cens logo

Taiwan's Transportation Vehicle Production Holds Steady in Q1

Oct 04, 2013 | By Quincy Liang

Weak consumer confidence and slow economic growth contributed to a 3.1% quarter-on-quarter (QoQ) drop in the production of cars and powered two-wheeler (PTW) and parts in Taiwan in the first quarter of 2013. Nevertheless, the industry ended the quarter with a 1.9% year-on-year (YoY) gain to reach NT$106.4 billion (US$3.55 billion), according to the IEK Industrial Economics & Knowledge Center (IEK)-ITIS (Industry & Technology Intelligence Services) in Taiwan.

Overall auto-parts production value in the first quarter increased by 1.4% QoQ and 6.0% YoY despite poor weather in North America, Taiwan's biggest export market for aftermarket (AM) auto parts.

Shortage of key systems and parts for hybrid electric vehicles (HEVs), as well as stagnant domestic sales of e-scooters slashed local EV production value, including value generated from locally-produced Toyota Camry hybrids and electric scooters, by 38.8% QoQ and 37.8% YoY.

Value of Transportation Vehicle Production in Taiwan
Unit: NT$

 

Q112Q212Q312Q412Q113QoQYoY201020112012
Assembled
Vehicles
NT$44.9 B. NT$47.2
B.
NT$45.8
B.
NT$48.5
B.
NT
$44.3
B.
-8.3% -1.2% NT$165.5
B.
NT
$187.3
B.
NT$186.5
B.
Auto
Parts
NT$48.9
B.
NT$47.1
B
NT$49.4
B.
NT$51.2
B.
NT
$51.9
B.
1.4% 6.0% NT$175.9
B.
NT
$185.4
B.
NT$196.6
B.
PTWs NT$10.5
B.
NT$11.7
B.
NT$13.0
B.
NT$10.1
B.
NT$10.1
B.
0.7% -3.6% NT$41.8
B.
NT
$46.3
B.
NT$45.3
B.
Auto
&
PTW
NT$104.3
B.
NT$106.2
B.
NT$108.2
B.
NT$109.8 NT$106.3
B.
-3.1% 1.9% -- NT$419.0
B.
NT$428.2
B.
EV NT$2.1
B.
NT$3.4
B.
NT$3.3
B.
NT$2.1
B.
NT$1.3
B.
-38.8% -37.8% NT$305.6
M.
NT
$627
M.
NT$10.9
B.

Source: IEK-ITIS, May 2013.


Assembled Vehicles
The production value of assembled automobiles dropped 8.7% QoQ and 1.2% YoY to end the first quarter at NT$44.3 billion (US$14.8 billion). New car sales in January continued a strong trend from December 2012, but the long Chinese New Year holidays in February, and a wait-and-see consumer mindset when the Japanese Yen began depreciating, made consumers hesitant to open their wallets.

Auto Parts
Peak-season demand and steady exports to major markets such as China, North
America, and Association of Southeast Asian Nations (ASEAN) powered the revenue of many listed auto-parts makers higher in the first quarter. Taiwan's auto-parts production totaled NT$51.89 billion (US$1.73 billion), up 1.4% QoQ and 6.0% YoY. The recovering demand for AM replacement parts from North America, such as bumpers, auto lamps, sheet-metal body parts, electrical parts and electronics, compensated for decreased shipments to Europe.

PTWs
Sales of new PTWs in Taiwan fell in the first quarter due to the winter-spring off-season, but most PTW makers ramped up production and inventories in preparation for the peak season from the second quarter. During the quarter, PTW production totaled NT$10.1 billion (US$336.7 million), up 0.7% QoQ, but down 3.6% YoY.

EVs
Willingness among Taiwan consumers to replace aging vehicles with environment-friendly and fuel-efficient hybrid cars helped to boost demand for such models. The locally produced Toyota Camry hybrid is the most popular hybrid on the island and more than 50% of Camry buyers opt for the dual-fuel model. However, the supply shortage of key parts from Japan, resulting from strong sales of Toyota hybrid cars worldwide, limited the local assembly volume. In the first quarter, monthly shipments of Camry hybrids dropped by 38.8% QoQ.

