Taiwan Automakers to Raise Prices to Offset Higher Cost

Taipei, Jan. 11, 2010 (CENS)--Some automakers in Taiwan will raise car prices soon to offset higher costs due to installing more safety equipment to meet new safety standards on the island as well as the sharp appreciation of the Japanese yen against Taiwan dollar.

Daniel Chang, president of Hotai Motor Co. Ltd., local agent of both locally assembled and imported Toyotas and Lexus, recently announced that his company would immediately raise the price for the entry-level Toyota Vios by NT$30,000 (about US$923), or about 7%, which is the highest in recent years in Taiwan.

From the first day of 2010, the government canceled a NT$30,000 (US$ 923) commodity-tax reduction for each new 2,000cc-or-less car sold. Including price adjustments, Chang said, new-car prices would be higher by 5% to 14% in the New Year.

Chang said that production cost has to rise due to appreciating Japanese yen, as well as having to meet higher safety regulations requiring more standard equipment as air-bag, anti-lock brake system (ABS), auto-leveling headlamps, rear auxiliary lights etc.

Other automakers also said that entry-level cars' prices will rise sizably due to stricter safety requirements.

Hotai has also raised prices on imported Lexus by 3% to 4% in the first quarter.

Honda Taiwan Motor Co., a fully-owned subsidiary of Honda Japan, said it plans to raise car prices by an average NT$30,000 (US$923) in early 2010, with such adjustment to reflect only about half of the higher cost due to the costlier yen.

Yulon Nissan Motor Co., the agent of locally assembled and imported Nissans, said it will soon raise prices by 2% to 5% unless the Japanese-to-greenback ratio drops to about 1: 95 or lower.