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Car sales in April hit by fuel price hikes: Morgan Stanley

2012/05/06 18:02:26

Taipei, May 6 (CNA) Taiwan's automobile market posted softer-than-expected growth last month after the government implemented major hikes in fuel prices, Morgan Stanley analysts said in a recently released research note.

The U.S. brokerage noted that Taiwan's car shipments totaled 28,616 units in April, up 8.9 percent from one year earlier and down 13.2 percent from March.

Sales in the first four months of this year reached 124,407 units, down 6.1 percent from the same period last year while tracking behind Morgan Stanley's full-year expectation.

As a result, the brokerage has revised down its full-year volume forecast for the Taiwan car market from 400,000 units to 380,000 units, implying flattish annualized growth.

"We think consumer sentiment was somewhat dented by the government's plans to raise gasoline and utility prices in April," said Morgan Stanley strategist Jeremy Chen.

The government decided to raise domestic fuel prices April 2 by 10.8 percent on average, the largest one-time increase since May 2008.

Hotai Motor Co., the local sales agent for Japan's Toyota Motors, reported shipments of 9,786 units in April, representing an annual growth of 27.8 percent, and helping it remain the largest auto vendor in the country.

Meanwhile, Morgan Stanley retained an "overweight" rating and a target price of NT$228 (US$7.8) for the car dealer, in view of Hotai's strong sales momentum that is expected to be fueled by hybrid car shipments.

In April 2012, Hotai secured a 34.2 percent share of the local car market, while China Motor Corp., a joint company between Yulon and Mitsubishi Motors of Japan, ranked second with 13.2 percent, the note said.

In third place was Yulon Nissan Motor Co., a joint venture between Taiwan's Yulon Group and Japan-based Nissan Motor, with 11.1 percent, followed by Honda Taiwan Co., Ford Lio Ho Motor Co. and Hyundai Motor Co. with 5.8 percent, 4.9 percent and 4.8 percent, respectively.

(By Jeffrey Wu)