TAIPEI: Auto parts supplier Tsang Yow Industrial Co yesterday said it plans to invest about NT$200 million (US$6.53 million) on capacity expansion in China this year in a bid to increase its presence in the nation’s automatic transmission market.
The company, which makes automotive powertrain components for global brands, is to add several laser-welding production lines at its subsidiary in Wuxi, China.“Some laser-welding lines are to enter mass production by the end of next month,” a Tsang Yow official said by telephone yesterday.
The official, who declined to be named, said the investment in laser-welding processes will help the company handle more orders for continuously variable transmissions (CVTs) components from Punch Powertrain NV, a first-tier CVT supplier.
CVTs can seamlessly transmit power from engines to wheels through a continuous range of gears, reducing fuel consumption in comparison with traditional automatic transmissions.
Belgium-based Punch Powertrain provides CVTs for major Chinese companies, including BAIC Automotive Group, Geely Automobile Holdings Ltd and Great Wall Motor Co, its Web site showed.
With the new production lines, Tsang Yow will be able to manufacture 80,000 sets of CVT components for Punch Powertrain per month in the near term, the official said.
The capacity expansion is in line with the company’s goal to increase revenue contribution from its Chinese subsidiary, the official added.
Total sales in China’s automatic transmission market are about NT$200 billion per year, with Tsang Yow taking up less than 1 percent of that amount, the official said, adding that the company hopes to increase its market share there.
The company aims to generate more than US$5 million per month in revenue at its Wuxi plant by the end of this year, the company said. The plant generates sales of US$4 million per month, taking up nearly half of the company’s total sales, according to company data.
Capital spending for this year would be also used to improve efficiency of existing production lines in China, in response to soaring labor costs there, the company said.
