Electric vehicles tipped to improve

By Chen Cheng-hui  /  Staff reporter

Mon, Dec 31, 2018 - Page 16

Electric vehicles and autonomous cars should be a bright spot next year, as growth in global auto sales slowed this year amid multiple challenges, which could bode well for the local supply chain, KGI Securities Investment Advisory Co (凱基投顧) said in a report on Dec. 22.

The world’s three major auto markets — China, the US and Europe — have seen car sales so far this year either decline or remain flat from a year earlier due to headwinds including trade tensions, weak demand in China and interest rate increases by the US Federal Reserve, KGI analysts led by Jennifer Liang (梁姿嫺) said in the report.

Car sales in the Chinese market this year are to register the first annual decline in 28 years, down 3 percent, the report said.

The US market would see no growth, while the European market could edge up just 1 percent, it said.

Next year, the Chinese market is likely to see car sales drop by 1 percent, if authorities offer no incentives for purchases, while the US and European markets might grow by less than 1 percent, it said.

“However, the trend of electric vehicles and self-drive cars (including the advanced driver-assistance system) should remain intact, likely making them a bright spot of the market as anticipated,” the analysts said.

The positive outlook comes as combined electric vehicle sales in China, the US and Europe grew 65.4 percent in the first three quarters from the same period a year earlier, beating the 44.8 percent increase of last year from 2016, while General Motors Corp is among the latest automakers to announce plans to cut costs, and focus more on autonomous and electric vehicles by halting production at five plants that build internal combustion engine vehicles.

Meanwhile, Chunghwa Telecom Co (中華電信) on Dec. 11 announced the launch of the Taiwan Autonomy Vehicle Alliance, which put together several automotive electronics suppliers, including Wistron Corp (緯創), Lite-On Technology Corp (光寶) and Advantech Co (研華), as well as research institutes, including the Industrial Technology Research Institute (工研院) and the Institute for Information Industry (資策會).

Last month, the Automotive Research & Testing Center (車輛研究測試中心) announced that it would team up with 18 local companies to focus on the development of local autonomous vehicle industry and enhance Taiwan's role in the global auto industry chain.

“We believe that suppliers of semiconductors and auto parts used in electric vehicles and autonomous cars would see larger growth momentum than their peers tied to internal combustion engines or even makers of whole cars,” the KGI report said.

KGI’s top picks among suppliers of automotive semiconductors, parts for electric vehicle and advanced driver-assistance systems include Cub Elecparts Inc (為升), which makes electric switches and sensors for automobiles, and Global PMX Co Ltd (智伸科), a provider of dual-clutch transmissions and direct injection parts for gasoline motors, on the back of their strong prospects for next year, as well as Hota Industrial Manufacturing Co (和大) and BizLink Holding Inc (貿聯) — firms in the local supply chain for Tesla Inc, the report said.