Political row unsettles car buyers

Apparently unsettled by the recent political instability, consumers are delaying luxury car purchases and shunning car showrooms, car salespeople said yesterday.

Hu Kai-chang (胡開昌), chief executive officer at Jaguar Taiwan, estimated that visitors to car showrooms had fallen by as much as 40 percent in the week following the disputed March 20 presidential election.

"Jaguar is no exception. During the week, order growth slowed as consumers hesitated to act," Hu said. "But we believe this will be a short-term phenomenon as we can see the local stock market rebounding on recovering investor confidence."

Hu was speaking on the sidelines of the launch of Jaguar's revamped S-Type luxury sedan in Taipei, which had been delayed one week because of the political row.

A 3.0-liter Jaguar S-Type, which will compete with Mercedes Benz's E-class and BMW's Five-series, costs about NT$2.85 million.

Hu said Jaguar would likely suffer slower sales next month but the company was still on track to meet its annual targets, as were other carmakers.

Jaguar expects sales to increase about 23 percent to 700 vehicles this year, from 568 last year, Hu said.

The car market is projected to rise by 7 percent to 440,000 vehicles this year, of which 22,000 will be luxury cars, he said.

DaimlerChrysler AG, which owns the German Mercedes-Benz brand, said the decline in visitors and orders started before the election.

"Elections did weigh on the Taiwanese auto market, but it's still premature to say how big the political factor will be on the relatively stable luxury car segment," said Jess Liu (劉秀盈), a public relations director at DaimlerChrysler Taiwan Ltd.

Pan German Motors Ltd, a local dealer of BMW brands, also said that it was difficult to assess the effect of short-term factors on potential car buyers' sentiment.

"Those who can afford luxury vehicles like BMW are not as vulnerable as average potential car buyers. They usually stick to their own timetable to dump old cars when the time is ripe," said a Pan German Motors official, who asked not to be identified.

Car sales during the SARS epidemic last summer did not fall sharply, he said, but they did during the presidential election in 2000, when China warned voters against electing Democratic Progressive Party candidate Chen Shui-bian (陳水扁).

"Life still has to go on no matter who gets elected. Buying cars is usually not a hastily made decision that can be easily reversed," concluded Arthur Liu (劉逸平), an auto analyst at Hua Nan Securities Investment Management Co (華南永昌投顧).