Thu, Aug 09, 2007 - Page 12 News List

Autoparts makers say US ban has limited impact

PARTS FUROR US insurers and a parts trade group opposed the ban, saying it gave carmakers too much power over who makes the parts and would mean higher prices

By Jason Tan  /  STAFF REPORTER, WITH BLOOMBERG

Taiwanese autoparts makers said yesterday the US ban on the importation of Taiwanese parts for a Ford truck model had only a "limited" impact on their businesses.

"We are appealing against the case," Alex Weng (翁一峰), finance manager of TYC Brother Industrial Co (堤維西交通), told the Taipei Times.

Ford Motor Co yesterday won a ban on the import of certain Taiwanese truck parts for its F-150 truck, as the administration of US President George W. Bush upheld a trade agency decision in a patent dispute.

The Taiwanese parts makers affected include TYC Brother, Gordon Auto Body Parts Co (耿鼎企業), YCC Parts Manufacturing Co (昭輝實業) and Depo Auto Parts Ind. Co (帝寶工業).

"The aftermarket industry gives us a chance to offer cheaper parts to consumers, allowing them another option other than buying parts from the manufacturer of the vehicle. There is a mechanism protecting aftermarket players in the US industry," Weng said.

TYC's business, which produces contract car lamps for Ford's Taiwan and South Africa branches, is going smoothly he said.

The case would not affect TYC's business, and it stopped shipping the controversial parts a long time ago, he said.

For the first five months of this year, TYC's net income grew 251 percent from the corresponding period last year to NT$257 million (US$7.8 million).

YCC Parts also said the issue would have no effect on its business as overall prospects in the "aftermarket industry are looking good."

The company has commissioned a law firm to deal with the matter, said a company official who refused to be quoted.

Shares in autopart makers were unaffected by the case, with Gordon closing unchanged yesterday at NT$17.20, while Depo rose 2.1 percent to NT$123 and TYC was up 4.3 percent to NT$26.80. YCC is not listed.

The US International Trade Commission (ITC) ordered a ban on imports in June after finding they infringed Ford design patents.

US Trade Representative Susan Schwab, who had a deadline of Tuesday to review the case, took no action, so the decision stands, spokeswoman Gretchen Hamel said yesterday.

Ford claimed knockoffs of parts including headlamps and side mirrors were flooding the market and hurting legitimate parts sellers.

F-series pickup trucks have led US sales since the early 1980s, with the F-150 accounting for approximately 60 percent of revenues. Ford introduced a new F-150 design in September 2003, and unauthorized Taiwanese parts were available within two years, Ford said in the ITC complaint.

US insurers and a replacement parts trade group opposed the ban, saying it would give carmakers too much power over who makes parts and mean higher prices for consumers.

"The Commission's determination in this matter will affect consumer choice and aftermarket competition far beyond the specific Ford F-150 parts involved in the instant proceeding," opponents said in a July 31 letter to Schwab. "If Ford is permitted to leverage its existing design patent rights to control markets in interoperable aftermarket products, competition cannot flourish."

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