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Economic Daily News: Electric cars key to reviving domestic auto market

2018/02/20 20:32:28

Over 440,000 new cars were sold in Taiwan last year, an increase of 1.1 percent from the previous year and the highest since 2006. However, the market share of domestic cars fell below 60 percent for the first time, with industry experts predicting that imported cars will soon account for over 50 percent of the domestic market.

In 2004, domestic cars had 87 percent market share in Taiwan and in 2005, the annual output value of the country's auto industry peaked at NT$230.9 billion (US$7.9 billion). In recent years, that number has dropped below NT$200 billion with the declining market share of domestic automakers.

Many consumers are turning to imported cars because the price difference between domestic and imported cars has gradually narrowed, and domestic car makers are slow to introduce new models.

In addition, consumers have become more safety conscious in recent years and the airbags and other safety features of imported cars are often more trusted. Consumers can also access crash test videos and safety evaluation reports for imported cars more easily than those of domestic cars -- all factors contributing to the increasing popularity of imported vehicles.

The government and local auto industry should not take this matter lightly because it affects not only an industry with an annual output of hundreds of billions of New Taiwan dollars, it also impacts Taiwan's job market.

Electric cars are likely to be the key to revitalizing Taiwan's auto market. The government has set the goal of banning the sale of non-electric vehicles by 2040. However, it has yet to give details of how it plans to reach that goal.

Countries such as France, Norway, the Netherlands and Britain are already strengthening their laws, infrastructure and tax systems to promote electric cars. In contrast, Taiwan has been slow to take action and lacks a clear direction.

Taiwan possesses world-class electric car part manufacturers and Taiwanese companies can compete with foreign competitors. The government should release the details of its electric car development plan so that local companies can step up their investment.

Local automakers must also introduce cars that are safer and meet the crash test standards of cars in Europe, the United States and Japan. (Editorial abstract, Feb. 20, 2018) (Summarized by Christie Chen)