06/28/2006
THE ASAHI SHIMBUN
KAOHSIUNG, Taiwan--A secretive project to develop a scooter with an engine displacement of 700 cc is under way at a Taiwanese company that started out as an assembler of Japanese motorcycles more than 40 years ago.
If successful, Kwang Yang Motor Co. (KYMCO) will become the manufacturer of a scooter with the world's largest engine, surpassing models with 650-cc and 600-cc engines made by Suzuki Motor Corp. and Honda Motor Co., respectively.
¨We are putting the utmost importance on research and development,¨ said KYMCO President Wang Son-chien, 59, speaking in fluent Japanese. ¨We want to soon narrow the gap in technology between us and Japanese and European manufacturers.¨
The company, whose head office and factory are near the Love River in Kaohsiung where Taiwan's largest port of entry is located, owes much to Honda for its growth as a manufacturer of scooters and motorcycles.
In 1964, Honda started exporting core motorcycle parts to Taiwan, which was then regulating the import of finished products.
At the same time, the Japanese manufacturer dispatched engineers to KYMCO, which was established the previous year, to oversee the assembly process.
Honda was seeking an efficient way to advance into overseas markets, while KYMCO was eager to absorb advanced technology.
The interest of the two companies coincided, and they formed a transnational ¨master-pupil¨ relationship.
A turning point for the Taiwanese manufacturer came in the early 1990s.
At the time, demand for 125-cc Honda scooters assembled by KYMCO was so strong in Taiwan that parts supply was falling behind.
Wang proposed that larger 150-cc models would also sell well, but Honda was unable to provide 150-cc engines for the Taiwanese market.
The situation prompted Wang to instruct a team of four engineers under the direction of Chen Chung-ying, then a mid-level engineer, to develop a design for a 150-cc engine based on Honda's specifications for 125cc engines.
The team members appropriated an office of the factory, drawing and erasing penciled plans and repeatedly revising calculations.
Chen now heads a research and development division.
Theoretically, 150-cc engines are more powerful than 125-cc ones. But once engine speeds exceeded 6,000 revolutions per minute, heat can cause horsepower to drop.
After 20 months of trial and error, the team completed an engine in 1992. A scooter equipped with the engine soon debuted.
When the team of engineers visited Japan to present the finished engine, a Honda executive told them¡G ¨Congratulations. Now you are ready to become independent.¨
KYMCO engineers were baffled at the unexpected remark.
Actually, Honda had been waiting for a chance to pull out because the Taiwanese market had matured.
Honda stopped supplying KYMCO with technical know-how in 1994 and ended capital ties in 2003.
In 2005, 790,000 scooters were sold in Taiwan. The market has shrunk to two-thirds of its peak.
Still, the manager of the largest distributor of KYMCO motorcycles in Taiwan is confident that the market has a potential for growth.
¡¨KYMCO's strength is its ability to quickly bring new models to market,¡¨ he said.
Some models undergo a full redesign in about 18 months.
Although dealers have the risk of being stuck with old models, the introduction of new designs reduces pressure to discount prices.
In 2001, KYMCO started exporting scooters to Japan and found a niche in the intensely competitive market.
The manufacturer chose the Tokyo Motor Show in October 2005 to make its presence felt. Luckily for KYMCO, it was able to acquire booth space originally assigned to a company that pulled out of the exhibition.
The space was only 40 square meters, 1/25th the size of the largest booth allotted to Honda motorcycles. Still, the occasion marked the Taiwanese manufacturer's international debut.
Once the show opened, the booth attracted an unexpected segment of visitors--young women.
¨Who's KYMCO? I think it's a South Korean maker, isn't it?¨ one woman asked her friend.
Groups of women would stop, and one member after another would hop on the exhibit model to have their picture taken on the ¨cute¨ scooter.
¨It's kind of retro. I think it's adorable,¨ one woman said.
The motorcycle on display was KTR150, which has yet to be launched in the Japanese market.
Scooters with automatic transmissions dominate the Japanese market for motorcycles with engines 150 cc or smaller. Manual transmission motorcycles are relatively few.
KYMCO officials immediately reported the unexpected popularity of their exhibit to the head office in Kaohsiung.
The company promptly developed a sister model fitted with a 125-cc engine for which there is little competition and put it on the Japanese market in February. Sales have been around 100 units a month.
In terms of global production, Honda turned out 12.51 million units in 2005, while the figure for KYMCO was 630,000 the same year.
Although the difference is overwhelming, the companies that were once ¡¨master and pupil¡¨ are now on the same rung in the markets of industrialized nations where consumers value quality.
With production in the Chinese mainland, Indonesia and Vietnam, KYMCO is pursuing Honda in the global race.
¨It is impossible for us to take over our master,¨ Wang said, laughing. ¨Such a thought has never even crossed my mind.¨
The white uniforms worn by all KYMCO workers, including Wang, look exactly like the work clothes that the late Soichiro Honda, the founder of Honda, used to wear.
Wang said he chose the uniform ¨so that we would not forget the spirit of manufacturing that we learned from our teacher.¨
Soichiro kept telling his employees¡G ¨If we aim at 100 percent, we are apt to miss 1 percent or so. That's why we have to aim at making 120 percent high-quality goods.¨
The slogan of KYMCO, which inherited the Honda spirit, is ¨better than best.¨
The seed that Honda planted in Taiwan is about to grow into a scooter with a 700-cc engine, the world's largest.
The stories on this page were written by Toshiyuki Hasegawa. The photos were taken by Masanori Takahashi and Koichi Ueda.(IHT/Asahi¡G June 28,2006)
