Taiwan’s auto sales appear lackluster, despite the arrival of the year-end peak season.
Earlier this month, Kuozui Motors Ltd (國瑞汽車) issued a statement confirming that it in August adjusted its manufacturing capacity and reduced working days for certain production line workers, with the adjustment planned to continue through the end of this year.
Kuozui, a Hotai Motor Co (和泰汽車), Toyota Motor Corp and Hino Motors Ltd joint venture, assembles Toyota and Hino vehicles at factories in Taoyuan’s Jhongli (中壢) and Guanyin (觀音) districts, selling to domestic and overseas markets.
“Kuozui’s move suggests that the company expects the auto market’s year-end, peak-season performance to be bearish and sees no need to maintain its production momentum,” Capital Investment Management Corp (群益投顧) analyst David Lai (賴季宏) said in a note on Monday last week.
The nation’s new car sales during the first nine months of this year fell 1.4 percent to 322,084 units from the same period last year, Directorate-General of Highways data showed.
In August and September, 56,834 new cars were sold, down 16.36 percent from the same period last year, which showed that sales momentum in the domestic market had not recovered significantly after Ghost Month, which ran from Aug. 11 to Sept. 9 this year, Lai said.
Meanwhile, local automakers’ exports might also be affected by weakening demand abroad and fierce competition in global markets.
As an example, Lai said that Kuozui exports might drop this year as purchasing power in the Middle East has been affected by relatively low oil prices.
“In the long run, although Kuozui still receives export orders for Corolla Altis sedans from the Middle East, its export volume is estimated to decline by nearly 20 percent this year,” he said.
Capital Investment has forecast that the total number of vehicle sales in Taiwan this year will decrease 2.22 percent annually to 435,000 units, a downward revision from its previous estimate of 440,000 units, he said.
"Further observation shall be required on the US-China trade war and its impact on consumer confidence. At the moment, we hold a conservative view of the auto market’s performance for next year," Lai said.
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