Automakers warned of anemic fourth quarter

Amid this week's launch of a slew of recreational vehicles, analysts cautioned that looming political instability and weak economic sentiment are set to eat into automakers' sales -- especially in the current quarter.

"The weak performance of the stock market, coupled with the recent flurry of political scandals, are having an impact on consumers' willingness to buy new cars," said Sam Wu (吳鴻昇), an analyst at Yuanta Core Pacific Capital Management (元大京華投顧).

He said the effect became noticeable last month, which is traditionally a peak month for auto sales. Carmakers typically push their new offerings in high gear in October, before preparing themselves for the slow months of November and December, he said.

However, the nation's automobile sales last month tumbled by 25.94 percent compared with the previous month and 9.3 percent a year ago, according to statistics from the Ministry of Transportation and Communications.

The weak economic sentiment and political chaos prompted Yulon Nissan Motor Co (裕隆日產), the nation's third largest automobile vendor, to revise downward its sales forecast to 67,000 units this year from its previous target of 70,000 units.

"These two months are the traditional slow months, as buyers hold off on car purchases to wait for next year's models. There shall be only fewer than 70,000 units in this period for every automaker to fight for," said Yulon Nissan spokesman Jack Wu (吳新發).

He added that the company is only confident it can sell 9,000 units in these two months.

Yulon Nissan will not be the only vendor experiencing falling fourth-quarter sales. According to Sam Wu's forecast, bigger rival China Motors Corp (中華汽車) will also fall short of its projected 90,000 annual sales by 4,000 units.

Although the nation's largest automaker Hotai Motor Co (和泰汽車) is confident about reaching its target of 150,000 units, it said vendors are now hunkering down for a gloomy fourth quarter.

"There are many variables to be considered for these two months," said Hotai Motor's spokesman Steven Yang (楊湘泉). "When political chaos impacts the stock market, consumers tighten up their purse strings."

As the pessimistic outlook is expected to keep the market flat, total car sales in the country this year will likely total just 490,000 to 500,000 units, not the earlier estimated figure of more than 500,000 units, according to Sam Wu's forecasts.

Despite the bleak outlook, auto vendors are not willing to give up their slice of the fast-growing recreational vehicle segment, which currently occupies 35 percent of market share. Three automakers introduced their respective models this week, including the Savrin 2.4 liter from China Motors, Mazda5 from Mazda Taiwan and Wish minivan from Hotai Motor.

Yulon Nissan will also launch its Serena 2.5 liter model, an upgrade of its 2.0 liter predecessor, later this month, said Jack Wu.

"The changing lifestyle toward enjoying recreational activities on the weekends has made recreational vehicles a best-seller in the market. Though the market will slow down in the next two years after hitting the peak, automakers will continue to invest in this segment in the future," he said.