Prices on minivans shrink

With imported vehicle taxes set to drop after Taiwan becomes a member of the WTO next year, at least one automobile dealer decided to cut imported minivans prices ahead of schedule.

"Our 3,800cc Ford Windstar model was originally to be priced at NT$1.56 million, however, in order to reflect the new tax rates, we have decided to sell it at NT$1.36 million," said Yeh, Ming-hsin (葉明信), sales division manager at Ford Lioho Motor Company (福特六和).

According to the Customs Administration under the Ministry of Finance, once a member of the WTO, Taiwan will reduce the tariff on imported cars from 29 percent in the first year of entry to 17.5 percent in 10 years.

In addition, the commodity tax on vehicles over 3600cc will be slashed from the current 60 percent to 35 percent.

The commodity tax reduction on cars under 3600cc is insignificant, Yeh said, therefore sparking the dealer promotion on minivans rather than small cars.

Another imported-automobile dealer estimated the rate differences would pull car prices down 10 percent lower.

"Taking the 25 percent commodity tax gap into consideration, car dealers will be able to offer products at approximately 10 percent off the sticker price," said Fang Ming-feng (方鳴峰), sales department manager at Chioho Automobile Corp (九和汽車)

"For example, our 4600cc Range Rover models, originally priced at NT$4.2 million, may be sold for NT$400,000 less because of the new rate regulations."

However, the company has put a hold on imports of the 4600cc Range Rover model cars until Taiwan enters the WTO and the new tariff regulations are inked, Fang said.

Meanwhile, another dealer -- Hotai Motor Co Ltd -- begun cutting prices on imported minivans last year.

"The NT$3.75 million Lexus LS430 model, imported from Japan last year, has been sold at NT$150,000 below its original price," said Yang Hsiang-chun (楊湘泉), public relation deputy manager of Hotai Motor. (和泰汽車)

According to Yang, in Taiwan, the minivan market is relatively small, however, it is expected to grow after Taiwan becomes a member of the WTO.

"With cheaper prices we expected more consumers will be interested in buying a luxury vehicle," Yang said.