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Taiwan Autos Report Q1 2010
Market |
Automotive and Parts |
Report Type |
Market Research |
Country |
Taiwan |
Published |
26 January 2010 |
Number of Pages |
37 |
Download |
|
Immediate |
|
Publisher |
Business Monitor International |
A reduction in commodity tax by TWD30,000 (US$909) on both locally produced and imported cars has significantly helped Taiwan buck the global trend – and in some style, with sales rising as much as 113% year-on-year (y-o-y) and 80% y-o-y respectively in August and September 2009. According to Taiwan Transportation Vehicle Manufacturers Association (TTVMA) estimates, sales during the 11-month period as a whole reached 200,287 units, up an impressive 15.8% y-o-y. Although the reduction in commodity tax has undoubtedly aided the surge, we point out that the increase in autos sales matched the overall rebound in economic activity. Taiwan’s Q309 real growth came in at -1.3% y-o-y, up from -6.9% in Q209.
The bounce has made us more optimistic about Taiwan's economy being in relatively good shape going into 2010 and has prompted us to raise our 2010 real GDP growth forecast to 4.6% y-o-y from 3.5% previously. For the autos industry, we expect this increase in domestic consumption to take vehicle sales up at least 8% y-o-y in 2010, on the back of an expected 17% y-o-y increase in sales, to 209,000 units, in 2009. With sales continuing to grow strongly thereafter, we expect the market to reach 293,300 units by end of the forecast period, to 2013, having nearly recovered to the demand levels seen in 2006. Meanwhile, Taiwan’s production which is largely catered for domestic market is likely to fall in line with the demand in the latter, rising by up to 250,200 by 2013, making it a close to 28% increase compared with an estimated 195,800 units estimated to be produced in 2009.
Taiwan’s demand potential has made it an attractive destination for carmakers. In November 2009, Yulon Motor launched its second own brand 'Tobe', after the recent launch of its 'Luxgen' premium brand. The carmaker will launch a rebadged Geely model as its first car under the new brand, through co-operation with its Chinese partner Geely Automobile. The automaker is planning to export Tobe cars to Vietnam from December 2009, followed by sales to the Philippines, China and the Middle East Taiwan’s strong economic low long-term economic risk and low corruption helped it climb to 10th position in our Business Environment Ratings for the autos industry in Asia. However, the country receives an above average rating for its regulatory environment, although links with the Chinese mainland may arouse concerns over IPRs.
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