Mon, Aug 12, 2019 - Page 15 News List

OEM segment hits Tong Yang revenue

SLOWDOWN:Sales from Tong Yang’s OEM business fell 17 percent to NT$14 billion in the first seven months, due to a decline in China’s auto market, a company official said

By Kwan Shin-han  /  Staff reporter

Tong Yang Industry Co (東陽實業), which manufactures bumpers and automotive sheet metal, on Thursday reported that cumulative revenue in the first seven months of this year fell 10.22 percent annually to NT$12.43 billion (US$396.3 million) due to a slowdown in its original-equipment manufacturing (OEM) business.

Sales from the OEM business fell 17 percent to NT$14 billion over the period, a public relations official told the Taipei Times by telephone, citing a decline in China’s auto market over 12 consecutive months.

However, sales in the company’s aftermarket business rose 6 percent to NT$9.13 billion in the first seven months, the official said.

Demand in the US remains stable, as orders for auto parts with water-based coatings and electroplating products have increased steadily this year, she said.

Shipments to the US market are expected to grow further in the second half, she added.

As the company’s products for the US market are mostly manufactured in Taiwan, it faces a limited impact from the US’ additional 10 percent tariff on US$300 billion of Chinese goods, set to take effect on Sept. 1, she said.

Tong Yang is building a warehouse in Tainan, which it expects to complete next year, and it plans to finish an upgrade of its plants in Taiwan in at least two years, she said.

Meanwhile, tire pressure monitor system (TPMS) maker Orange Electronic Co (橙的電子) reported that cumulative revenue in the first seven months of this year fell 27.52 percent to NT$190.81 million amid a slowdown in the global auto market.

However, the company said that it expects shipments of snow tires to Europe to increase next month and the market penetration of TPMS products to continue to expand, which would boost its aftermarket business.

As for its OEM business, the company has shifted its focus to auto parts for heavy trucks and large vehicles, which have higher margins than passenger vehicles, it said.

The company reported net income of NT$5.67 million for the second quarter from net losses of NT$5.28 million in the first quarter, with earnings per share of NT$0.25 and gross margin of 40 percent.

Auto parts maker Global PMX Co (智伸科) reported record revenue of NT$431.63 million for last month, up 21.83 percent year-on-year, thanks to growing market penetration of gasoline direct injection (GDI) systems, which provide higher fuel efficiency and lower emissions than traditional engines.

The company said that its components for GDI systems and medical components would be key growth drivers in the second half.

Cumulative revenue in the first seven months grew 8.65 percent to NT$2.76 billion, the company said.

China Fineblanking Technology Co (和勤精機) saw cumulative revenue in the first seven months drop 22.99 percent year-on-year to NT$1.12 billion.

The company said that the US-China trade dispute negatively affected its orders in the peak season, but forecast that revenue would climb in the coming months thanks to shipments of new products.

Shipments of electrical equipment bases and related components for a global electric vehicle brand are expected to double this month, while shipments of trackpads for China’s high-speed railways and process products for Miba Precision Components China Co (米巴精密零部件) would also increase and contribute to sales this quarter, the company said.

However, “as most of our business is in China, we are still observing the effects of the US’ new 10 percent tariffs, as previous tariffs imposed by Washington lowered demand in China’s car market,” the company said in an e-mail to the Taipei Times.

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