The nation’s machine tool exports declined 16.2 percent last year to US$3.55 billion from US$4.24 billion the previous year because of the depreciation of the Japanese yen and an economic slowdown in China, the latest industrial data showed.
However, machine tool exports are likely to grow by 10 percent this year as there are fewer economic uncertainties and investment confidence is higher, Carl Huang (黃建中), secretary-general of the Taiwan Machine Tool and Accessory Builders’ Association (TMBA), said by telephone yesterday.
Because of the depreciation of the yen, Japanese machine tool companies started giving larger discounts on their products in the second half of last year after they completed inventory adjustments, leading to a decline in Taiwanese machine tool exports to Southeast Asia, Huang said.
The nation’s machine tool exports to Thailand, the sector’s third-largest export destination, fell by 15.3 percent to US$225.35 million from US$265.97 million the previous year, while exports to Malaysia shrank 16.9 percent to US$92.09 million from US$110.76 million the previous year, according to the association’s data.
Exports to China, the sector’s largest export destination, also declined 20.3 percent to US$1.19 billion from US$1.49 billion the previous year, the data showed.
“Taiwanese and Chinese machine tool companies miscalculated the growth in China last year after its political transition,” Huang said.
A 4 trillion yuan (US$661 billion) investment plan initiated by the Chinese government after the financial crisis made a lot of companies move ahead with their investments, resulting in fewer investments last year, Huang said.
Machine tool exports to the US, the sector’s second-largest export destination, fell 24.5 percent to US$402.71 million from US$533.09 million the previous year, the data showed.
Huang said inventory levels of machine tools in the US are currently high because in 2011 and 2012 US companies imported a significant amount of machine tools due to tax reductions that ended at the end of 2012.
Demand from the aerospace industry in the US is strong, but Taiwanese machine tool companies do not have the technological know-how to make the related products, Huang said.