New-car Sales in Taiwan to Keep Flat This Year: Yulon's Chairman Yen

Contrary to popularly predicted rising car sales this year in Taiwan, Kenneth Yen, chairman of the Yulon Group, a major carmaker on the island that also contract-assembles Nissan, Infiniti, Mitsubishi, in addition to having developed in-house the  Luxgen line, recently warned of many uncertainties ahead that could sap new-car sales in Taiwan, to the level of only 380,000 to 385,000 units this year.

Yen says that the most troubling factor is the 7-in-1 elections at the year-end.

In contrast, Justin Su, president of Hotai Motor Co. Ltd., local agent of Toyota and Lexus, as well as Eckart Mayer, president and CEO of Mercedes-Benz Taiwan, remains optimistic. So far nothing has affected Mercedes-Benz sales growth in Taiwan, says Mayer.

At the shareholders meeting of the group subsidiary China Motor Corp. (CMC), the local assembler and agent of Mitsubishi, Yen says  that some 370,000 new cars were sold in Taiwan in 2013, and some 380,000 to 385,000 units are expected to be sold this year, without surprising sales growth to be expected this year; while most vendors fear political elections that tend to slow businesses. Other Yulon executives say that Yulon has not reduced its overall market forecast to maintain its original estimate.

A total of 40,189 new cars were sold in Taiwan during June, up 23.4% year-on-year (YoY) and far outstripping original market expectation of about 36,000 units, according to statistics compiled by the Ministry of Transportation and Communications (MOTC). Industry experts said that new-car sales in Taiwan has been surprising almost every month this year, forecasting the volume in July to hit some 45,000 units.
 

Though the domestic automobile market has been showing a growth trend since mid-2013, some industry experts have found that the growth has concentrated on some brands and  models, such as the entry-level models of imported luxury brands. Increasing sales of luxury-brand entry-level cars are, on the one hand, helping expand the overall market, but it also compresses the sales of locally assembled models on the other hand. The most obvious result in recent months is that new-car sales has been mostly new Toyotas and Nissans, while those of other brands are stagnating.