Ford Motor Co, the No. 2 automaker, expects sales at its Taiwan unit to fall about 13 percent this year, as the nation's economy slumped into a recession in the third quarter.
The unit's sales will likely decline to 55,000 cars from 63,000 last year. Still, the automaker plans to outperform Taiwan's car industry, which it sees dropping about 20 percent this year to between 335,000 and 340,000 cars.
Consumer confidence in Taiwan is falling amid tumbling electronics exports, the country's main source of revenue. The economy shrank 4.21 percent in the third quarter, the steepest in 26 years. Exports make up about half of the country's gross domestic product.
"We're doing better than expected with the crisis," Jeffery Nemeth, director of finance at Ford Lio Ho Motor Ltd (
Ford's factory in Taiwan is running at about 40 percent capacity, Nemeth said. To cope with the falling demand, the Taiwanese unit has cut costs and started selling other items, including tires and chemical-related products.
Ford Lio Ho, of which Ford owns 70 percent, is also focusing on higher-margin cars, which the company hopes will limit its drop in revenue to 8 percent. The company introduced two new car models this year, and is expecting to introduce one new model, the Ford Escape, and new versions of two older models next year.
The unit doesn't plan to fire workers as it trimmed its workforce during the Asian financial crisis. In 1999, Ford Lio Ho cut 300 jobs, or 15 percent of its local workforce.
Ford's competitors in Taiwan include Nissan Motor Co, Daewoo Motor Co and Hong Kong-based Swire Pacific Ltd, which owns the franchise of Volkswagen AG, Kia Motors Corp and Volvo AB vehicles in Taiwan.
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