Kwang Yang hikes prices of bikes by NT$500-NT$1000

Starting next month, consumers will find themselves paying an extra NT$500 (US$15.2) to NT$1,000 for a motorcycle produced by Kwang Yang Motor Co (光陽工業), the nation's largest motorcycle maker, as it announced a price hike last week to cope with rising material costs.

The increment translates to a price rise of 5 percent to 10 percent across its current product lines.

"During the past two to three years, increasing utility bills and the cost of raw materials such as steel, rubber and aluminum have placed a large burden on motorcycle makers," said David Chuang (莊家政), Kwang Yang's public relations manager.

In recent years, he said, makers had seldom raised scooter prices, preferring to take other measures to bring down costs.

But this is not the case this year.

In July, Yamaha Motor Taiwan Co (台灣山葉), the second-largest motorcycle maker, was the first vendor to raise retail prices, with the same increment range of NT$500 to NT$1,000.

"The overall economic environment is not favorable due to the level of consumers' card debts and higher fuel prices. Our profits are down and it is hard for us to carry further losses," Chuang said.

However, Sanyang Industry Co (三陽工業), the No. 3 maker, has no intention of matching its peers' price hikes for now.

Slow consumer spending this year has hurt both local automobile and motorcycle makers.

Car sales for the first eight months of the year dropped nearly 30 percent, and sales for the whole year are expected to dip to 400,000 units or less, a far cry from the 514,000 units sold last year.

In terms of two-wheelers, 780,000 units were sold last year, an eight-year high.

But this year's outlook will be less rosy and sales look likely to plunge to as low as 720,000 units, Chuang said.

For the first eight months of the year, 477,000 scooters were sold, a decrease of 6.8 percent over the same period last year, according to statistics from Ministry of Transportation and Communications.