PTW Sales in Taiwan Rises, Exports Decline in Oct. 2013

Taiwan has long been a mature market for powered two-wheelers (PTWs) as most the population crowds in major cities in the west part of the island. Statistics show that in 2013 each 1.54 Taiwanese people own one PTW, compared to 1.91 people in 2001, implying an almost ceiling ownership volume.

The highly mature domestic market has been driving local manufacturers of assembled PTWs to more aggressively develop export sales. In 2013, the average export ratio of Taiwan-made PTWs was 38%, which has risen to 47% in 2010. Due to the continued sales declines resulted from the poor economy performance in Europe, Taiwanese PTW makers' major export market, export volumes in 2012 and 2013 (as of October) saw decreases.

Recovering Domestic Demand
Sales of new PTWs in Taiwan hit a new high in recent years in 2008 of about 860,000 units, a 14% increase from previous year, thanks to that all PTW makers provided incentives to clean their inventory models compatible with the fourth-stage emission standard, before the fifth-stage regulations (equal to Euro 5 in Europe) are put into effective in 2009. The overall PTW sales volume, due to the new fifth-stage emission standard, clearly plunged by 44% to only 480,000 units in 2009

In 2010 and 2011, however, new-PTW sales in Taiwan recovered to 540,000 and 640,000 units, respectively; but in 2012 the volume again fell to about 607,000 units due to the suddenly froze purchase willingness after the government announced to hike the prices of electricity and fuel.

In 2013, PTW sales in the first 10 months saw a 6.7% increase from a year earlier to 561,000 units, and major PTW makers are optimistic about their sales in the rest part of the year.

Taiwan's Total PTW Production (2005-2013)
Year	Total Production (10,000)	YoY	Domestic Sale		Ratio	Export Sales		Ratio
			Volume (10,000)	YoY		Volume	YoY
2005	144.7	-11.4%	79.4	2.7%	54.8%	65.4	-28.2%	45.2%
2006	142.3	-1.8%	74.7	-6.4%	52.5%	67.6	3.3%	47.5%
2007	152.1	6.9%	74.9	0.4%	49.3%	77.1	14.1%	50.7%
2008	153.9	1.2%	85.8	14.4%	55.7%	68.2	-11.6%	44.3%
2009	102.0	-33.7%	47.8	-44.2%	46.9%	54.2	-20.5%	53.1%
2010	102.5	0.4%	54.1	13.2%	52.8%	48.3	-10.8%	47.2%
2011	120.6	17.7%	64.0	18.1%	53.0%	56.7	17.3%	47.0%
2012	109.0	-9.6%	60.7	-5.2%	55.6%	48.4	-14.6%	44.4%
2013*	90.3	-0.4%	56.1	6.7%	62.1%	34.1	-10.3%	37.9%
*: January-October Source: TTVMA, ARTC (November 2013)

PTW Exports
Taiwan's export volume of assembled PTWs outstripped overall domestic sales in 2006 for the first time, but the exports began falling since 2008 after the global recession led to demand increases from major markets such as Europe, the U.S. and Japan, to about 500,000 units a year.

In 2012, the top-three assembled-PTW exporters in Taiwan were Kwang Yang Motor Co., Ltd. (KYMCO brand), Yamaha Motor Taiwan Co. (Yamaha), and Sanyang Industry Co. (SYM), exporting some 207,000, 126,000 and 114,000 units, respectively. Other assembled-PTW makers also exported a certain volume of their products, such as scooters, all terrain vehicles (ATVs), buggies, UTVs (utility vehicles, or side-by-side in North America) etc., including Taiwan Golden Bee (TGB), Her Chee Industrial Co., Ltd., Aeon Motor Co., Ltd. etc..

Major Export Markets
As a production base of under-150cc scooters for Japanese brands Yamaha and Suzuki, assembled-PTW exports to Japan accounted for 35% of the island's total in the first eight months of 2013.

Major PTW makers in Taiwan have been facing increasing pressure due to market maturity in Taiwan, fierce competitions from Chinese makers in the global market, and long-term domination by Japanese brands in Southeast Asia. Latin America, as a result, has become the new frontier for Taiwanese PTW makers to develop exports.

In the first eight months, Taiwan's assembled-PTW exports to Colombia already reached some 29,000 units, a 13% year-on-year (YoY) increase, making the South American nation replace the U.S. to become the second-largest export market for Taiwan-made assembled PTWs during the period.

