Hwang Yu Supplies Three-of-Ten Auto Steering Parts Made-in-Taiwan

Ambitious maker eyes diversifying

Since its founding in 1972, Hwang Yu Inc. has been the largest supplier of high-quality aftermarket (AM) automotive steering and suspension components in Taiwan, as well as a leading player worldwide. Focusing on its core business by increasing its product line, the company supplies several major products: ball joints, tie rod ends, rack ends, control arms etc.

Hwang Yu, a TS16949-certified company, actually delivers about three in 10 AM steering parts produced on the island, an indicator of its size.

Although a significant supplier of parts for Japanese and American cars, the company has been trying to branch into supplying high-end European cars.

Boasting about 4,500 items in its line, Hwang Yu introduces about an average of around 100 new items every year, which is made possible by its aggressive investment in R&D of around NT$50 million (US$1.5 at US$1: NT$33) annually.

Perhaps shadowing its Taiwan-leading R&D investment is its long-term goal, as proclaimed by vice president S.H. Fong: to be the leader in both product quality and comprehensiveness in not only Taiwan but also globally.

Hwang Yu distributes most of its steering parts globally under the private labels "Three Five" and "Three Star", with the rest supplied on an original equipment manufacturer (OEM) basis to many global brands. Over 40% of Hwang Yu's parts are shipped to the U.S., 20% to 30% to Latin America, and the rest to other markets.

In 2009, the company announced another ambitious project: to expand product lines to include safety- and quality-critical automotive brake calipers and to continue employing the same top-end manufacturing equipment as adopted by other first-tier caliper makers, so as to turn out the highest-quality products.

Hwang Yu also claims that the company will self-develop all the special-purpose jigs and fixtures as well as inspection and testing equipment in-house so as to further upgrade the quality of its brake calipers to the level even higher than that of global first-tier suppliers.

Diversification

One of the key factors for its success is Hwang Yu’s ability to diversify into other product segments.

Having started up as a supplier of steering and suspension parts for mainly Japanese cars, Hwang Yu’s strategy lasted for about three decades, making it a specialist in such segment and a critical supplier globally.

About seven or eight years ago, Hwang Yu decided to diversify into building parts for American makes and models, and has been investing substantially to increase such product range. The firm's product diversification immediately garnered strong response from American customers, the world's largest buyers of AM-parts, hence further upgrading the company’s revenues and influence.

The VP says that 2009 marks another diversification milestone for Hwang Yu, as its product lines will be expanded to cover luxury European cars, including Mercedes-Benz, BMW, Audi, Opel etc. At the same time, the VP claims, Hwang Yu will also attempt to make a quantum leap—turning from mere OEM into a more pro-active mode—meaning that the firm may actually try to develop parts for targeted popular European cars. Such enthusiastic program calls for, Fong says, boosting the R&D investment by 20% to 30% per year, to a record high of NT$60 million to NT$70 million (US$1.8 million to US$2.1 million at US$1: NT$33).

Ambitious Plans

Hwang Yu is also actively eyeing the original equipment (OE) parts market: Fong claims that the company is set—with sufficient quality, production efficiency, cost control, and management skills—to step up efforts to be a first- or second-tier steering-parts supplier globally. The VP believes, despite the grave impact on the global automotive industry from the financial fallout, that truly capable, competitive newcomers can find new windows of opportunities in automotive supply chains worldwide.

Having installed new, advanced equipment at its plant in central Taiwan's Wuchi, Hwang Yu is also engaged in a product-upgrading program—one that involves, for example, building lightweight aluminum-alloy control arms with built-in ball joints.

Uncompromising QC

Yet another reason for Hwang Yu’s sustained success, also a source of pride, is its unmatched quality control in Taiwan, one that helps to achieve unrivalled product quality in the AM parts supply field on the island. Hwang Yu requires, among each batch of products, inspecting the first, last item as well as ones in between, with quality engineers also doing spot lab-checking and testing.

High product quality is maintained by inspecting during the manufacturing, not merely at the end, a technique that Hwang Yu has adopted faithfully and successfully in this traditional industry. Fong says that the company is proud of being able to deliver products of superior quality from those of rivals.

