Kwang Yang Aims for Top-10 Spot In Global PTW Market

Just one year after its 40th anniversary, Kwang Yang Motor Co., Ltd. (with the KYMCO brand), Taiwan's largest powered two-wheeler (PTW) maker, has announced a series of ambitious projects aimed at turning the company into a global leader in its industry.

In its run to the top—management hopes to make the firm one of the world's top 10 PTW makers in the next few years--Kwang Yang is betting on new models and business diversification to drive growth.

"As one of our initiatives, Kwang Yang has mapped out comprehensive and aggressive plans to make us a major international provider of light-power sources by offering integrated design, development, and manufacturing services," claims Chen Fu-an, Kwang Yang's spokesman and vice general manager of the administrative division.

Chen says in the next few years, Kwang Yang will introduce new PTW models with bigger engine displacements, more advanced technologies, and state-of-the-art designs. It will expand health-care electric-scooter production and KYMCO-brand all-terrain vehicle (ATV) sales. It will set up plants in major overseas markets and develop global service networks. And it will produce small engines and relevant applications, such as generators and lawnmowers.

Kwang Yang was the No. 1 PTW maker in Taiwan last year, selling about 235,000 units domestically and exporting another 140,000 units or so. This year the company expects domestic sales to be somewhat lower, at 180,000 to 200,000 units, but it aims to increase exports to about 400,000 units.

In the past 40 years, Kwang Yang has grown from a small company into an international enterprise with products sold to over 61 nations worldwide and a global workforce of over 4,000 employees (including about 2,200 in Taiwan).

In some overseas markets, KYMCO-brand PTWs and ATVs have become the best-selling imported models. Chen predicts that in its next four decades, Kwang Yang will be able to tap its R&D capability, global competitiveness and strong financial support to continue growing at a rapid pace.

Taiwan's Most Powerful Scooter

Kwang Yang will soon unveil a 500cc scooter model, the Xciting. Currently, 500CC models are the most powerful made in Taiwan. According to Kwang Yang, the Xciting is aimed mainly at the European market, especially Italy and Germany.

The Xciting is a new-generation scooter that represents the results of Kwang Yang's intensive investment in R&D, says Chen Chung-ying, general manager of the first research and development division, whose budget of NT$1 billion (US$30.03 million) or so represents 7% to 8% of Kwang Yang's annual revenue.

In 2002, Kwang Yang demonstrated three 250cc motorcycle and scooter models powered by engines developed in cooperation with Taiwan's Industrial Technology Research Institute (ITRI).

Chen Chung-ying says, however, that his company independently developed the first version of its 500cc scooter engine (with the engine management system or EMS supplied by an Australian company), which is a single-cylinder, four-valve, water-cooled model. The 500cc engine can be modified up and down for other scooter and ATV models scheduled in the future, Chen says.

According to Chen, Kwang Yang will roll out two versions of the Xciting heavy scooter model, including one with a traditional carburetor and another with a fuel-injection system. The two models will have different horsepower outputs, fuel consumptions and emissions--as well as different sticker prices--to appeal to different market segments, the R&D chief says.

The Xciting has many state-of-the-art designs, including auto-folding side mirrors, a large storage compartment, and angle-adjustable heat ducts. As the leader of the Xciting development project, Chen is confident that the new model will out-perform several rival models in the current market.

In order to circumvent the fierce competition in the international market for high-power motorcycles, which has long been manipulated by few a big companies in Europe and Japan, Kwang Yang chose to focus on the rising heavy-scooter segment. The ambitious PTW maker is also developing a 700cc scooter model, which will be the world's most powerful scooter when it is hits the market next year.

Electric Scooters

Kwang Yang is also actively developing its health-care electric scooters as part of its business diversification and it expects the new line to become one of its major profit-earners in the future.

Chen Chung-ying says that Kwang Yang has several advantages in the electric scooter market, especially in terms of manufacturing ability. Kwang Yang is one of the few PTW companies in Taiwan that has self-developed electric scooters, as opposed to assembling them from existing sub-systems, and this, says Chen has given the company an edge in product development in this segment.

Kwang Yang has developed five health-care e-scooter models, in three- and four-wheel versions. The scooters can be configured for maximum speeds of 6, 11 or 15 kilometers per hour (Kph).

Kwang Yang claims that its health-care e-scooter models out-perform competing models because they are equipped high-level sub-systems made largely of key electronic components self-developed by Kwang Yang's R&D team.

"Our health-care electric scooter models cannot be compared to the general models made by small assemblers," Chen Chung-ying claims. "They are specially developed to meet the various requirements of aged and disable people and are packed with advanced functions not found on general models."

In designing its high-level e-scooter models, Kwang Yang has paid close attention to safety, convenience and riding comfort. Many models can automatically decelerate when the scooter turns or heads downhill. The scooters also feature a speed-setting mode for younger/older riders, easy four-step fold-up, and a plug-type portable battery for easier charging. The vehicles are also light to make for easier transportation.

Kwang Yang is also expanding its ATV business. Currently, the company has developed several models range from 50cc to 250cc, and it is working on a 500cc new model. KYMCO is the top-selling ATV brand in many European nations and the Taiwan company expects to further develop the market there in the future.


Global Deployment

Kwang Yang is also developing its global production network. The company currently runs three PTW plants in Taiwan, two in mainland China (Changzhou Kwang Yang Motor Co., Ltd. And Hunan Kwang Nan Motor Co., Ltd.), and one in Indonesia (PT. Kymco Lippo Motor Indonesia). The company has also set up cooperation ties with two foreign partners to supply technical support and parts, including S.C KYMCO in the Philippines and Hongkings Co., Ltd. In Vietnam.

According to company spokesman Chen Fu-an says, Kwang Yang also will finalize decisions to set up PTW plants in India and Vietnam this year and begin implementing the two projects in 2005. In the future, Kwang Yang also aims to set up plants in emerging markets in Latin America, Eastern Europe and other regions.

Kwang Yang is also developing its global service networks as KYMCO has become a major brand in many markets. Better service quality is expected to further boost the company's brand image and boost global sales.

"Kwang Yang is becoming stronger and stronger," claims Chen. "This year, we are expected to maintain our No. 1 position in Taiwan for the fifth straight year. Our export volume also has been steadily rising."

In addition to its manufacturing prowess, Kwang Yang enjoys a strong financial position. The company has bought out the entire 22.5% stake previously owned by Honda Motor of Japan, and shares not closely held are controlled by a limited number of major shareholders with a great esprit de corps. "Our board of directors is much more efficient than that of other companies," Chen claims. "This creates a highly efficient decision-making mechanism that is vital to our development, both in terms of products and operations."