Automakers in Taiwan Reverse Cutbacks as Market Rebounds

Taipei, April 6, 2009 (CENS)--Thanks to climbing demand driven by the government's commodity-tax deduction program, rising new car sales in Taiwan are forcing some local automakers to reverse production cutbacks.

Hotai Motor Co. Ltd., local distributor of locally assembled and imported Toyota and Lexus cars, pointed out that the government's subsidizing program has effectively fueled new-car sales in the domestic market.

The distributor sold 15,500 units in February, a 3.7% year-on-year increase, and the monthly volume is expected to reach 19,000 to 20,000 in March.

Some automakers said that most automobile assemblers in Taiwan were pessimistic toward the 2009 market and had been cutting back production since the fourth quarter of 2008, including Honda Taiwan Motor Co. that had stopped production one and a half months since December last year.

Ford Lio Ho Motor Co., the local subsidiary of Ford in the USA, for examples, said that many of its new models such as the Focus Powershift diesel-engine compact car are facing serious supply shortage, but the ordered key parts have to be delivered from foreign suppliers in two months. The company has cut its compulsory days off by half.

After restarting production in early February, Honda Taiwan's plant in Pingtung has been busy-with all the Saturday offs through till March having been cancelled.

Kuozui Motors Ltd., local assembler of Toyota cars, said that it canceled all the extra days-off in March and would continue such production schedule in April due to better-than-expected market demand.