Top auto transmission system maker views future optimistically

Shen Guo-rong, chairman of the auto transmission system manufacturer Hota Industrial, said today that there is no doubt about the chances of economic growth in the second half of the year, however, it is still necessary to observe the variables of the chip shortage. It is estimated that the shortage situation in August will stabilize. As for the electricity price adjustment, it has little impact on Hota, as the monthly increase is about NT$1.5 million.

Hota held a ground-breaking ceremony for its fifth factory on Thursday at the Tai Po Mei Park in Chiayi. Shen was interviewed by the media after the ceremony.

Speaking about the industrial boom in the second half of the year, Shen said that he has no doubts about the boom in the second half of the year. The main thing is to observe whether the shortage of automotive chips has eased; the price of raw materials has also slowed down, and the freight rate of sea containers has also reached a high level. In the future, around 30 yuan will become the norm, and foreign migrant workers will gradually return to normal. He noted that the worst for 2021 and this year are over.

Looking forward to the performance in the second half of the year, Shen pointed out that Heda was mainly affected by the lack of work and the COVID-19 epidemic in the past few months, and the production capacity could not be reflected in the monthly revenue performance. At present, there is still a shortage of electronic chips for electric vehicles and traditional fuel vehicles. Part of the impact on the performance from May to July; he said that he originally expected the second half of the year to be very good, but it is still necessary to observe the variables of the chip shortage.

As for the increase in domestic electricity prices, Shen said that the increase in raw material prices and exchange rate variables would cut into about 16% of the gross profit. Although the electricity price rises, it has little impact on Heda's costs. Electricity costs account for 2.8% of Hota's total production capacity. The price hike will prompt a monthly electricity bill increase by about NT$1.5 million.

Shen pointed out that Taiwan's electricity prices are low, and Taipower's big losses are also covered by the taxes. The impact of electricity price increases is not as great as the exchange rate impact.