Taiwan's Transportation Vehicle Production Value to Grow 10.5% in 2011: IEK-ITIS

Subsidies drive e-scooter production value up 115% in 2011 over 2010

Seemingly defying the globally volatile economy, Taiwan's production value of transportation vehicles and parts, a category including assembled automobiles, auto parts, powered two-wheelers (PTWs) and electric scooters (e-scooters), grew 13.3% quarter-on-quarter (QoQ) and 15.8% year-on-year (YoY) in the third quarter of 2011 to NT$109.64 billion (US$3.65 billion), according to the IEK Industrial Economics & Knowledge Center (IEK)-ITIS (Industry & Technology Intelligence Services) in Taiwan.

Assembled Vehicles

The production value of assembled automobiles climbed 24.8% from the previous quarter and 24.9% from a year earlier to NT$49.2 billion (US$1.64 billion), thanks to recovery of auto-parts supply from Japan. In the third quarter, about 91,000 cars were produced in Taiwan for domestic and export sales.

Auto Parts

Thanks to stable export sales and increased demand from local automakers, the production value of auto parts in the third quarter reached NT$46.33 billion (US$1.54 billion), up 3.6% QoQ and 6.1% YoY.

PTWs

Sales of new PTWs in Taiwan continued to rise in the third quarter, thanks to PTW makers' aggressive promotions. Statistics compiled by Taiwan Transportation Vehicle Manufacturers' Association (TTVMA) show that some 194,000 new PTWs were licensed in Taiwan in the third quarter, up 17.5% from about 165,000 units in the second quarter. Taiwan's PTW exports also rose slightly during the period, with third-quarter PTW production value increasing 11.7% QoQ and 21.4% YoY to NT$14.1 billion (US$470 million).

E-scooters

The value of e-scooter production in Taiwan soared 27.2% QoQ and 48.4% YoY in the third quarter, to NT$208 million (US$6.9 million), driven by subsidies from central and local government agencies.

Value of Transportation Vehicle Production in Taiwan
	Q310	Q410	Q111	Q211	Q311	QoQ change	YoY change	Q411 (f)	2010	2011(f)	YoY
Assembled Vehicles	NT $39.4 B.	NT $49.7 B.	NT $46.8 B.	NT$39.4 B.	NT$49.2 B.	24.8%	24.9%	NT $51.5 B.	NT $165.1 B.	NT $186.9 B.	13.2%
Auto Parts	NT $43.7 B.	NT $48.9 B.	NT $45.8 B.	NT$44.7 B.	NT$46.3 B.	3.6%	6.1%	NT $50.2 B.	NT $175.8 B.	NT $187 B.	6.4%
PTWs	NT $11.6 B.	NT $9.5 B.	NT $10.1 B.	NT$12.6 B.	NT$14.1 B.	11.7%	21.4%	NT $12.1 B.	NT $41.8 B.	NT $48.9 B.	16.9%
E-scooters	NT $58 M.	NT $65 M.	NT $93.9 M.	NT$163.6 M.	NT$208 M.	27.2%	48.4%	NT $200 M.	NT $305.6M.	NT $658 M.	115.4%
Total	NT $91.7 B.	NT $91.7 B.	NT $102.6 B.	NT$96.8 B.	NT$109.6 B.	13.3%	15.8%	NT $113.8 B.	NT $382.7 B.	NT $422.9 B.	10.5%
Source: IEK-IT IS

E-scooter Models Approved by TES (Taiwan E-Scooter Standard) as of September 1, 2011
Approval Date		Model Name	Model No.	Category		Subsidy Per Unit	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	2010/08/25	E-st@r	EA1LU	●		NT $8,000	SYM
4	2010/10/26	EVT-4000E	EVT-4000E-BLM1		●	NT $11,000	EVT
5	2011/03/24	City Cruiser	CC-888	●		NT $8,000	Kentfa
6	2011/07/29	e-MO	IBA3		●	NT$11,000	E-Ton
7	2010/10/26	e-moving	EM1A6		●	NT $11,000	China Motor
8	2011/07/29	DBX			●	NT$11,000	DK City
9	2010/05/07	e-moving	EM198	●		NT $8,000	China Motor
10	2011/09/01	Passol	ED06	●		NT$8,000	Yamaha Taiwan
Source: Industrial Development Bureau (IDB) of the Ministry of Economic Affairs, IEK-IT IS

Major Events

2011 Cross-Strait Automotive Industrial Cooperation and Exchange Meeting

The third annual 2011 Cross-Strait Automotive Industrial Cooperation and Exchange Meeting was held in Hsinchu, Taiwan in late August 2011, which was organized by the Taiwan Transportation Vehicle Manufacturers' Association (TTVMA), Taiwan Automotive Research Consortium (TARC), and China Association of Automobile Manufacturers (CAAM).

