Encouraged by the opening of direct cross-strait links, a leading auto parts retailer in the US is setting up an Asian sourcing center in Taiwan next month to boost operational efficiency, a Central News Agency (CNA) report said on Thursday.
Advance Auto Parts Inc said that the sourcing center in Taipei, scheduled to open on May 3, would be its first overseas sourcing unit, the CNA report said.
American Institute in Taiwan (AIT) Director Stephen Young will attend the grand opening ceremony next month, the report said.
Kevin Dempsey, vice president of global sourcing at Advance Auto Parts, was quoted as saying that the Taipei center would procure goods directly from suppliers in Asia — including China, South Korea and India — for the company’s US retail stores, as well as engage in product development.
The company plans to hire 50 workers in Taiwan over the next three years, Dempsey said.
Headquartered in Roanoke, Virginia, Advance Auto Parts ranked 476 in Fortune magazine’s ranking of the 500 largest publicly traded US companies last year. The company was also the 23rd largest professional retailer in the US, with US$5.1 billion in sales last year.
By setting up an office in Taipei, Dempsey said the company could save on rental costs, as office rental rates in Hong Kong and Shanghai were US$50 and US$30 per square foot respectively compared with US$20 per square foot in Taiwan.
The report also quoted Dempsey as saying that China had a higher turnover rate of white-collar workers, while Taiwan had a more reliable work force, which could help the company save on personnel training and management costs.
“Auto parts manufacturing has always been a major strength of Taiwan,” Dempsey said. “Moreover, the opening of direct cross-strait links will help boost the company’s operational efficiency.”
Dempsey said the US automotive aftermarket had an annual output value of approximately US$68 billion, with retail stores and repair and assembly plants accounting for US$20 billion and US$48 billion respectively.
Advance Auto Parts has market shares of 13 percent and 3 percent respectively in those two markets, and still has a lot of room for growth, he said.
Dempsey will be in Taipei to attend the Taipei International Auto Parts and Accessories Show (Taipei AMPA) at the Taipei World Trade Center’s Nangang Exhibition Hall from Tuesday through Friday.
Advance Auto Parts is scheduled to hold a procurement seminar on May 4 in Taipei, the report said.
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