Major Events & Analysis
1. The depreciating Japanese Yen has led to consumer expectations that car prices will drop. The Ministry of Economic Affairs (MOEA) invited 11 local automobile companies in partnership with Japanese technical partners for a meeting in the first quarter. The two sides signed a joint announcement consistent with the MOEA's policy to cut their prices or provide more preferential purchasing terms reflecting the foreign-exchange difference.

IEK-ITIS Analysis
Anticipation of price cuts on Japanese cars deterred domestic consumers from buying new cars in February and March, though new-car sales in January remained strong from December 2012. Some Japanese car brands announced plans to freeze planned price increases in the first quarter, while some decided to cut vehicle prices by 3% to 6% in March. In an attempt to stimulate demand, all major auto brands have rolled out consumer incentives, such as zero-interest loans and extended product warranties since March.

2. Demand for AM replacement parts has been smooth, while Taiwan's exports of original equipment (OE) auto parts to global automakers have been increasing. Thanks to strong demand from China for OE parts, as well as recovering demand for AM collision parts from North America, many listed auto-parts makers reported good result, in some cases record highs, in the first quarter.

IEK-ITIS Analysis
Almost all major auto-parts makers in Taiwan are eyeing China, the world's largest automobile market since 2011, and plan to invest heavily to expand production capacity across the Taiwan Strait. The ebbing of anti-Japan consumer sentiment in China is also driving up demand for Japanese cars.

3. Aeon Motor Co., Ltd., which exports large-displacement ATVs and PTWs to customers in the U.S. and Europe, turned its attention to the domestic market with the debut of several scooter models. To further expand domestic sales, other major players, such as Kwang Yang Motor Co., Ltd. (KYMCO brand) and Sanyang Industry Co., Ltd. (SYM), have been expanding service points on the island. The European PTW market has been shrinking for more than three years in a row. Both KYMCO and SYM, as a result, have been forced to boost domestic sales to compensate flagging shipments to Europe.

4. Some local companies are reportedly developing extended range EVs (EREVs), which generally can run for a range of more than 600 kilometers, eliminating the range anxiety of EV adopters. As most industry experts deem that battery electric vehicles (BEVs) will not gain high popularity by 2020, EREVs are generally deemed as a potential transitional product before the BEV era arrives in full force.

Sales of plug-in hybrid electric vehicles (PHEVs) have outperformed BEVs in advanced economies. In 2012, for example, sales of PHEVs in the U.S. accounted for more than 50% of EV sales. Taiwanese companies developing and making EV-related systems and parts generally lack the chance to have their products certified for PHEVs because the island has not mapped out a testing platform for PHEV models. This also makes it more difficult for them to tap into the international PHEV market. In conjunction with local assembled-vehicle makers jumping onto the PHEV bandwagon, local PHEV system and parts makers are expected to have a better chance to develop business in this segment in the future.

Prospects
Assembled Vehicles: According to the IEK-ITIS, the introduction of new car models and more consumer incentives are expected to help automakers clear out inventories of older models. It is estimated that many potential car buyers decided to get off the fence and purchase new vehicles in the second quarter, leading to forecasts of assembled-vehicle production value at NT$47.09 billion (US$1.57 billion) for the quarter, up 6.3% QoQ.

Auto Parts: Several negative factors are expected to keep local production of auto-parts flat in the second quarter at about NT$52 billion (US$1.73 billion). Among these are weakness in the European and global economy, the depreciating Japanese yen, which weakens the cost competitiveness of Taiwan-made parts, and better weather in the Northern Hemisphere with the arrival of summer.

PTWs: Most PTW vendors in Taiwan are optimistic about their sales in the second quarter as this is typically a peak demand season and growth trends began to point up in the first quarter. Many PTW makers have raised their sales goals. In the second quarter, Taiwan's PTW production value is forecast to rise 16% QoQ and 0.6% YoY to reach NT$11.78 billion (US$392.7 million).

EVs: In 2013, the Ministry of Transportation and Communications (MOTC) began offering NT$115,000 (US$3,833) subsidies for the replacement of old internal combustion engine taxis with new hybrid models. This measure and the increasing popularity of hybrid cars in Taiwan is expected to boost EV (including e-scooter) production on the island to NT$2.17 billion (US$72.3 million).