The meeting hosted a variety of industry and academic representatives, including Wang Fuchang, Deputy Director of Ministry of industry and Information Technology of China; Dong Yang, executive vice chairman and secretary general of CAAM; Cheng Guo-rong, TTVMA chairman, and over 400 representatives from makers of assembled vehicles, parts, automotive electronics etc. as well as universities and research institutes in Taiwan and China. Dong Yang said in the opening speech: "The targets of the meeting are "Cross-strait cooperation, mutual benefit, opening up business opportunities in the global market".

Four cooperative memorandum of understandings (MOUs) were signed during the meeting, including those for electric-bus, telematics and intelligent public bus, active vehicular safety system, and special-purpose vehicles.

Industry sources say that China may have a massive assembled-vehicle industry and market, but lacks strong capability to self-develop key parts and components. Taiwan's globally famous information and communication technology (ICT) industry value chain and local companies' abundant experiences, know-how in automotive-electronics development and production have been fueling the growth of the local auto-parts industry. In recent years and in conjunction with the government's strong support of various technological development programs, local companies and R&D institutes have been mapping out advanced active safety systems for automotive applications. These new systems have been installed in some locally-assembled cars, but should target the China market; while companies in Taiwan and China should focus on electronic systems as they cooperate, they said.

Five More e-Scooters Certified

In the third quarter of 2011, five new e-scooter models from four local makers were TES (Taiwan E-Scooter Standard) certified and qualified for subsidies of either NT$8,000 (small/light e-scooter) or NT$11,000 (light model) for each unit sold in Taiwan. Two of the new TES-certified models are in the small/light category and three being light.

Makers launched more "light" e-scooters due to that many consumers are dissatisfied with the weaker performance of small/light models. The addition of more-powerful e-scooters, industry sources say, will help to spur e-scooter sales in Taiwan to suburban areas and offshore islands, beyond mainly major urban areas currently.

EU-Korea Free Trade Agreement

The Free Trade Agreement (FTA) between the European Union (EU) and South Korea became effective on July 1, 2011, eliminating most tariffs on auto parts and powered two-wheeler (PTW) products bilaterally traded and providing a three- to five-year zero-tariff buffer for some vehicle and PTW parts and accessories.

Such development has no immediate, obvious impact on Taiwan's exports of PTWs and auto parts, industry sources say, as Korean auto-parts makers focus mainly on original equipment (OE) auto-parts, different from Taiwan's focus on exports of aftermarket (AM) replacement parts. On the other hand, Taiwan's assembled-PTW and parts exports now are relatively more competitive globally than Korean counterparts.

But industry experts say that Taiwanese PTW and parts makers should further strengthen product development and marketing to widen the lead over Korean counterparts, with such efforts to further upgrade Taiwanese makers' share in the European market as well as profit margins.

E-scooter Subsidy in Penghu

In August 2011, the Taiwan Cabinet approved a plan to designate the offshore Penghu island a "low-carbon" zone by subsidizing locals to buy 6,000 electric scooters over three years.

Industry sources say Penghu is perfect as an e-scooter-friendly island, where the government is subsidizing each potential buyer NT$17,000 (US$567), excluding other subsidies as NT$8,000 (US$267) from the Industrial Development Bureau (IDB), NT$3,300 (US$110) from the Ministry of Finance (MOF) for commodity-tax reduction, and NT$3,000 (US$100) from the Environmental Protection Administration (EPA) for two-stroke powered two-wheeler (PTW) replacements, to pay less than half retail price for an e-scooter.

China Motor Corp. (CMC), a local carmaker and currently the most active, largest player in the e-scooter business, is expected to be the greatest beneficiary. CMC's "e-moving" e-scooters take about 90% of Taiwan's market, and launched its second e-scooter in the third quarter of 2011, whose horsepower equals that of an 80cc gasoline-engine scooter.

In addition, the Cabinet will also subsidize Penghu NT$34.9 million (US$1.2 million) to set up battery-charging and -swapping stations.

4Q Performance

IEK-ITIS says the value of Taiwan's assembled-vehicle production in the fourth quarter of 2011 continued to increase 4.5% QoQ to NT$51.5 billion (US$1.7 billion), thanks to still-strong replacement purchases, with the value of assembled-vehicle production for 2011 to reach NT$186.9 billion (US$6.2 billion), up 13.2% YoY.

Auto-parts production continued growing in conjunction with increasing new-car sales and AM parts exports (the fourth-quarter is a traditional high season for replacement parts). The total value for the fourth quarter grew 8.4% QoQ to NT$50.2 billion (US$1.67 billion), while the whole-year value increased 6.4% to NT$187 billion (US$6.2 billion).

Fourth-quarter PTW production decreased 14% QoQ to NT$12.1 billion (US$403 million), as the season is a traditional off period due to the winter. Total sales of new PTWs on the island topped 600,000 units in 2011, which, along with increased exports, raised whole-year PTW production 16.9% to NT$48.9 billion (US$1.63 billion).

Government subsidy programs continued to encourage e-scooter purchases in the fourth quarter, while exports of the products slowed due to seasonal factors. E-scooter production value reached NT$200 million (US$6.7 million) in the fourth quarter, on par with that of the third quarter, with production value for the year reaching NT$660 million (US$22 million), up 115% from 2010.