Thu, Oct 13, 2005 - Page 10 News List

IT firms need a new mindset: pundits

BRANCH OUT Information-technology companies should use the strengths of the nation's auto industry to enter the global auto-electronics market, carmakers say

By Jason Tan  /  STAFF REPORTER

The nation's information-technology (IT) companies should gain a full understanding of the nature of the automobile-electronics industry before jumping onto the bandwagon, auto vendors cautioned yesterday.

"The IT industry needs to rebuild its mindset and explore multi-dimensional cooperation with the auto industry," said Huang Wen-cheng (黃文成), president of China Motor Corp (中華汽車), the nation's No. 2 automaker, in a keynote speech delivered at the Taipei International Automotive Electronics Forum.

According to Huang, the IT industry's goals of producing low-cost, high-quality components in a timely fashion do not necessarily apply to the auto component industry, as auto parts have a longer development cycle and special technical standards.

Utilizing strengths from the auto industry would be helpful for IT firms to gain a niche in the market and make inroads in the global auto-electronics market. And forming mergers or alliances with auto manufacturers will be one of the fastest ways for them to capture market share, Huang said.

Boston-based consulting firm Strategy Analytics estimated in November last year that the global auto-electronics market is set to grow to US$163.46 billion in 2008, from US$122.46 billion last year.

Eyeing a share of this huge pie, the local IT industry is gearing up to develop the fourth C -- car electronics -- to add to the existing 3C (computers, communications and consumer electronics) segments.

Quanta Computer Inc (廣達電腦), the world's No. 1 notebook assembler, set up an automobile electronics unit in April to enter the market, following in the footsteps of Hon Hai Precision Industry Co (鴻海精密) and Asustek Computer Inc (華碩電腦).

The IT industry is setting its sights on the US$192 billion auto-technology sector in a bid to improve deteriorating margins, Lee Chun-chong (李俊忠), senior vice president of Yulon Motor Co (裕隆), the nation's third-largest automobile vendor, said at the forum yesterday.

The Automotive Electronics Forum is one of the three major forums presented at Taitronics Autumn 2005, an international electronics expo running through Saturday at Taipei World Trade Center Exhibition Hall I, II and III.

On the sidelines of the forum, Motorola Inc said that Asia has gained in strategic importance for the company. It is on the lookout for potential partnerships with autopart vendors in the region, including Taiwan, said Kieran O' Sullivan, Motorola's vice president of telematics, interiors and aftermarket. He declined to offer any further information.

A Delphi Corp representative, meanwhile, refuted news reports that Taiwanese auto-part vendors would absorb its orders, as it had filed for bankruptcy proceedings in the US last Saturday.

The largest US auto supplier is reportedly going to slash jobs and wages and close many of its 31 US plants as part of its necessary reorganization.

"Business will carry on as usual, as the restructuring exercise will not impact the company's global operations," said Marcus Chao (趙克強), the firm's global purchasing director.

The reorganization will be completed in 2007, allowing Delphi to do away with workers-union restrictions and expand the scope of its business, he said.

This story has been viewed 3242 times.
TOP top