A review of the 5th Taipei International Automotive Electronics Forum on April 14, 2009 (more...)

   

Smart cars and electric cars to become the solution for the global automobile market recession and energy crisis
In light of the waves of global financial and energy crises that devastated the world, automobile and relevant parts manufacturers have turned their eyes on the latest target of the automobile industry in recent years: the market for smart cars and electric cars. As such, the Taiwan External Trade Development Council (TAITRA) has invited Lee Chun-Chung, Vice-president, Hua-Chuang Automobile Information Technical Center and Craig Vielguth, Executive Director from the renowned US telecom software firm, Telcordia Technologies, to share their views on the status of development and future trends of global automotive electronic industries and how the automotive industry could be reconstructed at the 2009 Taipei International Automotive Electronics Forum.
   
   
According to Lee Chun-Chung, the V.P. of Hua-Chuang Automobile Information Technical Center, if one were to focus on energy and CO2 conversion efficiency from the perspective of automobile manufacturers, electric vehicles (EV) offer 1.5 times better energy conversion efficiency compared to conventional petroleum-powered vehicles, while producing merely 40-50g of CO2. Considering the fact that conventional petroleum-powered vehicles produce up to 150-400g of carbon dioxide to cover the same distance, EVs certainly reflect a tremendous success in terms of energy conservation and carbon reduction. In addition, the adoption of EVs also happens to be in line with the global trend of environmental protection. Given Taiwan’s status in the market of electronics and electric components, Taiwan needs to overcome two main challenges: minimizing the size of parts/components while enhancing their performance, and constructing an optimized supply chain in order to ensure the nation’s success in the EV market of the future.
 
Craig Vielguth, Executive Director, Telcodia Technologies (USA) also pointed out that the integration of the automotive industry with other sectors will make the production of smart vehicles possible, and facilitate a close collaboration between the automotive industry with information communication technology sectors. In the foreseeable future, consumers can expect extensive application of wireless technologies, software detection and voice transmission technologies. Vielguth added that the integration of automotive electronics and information communication technology will prioritize passenger safety. Statistics show that, on average, the death toll from automobile accidents around the world in a given year is approximately 1.2 million, while 40 million passengers suffer injuries from car accidents. The figures reflect that there is still much room for improvement when it comes to automobile safety. The Vehicle Infrastructure Integration (VII) available on smart cars is designed to provide all relevant information including maps, vehicle status and so forth to ensure the driver’s safety on road. Apart from enhanced safety, the collaboration between the government, automobile manufacturers and telecommunication service providers will allow VII to provide additional value. For instance, passengers may enjoy interactive games with fancy multimedia effects; enjoy streaming audio/video; shop online or even find spots of entertainment through Location-Based Service (LBS). The vast possibilities for applications promise unlimited business opportunities.
 
Discussion on the opportunities for cross-straits collaboration in light of Mainland China market’s positive outlook
The “three links” between China and Taiwan are expected to bring enormous changes to the market in the near future. In order to assist vendors and businesses to identify opportunities of industrial collaborations in the time to come, the TAITRA has invited several prominent figures from China and Taiwan to take part in a discussion between cross-straits automotive electronic sectors so as to shed light on the importance of the Chinese market for Taiwanese businesses at the 2009 Taipei International Automotive Electronics Forum.
   
 
Featured speakers include senior executives from two Chinese automobile manufacturers: JAC Motors Automobile Planning & Development Department Director Li Shi-Hang, Chana International Corporation Development Planning Division Director Jiang Hong and Development Research Center of the State Council Research Department of Industrial Economy Deputy Director Wang Xiao-Ming from China along with Mobiletron Electronics Co., Ltd. Chairman Tsai Yu-Ching, E-Lead Electronic Vice Chairman Chen Hsi-Yao and Tung Thih Electronic Technical Adviser Luo Kuang-Tso from Taiwan. Now that both China and Taiwan have become members of the WTO, Taiwanese manufacturers will have to figure out how to collaborate with automobile manufacturers and associated partners in China in order to foray into the Chinese market.
   
Presently, the demand for small, energy saving vehicles and cars that run on alternate energies in China is growing rapidly, and the number of original automobile brands is constantly rising. In addition, consumers are increasingly concerned with various features and functionalities of automobiles such as safety, energy saving, entertainment, fashion, comfort and so forth. Just as Mobiletron Electronics Co., Ltd. Chairman Tsai Yu-Ching has pointed out, vehicles with network and multimedia features will shape the mainstream trend for the market. However, it is also true that the Chinese automobile market is still a little behind in terms of technology and innovation. The collaboration between automotive electronics and automobile industries in China and Taiwan and the selection of talents call for further discussion. Hopefully, both China and Taiwan will be able to shine on the international stage with their progress in automotive electronics.
   
