Tue, Oct 03, 2006 - Page 12 News List

Automobile sales still declining

ALARMING This year's two `ghost months' proved ghastly for the nation's car market as sales continued to plummet despite big-money advertising campaigns

By Jason Tan  /  STAFF REPORTER

The nation's automobile sales figures continued to plunge for the first nine months of the year, with last month seeing a drastic decline of more than 40 percent, latest statistics show.

Car sales during the period from January to last month totaled 286,238 units, a 30 percent drop from the corresponding period last year, according to figures released by the Ministry of Transportation and Communications.

Last month alone sales fell by 43 percent from last year to only 25,005 units, the statistics showed.

The car market was adversely affected this year by two "ghost months," starting on July 25, which caused consumers to put a brake on major spending.

Auto sales during ghost month normally decline by around 30 percent, Steven Yang (楊湘泉), spokesman of Hotai Motor Co (和泰汽車), the nation's top automaker, said in July.

But last month's sales dip was more severe compared to August -- the first ghost month -- which saw a dip of 37 percent to 17,513 units.

Though oil prices have showed signs of declining, Ford Lio Ho Motor Co (福特六和), the nation's fourth-biggest automaker, didn't expect lower gasoline prices to have much of an effect on the falling figures for the year as a whole.

"The aftermath of consumers' card debt will probably drag on for two years, and we assume the market will only start to pick up in the second half of next year," said Steven Chang (張偉昌), the vice president of Ford Lio Ho's marketing and sales division.

Consumer spending in Taiwan this year has been sluggish due to the abuse of credit and cash cards, with financial institutions tightening control of loans, which affects car sales.

Ford Lio Ho -- which experienced the biggest sale decline, 44 percent, among all automakers during the first nine months of the year -- projected that total sales this year will reach just 350,000 units, its lowest figure in five years.

To revive lackluster sales, vendors are pumping big bucks into car advertising and promotional activities, but this will not necessarily lift brand recognition among consumers, said Paul Huang (黃志鵬), associate director at researcher ACNielsen Taiwan.

China Motor spent the most on advertising in the first half of the year, forking out NT$226 million (US$6.8 million), while Ford Lio Ho was not far behind with NT$206 million, according to the results of an online poll by ACNielsen released last Wednesday.

Toyota was ranked the No. 1 local car brand by the 1,800 respondents, even though its distributor Hotai Motor only spent NT$156 million on advertising in the first half, according to company figures.

Honda Taiwan Co, which allocated NT$67 million to promote its lineup, has its Honda brand ranked the second highest among local consumers.

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