Taiwan's Assembled-PTW Exports by Makers (2003-1012)
Year/Maker	SYM	KYMCO	Tailing	Yamaha Taiwan	Motive Power	Her Chee	HartFord	Cpi Group	Total
2003	225,909	141,456	56,874	94,710	14,775	26,987	--	--	560,711
2004	310,920	224,294	51,249	167,678	46,538	39,730	--	--	840,409
2005	181,694	209,419	42,519	150,499	41,038	28,623	--	--	653,792
2006	175,217	210,440	58,164	160,028	33,233	14,776	3,065	21,364	676,287
2007	258,083	242,845	57,003	162,583	25,080	12,290	1,608	11,904	771,396
2008	186,949	240,149	56,650	156,893	32,667	1,340	770	6,552	681,970
2009	177,051	186,788	26,004	127,902	18,414	0	4,459	1,304	541,922
2010	150,171	191,094	28,343	97,366	11,752	0	777	3,709	483,212
2011	221,230	191,025	22,904	115,862	13,161	0	427	1,955	566,564
2012	114,043	206,853	18,442	126,306	16,188	0	0	1,778	483,610
Source: TTVMA, ARTC

C.B. Ko, KYMCO's vice president, recently pointed out that his company is very optimistic about more shipments to Colombia, and plans to develop regionally-specific scooter models for it and neighboring nations as Brazil, Argentina, Chile etc.. In the future, Ko adds, Latin America is expected to pull ahead Europe to become KYMCO's largest export market by accounting for more than 50% of the company's exports.

According to KYMCO, many nations in Latin America are seeing rapid economic development with PTWs becoming affordable transportation. High market potential and relatively-fewer assembly factories set up by international PTW brands in Latin America won KYMCO's attention, and the Taiwanese maker has been aggressively developing business deployment in the region to win more opportunities.

(Earl, please disregard this. It's the location for a photo)

In 2012, KYMCO exported more than 50,000 scooters to Colombia, up more than 70% from previous year, and in 2013, KYMCO's total export volume to Colombia is estimated to continue increasing 20% to surpass 60,000 units. Colombia, as a result, will substitute Italy as KYMCO's largest overseas market. Currently, about 540,000 new PTWs are licensed in Colombia every year, most of which being gear-shift motorcycles rather than continuous variable transmission (CVT) scooters. Sales of higher-priced scooters in the nation, however, have been rapidly rising in recent year thanks to the construction of better motorways and increasing gross domestic product (GDP). In 2013, some 80,000 higher-priced scooters are expected to be licensed in Colombia, including 30,000 KYMCOs, making the Taiwanese brand the No. 1 nameplate in the segment.

In addition to Colombia, KYMCO's export sales have also extended into neighboring Brazil, Argentina, and Chile, etc. Ko claims that if the Latin American PTW market continues to grow, his company may find a local partner for setting up a joint venture, or set up its own assembly factory in the region to further strengthen cost competitiveness.

In conjunction of continued volume decrease, assembled-PTW exports to Europe accounted for only 18% of the island's total in the first eight months of 2013, compared to a record high of 35.4% seen in 2010. Most of Taiwan-made assembled PTWs exported to Europe go to major customers in Italy, Spain, Germany, Belgium, Denmark etc..

Automotive Research & Testing Center (ARTC), the transportation-vehicle testing and R&D hub in Taiwan, concludes that sales performance in the first 10 months were a major indicator of the recovering domestic PTW market, but major vendors should not have high expectations for further volume growth over next couple of years. The center urges both the government and private PTW makers to jointly map out effective tactics to help local makers compensate for the lost export volume to Europe, as well as develop more new markets for Taiwan-made PTWs.
 

Taiwan's PTW Exports by Nation (Jan.-Aug., 2013)
	Nation	August	Share	YoY	Jan.-Aug.	Share	YoY
1	Japan	7,787	34.46%	2.85%	80,273	35.05%	5.28%
2	Colombia	4,000	17.70%	64.61%	29,033	12.68%	37.43%
3	Italy	896	3.97%	-9.59%	11,687	5.10%	-6.61%
4	Germany	934	4.13%	0.32%	10,280	4.49%	11.47%
5	Spain	1,409	6.24%	29.62%	9,382	4.10%	-11.46%
6	U.S.A.	372	1.65%	148.00%	8,087	3.53%	-6.70%
7	Madagascar	221	0.98%	-76.61%	8,071	3.52%	-58.79%
8	Nigeria	482	2.13%	-55.70%	6,399	2.79%	-6.27%
9	Denmark	613	2.71%	-45.41%	6,243	2.73%	-21.41%
10	Belgium	303	1.34%	-50.16%	5,680	2.48%	-18.33%
11	Iraq	1,051	4.65%	302.68%	5,332	2.33%	-13.55%
12	Israel	532	2.35%	-31.62%	4,588	2.00%	-26.30%
13	Hong Kong	378	1.67%	-45.92%	4,380	1.91%	-18.33%
14	Malaysia	240	1.06%	-50.00%	3,919	1.71%	46.29%
15	Denmark	84	0.37%	-74.55%	3,028	1.32%	-52.62%
16	Greece	230	1.02%	0.00%	2,851	1.24%	-13.40%
17	Mexico	320	1.42%	14.29%	2,420	1.06%	-1.14%
18	France	232	1.03%	136.73%	2,139	0.93%	-63.65%
19	Macau	212	0.94%	30.86%	2,108	0.92%	-4.66%
20	Ghana	6	0.03%	-97.61%	1,726	0.75%	-30.04%
Others		2,295	10.16%	10.98%	21,413	9.35%	-27.14%
Total		22,597	100.00%	0.16%	229,039	100.00%	-9.18%
Source: TTVMA (November, 2013)