The pace of growth in Taiwan’s auto sales might slow down this quarter due to a global shortage of chips used in the automative industry, despite robust sales performance last month, Capital Investment Management Corp (群益投顧) said.
The nation’s new car sales increased 12.47 percent month-on-month and 29.84 percent year-on-year to 51,179 units last month, auto information provider UCar.com said in a report on Monday last week, citing Directorate-General of Highways (DGH) data.
Capital Investment attributed the annual growth to seasonal factors, higher sales of Toyota Corolla Cross sports utility vehicles (SUVs) and consumers rushing to buy vehicles amid concerns of an auto shortage.
Photo: CNA
Thanks to sales of 6,195 Corolla Cross SUVs, Hotai Motor Co (和泰汽車), which distributes Toyota Motor Corp vehicles in Taiwan, sold 16,661 vehicles last month, up 34.2 percent from the previous year, giving it a 32.6 percent share of the market, UCar said.
Yulon Nissan Motor Co Ltd (裕隆日產) and Ford Lio Ho Motor Co (福特六和) made significant progress last month, with sales growing by double-digit percentage points from the previous year, while sales of imported vehicles increased 5 percent year-on-year to 20,846 units, maintaining a stable growth trend.
“However, due to the shortage of automotive chips and cars in the market, it is expected that Taiwan’s auto market will see growth taper off by the end of this quarter,” Capital Investment analyst David Lai (賴季宏) said in a note on Tuesday.
Total sales in the nation’s auto market last year rose 4 percent year-on-year to 457,435 vehicles, the highest in 15 years, DGH data showed.
Lai said the domestic auto market might face two issues in the first half of this year which would undermine auto sales before a recovery in the second half of this year due to strong demand.
“First, due to lower production by various automakers and higher demand of the international market, Taiwan’s quota of imported cars is indirectly capped,” he said.
“Second, the global shortage of automotive chips, which might not be eased until the second quarter of 2021, is expected to affect the production of Taiwan-made vehicles,” he added.
The Executive Yuan has proposed a new tax break to encourage consumers to replace old vehicles with new ones, subject to Legislative Yuan approval.
A previous reduction of NT$50,000 in commodity tax, which took effect in 2016, expired last month.
Lai said the new program would be similar to the previous program in terms of stimulating the market.
However, as some people had already purchased new vehicles last year, Taiwan’s auto market might weaken this year, he said, forecasting total vehicle sales to drop 2.63 percent from last year to about 445,000 units.
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