Taiwan's Transportation Vehicle Production Value Down 0.6% QoQ in Q3, 2012
2012/12/24 | By Quincy LiangSeveral negative factors impacted Taiwan's transportation vehicle industry production value, including values of assembled vehicles, auto parts, powered two-wheelers (PTWs), and electric vehicles (including locally-produced hybrid cars and electric scooters), in the third quarter of 2012, leading to a 0.6% quarter-on-quarter (QoQ) and 4.3% year-on-year (YoY) drop to NT$106.6 billion (US$3.55 billion), according to the Industrial Economics & Knowledge Center IEK-ITIS (Industry & Technology Intelligence Services) in Taiwan.
The negative factors include sluggish economy, high fuel prices, and the Chinese Ghost Month, during which most consumers may delay or advance purchases to compromise new-car sales.
Assembled Vehicles
The value of vehicles produced in Taiwan in the third quarter, including mid-sized and compact passenger cars, full-sized passenger cars, light trucks, passenger and commercial vehicles, and heavy-duty trucks/buses, dropped 4.2% QoQ and 10% YoY to NT$45.2 billion (US$1.5 billion), relative to the second quarter's NT$49.3 billion or US$1.64 billion.
Auto Parts
Increasing demand from China after the Economic Cooperation Framework Agreement ECFA, which lowers tariffs on auto-parts traded between Taiwan and China, as well as increased exports to Hong Kong, Indonesia, Association of Southeast Asian Nations (ASEAN) markets in the third quarter offset declining auto-parts exports to Europe in the third quarter. The overall auto parts production value climbed 2.2% QoQ and 1.4% YoY during the period to NT$48.1 billion (US$1.6 billion), relative to the second quarter's NT$46.6 billion or US$1.55 billion. Domestic demand for original equipment (OE) auto parts is expected to remain stable in the fourth quarter due to local auto makers and vendors promote sales; while demand for aftermarket (AM) replacement body parts, such as bumpers, auto lamps, engine hoods, door panels etc., from the northern hemisphere is expected to remain strong.
PTWs
Sales of new PTWs saw QoQ volume growth in the third quarter, thanks mainly to back-to-school demand, but still saw YoY decline. Domestic PTW production value in the third quarter increased 13.3% QoQ, but dropped 3.4% YoY, to about NT$13.3 billion (US$443.3 million), relative to the second quarter's NT$11.67 billion, or US$389 million.
EVs
The value of EV production in Taiwan (including e-scooters) grew 13.6% QoQ in the third quarter to NT$3.3 billion (US$110 million), relative to the second quarter's NT$2.9 billion, or US$96.7 million, thanks to strong demand for locally-assembled Toyota Camry hybrid sedans and e-scooters.
Value of Transportation Vehicle Production in Unit: NT$ | ||||||||||||
| Q211 | Q311 | Q411 | Q112 | Q212 | Q312 | QoQ | YoY | Q412 | 2010 | 2011 | 2012 (f) |
Assembled | 39.8 B. | 50.2 B. | 50.4 B. | 44.8 B. | 47.2 B. | 45.2 B. | -4.2% | -10.0% | 46.3 B. | 165.5 B. | 187.3 B. | 183.5 B. |
Auto Parts | 43.9 B. | 47.5 B. | 48.7 B. | 48.9 B. | 47.1 B. | 48.1 B. | 2.2% | 1.4% | 54.8 B. | 175.9 B. | 185.4 B. | 199.0 B. |
PTWs | 13.7 B. | 13.7 B. | 9.9 B. | 10.5 B. | 11.7 B. | 13.3 B. | 13.3% | -3.4% | 9.9B. | 41.8 B. | 46.3 B. | 45.4 B. |
EV | | | | 1.8 B. | 2.9 B. | 3.3 B. | 13.6% | 1460% | 3.5 B. | | | 11.5 B. |
Total | 96.3 B. | 111.5 B. | 109.0 B. | 104.3 B. | 106.0 B. | 106.6 B. | 0.6% | -4.3% | 1110. B. | 383.2 B. | 419.0 B. | 427.9 B. |
Source: IEK-ITIS, November 2012. | ||||||||||||
Makers' Moves
In the third quarter, Japanese automaker Toyota announced a plan to set up an auto plant in Indonesia to meet rapidly growing local demand. The new factory, the third in the nation, will have designed annual capacity of 100,000 cars, and is scheduled to start production in 2015 to turn out mainly sub-compact cars as Toyota Etios and Yaris.
With rising hostility in China against Japanese brands due to territorial dispute over the Senkaku Islands, IEK-ITIS points out that more and more Japanese automakers are accelerating relocating investments to other nations in Southeast Asia. In addition to Toyota, Honda, Nissan and Mitsubishi are expected to adopt similar strategies.
