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Taiwan's New Car and PTW Sales Drop in August

Nov 18, 2013 | By Quincy Liang

New car sales in Taiwan dropped by more than 10% month-on-month (MoM) in August to 21,300, according to statistics compiled by the Ministry of Transportation and Communications (MOTC). The decline is attributed partly to the effect of the traditional Ghost Month, part of which fell in August and which is considered an inauspicious time for making major purchases.

Hotai Motor Co. sold 6,603 Toyota models (both locally assembled and imported) during the month to take the top market share of 31%. Yulon Nissan Motor Co. sold 2,436 cars for a share of 11.4%, and China Motor Corp. sold 2,091 Mitsubishi cars and commercial vehicles for a 9.8% share. Ford Lio Ho Motor Co. and Mercedes-Benz Taiwan limped behind.

A total of 243,600 new cars were licensed in Taiwan in the first eight months of the year, down 3.5% from the same period of 2012.

In response to the slack sales in the Ghost Month, reports the Automotive Research & Testing Center (ARTC), most of Taiwan's automakers scheduled annual production-line repair and maintenance during the period. September is generally a decisive month in determining whether carmakers achieve their annual sales targets, and so many companies introduced or facelifted models—the version-change LUXGEN7 SUV, the New Audi A3, the Mazda CX5 diesel SUV—to attract buyers during that month.

The number of new SUVs registered in Taiwan in August totaled 57,500, down 11.63% from the previous month and 7.6% from the same month of 2012. In the first eight months of the year as a whole, however, sales were up 8.6% year-on-year (YoY) to 443,600 units. The No. 1 vendor for 10 months in a row, Kwang Yang Motor Co. (KYMCO brand), sold 181,800 units during the eight-month period, up 4.02% YoY. Second-tier brands such as Aeon and PGO enjoyed YoY increases of up to 40%. Most industry experts expect the overall PTW market in Taiwan to grow around 5% this year.

The ARTC believes that the drop in August sales of PTWs was caused by increased purchases earlier by students, mainly in June and July, in response to incentives offered by PTW vendors when university-entrance exams were moved up to an earlier date, as well as the dampening effect of Ghost Month. With Ghost Month gone and students returning to class, the ARTC predicted that sales would recover in September and that total sales for the year would reach 650,000 units.

E-bus Subsidies

In late August Kuan Chung-ming, minister of the Council for Economic Planning and Development, proposed that the government redirect its developmental strategy from a focus on intelligent electric vehicles (EVs) to medium-sized and large electric buses (e-buses), since most countries have failed to meet their goals for EV development.

After three years of planning, the Ministry of Economic Affairs (MOEA) originally wanted to carry out a variety of EV pilot projects with the goal of putting 3,000 EVs on the island's streets and highways by the end of 2013. So far, however, the number of EVs on the road has reached only 230, or 7.7% of the target. The MOEA has proposed to the Executive Yuan (Cabinet) that the program be extended another three years.

The MOEA's revised plans calls for 2,400 EVs on the roads at the end of 2016, the continuation of existing of electric-car development and related pilot programs, expansion of R&D and pilot projects to include e-buses and plug-in hybrid electric vehicles (PHEVs), and strengthening of local EV production. The new plan has yet to be approved by the Executive Yuan.

The ARTC points out that most EV development targets in different countries were set before the 2008 financial meltdown, and that they were excessively optimistic. The result is a target-achievement ratio of only 2% to 3% so far. The e-bus is easier to promote, the ARTC notes, because it plies fixed routes and has a relatively high battery capacity, and because it can be charged conveniently during its downtime at night.

The Tesla Exception

Tesla Motor Inc., an American maker of premium electric cars, has drawn intense attention around the world because of the hot sales of its Model S, which in the U.S. sold even better than the German luxury brands Mercedes-Benz, BMW, and Audi in the first half of 2013. In August Tesla announced its intention to enter the Chinese market by setting up its first showroom there in Beijing.

The ARTC notes that with their unmatched advantages in small-batch, large-variety production, rapid response, strong design and development capability, outstanding innovation, and good cost control, Taiwanese parts suppliers have tapped into Tesla's supply chain and now provide motors, key powertrain system parts, power harnesses, system test equipment, in-vehicle displays, and other parts to Tesla. These suppliers include Fukuta Elec. & Mach. Co. (sole supplier of motors for Tesla's volume-production models), Chroma ATE Inc; (powertrain test equipment), Well Shin Technology Co. (charging cables), and Hota Industrial Manufacturing Co. (speed-reduction gearboxes).

The ARTC expects more and more international EV makers to source quality parts in Taiwan and take advantage of the know-how and reputation that local suppliers have built up.

Nissan, the ARTC reminds the automotive industry announced in late August that it would introduce an autonomous car, in partnership with prestigious universities, in 2020. The autonomous model will incorporate advanced radar sensors, cameras, and communication technologies, and will be able to operate autonomously—without a human driver—on ordinary streets and highways. The vehicle will help reduce traffic jams and save fuel by automatically choosing the best routes and lanes to its destination.

But safety is the biggest issue in autonomous-car development, the ARTC says, and any company developing such a car will have to overcome three challenges: the enhancement of sensor sensitivity, safety-system integration, and cost reduction. Several companies have already initiated pioneer work in such development. GM inaugurated related research with Carnegie Mellon University in 2001; Audi built the TTS Pikes Peak experimental car, which completed a 20-kilometer uphill race in 27 minutes in 2009; and Volvo put its SARTRE autonomous driving technology into a truck and several passenger-car models in 2012, and completed a series of tests on them. Other automobile makers, including Toyota, Mercedes-Benz, and BMW, have announced related projects.

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