Wed, Jan 06, 2010 - Page 11 News List

Tax cut boosted car sales last year

By Kevin Chen  /  STAFF REPORTER

Domestic sales of new vehicles grew 162.8 percent from a year earlier to 44,977 units last month, the highest monthly level in nearly four years, boosted by a tax cut of NT$30,000 on car purchases.

Figures released by the Ministry of Transportation and Communications on Monday showed sales of new vehicles last month saw an increase of 43.5 percent from November. The one-year tax cut expired on Thursday.

For the whole of last year, auto sales rose 28.3 percent to 294,423 vehicles from 229,495 in 2008, marking the first year of increase after shrinking for three consecutive years.

Auto sales, as measured by the number of vehicles applying for license plates, are monitored by economists and industry players as an indicator of consumer spending, which accounts for about two-thirds of the nation’s overall economic activity.

In 2005, auto sales broke a 10-year record, hitting 514,626 units. The figure had fallen since then to 366,331 in 2006 and 326,777 in 2007.

Hotai Motor Co (和泰汽車), which distributes both Toyota and Lexus models, maintained its place as the domestic market leader last year, selling 111,700 units, accounting for 37.9 percent of the market.

“Last year’s sales were much stronger than expected,” Hotai spokesman Steven Yang (楊湘泉) said in a telephone interview yesterday. “But the market will lose momentum this year without the new car subsidy.”

Yang said the company expected to sell around 98,000 new cars this year, down 12.3 percent from last year, with total new vehicle sales nationwide reaching 230,000 units, down 21.9 percent from last year.

China Motor Corp (中華汽車), the runner-up last year in terms of vehicle sales, distributed 45,900 Mitsubishis and secured a market share of 15.6 percent. That was followed by Yulon Nissan Motor Co (裕隆日產), which sold 33,400 cars last year, with a market share of 11.3 percent, the government’s tallies showed.

Both China Motor and Yulon Nissan expected to sell between 240,000 and 260,000 new vehicles this year.

Shares of Hotai rose 0.52 percent to NT$76.9. China Motor gained 0.9 percent to NT$22.35 and Yulon edged up 0.65 percent to NT$38.9 yesterday on the Taiwan Stock Exchange, where the benchmark index moved up 0.04 percent.

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