Sat, May 03, 2008 - Page 12 News List

Auto sales plunge 20% year-on-year to 20,189 units

By Jerry Lin and Kevin Chen  /  STAFF REPORTERS

Customers inspect vehicles at a Mercedes-Benz showroom in Taipei yesterday. Domestic car sales have plummeted this year, with new vehicle sales last month dropping to the lowest level for the same month in the last two decades.

PHOTO: KAO CHIA-HO, TAIPEI TIMES

Following months of weak domestic sales as high fuel prices stoked consumer demand, the nation’s auto industry may report worse sales this year than last year, a company official said yesterday.

The official’s warning came after the latest government data showed new vehicle sales last month dropped to the lowest level for the same month in the last two decades.

Auto sales plunged by 20 percent year-on-year to 20,189 units last month and dropped by 7.7 percent from the previous month, the Ministry of Transportation and Communications’ latest data revealed yesterday.

Total sales for the first four months of the year fell nearly 20 percent to a little more than 90,000 units from the same period last year, the statistics showed.

“Sales in the domestic auto industry are still declining compared with last year, and the situation has not experienced any improvement even after the March 22 presidential election,” Steve Yang (楊湘泉), spokesman of Hotai Motor Co (和泰汽車), said in a telephone interview.

He attributed the weaker-than-expected purchases of cars in the home market to the lack of consumer confidence and persistent inflationary concerns.

Hotai, the nation’s largest automaker that also distributes both Toyota and Lexus models, sold around 31,000 cars in the first four months of the year, down eight percent from a year earlier.

Total new vehicle sales reached 326,000 units last year, which was 10.8 percent lower from the previous year and the lowest number of vehicles sold in 20 years in this country.

Some automobile industry watchers have grown increasingly concerned that the yearly number could be below 300,000 units this year, barring substantial policy changes to boost consumer spending.

Yang said he expected total sales for this year to be the same as last year, but the figure may drop to around 300,000 in a worst-case scenario, he said.

Han Cheng-ping (韓正平), senior vice president and spokesman for Yulon Motor Co (裕隆汽車), said he expected total sales this year to be slightly above 300,000 units, affected mainly by the fuel prices.

Yulon Motor is the nation’s third-largest automobile manufacturer which assembles Nissan and General Motors cars in Taiwan.

However, China Motor Corp (中華汽車), the nation’s second largest automaker, said consumer confidence has been slowly climbing back after the presidential election, as the number of visitors to the company’s showrooms increased by 30 percent last month from a month ago, a company official said.

The official, who preferred to remain anonymous because he was not authorized to speak to the press, said the company’s sales in the first quarter fell by nearly 20 percent from a year ago.

But as the purchase sentiments seemed to show signs of slight improvement last month — allowing China Motor to sell 1,058 Outlander sport utility vehicles with a 2.4-liter engine last month and boost its overall market share to 15.1 percent in Taiwan — the company sold 3,642 new vehicles last month, a decline of just 10 percent from a year ago, he said.

Even so, consumers are still conservative about spending on cars because of rising domestic fuel and commodity prices, said the official at China Motor, which assembles and distributes Mitsubishi cars in Taiwan.

Yang and his China Motor peer agreed that it was still premature to comment on how the sales outlook in the second half of the year would turn out, as it would depend on the new administration’s policies and how those policies can help boost an actual increase in work opportunities and household incomes.

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