Sizable Used-car Market Draws Attention from Auto Vendors in Taiwan
2015/07/24 | By Quincy LiangIn Taiwan, over 700,000 used cars are bought and sold per year, compared to about 400,000 new cars sold a year, creating a market of about NT$300 billion (US$10 billion).
Eyeing the growing domestic used-car market, automobile vendors have been aggressively developing such sales channels by tapping the ample supply of cars sourced from new-car distributors and affiliated car-leasing companies in Taiwan.
A recent example is Fortune Motors Co., Ltd., reportedly the largest distributor of Mitsubishis, who has set up the largest local used-car sales chain: SUM Used-car Alliance that includes so far some 400 used-car dealers. Fortune Motors just announced to set up its second brand of used-car chain, EazyCar, which targets integrating traditional used-car sales outlets and an Internet platform to provide real-time information to younger-generation used-car buyers.
EazyCar aims to bring onboard about 200 used-car dealers throughout Taiwan over the next two years, with the total number of alliance members under EazyCar and SUM expected to reach about 700.
Jiang Chan-qui, Fortune Motors' president, noted that Taiwan sees about 750,000 to 780,000 used cars transferred per year, with about 2,300 used-car dealers on the island, 1,032 of which have joined various branded used-car dealerships. Regarding younger-generation used-car buyers (aged between 25 and 39), Jiang added, about 55 percent tend to buy a used car at branded sales channels, to reflect rising demand for branded used-car dealers. As result, he added, Fortune Motors had decided to set up the EasyCar brand targeting mainly younger-generation and online buyers.
Major Used-car Sales Alliances (Brands) in Taiwan
| |||||
Brand
| SUM
| EasyCar
| SAVE
| CarOK
| HOT
|
Member
| 403
| 26
| 212
| 190
| 188
|
Group Background
| Fortune Motors
| Fortune Motors
| Yulon Group
| Shung Ye Motor
| Hotai Group
|
Source: The companies
|
Another major auto vendor who has developed used-car sales for many years is Hotai Motor Co. Ltd., local agent of Toyota and Lexus, as well as No.1 new-car vendor in Taiwan by volume in the past 13 years straight. The vendor operates its own dealers to sell "certified" used Toyota and Lexus throughout Taiwan; while its subsidiary Hotai Leasing Co., a car-leasing company, has set up the HOT used-car sales alliance and Hotai Easyauction (HAA) to auction used-cars sourced from distributors and Hotai Leasing.
The number of used-car dealers under Hotai has outstripped 200, including 20 to sell certified Toyota and Lexus with annual sales volume of about 5,000 certified models.
To further expand used-car sales, Hotai has also set up an Internet platform, the @abccar, and admitted that the total investment in the web platform equals that to set up two traditional used-car dealers, albeit with amplified benefits to be expected. The Internet platform provides the biggest databank of used-car prices, and has helped assess the residual value for more than 1,000 used cars of registered members. In addition, the used-car website also frequently offers demonstration or executive cars for auctions.
Sinjang Corp., a member of Yulon Group, is an agency, wholesaler and retailer of used cars that used to auction 2,000 to 3,000 used-cars per month during its monopoly of the domestic used-car auction business. To cope with strong competition from Hotai Group, Sinjang established the SAVE certified used-car sales alliance in 2009 to have registered 212 used-car dealers.