Taiwan vehicle sales expected to grow by 8.5 percent this year
By Kathryn Chiu, The China Post
July 24, 2014, 12:08 am TWN
TAIPEI, Taiwan -- The strong growth in Taiwan's vehicle sales and production has recently prompted a research firm to upgrade its full-year growth forecast to 8.5 percent, from the previous minus 1.8 percent.
Automotives Insight recently said in a research note that the strong growth in Taiwanese vehicle sales and production has prompted it to upgrade its full-year forecasts. However, it remains cautious on the second half of 2014 due to Taiwan's close linkages with the Chinese economy, which remains mired in a slowdown.
According to the Taiwan Transportation Vehicle Manufacturers Association, domestic auto sales in May rose 24.5 percent year-on-year to 26,607 units. Sales for the last April-June period have grown at a rapid clip and May figures bring vehicle sales for the first five months of the year to 123,754 units, an increase of 11.6 percent year-on-year.
Automotives Insight said it previously had a downbeat view on Taiwan's auto sales, but in light of the sector's strong showing in the past few months, it now has a more bullish outlook on the market for the rest of the year, saying that it has revised its full-year car sales growth forecast to 8.5 percent versus its previous minus 1.8 percent estimate.
According to Automotives Insight, the surge in vehicle sales has been primarily driven by the passenger car segment, with car sales growing 9.8 percent year-on-year for the first four months of 2014.
Driven by steady growth in the past two years, most industry experts forecast that overall new-car sales in Taiwan will exceed 400,000 units in 2014 and 2015. Other incentives driving other foreign carmakers to set up subsidiaries on the island include tax incentives offered by the Taiwanese government.
With the strong growth of new-car sales in June, which increased 23.4 percent year-on-year to hit 40,189 units, the highest June volume in 10 years, many auto sellers are optimistic that the overall monthly market will further climb to about 45,000 units in July.
A Hotai Motor Co. ranking officer earlier told the United Evening News that that if July new-car sales in Taiwan hit 45,000 units, the overall sales this year is likely to hit 450,000 units. Hotai Motor Co. is the local agent for Toyota and Lexus.
Foreign Automakers Eye Market Recovery
Sales of new cars in Taiwan have been increasing monthly since early this year, with more and more industry experts agreeing on the arrival of a 10-year replacement peak. Such predicted and clear recovery is driving many foreign auto brands to invest in independently-owned distributors rather than licensing local agents as before.
Mazda Motor Corp. of Japan, for example, recently decided to set up a branch office in Taiwan and will take over its local agent Ford Lio Ho Motor (福特六合).
United Daily News reported that Volkswagen AG of Germany, the world's second-largest automaker, will start up a fully owned subsidiary in Taiwan in January 2015 to also take over the local agency of imported Volkswagen cars and commercial vehicles, Skodas and Audis. The original Volkswagen agent Taikoo will be transformed into the largest Volkswagen distributor on the island.
Sime Darby Motor Services Ltd., the largest auto-distribution group in Malaysia, has also announced its plan to set up a Taiwanese subsidiary to vend Kias imported from South Korea in Taiwan. Sime Darby will have its first Kias in showrooms in the fourth quarter of this year.
Motor Image of Singapore came to Taiwan to take over the Taiwanese agency for imported Subarus. Over the past three years, Subaru Taiwan has become a top-three brand among Japanese imports.