China Motor Corp (中華汽車) yesterday said it has boosted the local content ratio to the required 20 percent for MG electric vehicles (EVs) developed by China’s MG Motor Co, paving the way for the popular EVs to return to the local market in the near future.
China Motor helps assemble MG EVs in Taiwan with a majority of key parts from China to save on costs, but it was forced to suspend sales of the vehicles in August after new local content regulations took effect. The firm also only accepted limited new orders for MG’s HS sport utility vehicles and ZH compact cars, citing an insufficient inventory of components.
The Ministry of Economic Affairs tightened local content regulations in August amid fear that low-cost Chinese cars would undermine the domestic auto industry. Under the new rules, automakers must have 20 percent of the components in their vehicles locally made during the first-year of sale, and see the rate increase to 30 percent in the second year and 35 percent in the third year.
Photo: Amy Yang, Taipei Times
“We are quickening our pace in boosting the local content ratio to meet the mandatory requirement in collaboration with our suppliers,” China Motor vice president Chien Ching-wu (錢經武) told investors during an online conference yesterday.
The company yesterday reported revenue expanded 16.52 percent annually to NT$32.22 billion (US$990 million) in the first nine months of the year, from NT$27.65 billion, aided by the sales of new MG cars.
Net profit plummeted 25.24 percent to NT$3.27 billion from NT$4.37 billion a year earlier, attributable to lower gains from its Chinese car business amid stiff competition and a higher comparison base last year associated with its insurance arm, Tokio Marine Newa Insurance Corp (新安東京海上產險), the firm said.
Earnings per share sank to NT$5.99 during the first nine months, from NT$8.01 in the same period last year.
The company did not offer its business outlook for next year, but said it is developing a new electric commercial car likely to be launched next year.
“The MG HS 1.5T model is the most important model among all of the MG series in the pipeline, so we will prioritize this model when applying for a local content certification. HS now contains more than 20 percent locally made parts,” Chien said.
Chien declined to confirm if the HS model is to return to the market by the end of this year, since the regulatory hurdles are almost cleared.
The company plans to raise prices for the MG cars containing more locally-made parts because of higher costs, he said.
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