German's Continental sourcing auto parts supply from Taiwan

Taipei, Dec. 24, 2004 (CENS)--Continental AG of Germany recently held its first procurement meeting with over 30 auto-parts suppliers in Taiwan, though the firm set up an international procurement office in Shanghai, mainland China early this year.

Taiwan External Trade Development Council (TAITRA), organizer of the procurement meeting, said that Continental has put Taiwan on its procurement list as Taiwan-made auto parts are famous for high quality and competitive prices.

According to TAITRA, Continental is Germany's largest manufacturer of tires for cars, trucks, bicycles, and agricultural products, selling its tires under the brands of Continental, Uniroyal, and General to automakers such as BMW, DaimlerChrysler, Nissan, Toyota, Volvo, Peugeot, Ford, and Porsche. Through its ContiTech division, Continental also produces power transmission systems, engine and suspension mounts, and vehicle interiors.

Continental also makes electronic brake and traction control systems (Continental Teves). The firm has acquired a controlling stake in Temic, DaimlerChrysler's automotive-electronics business. Many of Continental's auto-parts items are No. 1 in the global market in terms of sales volumes. Currently, Continental has 121 production bases and employs 69,000 people worldwide. The company's 2003 revenue was 11.5 billion euro.

John Tang, a specialist at TAITRA's market development division, said that his council has help Continental's procurement delegation arrange visits to local parts makers. If everything goes smoothly, the German company is expected to place orders for millions units of a single parts item in the future.

Continental is currently the world's No. 4 tire maker and No. 1 supplier of auto steering, suspension, and brake system parts. In addition, the company is also the world's No. 2 auto-electronic parts brand, trailing Bosch of Germany.

According to Tang, Continental plans to procure cast-iron, pressed, machine-processing, rubber, plastic and aluminum-cast parts as well as various kinds of fasteners from the island.

TAITRA said that Continental started to outsource from low-cost nations this year and set up its Asian procurement office in Shanghai early this year. The Asian procurement office's ranking officials contacted a Taiwanese parts-business promotion delegation in mainland China in September 2004, including such makers as Lio Ho Machinery Works Co. (leading supplier of casting parts and aluminum wheel rims), Ji-Ee Industry Co., Ltd. (water pumps etc.) and Jui Li Enterprise Co. Ltd. (sheet-metal body parts).

In a bid to help set up a platform to link local auto-parts makers and big foreign buyers, TAITRA invited many international big names in the line to hold 23 procurement meetings in Taiwan. A total of 1,569 local companies have participated in related meetings to explore possible business opportunities with the big foreign buyers so far this year.

According to TAITRA, it has successfully invited ranking procurement officials of DaimlerChrysler, ZF, Delphi, TRW, Kia Motor, Honda, MG-Rover, Takata, Valeo etc. to meet Taiwan's makers of auto parts, this year, and many of the big international automakers and parts brands have begun placing orders with Taiwan makers.