China Motors does not fear steel shortage

China Motors Corp (中華汽車), the nation's second-largest carmaker, said yesterday that it has a stable supply of steel sheeting and does not need to reduce production, as some of its Japanese counterparts have been forced to do.

"We have a secure steel supply and there are no signs that production will have to be suspended in the foreseeable future," Huang Wen-cheng (黃文成), China Motor's president, said yesterday.

China Motors gets its steel through a joint purchasing deal with its parent company, Yulon Motor Co (裕隆汽車), from Japanese and local steel suppliers, Huang said.

The tight supply of steel sheeting, brought about by robust exports of Japanese vehicles and China's massive demand for steel, yesterday forced Suzuki Motor Corp, an affiliate of General Motors Corp, to announce that it will suspend its planned extra production for a total of three days this month because of a shortage of steel sheeting.

Suzuki's move came after Nissan Motors Co, Japan's second largest automaker, announced last week that it had decided to halt production over a total of five days late last month and early this month. The decision is expected to cut output by 25,000 vehicles, the company said.

Meanwhile, China Motors yesterday unveiled a new imported vehicle, the Mitsubishi Outlander, equipped with 2.4-liter engine, in a bid to take a bigger slice of the nation's fast-growing sports utility vehicle (SUV) market.

According to China Motors' figures, the monthly sales volume of SUVs in Taiwan doubled to 4,889 units last year compared with 2,427 in 2002 and is expected to grow to 6,171 units this year and 6,458 next year.

The Outlander, priced at between NT$969,000 and NT$999,000, is positioned to be a sports activity vehicle which combines characteristics of a sedan, sports car and SUV, and is targeted at young professionals who enjoy outdoor activities, Huang said.

China Motors, which has sold 84,979 vehicles from January to last month this year, would start delivering Outlanders to customers in January and hopes to market 1,200 units for the first year, Huang said.

However, China Motors faces sharp competition in the mid-sized SUV segment, where locally manufactured vehicles grabbed 94.4 percent of the market this year.

The Nissan X-Trail, which is manufactured by Yulon, led the segment with average monthly sales of 1,806 units, or a 36.2-percent market share, in the first 10 months of this year, followed by 1,361 units of the Ford Escape, distributed by Ford Lio Ho Motor Co (福特六和), and 1,072 units of Honda Taiwan Co's CR-V over the same period.