Recently released market study: Taiwan Autos Report Q2 2013

Executive Summary

According to the Taiwan Vehicle Manufacturers Association (TVMA), domestic vehicle sales for 2012 came in at 270,078 units, down 5.5%. This was the first contraction in auto sales in four years. The passenger car segment contracted by 10%, to 211,578 units. However, the commercial vehicle (CV) was a bright spot and 2012 CV sales went on to grow 15.6%, to 58,500 units.

We forecast 2013 sales to improve as we believe bearish sentiment in the auto market has reached a peak in 2012. We forecast passenger car sales to grow 7%, to hit 230,000 units and we forecast commercial vehicle (CV) sales to grow 8%, to hit 60,000 units.

Full Report Details at
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A new lithium battery plant is set to be built in Taiwan. Japanese firms Sanyo and Sony are set to invest in the new plant after talks with the Taiwanese government. The government is currently helping the Japanese firms find a local partner for the plant. Electric vehicle (EV) batteries will be a major focus of the plant, meaning that local firm Yulon Motor is a front-runner along with Simplo Technology for the deal. Taiwan's government has made a strategic decision to foster the development of a local electric vehicle market, explaining their involvement in this planned manufacturing centre.

We are starting to witness an increasing amount of domestic investment from Taiwanese businesses that had previously set their sights outside Taiwan. The Investment Commission has noted that Taiwan businesses have, in recent years, been reorienting their investments away from China and towards ASEAN members, with investment in the mainland reaching a three-year low in 2012. The Taiwanese economy looks set to be a key beneficiary of such a phenomenon. According to government statistics, officials approved US$5.7bn worth of homebound investment by Taiwanese businesses between November 2012 and February 2013, with a majority coming in this year. This eclipses the US$5.0bn and US$5.6bn in total foreign investments that Taiwan garnered in 2011 and 2012 respectively.

Comparatively to China, in addition to a narrowing differential production cost, Taiwan affords businesses a greater degree of intellectual property protection, a strong rule of law, as well as a more stable political environment. Recently two automakers, Volkswagen (VW) and PACCAR have announced investments in Taiwan.

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