Mon, Jan 22, 2018 - Page 16 News List

Auto industry sees two straight years of growth

By Lisa Wang  /  Staff reporter

The production value of Taiwan’s auto industry is expected to increase mildly by about 2 percent annually this year to NT$623 billion (US$21.17 billion), the Industrial Economics and Knowledge Center (IEK, 產業經濟與趨勢研究中心) said on Wednesday.

That would be the second straight year of growth following an annual increase of 4.6 percent last year to NT$610.9 billion in the industry, which includes vehicles, auto components and auto electronics, according to the government-funded research house’s statistics.

However, local car manufacturers are to face a fourth year of recession amid weak demand from domestic and Middle Eastern markets, the IEK said.

“This year, automakers will face big challenges again. They will continue to feel the squeeze from global brands in the domestic market as imported cars become more affordable,” IEK analyst Annie Shih (石育賢) told a media briefing in Taipei.

Sales of imported brands such as Mercedes-Benz, BMW, Volkswagen and Lexus rose 8.9 percent to 185,531 units last year, accounting for 41.7 percent of the new car sales of 444,669 units, while sales of locally made vehicles declined 3.75 percent to 259,138 units, according to online automobile information Web site U-Car.

“A tepid demand from Middle Eastern countries and escalating competition from rivals in Turkey and South Korea are poised to reduce car exports from local firms this year,” Shih said.

About 92 percent of Taiwan’s car exports last year were shipped to the Middle East, which experienced an economic slowdown due to volatile crude oil prices.

As a result, production value from the car manufacturing segment is to shrink by between 2.9 and 3.8 percent annually to between NT$178.4 billion and NT$180.1 billion this year, Shih said.

However, the auto electronics segment provides a bright spot for the overall industry, as its production value jumped 14.3 percent to a record high of NT$208 billion last year, and the figure is forecast to grow by between 5.6 and 6.7 percent to between NT$219.7 billion and NT$221.9 billion this year, Shih said.

The IEK projected that the auto component segment is also likely to see output increase by between 1.2 and 2 percent this year to between NT$220 billion and NT$221.8 billion, benefiting from rising US demand.

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