JAC Motors Automobile Planning & Development Department Director Li Shi-Hang offered his insights on the industry’s current status and trends of development. He pointed out that the automotive electronic industry can be divided into two main domains, namely vehicle electronic control device and on-board units. Electronic Control Unit (ECU) is primarily responsible for the control of the vehicle’s operation while working in conjunction with other systems including automotive multimedia entertainment system, telematics system and navigation system. According to the forecasts from market survey organization Strategy Analytics, the annual compound growth rate for automotive entertainment system around the world from 2005 to 2010 will fall at 3.74%. The forecast reflects vast opportunities for parts and component manufacturers. Director Li also reminded manufacturers that, in order to achieve sustain operation, they must pay attention to all aspects of their operations (i.e. purchasing, quality assurance, marketing, production management and so forth) so as to succeed.
   
Unlimited business opportunities await in emerging markets
In light of the fact that emerging markets in Asia Pacific and Middle East have thrived in spite of the global economic recession in recent years, the TAITRA has invited Mr. Tarun Singha, President of Oman (and one of the world’s largest automobile distributor) Saud Bahwan Automotive (with an annual turnover approaching US$ 5 billion) to attend the 2009 Taipei International Automotive Electronics Forum. In addition, the TAITRA has also invited Senior General Manager Mr. C V Raman from Maruti Suzuki (India’s largest manufacturer of small passenger vehicles) and Director Hajime Yamamoto from CSM Worldwide Thailand (an organization that specializes on researches on the ASEAN market) to share their views on Taiwanese manufacturers’ niche from the market perspective.
   
All forecasts reveal that any manufacturer wishing to successfully distribute their products over the world cannot afford to neglect the Indian market. Statistics indicate India to be the 7th largest market around the world with 31% of her population residing in urban areas. However, the prevalence of automobile ownership in India is surprisingly low at merely 9%. The average consumer in India prioritizes sentiment and functionality in products. In recent years, rural areas in the country have grown to become a key market. As the average age of consumption among the younger population declines in India in conjunction with the population of dependents, such trend reflected that the middle class population in India has been on the rise and that the demographic of people who can afford automobiles is steadily growing.
   
India opened her gates to the world in 1990 and it boosted the growth of India’s market by an incredible margin of 6.2%. Electronic products in India have enjoyed an average growth of 10%-12% per year while her mobile phone market expanded to nearly 400 million subscribers (still growing at a rate of 6 million new subscribers per month). Not surprisingly, India’s market for MP3 players has been growing just as quickly. It is only reasonable to expect India’s automobile market to grow at the same pace as her economy. When asked about his visions for India’s automobile market in 2016, C V Raman expressed his wishes for India to become the world’s 7th largest automobile (and the world’s 4th largest cargo truck) manufacturing nation by then.
   
Since Middle East countries are the world’s primary petroleum producing nations, the income level for in Middle East countries are generally higher. And as such, consumers in these nations have developed a penchant for customized cars more than standard models. In fact, 90% of the new vehicles purchased in Middle East countries feature advanced electronic equipment. Mr. Tarun Singha pointed out that the integration between automobiles and other peripherals has been closer than ever, and he used the local law enforcement personnel’s use of mobile phones as an example. In addition, the fact that passage among different Middle East countries does not require a visa means a substantial demand for GPS navigation device in the local automobile industry. This is undoubtedly a niche for Taiwanese manufacturers to venture into the Middle East market.
   
Finally, Hajime Yamamoto the director of CSM Worldwide Thailand shared his analysis on the ASEAN market. He pointed out that due to political unrest and soaring oil prices, Thailand’s productivity has fallen drastically by 40% and the situation has yet to see noticeable improvement even as of March 2009. The waves of unemployment at numerous corporations in Thailand have also resulted in serious consequences. Despite of all these negative developments, the impact of the global financial crisis in 2008 has been fairly moderate on ASEAN nations and they have performed quite well. Generally speaking, the outlook for ASEAN market is still positive. Given the fact that Thailand is still the hub of production and manufacturing in the ASEAN market, Yamamoto suggested that Taiwanese manufacturers could foray into the ASEAN market with eco-friendly vehicles and low-cost cars (i.e. budget car components such as low-cost ECU and so forth). In a nutshell, Taiwan’s competitive edge in the region would be her capacity to lower the level of automation and reduce fixed costs.