Like most local counterparts, Hwang Yu can depend on the well-established satellite plant network on the island for less critical subcontract manufacturing services, including metal die-casting, forging as well as heat-treatment; but the firm insists on carrying out in-house all the key manufacturing and processing, such as computerized numerically controlled (CNC) machining, high-frequency surface-treatment, tapping, assembly etc., which assure the highest product quality.

The Only One in Taiwan

"Hwang Yu is the only AM steering-parts maker with in-house high-frequency processing equipment, which shows our determination to deliver the best quality," Fong claims. "We insist on doing tapping in-house, which often requires double the production time compared to outsourcing, because we know even tiny defects would damage quality and corporate image."

Hwang Yu does not take chances with material quality: always using OE-identical metals as SAE 1045 carbon steel and the SAE 4140 alloy steel for making studs. The company also does not scrimp on lubricants used on ball joints, adopting the highest-grade Mobile 1 that costs seven or eight times as much as ordinary options.

Such perfectionist professionalism helps to achieve world-leading quality that is field-tested, as well as highly praised by global customers. For example, a Hwang Yu ball joint is tested to withstand over seven metric tons of drag, exceeding the five-ton rating on one made by another famous brand.

Exceeding World Standards

Operating one of the highest-grade testing and inspection labs in the AM auto-parts industry in Taiwan is pivotal to Hwang Yu’s capacity to turn out parts that exceed industry standards, as well as its dedication to high quality and sustainable operation.

The company has a testing lab similar to that in a tech firm, including all the top-end equipment as advanced microscope and projector, three-dimensional (3D) gauges for measuring roundness, surface roughness, and hardness; computer-servo controlled material tester, impact-tester, fatigue tester, rotation-tension tester etc.

With a lab fully meeting SAE J193 Ball Stud and Socket Assembly-Test Procedures, according to Fong, the company produces a stud that withstands 30-degrees of distortion, exceeding the 10-degrees as required. "The industry-standard test lab is a watchdog of product quality that also helps to uphold, upgrade manufacturing techniques," the VP claims.

Division-of-Labor

Having set up a plant in Taiwan and another in Xiamen, Fujian Province, China also helps Hwang Yu fully meet customers' various requirements for quality, price, and shipment location, effectively tapping the locally-available advantages for mutual gains.

Established in 1992, the factory in China, with a workforce of over 400, turn outs around 300,000 to 500,000 steering parts, brake discs and drums per month. Also, the plant has been set to produce safety-critical brake calipers starting 2009.

The plant in Taiwan turns out around 300,000 to 500,000 parts per month with about 100 workers, a modest number thanks to the sound satellite plant system on the island. Besides filling small-batch, large-variety orders, the Taiwan factory also develops new products and offers technical support to its Chinese plant.

Hwang Yu's China facilities is a perfect complement to its Taiwan counterpart, with the former handling big-volume products, as well as orders asked to be shipped directly ex-China.

Smart Inventorying

Hwang Yu’s years of real-world experience means the firm is a savvy operator—able to keep adequate inventories of finished products, semi-finished products, and materials to quickly respond to urgent and small-batch, large-variety orders.

The company, at its Taiwan plant and two nearby warehouses, warehouses hundreds or even over a thousand popular items. “As long as an order is not too big,” Fong claims, "Hwang Yu can tap its stock to deliver such items in 10 days, compared to on-average 45 days—the typical lead time for an order. Being demanded to fill small-batch, large-variety orders is a fact-of-life in the AM auto parts business, so to succeed depends on knowing to keep reasonable inventories, a technique we have mastered. Inventorying expertise is another of our core strengths, a skill that is honed with experience, not financial clout and tech know-how possibly possessed by newcomers."

HWANG YU AUTOMOBILE PARTS CO., LTD.

No. 2, Alley 15, Lane 1, Chungking North Rd., Sec. 4, Taipei City 111, Taiwan

Tel:+886-2-28129311

Fax:+886-2-28132183

E-mail:three5.hy@msa.hinet.net

http://www.hwangyu.com