Fri, Nov 08, 2013 - Page 14 News List

Hota Industrial expecting to seal Toyota supply deal

TORQUE CONVERTERS:The company will sell 9,000 units a month to BorgWarner in the US, which is to assemble and sell the end products to Toyota Motor

By Camaron Kao  /  Staff reporter

Hota Industrial Manufacturing Co (和大工業), which makes gears and shafts for automobiles, motorcycles and agricultural tractors, yesterday said it is likely to enter the supply chain of Toyota Motor Co’s gasoline-powered cars after it receives final confirmation from the firm today.

“We estimate that the deal can increase our sales by NT$100 million [US$3.41 million] a year,” Hota president Charles Chen (陳俊智) said by telephone. “We are highly confident we will seal the deal tomorrow.”

Starting next month, Hota is to sell 9,000 units of its torque converters a month to its largest client — US-based BorgWarner Inc — for assembly and BorgWarner will then sell the end products to Toyota, provided that it receives confirmation, Chen said.

Nine of BorgWarner’s and Toyota’s personnel will be at Hota starting on Monday for final confirmation of the deal, he said.

Rising orders and the recovery of the global auto industry have benefited the company and it reported a record monthly revenue of NT$360.19 million last month, an increase of 24.23 percent from NT$289.93 million the previous year and 19.15 percent higher than the NT$302.3 million posted in September, according to a company filing to the Taiwan Stock Exchange.

Chen said the company started to provide gears for Bombardier Recreational Products Inc last month to make motorcycles powered by 1.4 liter engines.

In addition, BorgWarner sales, which contributes about 26 percent of Hota’s revenue, rose to NT$90 million last month from less than NT$80 million in September, while shipments to Punch International NV, the company’s second-largest client with a revenue share of 17.7 percent, also increased to 18,000 units from 13,000 units in September.

Sales to Bombardier are expected to account for 5 percent of Hota’s revenue this year, while those to Tesla Motors Inc are set to increase to 4.6 percent from 1.8 percent last year, Chen said.

Hota’s revenue totaled NT$3.05 billion in the first 10 months of the year, flat from the previous year.

The company has cut its annual sales growth forecast to 5 percent this year from a previous guidance of 12 percent to reflect inventory adjustments at Punch during the first half of the year.

Hota shares rose 4.66 percent in Taipei trading yesterday, outperforming the TAIEX, which was up 0.02 percent.

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