Taiwan scooter makers slash prices to boost sales

Taipei, July 25, 2003 (CENS)--Taiwan motorcycle maker Kwang Yang Motor Co., Ltd. (KYMCO brand) recently announced that it would introduce an entry-level 50cc scooter model priced at only NT$22,800 (US$663 at US$1:NT$34.4), further heating up competition in the domestic market.

Kwang Yang also said that it would soon demonstrate its first 250cc all terrain vehicle (ATV) model, about 3,000 units of which are expected to be sold in the North American market.

Kwang Yang recently won a bid to supply 5,000 scooters to the National Police Administration of the Ministry of Interior. Though the company will earn only a thin margin on the contract, Kwang Yang said that the deal will help it boost sales volume this year.

Sanyang Industry Co., Ltd., maker of SYM brand scooters and Kwang Yang's major rival in Taiwan, said that it would launch ad campaigns featuring local pop stars to promote its new scooter models. Many of the ads will be targeted at the summer vacation period.

Sanyang was the first to trigger the low-price competition wave in Taiwan's scooter market with the introduction of a 50cc scooter priced at only NT$25,800 (US$750) a few months ago.

Industry sources said that the race by domestic scooter and motorcycle makers to outdo each other on price cuts in recent months has pushed prices sharply lower in the sector. For example, they said, a 100cc scooter model originally priced at over NT$40,000 (US$1,163) is now sold for under NT$34,000 (US$988).

The sources noted, however, that all of the low-priced motorcycle and scooter models have two-stroke engines, which will be banned in Taiwan under future emission regulations.

Kwang claimed that it would "keep company" with its rivals on pricing in order to win back the top spot in the scooter and motorcycle market. The company ceded the No. 1 position to rivals in May and June.

Kwang Yang claimed that its export business is improving. In addition to its new electric scooters for elderly and disable riders, the company is very confident about the sales of its new 250cc ATV model, over 500 units of which have been ordered by Kwang Yang's distributors in the U.S. Kwang Yang stepped into the ATV market last year with the debut of a 150cc model that has sold well in Europe.

To confront Kwang Yang's new price cuts, Sanyang plans to pour more resources into promoting its upcoming 100cc and 125cc scooter models.