Taiwan Automotive, PTW, E-scooter Production Show First-Quarter Growth

Driven by the steady global economic recovery, Taiwan's production of assembled cars, auto parts, powered two-wheelers (PTWs), and electric scooters grew substantially in the first quarter of 2011, compared with the same period a year earlier, according to IEK-IT IS, a unit of the Industrial Technology Research Institute (ITRI).

Assembled Vehicles
The production of assembled vehicles in Taiwan, including medium and compact passenger cars, large passenger cars, light trucks, passenger and commercial vehicles, and heavy-duty trucks/buses, rose 26% year-on-year (YoY) in the first quarter to reach NT$47.7 billion (US$1.59 billion).

A number of factors worked together to boost new-car purchases in the first quarter, including the recovering domestic economy, salary increases, and advance purchases after the massive March earthquake in Japan (consumers had worries about delayed delivery due to the shortage of key parts from Japan). Statistics compiled by the Taiwan Transportation Vehicle Manufacturers' Association (TTVMA) show that sales of new cars reached 28,159 units in March, up 76% from previous month and 29% from the same period of 2010.

Taiwanese auto companies sold a total of 100,524 new cars (including exports) in the first quarter, up 47% YoY.

Value of Transportation Products in Taiwan
	Q310	Q410	Q111 (e)	QoQ Change	YoY Change	Q211 (f)	2009	2010
Assembled Vehicles	NT $39.4 B.	NT $49.7 B.	NT $47.7 B.	-4.0%	26%	NT $28.6B.	NT $118.4 B.	NT $165 B.
Auto Parts	NT $43.7 B.	NT $48.9 B.	NT $45.6 B.	-6.6%	12%	NT $35.9B.	NT $142.2 B.	NT $176 B.
PTWs	NT $11.6 B.	NT $9.5 B.	NT $10.9 B.	14.8%	12%	NT $11.6B.	NT $37.6 B.	NT $42 B.
E-scooters	NT $58 M.	NT $65 M.	NT $72 M.	9.4%	72%	NT $132M.		NT $306 M.
Total	NT $91.7 B.	NT $91.7 B.	NT $104.2 B.	-3.5%	18%	NT $76.2 B.	NT $298.3 B.	NT $383 B.
Source: IEK-IT IS

Auto Parts
Both the increased sales of new cars in Taiwan and strong demand from the international market drove up Taiwan's auto-parts production value in the first quarter. TTVMA data show that in the first two months of the year the island's auto-parts exports saw a 5% YoY increase, with exports to the U.S. climbing 12%.

The value of first-quarter auto-parts production is estimated at NT$45.64 billion (US$1.52 billion), up 12.05% YoY but down 6.06% QoQ.

PTWs
Sales of new PTWs in Taiwan showed signs of recovery in the first quarter, following two years of sluggish demand. Thanks to the domestic economic upturn and the promotion by PTW makers of "combat" (lower-price) models, some 131,000 new PTWs were licensed on Taiwan in the first quarter, up 30% YoY. PTW exports also rose, albeit by a slight 3%, to 139,000 units.

Taiwan's PTW production value in the first quarter was estimated to be up 12% YoY, to NT$10.86 billion (US$362 million).

E-scooters
Taiwan's e-scooter production value grew 71.7% YoY in the first quarter to reach NT$71.7 million (US$2.4 million). Some 880 new e-scooters were licensed during the period, down 21% QoQ. However, with more and more local governments introducing EV subsidy programs in March and April, e-scooter sales are expected to grow steadily this year. Exports of Taiwan-made e-scooters increased in the first quarter.

E-scooter Models Approved by TES (Taiwan E-Scooter Standard) as of June 2011
Approval Date		Model Name	Model No.	Category		Subsidiy	Maker
				Small/ Light	Light
1	2009/10/26	e-MO	EV3A	●		NT $8,000	E-Ton
2	2010/05/07	SUNBOY	EA10BB	●		NT $8,000	KYCMO
3	2010/05/07	e-moving	EM198	●		NT $8,000	China Motor
4	2010/08/25	E-st@r	EA1LU	●		NT $8,000	SYM
5	2010/10/26	EVT-4000E	EVT-4000E-BLM1		●	NT $11,000	EVT
6	2010/10/26	e-moving	EM1A6	●		NT $8,000	China Motor
7	2011/03/24	City Cruiser	CC-888	●		NT $8,000	Kentfa
Source: IEK-IT IS

Major Events

1. To provide additional propulsion optionsfor public transportation, the Taiwanese government-sponsored researchinstitutes ITRI and the Automotive Research & Testing Center (ARTC), alongwith private companies Delta Electronics Inc. and Master Transportation BusManufacturing Ltd. formed an "Extended-Range Electric Bus R&DAlliance" in late March.
   
