cens logo

Change on the menu for automotive trends, yet disrupted supply chains pose challenges

Mar 29, 2022 | By CENS


After two years of the COVID-19 pandemic and the world grappling with Russia's invasion of Ukraine that began on February 24, supply chain disruptions that have derailed many industries are forecasted to continue well into 2022, amid a myriad of trends and problems. In this section, we discuss industry trends in three main areas.

Auto Parts

Auto parts, or more specifically, aftermarket (AM) parts, have seen a strong surge in demand. Industry Research reports that the global automotive parts and components market size is expected to reach USD$2258.72 billion by 2027. According to LinchpinSEO, the U.S. auto AM, Taiwan's biggest export destination market, captured USD$16 billion in market share through eCommerce in 2020, marking nearly a USD$2 billion increase over initial forecasts for the year.

The pandemic had spurred consumers to take to online shopping as in-person shops posed health risks due to social gatherings. Tighter reins on money also propelled consumers to delay purchasing new vehicles, and opt for extending the lifespan of their existing owned cars instead.

As electric vehicle (EV) ownership is becoming more and more popular in markets around the world, auto parts and AM auto part suppliers are also looking to increase their market presence in these areas as well. Expect more and more AM alternatives to the normally-pricey EV or in markets like Taiwan, electric scooters, as the consumer base using these transportation methods increases.

Auto parts suppliers are cognizant regarding the status of the world's automotive and overall industry situation. There is not another moment in recent decades where the consistent supply of auto parts is more crucial than ever. For example, due to congested supply chains and shipping ports, auto parts and components have been in more demand in markets around the world, as consumers are holding onto their older vehicles longer than purchasing new vehicles. In parts of the world that are heavily reliant on long-distance trucking shipping, shipping companies are unable to maintain pre-disrupted fleet levels as they are unable to service trucks without the necessary components. New trucks are not arriving either, worsening the situation.



Automotive Electronics and EV

Unfortunately, the Russia-Ukraine conflict has upended what should have been a global economic recovery, worsening the overall situation amid rising prices in raw materials, unstable shipping prices and markets, and a recovering supply chain. Amid these raw materials include nickel, in which early March, the nickel market saw so much instability that the LME suspended trading due to price surges. This has led Chinese new-energy vehicle makers to look to hike prices as well.

Unstable and inflating raw material and metal prices pose a crucial concern for the growing EV market, in a time when overall technology advancements have helped push down the barrier of entry to become an EV owner. The World Economic Forum estimates that by 2040, the world's EV sales will reach 500 million units, a fleet that will require at least 290 million charging stations to maintain and power.

Take the EV market in Taiwan for example, statistics show that the number of newly registered EVs on January 10, 2021, amounted to 5,221 units. Even with the COVID-19 pandemic surging, causing a shortage of automotive semiconductors that is gradually lessening, EV sales still reached a year-on-year increase of 74%. As of the release of these statistics, Taiwan's yearly EV registration numbers have already exceeded 16,000 units.

Disruption Will Continue

Despite the general sentiment to return to pre-COVID social norms and economic conditions, experts have routinely warned that the current situations and conditions could be here to stay in the following years. According to IHS Markit's “The Great Supply Chain Disruption: Why it continues in 2022” report, a number of global circumstances, not just the impacts from the pandemic and the Russian-Ukraine conflict, have contributed to the worsening supply chain. Delays and disruptions for manufacturers and deliveries on a scale unprecedented in the past 30 years of globalization, container shipping networks remain jammed, existing and incoming constraints on various types of computer chips, strained capacity in world oil output, endemic shortages of labor and materials, as well as the significance of geopolitics and ESG on supply chains and company strategies.

Master Transportation Bus Manufacturing showcases its electric bus model and charging station at the 2035 E-Mobility Taiwan show in 2021.Master Transportation Bus Manufacturing showcases its electric bus model and charging station at the 2035 E-Mobility Taiwan show in 2021.

Writing for the section on automotive in the report, Matteo Fini, Vice President, Automotive Supply Chain and Technology, says that 2022 is highly another write-off, as the limitations on the current manufacturing inputs are unlikely to be resolved in the short term. While the chip shortages are largely under control now, Fini warned that the shocks caused by these shortages in the first place will persist for a time. Automakers will need to make tradeoffs when producing vehicles in 2022.

Fini writes that another area of concern in the automotive supply chain is electrical steel, which for EVs, is a grade of steel used in significant amounts specifically in electric motors for propulsion. Very similar to how semiconductor production is concentrated in Asian countries, two-thirds of the production for electrical steel takes place in China and South Korea as well. As of writing, China and South Korea are facing their own Omicron-fueled outbreaks that are at their worst since the pandemic broke out two years ago.

