Sat, Feb 11, 2006 - Page 10 News List

Popularity of utility vehicles increasing their market share

By Jason Tan  /  STAFF REPORTER

Calvin Chiu (邱柏達), a journalist with a local TV station, plans to bid goodbye to his current car this year after three years of trouble-free motoring.

The 31-year-old reporter said that recreational vehicles are one of his top choices as he considers replacing his Yulon GM Motors Co (裕隆通用) 1.6-liter Opel sedan.

"As recreational vehicles are ideal for most conditions, my travel will no longer be limited to town. I can also go on expeditions to the countryside during weekends to enjoy the greenery," he said.

Customers such as Chiu, who want to upgrade their car or those intending to purchase a second one, are the reason behind continued growth this year in the nation's recreational vehicle segment.

According to statistics from the Taiwan Transportation Vehicle Manufacturers Association (台灣車輛工業公會), sales in the recreational vehicle segment ? which includes sports and utility cars ? grew at a compound annual growth rate of 46 percent between 2001 and last year.

"This rapid increase is one of the major factors stimulating early demand and replacement as many consumers are attracted by the convenience and comfort afforded by the new recreational vehicle models," said Albert Hsu (徐志偉), an analyst with the US investment-research firm Merrill Lynch.

According to Hsu, the segment has been gaining in popularity since 2000, with its market share rising from 9.2 percent in 2000 to 24 percent in 2004 and climbing further to 25.7 percent last year.

He expects the market to continue to gain share of 1.5 percent to 2 percent per annum.

"Popularity will continue to be strong until such vehicles make up 40 percent of total new car sales, which is similar to the level in Japan's regular car market," he added.

And the nation's major automakers have been quick in tapping into the burgeoning market.

Launches late last year included the Mazda 5, the Z Aero from Hotai Motor Co (和泰汽車) and China Motors Co's (中華汽車) Zinger and Savrin 2.4 liter models.

This year, Chrysler Group Taiwan Sales Ltd will introduce a higher-end Town & Country model, with Yulon Nissan Motor Co (裕隆日產) also set to make small changes to its X-Trail, said Hsu.

Not to be outdone, Ford Liu Ho Motor Co (福特六和) ? the nation's fourth largest automaker ? debuted its Freestar minivan yesterday.

Costing around NT$1.4 million (US$43,388) and targeted at top business executives, the minivan is a revamped version of the Ford Windstar. It comes with a 4.2-liter engine and seating for seven passengers.

"With the introduction of Freestar, consumers here can look forward to a wider selection of vehicles, which offer them a comfortable ride that is suitable for both family and commercial motoring," Ford Lio Ho's president Jeffrey Shen (沈英銓) said at a press conference yesterday.

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