Taiwan's Transportation Vehicle Production Value Drops 3.9% in Q2
2011/08/24 | By Quincy LiangDriven by the steady global economic recovery, Taiwan's production value of auto parts, powered two-wheelers (PTWs), and electric scooters grew substantially in the second quarter of 2011. The production value of assembled automobiles dropped 3.9% from the previous quarter to NT$98.63 billion (US$3.4 billion), however (despite a 7.6% increase year-on-year), because of parts shortages resulting from the massive earthquake and tsunami in Japan, according to IEK-ITIS, a unit of the Industrial Technology Research Institute (ITRI).
Assembled Vehicles
The production of assembled vehicles in Taiwan in the second quarter, including medium and compact passenger cars, large passenger cars, light trucks, passenger and commercial vehicles, and heavy-duty trucks/buses, declined by 17.2% quarter-on-quarter but rose 1.6% YoY, to NT$38.7 billion (US$1.33 billion).
With the shortage of key parts from Japan, some of Taiwan's non-Japanese carmakers tried aggressively to ramp up their market share; nevertheless, the number of automobiles assembled on the island still declined.
| Value of Transportation Vehicle Production in Taiwan | |||||||||
| Q310 | Q410 | Q111 | Q211 | QoQ change | YoY change | Q311 (f) | 2010 | 2011(f) | |
| Assembled Vehicles | NT $39.4 B. | NT $49.7 B. | NT $46.8 B. | NT$38.7 B. | -17.2% | 1.6% | NT $53.3B. | NT $165.1 B. | NT $203.9 B. |
| Auto Parts | NT $43.7 B. | NT $48.9 B. | NT $45.8 B. | NT$47.6 B. | 3.9% | 11.9% | NT $51.7B. | NT $175.8 B. | NT $203.4 B. |
| PTWs | NT $11.6 B. | NT $9.5 B. | NT $10.1 B. | NT$12.3 B. | 22.4% | 11.3% | NT $12.9B. | NT $41.8 B. | NT $47 B. |
| E-scooters | NT $58 M. | NT $65 M. | NT $93.9 M. | NT$184.2 M. | 96.1% | 217.3% | NT $191M. | NT $305.6M. | NT $6.3.6M. |
| Total | NT $91.7 B. | NT $91.7 B. | NT $102.6 B. | NT$98.6 B. | -3.9% | 7.6% | NT $117.9 B. | NT $382.7 B. | NT $454.3 B. |
| Source: IEK-IT IS | |||||||||
Auto Parts
The production of auto parts was not appreciably affected by the decline in new-car sales in the second quarter, registering growths of 3.9% QoQ and 11.9% YoY to reach NT$47.6 billion (US$1.52 billion).
PTWs
Sales of new PTWs in Taiwan showed signs of recovery in the first quarter, following two years of sluggish demand, and continued to strengthen in the second quarter. Thanks to the domestic economic upturn, the promotion by PTW makers of "combat" (lower-price) models, and the peak buying period during the graduate/pre-summer vacation period, more than 165,000 new PTWs were licensed on Taiwan in the second quarter, up more than 20% YoY. PTW exports also rose slightly during the period.
Taiwan's second-quarter PTW production value rose 22.4% QoQ and 11.3% YoY, to NT$12.3 billion (US$424.1 million).
E-scooters
The value of e-scooter production in Taiwan soared 71.7% YoY in the first quarter, to NT$71.7 million (US$2.4 million); in the second quarter production skyrocketed 96% QoQ and 217% YoY to NT$184 million (US$6.3 million), thanks to subsidies from central and local government agencies.
| E-scooter Models Approved by TES (Taiwan E-Scooter Standard) as of June 2011 | |||||||
| Approval Date | Model Name | Model No. | Category | Subsidy Per Unit | Maker | ||
| Small/ Light | Light | ||||||
| 1 | 2009/10/26 | e-MO | EV3A | ● | NT $8,000 | E-Ton | |
| 2 | 2010/05/07 | SUNBOY | EA10BB | ● | NT $8,000 | KYCMO | |
| 3 | 2010/05/07 | e-moving | EM198 | ● | NT $8,000 | China Motor | |
| 4 | 2010/08/25 | E-st@r | EA1LU | ● | NT $8,000 | SYM | |
| 5 | 2010/10/26 | EVT-4000E | EVT-4000E-BLM1 | ● | NT $11,000 | EVT | |
| 6 | 2010/10/26 | e-moving | EM1A6 | ● | NT $8,000 | China Motor | |
| 7 | 2011/03/24 | City Cruiser | CC-888 | ● | NT $8,000 | Kentfa | |
| Source: IEK-IT IS | |||||||
Tong Yang Group Adds Two Ventures in China
To continue strengthening its competitiveness in China's original equipment (OE) auto-parts market, the Taiwan-based Tong Yang Group, the largest auto-parts manufacturing conglomerate on the island, added two joint-venture factories in China in the second quarter.
