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New-car Sales in Taiwan Rise 19% in H1: ARTC

2014/08/25 | By Quincy Liang

More than 211,000 new cars were sold in Taiwan in the first half of 2014, a 19% increase year-on-year (YoY) and a record high for the period since 2006, according to Taiwan's Automotive Research & Testing Center (ARTC), the most important transportation-vehicle R&D and testing hub on the island.

ARTC said there was strong demand for new cars in the second half of 2013 and that demand outstripped market expectations in the first six months of this year. The center attributes the demand increase mainly to 10-year replacement purchases and increased purchase willingness due to gains in the local stock market. The introduction of new car models in the first half further added wind to the market's sails, ARTC added.

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Hotai Motor Co. Ltd., local agent of Toyota and Lexus cars and the No. 1 auto vendor in Taiwan for past 12 straight years, maintained its leading position in the first half by selling 67,519 new cars, a 8.7% YoY increase and translating into market share of about 32%.

Yulon Nissan Motor Co., local agent of Nissan and Infiniti cars, enjoyed a 23.2% YoY volume growth in the first half, selling 25,538 new cars and usurping affiliated China Motor Corp. (CMC, local agent of Mitsubishi cars) as the No. 2 vendor.

 Top-6 Auto Brands in Taiwan (Jan.-June, 2014) (Source: TTVMA, ARTC)
Top-6 Auto Brands in Taiwan (Jan.-June, 2014) (Source: TTVMA, ARTC)

CMC reported a 4.1% YoY sales growth during the period by selling 22,889 new cars, thanks to smooth sales of its commercial vehicle models. Ford Lio Ho Motor Co., the local subsidiary of Ford American and the No. 4 automaker on the island, saw a 12.3% volume growth by delivering 12,019 new cars, helped by efforts to introduce more competitive models in recent years. Honda Taiwan Motor Co., which rolled out new models in June, saw sales drop 10.4% in the first half to 10,960 units. Reporting an eye-catching 135% YoY gain, Luxgen Motor Co., Ltd., a subsidiary selling the LUXGEN own-brand cars developed and produced by local Yulon Group, sold 9,873 new cars and took the No. 6 spot in the market.

Double-digit Growth Since March

The continued launches of new models by automakers and importers have driven up market demand, leading to continued YoY volume growth in each of the first six months of the year. Growth hit a double-digit pace from March to June, with 24.9%, 18.7%, 19.9%, and 23.4% gains, respectively. One local auto vendor described the strong YoY sales increases over the past few months as a shot in the arm for Taiwan's long-stagnant automobile market.

 YoY New-car Sales Growth in January to June, 2014. (Source: TTVMA, ARTC)
YoY New-car Sales Growth in January to June, 2014. (Source: TTVMA, ARTC)

Imported Cars Gain Shares

In conjunction with the rising price tags of locally assembled car models, and the increasingly wide selection of imported cars, more local consumers are opting for imports, especially the entry-level models of luxury brands.

Market Share Changes of Locally-assembled and Imported Cars (2009-H1, 2014) (Source: TTVMA, ARTC)
Market Share Changes of Locally-assembled and Imported Cars (2009-H1, 2014) (Source: TTVMA, ARTC)

In 2013, the market share of imported cars hovered at under 30%, compared to the long-term ratio of less than 20%. The ratio broke the 30% mark in the first month of 2014 and is expected to continue rising over the remaining months of this year. The strong demand for imported cars has attracted the attention of many international automakers, encouraging them to set up local subsidiaries and directly access the Taiwanese market.

Mazda of Japan, for example, took back its local agent right by establishing a 100%-own Taiwanese subsidiary, the Mazda Motor Taiwan, which just kicked off operations in July. Volkswagen of Germany, the world's third-largest automaker, is also scheduled to open a subsidiary in Taiwan in January 2015.

ARTC says that all of major version-change and face lift car models of various brands were introduced in Taiwan in the first half of 2014 and new-car sales are expected to continue rising in the second half this year. The recovering market in Taiwan is also attracting other brands to jump onto the bandwagon. For example, South Korean brand Kia is scheduled to return to the Taiwan market by contracting a local auto assembler (Sanyang Industry Co., Ltd., already the local assembler of Hyundai cars) to supply some locally made models in the fourth quarter. The automotive center forecasts that there is going to be a structural change in future's automobile market in Taiwan, in conjunction with the changing consumer preferences.