Domestic Auto Market Appears to Have Bottomed Out

Taipei, May 5, 2009 (CENS)--Thanks to the incentive of free commodity tax for auto purchase and stock market upturn, the domestic auto market appears to have bottomed out, as domestic automakers are running overtime, in order to fill their backlog of orders.

The total backlog of orders of domestic automakers topped 8,000 cars in April, similar to the previous two months, prompting Kuozui Motors, maker of Toyota cars, China Motors, maker of Mitsubishi cars, and other automakers to work their workers on weekends. Honda Taiwan has even announced resumption of two-shift work from June, the first domestic automaker to do so.

The market has been fueled further by the rollout of a number of new models, including a remodeled Teana of Nissan and imported Hyundai small car i10. Industry insiders predicted that auto sale in May could top 20,000 units and Hotai Corp., agent of Toyota cars, forecast the second-quarter domestic auto sale at 60,000 units.

Domestic automakers are running at full capacity but are still unable to meet demands. As a result, the number of new-car licenses still dropped 4.7% year-on-year to 19,200 units in April, 0.5% less than the March level.

Hotai Corp. reported that the company's backlog of orders stood at 4,000 units in April, notably Camry 2,000 c.c. model and small cars Yaris and Vios, both with 1,500 c.c. engine displacement.

To meet the influx of orders, automakers have canceled their unpaid leave. In addition to work on weekends, workers of many automakers, such as Kuozui and China, also have to undertake one to two hours of overtime every day since the start of May. Honda Taiwan will even resume two-shift operation, in order to fill the backlog of orders which has stood at 800 units for two months.

Consequently, most domestic automakers have increased their orders placed with upstream auto-parts suppliers for next quarter and raised their sale targets for the whole year.