KYMCO Aims for No. 1 Player in Taiwan for 9th Year in 2008

Taipei, Jan. 9, 2008 (CENS)--The highflying gas prices pushed sales of powered two-wheelers (PTWs) in Taiwan to 780,000 units in 2007, according to statistics compiled by Ministry of Transportation and Communications (MOTC).

Kwang Yang Motor Co., Ltd. (KYMCO), maintained its No. 1 position in 2007 for the eighth consecutive year with sales volume of 281,000 units, or a market share of 36%.

Industry sources said that all local PTW makers are expected to clean their models compatible with only fourth-stage emission standard in 2008 at lower prices so as to push new models meet the fifth-stage standard formally effective on the first day of 2009, after when all PTWs sold in Taiwan are required to be fifth-stage compatible. The inventory clearance is expected to stimulate purchase willingness.

Taiwan government promulgated the fifth-stage emission standard, the world's most demanding emission-regulation system, in mid-2005 and offered a buffering period until the last day of 2008.

Ko Chun-ping, executive vice president of KYMCO, pointed out that a similar demand peak for third-stage PTW models in 2006, when the fourth-stage standard would be effective in late that year, is expected to be seen again in the second half of 2008. Especially in non-urban areas, he added, the sales volume of fourth-stage models is expected to climb clearly in conjunction with price-cutting sales campaigns by distributors.

The fifth-stage emission standard will drive local PTW market into an electronic fuel-injection (EFI) era. Most major brands began pushing EFI-engine products from mid-2006 and developing computerized network among distributors so as to meet the repair and maintenance requirements from EFI models.

KYMCO, for example, poured NT$30 million (US$923,076 at US$1: NT$32.5) and cooperated with HP to digitize its distribution channel around the island. The company recently announced the opening of its 600th digitized EFI engine repair/maintenance & sales point in Taipei. Ko said that the number of such point is expected to increase to around 1,000 by the end of 2008.

Each EFI-engine PTW is priced about NT$8,000 to NT$10,000 (US$246 to US$307) higher than traditional carburetor-engine same-class counterpart. Ko, however, is optimistic about future sales of EFI models especially to younger-generation buyers because the upgraded horsepower performance, though in the initial stage the sales performance might be affected slightly.

KYMCO forecasted the domestic new-PTW sales would reach 800,000 units in 2008, in which the company aims to account for 300,000 units.

Regarding exports in 2008, KYMCO aims to export 180,000 to 200,000 PTW and ATVs from Taiwan, as well as 120,000 to 150,000 units from plants in mainland China. In mainland China, Vietnam, and Indonesia, the Taiwan-based brand aims to sell 50,000 to 100,000 units, 20,000 to 30,000, and 30,000 to 50,000, respectively.