some of their overseas markets, such as India.
TAMIA's report indicates that Taiwan's machine tool industry exported US$141 million worth of products to India in 2011, up 3.5% yearly to command a 3.5% share of the industry's total exports for last year, outpaced by Korea's exports of US$168 million to the same market, which, in turn, represented a 39% surge from 2010.
TAMI explained that Korean machine tool suppliers outdid the Taiwanese in the Indian market partly because of the Korean won depreciating against the greenback, and partly because of CEPA (Comprehensive Economic Partnership Agreement) signed between Korea and India in 2009 to lift tariffs on bilateral trades. In 2011, machining centers, NC (numerically controlled) lathes, and shearing machines together commanded around an 80% share of Korea's machine tool exports to India.
To Taiwanese machine tool suppliers, competition in other overseas markets may likely gradually tilt to Korean rivals as well. For example, Korean suppliers finished 2011 with exports of US$2.301 billion for a 37.2% yearly surge, with US$547 million and US$350 million of which going to Europe and the U.S., respectively, explosively soaring 124.4% and 135.9%. TAMI said that these surges mainly resulted from free trade agreements signed by the Korean government with EU and the U.S., not to mention that the cheaper Korean won also enhanced price competitiveness of Korea-made machine tools over Taiwan-made models.
TAMI's report says that Taiwan's machine tool exports totaled US$1.364 billion for the first four months of this year, up 12.4% from the same period of last year, with the growth primarily caused by strong market demands in North America. Hopefully, the industry is expected to finish the whole year with output value of US$5.5 billion, up 10% yearly, with exports amounting to US$4.5 billion for a 12.5% growth.
Exports by Taiwan and Korea's Machine Tool Suppliers to India | |||
| Export Value in 2010 | Export Value in 2011 | Year-on-year Growth Rate |
Taiwan | US$137 M. | US$141 M. | 3.5% |
Korea | US$120 M. | US$168 M. | 39.0% |