Hota Stays Busy
Thanks to increasing exports to China, Hota Industrial Manufacturing Co., Ltd., a major automotive transmission gear manufacturer in Taiwan, says its production lines will be fully booked throughout 2012, and demand is expected to be even stronger in 2013.
Hota says that though new-car sales in China is not eye-catching in 2012, but sales of international branded cars in China have been increasing, creating strong demand for transmission and engine parts.
Major Events
EV Sales in Europe Below Expectations
Though generally deemed as the largest EV market for the next 10 years, Europe is not seeing clear gains in EV popularity.
Quoting statistics compiled by international market research firms, IEK-ITIS says that in the first seven months of 2012, only about 13,000 plug-in electric vehicles (PEVs) were licensed across 16 European nations, including France, Germany, Netherlands, Norway, the U.K., Switzerland, Belgium, Denmark, Italy, Sweden, Spain, Austria, Ireland, Finland, Portugal, and Greece. The penetration rate (compared to total automobile sales in the said nations) was only 0.17%.
France, Germany, the Netherlands and Norway absorbed 9,291 PEVs during the period, accounting for about three-fourths of the total PEV sales volume.
Considering EV development and adoption to be a strategic priority with major economic, environmental, and security impacts for the country, the government of China aims to make China the world leader in PEV sales. This includes a target of manufacturing 500,000 PEVs per year by 2015. According to a recent report from Pike Research, however, annual sales of PEVs will reach only 45,000 units by 2015, increasing to 152,000 vehicles in 2017. That figure represents less than 1% of the total light duty vehicle market in China.
Subsidizing programs are often the most anticipated by EV buyers and makers, but intensive disputes over the policy justice or impartiality and governmental financial issues are expected to prevent more resources to be devoted into EV industry/infrastructure development. On the other hand, emission and fuel-efficiency issues might push demand for EVs, but electrification currently is not the only option.
Wireless EV Charging System
In conjunction with the vigorous development in EV industry, several automakers (such as Toyota, Mitsubishi, Nissan and GM) and first-tier parts suppliers (Simens, Vahle, Delphi, WiTricity , Evatran etc.) have been aggressively developing wireless charging systems.
Delphi, for example, is developing a wireless charging system that will automatically transfer power to a vehicle providing a convenient, wireless energy transfer system. The system was developed in cooperation with WiTricity Corp., a wireless energy transfer technology provider. It will enable an EV's battery to be recharged without the hassle of cords or connections. This hands-free charging technology is based on highly resonant magnetic coupling which transfers electric power over short distances without physical contact, allowing for safer and more convenient charging options for consumer and commercial electric vehicles.
The wireless technology is a product differentiator for advanced technology vehicles. The high efficiency wireless energy transfer technology will require no plugs or charging cords. Instead, a magnetic field from a source resonator on the ground is aligned with a capture resonator mounted underneath a vehicle.
Currently, major problems of the wireless charging systems include higher costs and lower charging efficiency. But the EV industry development takes time, and future's wireless charging systems will be improved a lot, so the match of EV and wireless charging is expected to create a new value that might attract more and more users.
Outlook
The fourth quarter is a traditional peak season for automakers to boost sales volumes and push new models, so the IEK-ITIS forecasts the assembled-vehicle production value in Taiwan to grow 2.4% QoQ to about NT$46.3 billion (US$1.5 billion).
Taiwan's auto-parts production in the fourth quarter this year is expected to grow about 13.8% QoQ and slightly YoY, totaling about NT$54.8 billion (US$1.8 billion), with the whole-year production expected to grow about 7.3% YoY. Stronger new-car sales in the U.S., increasing demand from China after the signing of ECFA, and stronger demand for AM parts due to seasonality are driving up exports.
Fourth-quarter PTW production is forecast to decline about 25.6% QoQ and 0.4% YoY to about NT$9.9 billion (US$329.3 million), with PTW sales on the island to drop after the back-to-school demand peak in the third quarter. Taiwan's PTW sales in 2012 are expected remain similar to 2011's, and PTW exports are estimated to remain the same or drop slightly due to debt woes in Europe, Taiwan's major PTW export market.
Sales of the locally assembled Camry hybrid cars are expected to rise in the fourth quarter, along with the upcoming high season in local automobile market. Sales of e-scooters in Taiwan are expected to drop in the same period, due to seasonality. Overall EV production value in Taiwan in the fourth quarter is estimated to increase 4.5% QoQ to about NT$3.5 billion (US$115.3 million).