Auto firms cut prices in light of falling sales

In view of plunging automobile sales, car makers are gearing up to secure market share by reducing prices for newly launched vehicles.

Mazda Taiwan, the nation's fifth-largest automaker, cut prices for its small-sized Mazda Genki sedans by NT$10,000 (US$308).

"Compared with the current versions, the newly revamped Genki comes with refined equipment worth NT$16,000. But we slashed our target price to attract buyers," chief executive Jason Liu (劉宗信) told reporters on the sidelines of the car's launch yesterday.

Sedans

Targeted at first-time buyers and fresh graduates, the 1.6 liter Genki retails for NT$485,000, while the hatchback version is priced at NT$495,000.

Yulon Nissan Motor Co (裕隆日產), the nation's third-largest automaker, also decided to sell its Tiida sedans, launched early this month, for a more affordable price.

The company is selling the 1.6-liter model for NT$499,000, much lower than the NT$530,000 price the market had speculated it would sell for.

The companies' moves reflect an eagerness to safeguard market share in the face of a bleak outlook for car sales.

Domestic decline

From Jan. 1 to June 10, domestic car sales plunged 24.7 percent from a year earlier to 181,387 units, according to the latest statistics compiled by the Ministry of Transportation and Communications.

An unstable political situation and rising consumer bad debts, due to credit and cash-card abuse, have reduced consumer spending on new cars.

Yulon Nissan and Ford Lio Ho Motor Co (福特六和) saw sales decline 37.8 percent and 39.9 percent respectively up to June 10, according to the ministry's data.

But smaller rivals Mazda Taiwan and Honda Taiwan Co are doing somewhat better.

Mazda Taiwan had sold 13,908 cars this year as of June 10, an 11.3 percent decline over the same period last year, while Honda Taiwan's sales only decreased 2.3 percent to 9,892 units.

Lower expectations

Yulon Nissan's president Jack Wu (吳新發) told shareholders last Friday that the company would reduce its car-sale projection in next month's board meeting, adding that the reduction was expected to be within the range of 20 percent.

The company said in January it intended to sell 70,000 units for the whole year.

Expecting that car sales will hover at 400,000 units this year -- compared with 514,626 units last year -- Mazda Taiwan is confident of securing a market share of above 7 percent, up from 5.8 percent last year.

The company's launch of its Mazda 5 recreational vehicles last November and stable sales of Mazda 3 sedans, will help secure its position, general marketing manager Frank Wang (王偉明) said.