Yulon Motor Co (裕隆汽車) yesterday said that total new vehicle sales in Taiwan this year would likely drop below last year’s level as buyers wait on the sidelines amid lingering tariff worries.
Taiwan is conducting tariff negotiations with the US after Washington announced a 90-day pause to “reciprocal” tariffs early last month. Authorities are also under pressure to reduce duties on imported vehicles or scrap commodity taxes on vehicles to ease US concerns.
“We assume the effect of policy changes on the automobile industry should be felt ... but there is no way to predict” their extent, Yulon spokesman Steven Lo (羅文邑) told an online earnings conference.
Photo: CNA
The firm said it would maintain close communications with authorities as the tariff issue weighs on the domestic automobile industry and the tens of thousands of companies in its supply chain.
Last year, total new vehicle sales in Taiwan fell by 4 percent from a year earlier to 457,837 units after growing 12 percent annually to 477,009 units in 2023, government data showed.
Regarding exchange rate fluctuations, every NT$1 change would affect Yulon’s revenue by about NT$60 million (US$1.99 million), but the overall impact on the company’s operating income is not significant, as Yulon could pass on cost changes in material procurement to downstream suppliers, Lo said.
However, with the absence of clear policy support, market sentiment remains conservative and the company expects overall vehicle sales in Taiwan this year to fall below 450,000 units.
Yulon’s downbeat forecast came as sales of new vehicles in Taiwan in the first four months of the year dropped 11.4 percent annually to 132,733 units.
The weakening demand in the domestic market led the company to report consolidated revenue of NT$17.59 billion in the first quarter, down 15.24 percent from the same period a year earlier.
Faced with falling sales and lower investment income, Yulon said net profit in the first quarter fell 49.7 percent year-on-year to NT$436 million, or earnings per share of NT$0.42.
The company, which has a long-term partnership with Nissan Motor Co, said it is paying close attention to the Japanese automaker’s organizational adjustments and overseas factory closures, but added that Nissan’s Taiwanese supply system is still operating normally.
On a positive note, Yulon is to manufacture electric vehicles (EVs) in Taiwan for Mitsubishi Motors Corp based on a model developed by Foxtron Vehicle Technologies Co (鴻華先進), its joint venture with Hon Hai Precision Industry Co (鴻海精密).
Yulon plans to start shipping its first EV model for Mitsubishi to the New Zealand and Australian markets next year, it said.
As for domestic EV sales, insufficient EV infrastructure has capped the growth of its Luxgen models, with sales down 10 percent to 1,391 units in the first four months.
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