As there are only 20 manufacturing sites in the world that can produce automotive-grade electrical steel, with none based in North America, plans to roll out new-energy alternatives in a world that are increasingly looking towards net-zero carbon initiatives to combat climate change, will largely be impacted in a significant way.

Electrification is Here to Stay

Despite the hurdles, the electrification of fleets, ranging from the consumer market to commercial markets like logistic trucks, is here to stay. As EVs become more available, options for EV charging have become increasingly common and faster than in the past, especially for options in public spaces.

Technology advancements have made it possible for EV owners to charge at home as well, ranging from plug-in chargers, or futuristic options like no-plug charging areas in parking spaces, which is still going through development by Taiwanese suppliers.

Electrification introduces several difficulties, including the urgent need to upgrade existing infrastructure and implement safety measures to accommodate various types of EV charging at home. But these new trends will open up new opportunities, as it introduces the possibilities of vehicle-to-grid (V2G), in which power flows back from EVs to power up homes.


Industry Reports

Photo credit: UDN/Reuters

Automotive makers look at solar energy sector for new opportunities

May 09, 2022

Hotai Group has been actively developing clean energy solutions, with its subsidiary He Jun Energy as a primary focus. The capacity of solar energy installations this year is expected to reach 50,000KW, and the profit and loss are expected to be even in the second year. With carbon rights becoming the future trend, the development of the solar energy business has become at the forefront for the a...


Photo credit: EDN

Chip shortages continue to hamper automotive imports

May 04, 2022

With chip shortages still hampering the global automotive sector, major car manufacturers expect a shortage of cars, leading to significantly decreasing imported numbers. The total sales volume in the market is currently at 35,200 units, an annual decrease of 7%. The TOYOTA and LEXUS brands under Hotai Motors have reached 12,500 units, the MITSUBISHI and CMC brands of China Motor Corporation ...


Photo credit: UDN/AP

Delayed container ship production could worsen shipping in 2023

May 03, 2022

The new regulations on shipping carbon emissions are set to come into effect next year, and with the number of global container ships over 20 years old will reach 8.2%, experts warn there will be a wave of elimination of old ships starting as early as this year. However, the supply and production of these ships have been hampered by China's strict zero-COVID policy and the Russian-Ukrainian wa...



Industry In-Focus

Photo credit: UDN

Machine tool orders fall, signal concerns

May 17, 2022

Taiwan Machine Tool and Accessory Builders' Association Hsu Wen-hsien said on Monday that prices for international steel, nickel, copper, and other raw materials have soared, coupled with the uncertainty of the Russian-Ukrainian war, domestic machine tool factories' have seen a recent decrease of orders around 20%. The association has decided to adjust the export forecast of machine tools this ye...


Auto parts suppliers brace for order surge post lockdowns</h2>

Auto parts suppliers brace for order surge post lockdowns

May 16, 2022

Auto parts and components were affected by the COVID-prompted lockdowns in various Chinese cities, leading to expected losses in revenue and profit in the first quarter. However, after May, various regions have gradually reopened and resumed work, and auto factories have stepped up the pace of delivering orders. Laster Tech Group and Yingli-KY are among the suppliers optimistic about the performa...


EV-related revenue to bolster new growth records: Chroma Corp.</h2>

EV-related revenue to bolster new growth records: Chroma Corp.

Apr 29, 2022

Measuring instrument maker Chroma Corporation reported significant growth due to the company's increased investment in electric vehicle applications at its earnings call and estimated that combined revenue trends for turnkey applications could remake company history in the future. Chroma Corp. said that 54% of Q1 revenue came from measuring instruments and automated inspection equipment, follo...



Supplier News

Young Shang thrives beyond obstacles</h2>

Young Shang thrives beyond obstacles

Apr 28, 2022

OVERVIEW The spread of the novel coronavirus (SARS-CoV-2) has made a deep impact across all sectors. As health authorities and scientists around the world work towards identifying solutions to bring the situation under control, demand for Food Packaging solution has increased dramatically as consumers attempted to stay away from public gatherings. This has led to let food producers requiring m...

YOUNG SHANG PLASTIC INDUSTRY CO., LTD.


Tair Wang's zinc die-casting and CNC OEM products. (Photo courtesy of Tair Wang)

Tair Wang offers high-quality zinc die casting products for OEM and low-volume high-mix needs

Apr 15, 2022

Founded in 1978, Tair Wang Enterprise Co., Ltd. is a zinc die-casting manufacturer with ISO 9001 quality certifications. With an excellent reputation among domestic and global buyers as a professional OEM manufacturer, Tair Wang has actively expanded its businesses abroad in the past decade by providing high-quality products and services for its clients. General Manager Lawrence Lee said that...

