Auto Industry Chain

The automobile industry is a technology-intensive and capital-intensive industry. Its industrial chain is quite large and affects a wide range of related industries. A car is composed of more than 30,000 parts, covering steel, plastic, rubber, glass, machinery, electrical machinery, electronics, Different industries such as services, and related professionals include research and development, manufacturing, procurement, marketing, management, warranty and other skills, so they are integrated into a complete automobile industry, so the automobile industry is known as the “locomotive industry”. The upstream of the automobile industry is mainly related to component manufacturers, the midstream is the center of vehicle manufacturers, assembly, repair and technical services, and the downstream is brand manufacturers and sales service bases. The total output value of Taiwan’s vehicle industry continues to grow, reaching NT$360.7 billion in the first half of 2022, accounting for about 4.16% of the total output value of Taiwan’s manufacturing industry, with an increase of 3.67%. The vehicle industry is an extremely important industry in Taiwan. Among them, the automobile industry will be 88.9 billion yuan in the first half of 2022, a decline of 11.10%. The locomotive industry will be 24.8 billion yuan in 2022, a decline of 9.61%. The auto parts industry will be 115.1 billion yuan in the first half of 2022, an increase of 3.50%.


There are many upstreams of the automobile industry, mainly for the production of components, including casting, stamping, forging, machining and heat treatment. Products include lamps, tires, sheet metal, aluminum alloy steel rings, hoods, bumpers, etc. The automobile industry The interrelationship and influence level are very large. Due to the complex manufacturing and assembly process of automobiles, more than 30,000 parts are required. After passing the quality inspection, the components are sent to the central factory for assembly. Therefore, the component manufacturers and the vehicle central factory form The central satellite factory system has a long-term and stable cooperative relationship, and each vehicle central factory will carry out vertical integration of different degrees in the upper, middle and lower reaches.


The mid-stream of the automobile industry is the central assembly factory. The process of assembling automobiles in the central factory includes body welding, painting, pre-assembly of some parts and components, and finally the assembly of the whole vehicle. OEMs outsource components to first-level satellite factories, and first-level satellite factories subcontract detailed parts to second-level and third-level satellite factories, forming a multi-level division of labor structure. The central factory integrates long-term cooperation with upstream component manufacturers and satellites. The factory provides the complete vehicles, spare parts and technical services required by the downstream sales end in real time, so that the downstream sales companies can reduce the related costs of self-owned inventory and reduce business risks. A complete car must pass various inspections and test standards under different conditions before leaving the factory. After it is confirmed to be qualified, the safe and reliable car is considered to be produced. At present, there are about 2,500 manufacturers in Taiwan’s vehicle industry, mainly distributed in Taozhumiao and Pingtung, while the auto parts industry is mainly distributed in Taozhumiaozhongchang and Tainan.


The downstream of the automobile industry is vehicle sales and after-sales service. Most domestic car manufacturers have technical cooperation mother factories, so they all have a complete supply chain to meet the market’s demand for different models. The main technical cooperation partners of Yulon Automobile are Japan’s Nissan, Yulon The Nissan (NISSAN) cars sold by Japanese cars are designed by Nissan (Nissan) as the technical mother factory, and are manufactured by Yulon in Taiwan. Zhonghua Auto signed a technical cooperation contract with Mitsubishi, and Sanyang cooperated with Hyundai Motor. Domestic automakers have many distribution bases to sell their own brand cars. Most of the vehicles sold are commercial vehicles, small and medium-sized cars, and SUV/commercial vehicles, and most of them are mainly in Taiwan at present; while the export market of OEMs is also expanding year by year, but because the domestic automobile market is currently saturated, increasing The scale of Taiwan’s auto market is relatively small, and the competitiveness of imported cars has increased due to factors such as the reduction of goods taxes and tariffs after joining the WTO; however, the import of auto parts has not followed, and the tariff on imported complete vehicles is the same as that of parts. , For domestically produced cars, the production cost is relatively high, resulting in the price of imported cars and domestically produced cars becoming more and more similar. Therefore, the domestic auto industry is specialized in manufacturing and selling multiple brands, striving to improve the manufacturing quality, cost, delivery time and service satisfaction of each brand, and providing customized services and after-sales services exclusive to each brand.

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