KGI Securities Co (凱基證券) yesterday said that with a few exceptions, most Taiwanese auto parts suppliers would not see a significant impact from the Volkswagen AG diesel emissions scandal.
However, Tong Yang Industry Co (東陽實業) and Macauto Industrial Co (皇田) are expected be affected the most by the German automaker’s misdeeds, KGI Securities said in a note to investors.
Sales of automotive metal sheets and bumpers to Volkswagen represent 9.5 percent of Tong Yang’s total revenue and 7 percent of total revenue at Macauto, which is a leading automotive sunshade manufacturer, the brokerage said.
KGI Securities said that as Japanese clients such as Nissan and Honda only make up 5 percent of Tong Yang sales and it is lacking major US clients, the company’s higher reliance on Volkswagen could affect its revenues. However, the impact would be limited, as Tong Yang supplies parts to FAW-Volkswagen (一汽大眾), a China-based joint venture between China’s FAW Group and Volkswagen, and diesel cars represent only 1 percent of the Chinese auto market.
Although Macauto’s products can be found in many Volkswagen models, including the Golf, Passat and Polo, as well as the German company’s upscale Audi Q3 and Q7 sports utility vehicles, the company also serves other major clients such as General Motors, BMW and Nissan, mitigating the effects of the scandal, KGI Securities said.
The note also said that Turvo International Co Ltd (宇隆) and Global PMX Co Ltd (智申科) could be indirectly affected by the scandal because they ship parts to Bosch Group, a major supplier of Volkswagen.
The brokerage said that it expects Volkswagen’s global market share to decline, in particular in Europe where diesel vehicles have established a 53.6 percent penetration rate.
KGI Securities noted that both Toyota and Honda had in the past lost between 3 percent and 5 percent of their US market shares in the two-to-three year period after initiating widespread recalls over severe product flaws.
The brokerage remains upbeat on the nation’s auto parts suppliers, citing favorable exchange rates, falling fuel and commodity prices, and anticipated steady sales growth for the remainder of this year.
Tong Yang shares gained 1.28 percent to close at NT$31.65 in Taipei trading yesterday, while Macauto shares gained 4.17 percent to NT$146.5. Turvo shares slid 3.05 percent to close at NT$55.2, while Global PMX shares dipped 0.18 percent to NT$56.1.
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