Japanese machine tool companies expand production in Taiwan

According to comprehensive news, many Japanese manufacturers have or are expanding the production of low-priced machine tools in Taiwan. In Taiwan, by relying on joint ventures for production and OEM, the production cost of machine tools can be reduced by 20-30%. Japanese manufacturers hope to compete with Chinese and Korean manufacturers that have competitive relations in China and Southeast Asia. It is understood that Citizen Seiki Miyano Company, a subsidiary of Citizen Group, plans to start commissioning Taiwan Youjia Industrial Group to produce low-priced machine tools. Citizen Seiki Miyano was responsible for proposing the main functions and costs of the product, and then entrusted the design, raw material procurement and manufacturing to Yoka Industries. As a first step, the manufacturing of lathes for cutting metal bars, manufacturing auto parts, etc. will be entrusted to Youjia within the year. In addition, Japan's Waida Manufacturing Co., Ltd. has also entrusted the production of grinding machines for grinding cutting tool surfaces to Yuka. First of all, it will adopt the assembly mode of loose parts, that is, the parts will be shipped from Japan to Taiwan, and then assembled into products by Youjia locally. In the future, it is planned to use parts made in Taiwan, and the range of commissioned models will also be expanded. It is expected to produce 10 to 20 grinders per month. Japan's Okuma Corporation and Taiwan's integrated industrial equipment manufacturer Datong Corporation jointly established Datong Okuma Corporation. Its new factory will be put into operation in 2013, and the production capacity of Datong Okuma Corporation will increase by 60% to 300 units per month. With the transfer of production bases overseas, the domestic demand for machine tools in Japan is shrinking. In order to cut costs, Japanese manufacturers planning to move production overseas are increasing. However, in mainland China, there are political risks such as technology exodus and anti-Japanese demonstrations, so many Japanese companies are hesitant to produce locally and cooperate with local companies. Taiwan, on the other hand, is close to the mainland in terms of language and culture, and many companies have personal connections in the political and economic circles of mainland China. Compared with the mainland, Taiwan has lower political risks and a more complete legal system, which also reassures Japanese companies to cooperate with Taiwanese companies. The realization of free trade between the two sides of the Taiwan Strait has also contributed to this trend. The 'Cross-Strait Economic Cooperation Framework Agreement (ECFA)' signed by Taiwan and the mainland is actually a free trade agreement. In the field of machine tools, tariffs on 17 products have been eliminated, which is also a driving factor for Japanese manufacturers to expand production in Taiwan. The Taiwan authorities not only hope to use the 'Cross-Strait Economic Cooperation Framework Agreement' to promote the development of Taiwanese enterprises, but also hope to attract foreign investment. The Taiwan authorities have indicated to Japanese companies that if they actively use ECFA, it will be easier to develop the mainland market. According to statistics from Taiwan's economic department, from January to November 2012, there were 563 Japanese investments in Taiwan. It has exceeded the level of the whole year of 2011 (441 cases) and hit a record high.