Page 25 - TTG-Taiwan Transportation Equipment Guide (TTG)2022-04 Edition

23
Industry News

Close rivals of Taiwan’s market
shares across different industries are
also seeking to join the trade bloc,
including China and South Korea, which
was reported by Yonhap News Agency
that the country is planning to submit its
application in April. CPTPP generates a
total gross domestic product (GDP) of
USD$10.6 trillion and makes up 13.3%
of the world’s GDP, making it a lucrative
opportunity to tap into emerging markets
in this FTA. Other applicants include the
U.K and Ecuador.

Joining the trade bloc is not without its
Taiwan has great potential to make a strong stake in the EV market with challenges, which is typical for Taiwan’s
its ICT capabilities. status in global affairs, and not without
its disadvantages, especially for certain
lack the ability to quickly develop new molds like industries, therefore it begs the question of how
their Taiwanese counterparts. Aside from North would Taiwan’s automotive and auto parts sectors
America and Europe, AM suppliers have much to fare in the CPTPP bloc?
gain in growing economies, such as China, where
car ownership rates have exploded as well. PwC, in an article published in the EETimes
Taiwan, reported that Taiwan’s domestic vehicle
Also, notably, Taiwanese AM suppliers are market would see the biggest impact from joining
often known for their elasticity and flexibility, the trade bloc. In the past two decades since
having built up decades of experience in quickly Taiwan joined the World Trade Organization, tariffs
designing molds through a high-mix, low volume imposed on imported cars had fallen from as high
capacity. With EV trending widely in global markets as 60% rates to only 17%, leading to imports
and governments directing more investment into making up a significant portion of the market share;
EV infrastructure, prompted by zero-emission in 2002, only 13.5% made up of Taiwan’s market
pledges, these suppliers are responding to market share, but in 2020, imported cars made up 48.4%.
demands. Coupled with Taiwan’s role in the ICT However, PwC noted that Taiwan’s vehicle market
industry and as the hub of semiconductor chips, would be able to tap into the developing markets
and geographical proximity with China, one of the in the CPTPP, as the FTA would remove tariffs and
world’s fastest-growing markets for EVs, Taiwanese trade barriers on both sides of the coin.
AM suppliers looking to make a major stake in the
emerging sector, should leverage its capability to do For the export-focused auto parts and AM
so. sector, Taiwan’s suppliers are expected to perform
well should the bid passes. According to Taiwan
Taiwan’s CPTPP Bid Transportation Vehicle Manufacturers’ Association
(TTVMA), Taiwan’s export value of auto parts
As an export-oriented economy, Taiwan’s totaled NTD$192.72 billion, with CPTPP-destination
overall outlook is closely tied to regional and global countries making up 13.7%; Japan was the top
affairs. Therefore, it should not be a surprise that destination for Taiwanese exports, followed by
Taiwan submitted a bid to join the Comprehensive Mexico, Australia, Canada, Malaysia, and Vietnam.
and Progressive Agreement for Trans-Pacific On the other hand, Taiwan’s auto parts import
Partnership (CPTPP) in September. The free trade value totaled NTD$99.54 billion. CPTPP members
agreement already has the membership of Australia, made up 27.6% of imports into Taiwan, with Japan
Brunei, Canada, Chile, Japan, Malaysia, Mexico, at the top of the list, making up 25.3%. As many
Peru, New Zealand, Singapore, and Vietnam, which Taiwanese automakers have existing partnerships
were signed in March 2018.
with Japanese auto brands, joining the CPTPP
would help lower costs of overall imported vehicle