Supplier News

(Electric Vehicle-Photo courtesy of CENS)

Microtest: Precise, Reliable, and Always Improving

Oct 16, 2020

Eyes Stake in 5G Industry with Impedance Analyzer 6632 With greater demand for electronics and manufacturers' need for more precise and diverse applications than before, testing equipment that ensures the reliability, safety, and quality of parts are in hot demand. Founded in 1993, Microtest Corp. is a professional maker and developer of high precision and automatic testing and measurement ins...


(Photo courtesy of Ho Shuan Enterprise Co., Ltd.)

Ho Shuan is Your Choice for Educational Furniture and More

Oct 16, 2020

Insisting that its customers are always a top priority, Ho Shuan Enterprise Co., Ltd.'s R&D team provides the best educational furniture and peripherals, computer tables, and desks to meet all customer requirements. Established in 1986, Ho Shuan has experienced recent sluggish local market performance, but eventually rebounded and came back better than ever. Despite difficulties, the firm neve...

HO SHUAN ENTERPRISE CO., LTD.


(S16-M01 Short Swivel-Handle Cabinet, photo courtesy of Chyn Fuh Enterprise)

Chyn Fuh: A Quality OA Metal Furniture Maker

Oct 16, 2020

Chyn Fuh Enterprise, founded in 1993, entered the market with the sole aim of offering other OA metal furniture options for customers. Since its inception, Chyn Fuh has focused on designing and producing OA metal furniture, providing various office use products, including file cabinets, storage cabinets, office desks, and different assistive metal products. Chyn Fuh partook in many government ...

CHYN FUH ENTERPRISE CO., LTD.



Industry In-Focus

Foxconn Engages European Auto Parts Talks for Tier 1 and EV Market Entry </h2>

Foxconn Engages European Auto Parts Talks for Tier 1 and EV Market Entry

Oct 20, 2020

Foxconn is looking to explore cooperation with European tier 1 auto parts suppliers in developing 3D auto-use curved glass covers. The electronics manufacturer is also reportedly engaging in talks with European auto firms to make curved, one-piece system consoles and dashboards. In a bid to diversify its product line, Foxconn's plans to enter the lucrative auto parts industry began with provid...


China's Strong Auto Market to Buoy Taiwan's Related Industries</h2>

China's Strong Auto Market to Buoy Taiwan's Related Industries

Oct 19, 2020

Taiwan's auto parts market has seen positive impacts as the Chinese automotive market continues to grow in its sixth consecutive month. Hotai Motors and Yulon Nissan Motor are the two significant firms enjoying the leverage. The island's related industries are benefiting from the strong performance of China's automotive market. Industry members say as long as competitive Taiwanese firms mainta...


Foundry Supply in a Pickle Amid Surging Demand Due to Pandemic and Restrictions</h2>

Foundry Supply in a Pickle Amid Surging Demand Due to Pandemic and Restrictions

Oct 19, 2020

Industry experts expect to see challenging times ahead for production in the foundry sector, forecasting that the current situation will not let up in the short-term and warns of unbalanced supply-demand next year. During the pre-pandemic era, IC design firms say clients usually made urgent orders to avoid having to manage inventory. Yet, considering limited foundry production volume, clients ...



Industry Reports

Foxconn Engages European Auto Parts Talks for Tier 1 and EV Market Entry </h2>

Foxconn Engages European Auto Parts Talks for Tier 1 and EV Market Entry

Oct 20, 2020

Foxconn is looking to explore cooperation with European tier 1 auto parts suppliers in developing 3D auto-use curved glass covers. The electronics manufacturer is also reportedly engaging in talks with European auto firms to make curved, one-piece system consoles and dashboards. In a bid to diversify its product line, Foxconn's plans to enter the lucrative auto parts industry began with provid...


(File cabinets, photo courtesy of Chyn Fuh Enterprise Co., Ltd.)

Taiwan's Furniture Industry Amid the COVID-19 Pandemic

Oct 16, 2020

The COVID-19 pandemic has deeply affected global and Taiwan's political and economic landscapes. Unlike some industries, the furniture sector did not escape unscathed, facing a squeeze from management and costs. While Taiwan continues to implement a stable, successful outbreak response, the industry has also misjudged the economic downturn duration. The furniture industry has yet to fully recover...


