Vehicle sales in Taiwan last year are expected be the lowest in 10 years due to a slump in exports to the Middle East and escalating competition from foreign rivals, statistics released on Wednesday last week by the Taiwan Transportation Vehicle Manufacturing Association (台灣車輛公會) showed.
Local automakers shipped 240,885 vehicles to domestic and overseas markets in the first 11 month of last year after adding 16,623 cars in November, the data showed.
That does not bode well for whole-year shipments, which could tumble to the weakest level since 2009, when 239,105 vehicles were shipped, the association said.
A total of 295,389 units were shipped in 2017.
Taiwan’s vehicle shipments have been in a downward spiral since 2015.
Kuozui Motors Ltd (國瑞汽車), the nation’s biggest automaker, saw its exports more than halved to 1,411 vehicles in November, compared with 2,828 units in the same month of 2017, the data showed.
That brought the automaker’s total exports in the January-to-November period to 21,668 units, plunging 40 percent from 36,333 units in the same period of 2017, the data showed.
Kuozui, a joint venture between Hotai Motor Co (和泰汽車), Toyota Motor Corp and Hino Motors Ltd, assembles Toyota and Hino vehicles at factories in Taoyuan’s Jhongli (中壢) and Guanyin (觀音) districts, and sells cars to local and overseas markets.
Kuozui accounts for more than 98 percent of the nation’s overall vehicle exports, with more than 60 percent shipped to Saudi Arabia.
Kuozui is poised to enter its fifth year of decline as aggregated exports last year are likely to shrink by 31 percent annually to fewer than 25,000 units.
The figure would be a mere one-quarter of 93,179 units it shipped in 2014, when shipments were at a peak, the association said.
To cope with sagging demand, Kuozui has trimmed three to five working days per month since August through the end of last month for workers on sedan assembly lines.
Capital Investment Management Corp (群益投顧) analyst David Lai (賴季宏) said that the automaker continues to be plagued by lukewarm economic recovery in the Middle East, meaning weak consumer purchasing power, while competition from global rivals is increasing.
Local automakers face more competition abroad as global rivals have set up production lines in Turkey and India to address relatively robust demand there, the association said.
Unfavorable foreign-exchange rates have also undermined local companies’ pricing power, the association added.
Toyota is allocating increasing orders to its new factories in Turkey, while Kuozui would still grab a smaller proportion as long as its manufacturing costs improve 30 percent within five years, the Chinese-language Commercial Times reported last week, citing sources from automotive component suppliers.
Kuozui — which has been making Toyota’s Altis series since 2010 for the Middle East market — hopes to regain some momentum this year following the launch of revamped Altis models, the Commercial Times reported.
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