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Auto industry reports 17% drop in sales for January

The nation's automobile industry reported a disappointing 17 percent decline in sales last month from a year earlier, despite a slew of promotion activities ahead of the Lunar New Year holidays.

Traditionally, local automobile companies offer bargains to potential buyers before the Lunar New Year as sales agents hope to drum up sales while beefing up their annual bonus.

The latest statistics compiled by the Ministry of Transportation and Communications show sales of new vehicles reached a total of 35,077 units last month.

Despite being lower than sales in January last year, the figure represents an increase of 28 percent from December, the government data showed.

Hotai Motor Co (和泰汽車), which distributes both Toyota and Lexus models, maintained its place as the domestic market leader by selling 11,000 units last month.

The company's sales accounted for 32.9 percent of the domestic market last month following its launch of new Corolla Altis sedans.

The Altis lineup is a family of sedans with engine capacities ranging from 1.6 liter to 2 liter.

"Last month's sales were much weaker than our expectations," Hotai spokesman Steven Yang (楊湘泉) said in a telephone interview yesterday. "The market remained bearish amid the lingering weak sentiment from last year."

Political uncertainty stemming from the legislative elections last month and the volatility in global stock markets also took a toll on the domestic auto market, he said.

Yang said the company estimated the nation's new vehicle sales would reach 330,000 to 340,000 units this year, slightly better than last year's.

Around 326,000 new vehicles were sold in Taiwan last year, the lowest level in two decades.

Considering the potential impact from China's macro-economic adjustment and the US subprime mortgage crisis, Hotai may review its sales estimates next month and readjust its marketing strategy to cope with the slowing market.

China Motor Corp (中華汽車) revised its sales forecast downward to around 300,000 units this year from a previous estimate of 320,000.

Shares of Hotai dropped 0.34 percent to NT$87.7 before the release of the latest sales figures. China Motor shares dropped 1.11 percent to NT$22.25.
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