Taiwan Auto Sales Hit 10-Year High in 2005

Jan 19, 2006 Ι Industry In-Focus Ι Auto Parts and Accessories Ι By Quincy, CENS
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A 10-year record of 514, 626 new automobiles were sold in Taiwan in 2005. Toyota was the biggest winner for the year in most model segments, including large, medium, compact, and luxury imported sedans, further consolidating its leading position in the island' s auto industry.

Toyota' s local general agent, the Hotai Motor Co., sold over 150, 000 new cars last year, making Toyota the best-selling brand for the fourth year in a row.

The Mazda Taiwan Co. and Honda Taiwan Motor Co. also set records in 2005, with sales of 30, 000 and 24, 000 units, respectively. Sanyang, the local assembler of Hyundai cars, sold about 24, 000 units as well, also a record for the company.

Statistics compiled by the Ministry of Transportation and Communications (MOTC) show that about 40, 000 new cars were sold in December alone, up 9.7% from the same month of 2004. This brought the annual total to 514, 626 units, up 6.3% and a post-1996 high.

Hotai' s market share for the year climbed to a record 39.2% in the last month of 2005, approaching the 40% goal that the company has set for 2010.

In addition to locally assembled Toyotas, Hotai also sold 8, 085 units of Toyota' s luxury brand, Lexus, in 2005, pushing Lexus ahead of Mercedes-Benz for the first time as the No. 1 luxury import in the island' s market.

The Ford Lio Ho Motor Co. was another big winner in 2005, selling approximately 55, 000 units (up 11.1% over 2004), while its subsidiary Mazda Taiwan sold 30, 000 units (up 20.8%). Both figures outstripped the original sales targets.

Staying on Top - Barely

The Yulon Group maintained its position as Taiwan' s No. 1 auto conglomerate last year, although it barely stayed ahead of Hotai with a market share of 29.5%. One of its member companies, the China Motor Corp. (which cooperates with Mitsubishi Motors), was the No. 2 seller last year, while the flagship Yulon Motor Co. (which cooperates with Nissan), kept is place as No. 3. However, both suffered a decline in sales volume, with reductions of 3% and 7%, respectively.

Most of the auto companies expect a drop in sales this year, but are working hard to keep their figures as high as possible. Yulon has been pushing both locally made autos and imports since late last year, and has announced plans to turn out cars in cooperation with GM of the United States. China Motor is to introduce the new locally assembled Chrysler Town & Country minivan in June.

Hotai hopes to buck the trend and boost its market share with an increased quota for imports of new locally made version of the hot-selling Camry medium-sized sedan as well as the Yaris subcompact.

Ford Lio Ho has set an overall target of 100, 000 units this year, including 60, 000 Fords and 60, 000 Mazdas. Honda Taiwan will introduce the eighth-generation Civic sedan this year, and hopes that this will help boost its total sales through the 30, 000-unit mark.

Carmakers caution that they have detected a downturn in local auto sales beginning in the fourth quarter of 2005. The high sales figures for that period, they explain, were boosted by incentives, the success of which might affect sales in the first half of this year.

In January, the carmakers go on to say, sales are expected to be affected by the reduced size of year-end bonuses which are expected in most industries. If total sales for January fail to top 60, 000 units, they caution, the outlook for all of 2006 will not be optimistic.

No Improvement Expected

Hotai, for example, conservatively predicts that its sales this year will remain at the 2005 level.

The Yulon Group forecasts sales of about 160, 000 Nissan, GM, Mitsubishi, and Chrysler models this year. The group' s prospects were brightened when orders for more than 2, 000 units of the Zinger were taken by China Motor in the first week after it introduced the model, and this new crossover utility vehicle (CUV) is expected to provide strong support for the company' s market share in the future.

Even before its formal introduction, Mazda Taiwan received orders for over 1, 500 units of the new Mazda 5 multi-purpose van (MPV). The company hopes to sell a total of around 40, 000 units this year, up about 30% over 2005' s performance.

In Taiwan' s relatively small domestic market, a best-selling model is often the deciding factor in an automaker' s success-and its effect can stretch out for several years. Hotai' s success provides a striking example of this phenomenon.

The Toyota Altis compact sedan was the island' s best seller in 2005, moving over 36, 500 units. The No. 1 seller in the commercial vehicle segment was the Toyota Zace, with over 14, 000 units sold. And the Lexus was the best-selling luxury import. Other Hotai sedans scored No. 2, No. 3, and No. 4: the subcompact Vious, the Wish MPV, and the Camry.

Competition is expected to intensify this year, with the planned introduction of six or seven new models. This will have a minimal impact on overall sales, however, since these are not brand-new models but only step-ups. (Jan. 2006)
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