   

   

   The new alliance aims to develop Taiwan's first homegrownextended-range bus, a model which can provide a cleaner solution for localpublic transportation and offer a competitive product for the internationalmarket.
   
   The ARTC, one of the most important automotive-related research organizationsin Taiwan,notes that under the impact of soaring gas prices and the global trend towardenergy conservation and carbon reduction, lower fuel consumption and moreenvironmentally friendly public transportation solutions have become the focusof major efforts in recent years.
   
   For the short distances that represent about 80% of all car trips, industryexperts say, extended-range electric vehicles (EREVs) can operate in fullelectric mode, making them as clean and energy-efficient as battery electricvehicles (BEVs). For longer distances, which represent only about 20% of total mileagetraveled, EREVs operate in generator mode; even then they consume substantiallyless fuel than conventionally powered cars, because their engines are muchsmaller. In addition, an EREV engine operates at a constant, highly efficientrotation speed, while the engine of a conventional vehicle often operates atall kinds of (less efficient) speeds.
   
   ARTC reports that the alliance will pour more than NT$1 billion (US$30.3million) into several key technologies for extended-range propulsion systems,and that it hopes for government subsidies to help out. The first 100%homegrown propulsion system for extended-range electric buses is expected to becompleted in 2012, after which Master Transportation will use the buses for allof its public transportation services in Taiwan.
   
   The goal of the alliance is to boost the ratio of extended-range electric busesto 15% of Taiwan's total bus production in 2015, generating an annualproduction value of about NT$3.5 billion (US$116.6 million)—and, of course,contributing to the sustainability of the Earth. The next year, exports ofelectric buses and parts are expected to bring in about NT$10 billion (US$330million).
   
   The alliance also hopes to help local makers of extended-range electric busesand key parts play a bigger role on the international stage.
   
   

2. In late January the government promulgated a new legal provision for thesubsidizing of buyers of all-electric cars or PTWs over next three years with a100% exemption from the commodity tax.
   
   In late April 2010, the Executive Yuan(Cabinet) okayed an action plan for promoting the development of the intelligentelectric vehicle (EV) industry in Taiwan through several measures, includingpilot operation at various locations, establishment of EV user-friendlyinfrastructures in major cities, provision of more incentives to buy EVs, establishmentof more stringent emissions standards, and mapping out of ways to help develop theEV industry in Taiwan.
   
   Industry experts expect these measures toupgrade consumers' willingness to purchase EVs and to speed up achievement ofthe goal of having 3,000 intelligent EVs in operation in 10 chosendemonstration areas as well as 160,000 e-scooters throughout Taiwan within the next few years.
   
   The experts add that two key factors inboosting the popularity of EVs are cost and charging infrastructure. Thecommodity-tax break will cut the cost of buying an EV, but the government stillneeds to accelerate the development of a better charging infrastructure on theisland. Another factor, they continue, is makers' efforts to introduce newerand better vehicle products.
   
   
3. The massive March earthquake in Japan damaged the supply chains of many Japaneseautomakers as well as their technical partners, affecting local assemblers in Taiwan.Production stoppages led to clear supply shortages of key parts in Taiwan,especially core parts and systems such as engines and transmission gearboxes.
   
   Industry sources say that the automotiveindustry is a very systematic line in which the great majority of sub-systemsand parts are developed for specific vehicle models. This characteristic led toserious production delays both in Japanand in the overseas factories of Japanese automakers, including those in Taiwan.
   
   

   

   IEK-ITIS notes that the shortage of keyparts began affecting Taiwanese auto makers in the second quarter of the year, after normal parts inventories wereused up. The industry sources predict that that the local production ofJapanese cars in Taiwanwill return to normal in the fourth quarter.

Prospects
The shortage of key parts from Japan has forced almost all major automakers in Taiwan to reduce their capacity utilization rates for several months. In the second quarter, their overall production volume was expected to drop by around 40% from the first quarter, bringing assembled-vehicle production value down to about NT$29 billion (US$966.7 million). The production of auto parts in the second quarter was forecast to be about NT$36 billion (US$1.2 billion), down 20% QoQ.

Most major PTW brands on the island are optimistic about the market recovery this year, with over 600,000 new PTWs expected to be sold domestically. With increased exports as well, Taiwan's PTW production is forecast to reach NT$47 billion (US$1.57 billion) for the year, up 11% from 2010.

Thanks to support from the government, sales of e-scooters in Taiwan are expected to climb steadily. Production value was forecast to reach NT$132 million (US$4.4 million) in the second three-month period, up 97% QoQ, while for the year as a whole the figure is projected to reach about NT$450 million (US$15 million), up 47% increase from 2010.