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Ford Lio Ho chief blames migration for sales slump

The Taiwanese auto market is unlikely to see a turnaround from the current slump if the migration of Taiwanese merchants to China continues, Ford Lio Ho Motor Co (福特六和) president Jeffery Nemeth said in an interview on Monday.

He said an estimated 1.3 million Taiwanese people have moved to China and the situation appears to be getting worse, which is disadvantageous to the local auto market.

Nemeth’s remarks came as the latest government statistics showed the number of new cars sales in Taiwan fell to only 17,324 units — the lowest October level in 20 years.

Industry experts estimated the total number of new cars sold this year may barely reach 230,000 units, after reaching a peak of 514,627 units in 2005.

Domestic automobile makers have agreed to propose several rescue plans, including suggesting the government allow tax breaks to encourage people to replace their old vehicles with new models. They hope to gain the Cabinet’s approval by the end of this year.

Nemeth said that Ford Lio Ho Motor had conducted an internal assessment that took into account the effects of recent financial turmoil and the volatile stock market, concluding that the migration of Taiwanese merchants to China is the primary cause of the slump in domestic auto sales. He said that statistics compiled by the Straits Exchange Foundation showed that nearly 1.3 million Taiwanese had migrated to China.

“These people are a major force of the Taiwanese consumer market, and affects local auto sales for about 100,000 units [a year],” Nemeth said.

Nemeth said he was worried as the migration trend appears to be growing, with the number of migrants to China expected to reach 2 million in the next few years. He said this migration would affaect Taiwan’s auto sales by 130,000 to 150,000 units a year.

In regards to rumors that the Michigan-based company might end its operations in Taiwan, Nemeth said: “Ford is upbeat about Taiwan’s future outlook and will continue our investment and introduce new models to Taiwan. Ford does not plan to leave or end our operations in Taiwan.”
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