Thu, Jun 21, 2012 - Page 14 News List

China Motor likely to see market share drop, analyst says

By Kevin Chen  /  Staff reporter

China Motor Corp (中華汽車) is likely to see its market share decline this year because of a lack of new models, especially gas-electric hybrid cars, to compete with domestic rivals, IBTS Investment Consulting Co (台灣工銀投顧) said yesterday.

The company, a member of Yulon Group (裕隆集團), is forecast to sell 52,400 cars this year in Taiwan, 4.38 percent less than the 54,800 cars it sold last year, IBTS Investment analyst Mandy Lin (林秋香) said in a note.

Its pretax income could drop 10 percent to NT$2.94 billion (US$98.4 million) this year from NT$3.26 billion last year, and revenue could slip 1.85 percent to NT$35.25 billion from NT$35.91 billion the year before, Lin said.

Earnings per share are forecast to fall to NT$1.98 this year from NT$2.2 last year, she added.

Lin’s forecast came after China Motor chairman Kenneth Yen (嚴凱泰) said on Tuesday that total car sales in Taiwan were estimated to range between 360,000 units and 370,000 units this year, lower than his previous estimate of 400,000 units.

“Taiwan is a major source of income for China Motor. A lack of new models will cut into its profit this year,” Lin said.

In Taiwan, China Motor assembles and sells passenger cars under the Mitsubishi brand and commercial vehicles under its own CMC brand.

The company has a 25 percent stake in China’s Southeast Motor Co (東南汽車), but that car venture with the Fujian provincial government is not expected to generate material profit contribution to the company this year, Lin said.

China Motor’s share price has dropped 1.09 percent so far this year to close at NT$27.20 yesterday, underperforming the TAIEX, which has risen 3.71 percent over the same period.

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