Japan’s Suzuki Motor Corp. recently decided to move its R&D and production of high-unit-price, under-150cc powered two-wheeler (PTW) products to Taiwan. This will make the island an important manufacturing base for Suzuki products exported to Japan, Europe, and the United States.
To accommodate its more important role in Suzuki’s global division of labor, the Tailing Motor Co., Suzuki’s local partner, has poured hundreds of millions of New Taiwan dollars into capacity expansion and equipment renewal. This project will boost the Taiwanese company’s annual PTW production capacity from 100,000 units now to 150,000 units by the end of the year.
The first 125cc scooter model to be exported to Japan, the Abbress V-125, will be loaded aboard ship soon. Suzuki plans to procure a total of about 80,000 PTWs from Taiwan this year, including 30,000 units to be shipped to Japan.
According to a senior Tailing official, Suzuki has realized that the quality of Taiwan-made products is equal to that of products made in Japan, while the island’s costs are much more competitive. The Tailing executive also claims that Taiwan has become the world’s technical leader in the production of scooters under 150cc.
Suzuki introduced the 125cc Abbress V-125 to the Japanese market early last year, where the new model quickly became a hot seller and helped Suzuki replace the Yamaha Motor Co. as the No. 2 PTW brand in Japan.
Tailing’s cooperation with Suzuki is not new. The Taiwanese official reports that his company once used The Japanese firm’s sales channels to export Taiwan-made scooters to Europe and the U.S., and that it recently won orders from Suzuki technical partners in Vietnam, Malaysia, the U.S. (where demand has been bolstered by the damage inflicted on New Orleans as well as the high price of gasoline), and South Korea for scooters over 100cc.
Tailing plans to introduce a new self-developed 100cc scooter in the middle of this year, and export it to a number of overseas markets. The company predicts that its exports of PTWs will double in 2006, to about 80,000 units.