2020 Energy Vision Summit for Green Energy to Kick off in Nov.</h2>

2020 Energy Vision Summit for Green Energy to Kick off in Nov.

Oct 14, 2020

The Taiwanese government has pledged to lead the effort in further developing the sustainable green economy, which is among the sectors highlighted in the Tsai administration's "5+2 Innovative Industries Initiative." Economic Daily News is hosting the "2020 Energy Vision Summit - Green Energy 2.0" on November 11. As one of the government's core policies, improving the island's energy self-suff...



Insiders' Views

Caption: Pictured from front row, third right, Changhua County Government Economic Affairs Department Director Liu Yu-ping, County Magistrate Wang Huei-mei, Secretary Chen Bo-tsun pose in front of the exhibition booth. (Photo provided by CHCIA)

Changhua County Government Shores up Biz-Matching to Global Buyers

Nov 18, 2019

■Yang Feng-Chun In a bid to assist manufacturers in Changhua County to expand their market reach overseas against severe competition in the globalized market, Changhua County Government has been an active player in pushing for a makeover and innovation of its local small and medium-sized enterprises. This is done in hopes of establishing stronger connection with international markets. An ex...


Paul Master offers high-quality chassis and engines parts for passenger cars, trucks, and industrial trucks. (Photo courtesy of Paul Master)

Paul Master Builds Reputation with Auto Chassis and Engine Parts

Nov 18, 2019

Founded in 1980, Paul Master Auto Parts Co. is headquartered in Taiwan, a professional manufacturer of chassis and engines parts for passenger cars, trucks, and industrial trucks including forklifts. General Manager Terry Liang said the company has its own professional design department, which provides customized products and specifications for global buyers, including automobile steering and...

PAUL MASTER AUTO PARTS CO.


Nan Hoang Traffic Instrument Co., Ltd.</h2><p class='subtitle'>Taiwan First brakes Technology Co., Ltd. </p>

Nan Hoang Traffic Instrument Co., Ltd.

Taiwan First brakes Technology Co., Ltd.

Sep 04, 2019

Nan Hoang Traffic Instrument Co., Ltd is one of the major manufacturers of automobile friction materials in Taiwan and globally. Chairman Austin Cheng has implemented the double-arrow strategy this year - own brand of “YangPo” is adopted to focus on global channels while the “NHC brand focuses on improving market shares in global markets, such as Europe, America, Asia, Australia, and the Middle E...



Exhibition Highlights

Gearing up for Post-COVID Recovery, THS Coming Soon in October</h2>

Gearing up for Post-COVID Recovery, THS Coming Soon in October

Oct 07, 2020

As the only hardware and hand tools trade show taking place this year globally, the three-day Taiwan Hardware Show (THS) will soon kick off on 13th October at the Taichung International Exhibition Center. Positive industry outlook for the post COVID-19 era has led to over 370 companies signing up as exhibitors, in a bid to gear up for a long-awaited economic recovery and plan the next strategic m...


Stable Development and Popular Fastener Show in China</h2>

Stable Development and Popular Fastener Show in China

Sep 11, 2020

Driven by market prospects, domestic and international exhibitors actively prepare International Fastener Show China in Shanghai on November 3-5, 2020. Suffering from global epidemic and quarantine nearly half year, exhibitions are hot and popular in mainland China. Thousands of visitors join and visit the exhibitions with inquiries, and are eager to know new technology. Domestic and inter...


2020 Medical Taiwan to Host In-Person and Virtual Events</h2>

2020 Medical Taiwan to Host In-Person and Virtual Events

Sep 10, 2020

2020 Medical Taiwan is slated to kick off on Oct. 15 to Oct 17 at Nangang Exhibition Hall 2. Aside from events at the show, show organizer Taiwan External Trade Development Council (TAITRA) is also hosting the “Medical Taiwan Virtual” online edition at the same time due to travel restrictions impacted by the COVID-19 pandemic. The virtual edition will present 200 exhibitors and over 700 medic...