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Price hikes hamper car production: IEK

2012/05/16 19:00:51

Taipei, May 16 (CNA) The Taiwan Industrial Economics and Knowledge Research Center (IEK) forecast Wednesday that the production value of finished cars in the second quarter of this year will decrease by 18 percent to NT$35.92 billion (US$1.24 billion) compared with the first quarter as a result of the recession and domestic oil and car price increases.

Overall, domestic manufacturers will produce 326,000 cars in 2012, down from 343,000 units, or a 5-percent decrease, from last year, while the total production value will reach around NT$178.1 billion, according to the Industry and Technology Intelligence Services (ITIS) under the research center.

Many consumers replaced their old cars with new ones earlier this year before the price hike. It is estimated that the car and motorcycle market, which reached a sales peak last year, will have negative growth quarter-on-quarter or year-on-year due to the economic uncertainty, the ITIS said.

In the first three months of this year, Taiwan produced 82,000 finished cars, representing a decrease of 5.7 percent from the same period of 2011 and down by 12.8 percent compared with the 94,000 cars manufactured in the fourth quarter of last year, the ITIS said.

It also warned that the price increase for domestic cars will affect competitiveness and that imported cars might steal a march in Taiwan.

However, demand for Taiwanese cars in the Middle East remained stable, the ITIS said.

(By Chao Hsiao-hui and Maia Huang)