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Slowing economy sideswipes local auto dealerships

While the peak season for car sales approaches, dealers are not spreading the holiday cheer just yet. In fact, several auto importers are either cutting wages or laying off sales staff in the wake of poor sales. Chinese New Year is normally peak season for car sales here as many use their year-end bonuses as down payments on new transportation.

As sales shift into low gear, Chrysler Taiwan (台灣克萊斯勒) last week axed 11 staff members from various divisions including several senior management positions. In addition, the company has lowered its sales targets to 1,500 vehicles this year from 2,000.

News from DaimlerChrysler USA has not been much better with the firm reporting a US$512 million loss in the third quarter, which sent the company's shares down by about half since Daimler-Benz's US$35 billion acquisition of Chrysler in 1998.

Responding to the job cut reports Chia Wu (吳世家), director of marketing and communications at Chrysler Taiwan, dismissed the firing of the 11 -- almost one-third of their total white collar workforce -- has anything to do with the ongoing restructuring at the world's No. 5 automaker.

"In the wake of a sluggish car sales in Taiwan as well as the declining sales of Chrysler and Jeep models here, we felt it is not necessary to maintain such a large local workforce," Wu said. In April, Chrysler Taiwan conducted its first layoff plan this year but Wu said the company has no plan to make another one before the Chinese New Year.

In the 1996-to-1997 period -- prior to the Asian financial crisis -- Chrysler Taiwan sold between 10,000 and 20,000 vehicles annually, but at present sales are hovering around 2,000 units for the year. Despite the planned introduction of four new models next year, the company expects to sell 1,800 vehicles in 2001, Wu said.

Like Chrysler Taiwan, Prochief Automobile Corp (路華汽車) -- dealer for Rover-brand vehicles -- is also feeling the chill of dwindling car sales, said Summer Chou (周富生), assistant manager of sales and marketing.

Prochief, which just Thursday launched a new model of Rover four-wheel drive vehicle, has no layoff plans. But the company will require sales representatives to meet sales target, take a pay cut if they fail to do so, or file their walking papers.

According to Chou, salespeople will either have their wages cut in half or take "voluntary leave" if they cannot meet undisclosed corporate sales targets. Currently, Prochief puts 25-to-30 new Rovers on the streets per month in Taiwan.

As for future sales outlook, a variety of factors are at play including the tightening pocketbooks as the economy slows, rising unemployment and depreciation of the New Taiwan dollar.

The situation looks more positive when Taiwan's expected entry into the WTO is figured in, as domestic demand for new small automobiles is expected to grow 440,000 vehicles in 2001, compared to the estimated sales of 435,000 for this year, according to statistics compiled by the Hotai Motor Co (和泰汽車).

Hotai is the local automobile sales agent for Toyota cars and trucks as well as Lexus brand vehicles.
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