Auto sales may fallto 12-year low on weakened economy

The size of Taiwan's annual automobile market is expected to shrink to a 12-year low of 370,000 units this year on the back of a slowing economy, it local media reported yesterday.

Dealer Hotai Motor Co (和泰汽車) had previously forecast that up to 420,000 units could be sold in Taiwan this year, the report said.

"But with the economy continuing to lose steam, I'm afraid the figure would have to be marked down to 370,000 units," Chen Chun-teh, president of the company, said.

Mazda Taiwan (馬自達汽車) and China Motor Corp (中華汽車) have also revised downward their targeted car sales for the year.

Motorcycle sales could also slip to a 20-year low of 670,000 units from the previous projection of 760,000 units, the report said.

The Directorate General of Budget, Accounting and Statistics on Friday marked down its 2001 economic growth forecast to 4.02 percent after announcing first-quarter growth of 1.06 percent -- the lowest in 26 years.

The sharp fall in year-on-year gross domestic product growth for the January-to-March period followed a 4.08 percent rise in the previous quarter, the government report said.

The low GDP growth in the first quarter was due to a faster-than-expected slowdown in the global economy, a decline in exports, falling share prices and rising unemployment.

Last month the quasi-official Chung-Hua Institution for Eco-nomic Research (中華經濟研究院) cut its 2001 GDP growth forecast from 5.74 percent to 4.57 percent, but some economists see growth falling below 4 percent on worsened conditions.

Taiwan's GDP growth last fell below 5 percent in 1998 during the Asian financial crisis.

Another factor behind slow auto sales may be vastly imporved public transportation systems in Taiwan's major cities.