Auto parts supplier Tsang Yow Industrial Co (倉佑) remains conservative about the Chinese auto market this year, as customers, such as Nanjing Punch Powertrain Co (南京邦奇) and BorgWarner Inc, are still digesting inventories.
Order visibility for the Chinese market in the second half of the year would be clearer next month after customers release their inventory data, company spokesperson Huang Fu-chen (黃富貞) told an investors’ meeting in Taipei yesterday.
The Chiayi-based company reported that net income plummeted 54.67 percent year-on-year to NT$42.02 million (US$1.34 million) in the first half of the year, with earnings per share decreasing from NT$0.9 to NT$0.41, while gross margin dropped 2.32 percentage points to 13.07 percent.
Due to declining sales in China, consolidated revenue in the first half shrank to NT$955.43 million, from NT$1.42 billion a year earlier.
Transmissions and torque converter parts accounted for 78.11 percent of total sales, while continuously variable transmissions and double-clutch transmissions contributed about 11 and 6 percent respectively.
North America remained the largest market in the first half, accounting for 55.45 percent of sales, and is expected to remain stable in the second half due to a promising aftermarket, compared with 30.8 percent of sales generated in Asia, Huang said.
To lower the impact of the weakness in China, Tsang Yow said it has been focusing on improving its product portfolio.
The company also expects shipments of transmission parts to improve in the second half due to China’s new emissions standards.
“The new standards would lead to higher shipments of small-sized transmission parts,” Huang said.
Considering the rise in the penetration rate of alternative-fuel and electric vehicles, the company expects shipments of driver motors and newly developed gear-reduction devices to increase and boost sales in the following years, it said.
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