One of the new ventures is located in Changsha, Hunan Province. It has an initial capitalization of US$17.5 million, with Tong Yang and Guangzhou Automobile holding 49% and 51%, respectively. It is scheduled to begin the mass production of auto parts in mid-2012 for supply to a joint-venture auto plant set up in 2010 between Guangzhou Automobile and Italian automaker Fiat. Initial production capacity will be about 400,000 units/sets per year.
The other joint venture is with Mitsuboshi Kaseihin of Japan in Guangzhou, Guangdong Province; it is capitalized at US$12 million, with Tong Yang holding a 35% stake. The new facility is scheduled to kick off mass production in June 2012 with an annual capacity of 340,000 sets/units for supply to customers such as Dongfeng.
Jui Li to Supply Chery Quantaum
The Jui Li Enterprise Co., a major sheet-metal body-parts maker in Taiwan, received permission in July from the Investment Commission, Ministry of Economic Affairs (MOEA), to invest US$8 million in a 100%-owned Chinese subsidiary, the Changshu Jui Li Enterprise Co., in Changshu, Jiangsu Province. The new subsidiary will supply OE sheet-metal parts to the Chery Quantum Auto Co., an auto production joint venture of Chinese automaker Chery and Quantum LLC.
Jui Li is already an OE supplier to many international automakers in China, including Opel of Germany and Ford of the U.S.
HAITEC, ARTC Auto Tech Cooperation LOI
In mid-June, the Hua-chuang Automobile Information Technical Center Co. (HAITEC), the R&D arm of the Yulon Group, Taiwan's largest automobile conglomerate, and the Automotive Research & Testing Center (ARTC), one of the island's top automotive research institutions, recently signed a letter of intent (LOI) to cooperate in the development of integrated, innovative vehicle technology.
The LOI further cemented cooperative ties between the two sides and is expected to accelerate automotive-technology innovation in Taiwan, where most domestic auto assemblers have long relied on foreign partners for the transfer of technology.
ARTC has introduced a total of 12 sub-safety systems that are integrated into four major system categories: front safety, driving information, side/rear image safety, and steering/auto-parking.
ARTC president Joe Huang pointed out that in addition to demonstrating all of its 12 advanced safety technologies on real vehicles, his center has mapped out macro tactics to greatly shorten the time needed for product commercialization. ARTC will continue to transfer its R&D achievements to more and more cooperative partners, develop prototypes for them, and conduct real-vehicle on-road tests as well.
IDB Subsidies for E-scooter Recharging Facilities
In early June the MOEA's Industrial Development Bureau (IDB) announced subsidy standards for e-scooter recharging facilities. The new standards divide the facilities into three categories: "simple charging facility," "rapid charging facility," and "battery exchange system facility."
The amount of the subsidies will not be more than 50% of the installation cost of the facilities, with exceptions for of government-unit applicants.
Industry sources say that recharging convenience is a key factor in the willingness of consumers to purchase electric vehicles, and that a well-established recharging infrastructure can effectively upgrade that willingness.
Prospects
IEK-ITIS forecasts that the value of Taiwan's assembled-vehicle production in the third quarter will increase 37.7% QoQ to reach NT$53.3 billion (US$1.8 billion), thanks to increased sales volume resulting from delayed deliveries originally scheduled for the second quarter. The value of assembled-vehicle production for all of 2011 is projected to reach NT$203.9 billion (US$7.03 billion), up 23% YoY.
Auto-parts production is expected to continue growing in conjunction with increasing new-car sales and AM parts exports. The total value for the third quarter is predicted to grow 8.8% QoQ to NT$51.8 billion (US$1.8 billion), while the whole-year value is projected to increase 16% to NT$203.4 billion (US$7 billion).
Third-quarter PTW production is forecast to increase 4.5% QoQ to reach NT$12.9 billion (US$444.1 million), with PTW manufacturers continuing to promote "combat" models to boost sales. Total sales of new PTWs on the island are expected to top 600,000 units in 2011; this growth, plus increased exports, is expected to boost whole-year PTW production 12% to NT$47 billion (US$1.6 billion).
Government subsidy programs are expected to continue to encourage e-scooter purchases in the third quarter, while exports of the products are expected to slow down due to seasonal factors. E-scooter production value is forecast to reach NT$190 million (US$6.6 million) in the third quarter, on a par with that of the second quarter. Production value for the year as a whole is forecast to reach NT$600 million (US$20.7 million), up 97% from 2010.