TAIR WANG ENTERPRISE CO., LTD.


ALTA-PRO CO., LTD. </h2><p class='subtitle'> Air spray guns, air paint guns, airless spray gun and related accessories</p>

ALTA-PRO CO., LTD.

Air spray guns, air paint guns, airless spray gun and related accessories

Apr 06, 2022

After over 20 years of devotion to developing and making air spray guns and related accessories, ALTA-PRO Co., Ltd. is well recognized as a globally prestigious supplier in Taiwan, offering HP series spray guns, HVLP (high volume low pressure) spray guns, LVLP (low volume low pressure) spray guns, airless spray guns, automatic guns, dry blow guns & air brushes, and related accessories as nozzles,...

ALTA-PRO CO., LTD.



Insiders' Views

Nan Hoang Traffic Instrument Co., Ltd.</h2><p class='subtitle'>Taiwan First brakes Technology Co., Ltd. </p>

Nan Hoang Traffic Instrument Co., Ltd.

Taiwan First brakes Technology Co., Ltd.

Mar 04, 2021

Nan Hoang Traffic Instrument Co., Ltd is one of the major manufacturers of automobile friction materials in Taiwan and globally. Chairman Austin Cheng has implemented the double-arrow strategy this year - own brand of “YangPo” is adopted to focus on global channels while the “NHC brand focuses on improving market shares in global markets, such as Europe, America, Asia, Australia, and the Middle E...

NAN HOANG TRAFFIC INSTRUMENT CO., LTD.


OmniEyes CEO and Co-Founder Chun-Ting Chou. (Photo courtesy of OmniEyes)

OmniEyes' AI Technology Paves the Way for Traditional Industries' Digital Transition

Dec 15, 2020

The COVID-19 pandemic has accelerated the industries' timeline for implementing digital transformation. However, the how's and what's of applying new technologies and improving the added value to existing products and services can be daunting. Three professors from the National Taiwan University College of Electrical Engineering and Computer Science founded the startup company "OmniEyes," basi...


Caption: Pictured from front row, third right, Changhua County Government Economic Affairs Department Director Liu Yu-ping, County Magistrate Wang Huei-mei, Secretary Chen Bo-tsun pose in front of the exhibition booth. (Photo provided by CHCIA)

Changhua County Government Shores up Biz-Matching to Global Buyers

Nov 18, 2019

■Yang Feng-Chun In a bid to assist manufacturers in Changhua County to expand their market reach overseas against severe competition in the globalized market, Changhua County Government has been an active player in pushing for a makeover and innovation of its local small and medium-sized enterprises. This is done in hopes of establishing stronger connection with international markets. An ex...



Exhibition Highlights

 INTERMACH & SUBCON Thailand 2022 Prepared to promote business partnerships and to promote Thailand to be an industrial center towards sustainable development</h2>

INTERMACH & SUBCON Thailand 2022 Prepared to promote business partnerships and to promote Thailand to be an industrial center towards sustainable development

May 19, 2022

After the opening of the Intermach-Subcon Thailand 2022 Machinery Technology and Subcontracting Industry Exhibition For the procurement of leading ASEAN parts held at the Bangkok International Trade and Exhibition Centre (BITEC) today (18 May 2022), Ms. Duangjai Asawachintachit,, Secretary General of the Thailand Board of Investment (BOI), stated that the board recognises the importance of develo...


Photo credit: Messe Frankfurt

Messe Frankfurt reschedules CAPAS 2022 and Auto Maintenance & Repair Expo 2022

May 06, 2022

In view of the evolving pandemic situation in China, the Government has escalated a number of COVID-19 prevention and control measures. To align with these efforts, Messe Frankfurt is rescheduling two of its Mobility & Logistics fairs in the country. CAPAS Chengdu will move to 18 – 20 August 2022, instead of the original timeslot (19 – 21 May 2022). In addition, the Auto Maintenance and Repair...


2022 Taipei AMPA four-day event attracted many buyers and attendees to the in-person show grounds. Photo credit: TAITRA

Taipei AMPA an astounding success – Taiwan is Back in Business!

Apr 27, 2022

The 4-day 2022 Taipei AMPA and Autotronics Taipei physical show closed out on a high note, with visitors coming from the automotive industry, auto electronics department, as well as other branches in connection with the automobile market. Nearly 600 exhibitors came to the physical show, and over 1300 booths were occupied. Combined with nearly 190 exhibitors on the online show AMPA DigitalGo, t...