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By Lisa Wang / Contributor
Hotai Motor Co (和泰汽車), which sells Lexus and Toyota vehicles in Taiwan, said yesterday it would support and implement the government’s new restrictions on cheaper auto components, especially from China, to prevent potentially unfair competition.
The Industrial Development Authority expressed concern about the issue last year, fearing it could affect the local market and lead to unfair competition, Hotai spokesman Lai Chih-wei (賴志偉) told investors at the company’s earnings conference in Taipei.
“The implementation of the new rules in August did not surprise us as the government has been talking to local automakers about this issue for a long time,” Lai said.
Photo: Amy Yang, Taipei Times
“Our position is that we support the regulations and will fully comply with them,” he said.
Hotai owns a 30 percent stake in Kuozui Motors Ltd (國瑞汽車), which assembles Toyota vehicles in Taiwan, sourcing most of its auto parts locally.
The government’s decision to tighten regulations on car assembly has sparked a debate about the legality of the new rules, but Hotai and China Motor Corp (中華汽車), which would bear the brunt of the measure, have expressed their support.
The new regulations require car manufacturers to increase the proportion of locally manufactured components in new vehicles. In the first year, the proportion must be 15 percent, in the second year 25 percent and in the third year 35 percent of all car parts.
China Motor has to postpone the launch of new electric vehicles from Chinese group GM Motor and SAIC Maxus Automotive Co (上汽大通汽車). China Motor assembles and sells GM cars in Taiwan, with up to 90 percent of the components imported from China.
Hotai yesterday maintained its full-year business outlook and aims to sell 170,000 vehicles this year, including from Toyota, Lexus and Hino, Lai said.
This means that the company’s sales figures will reach an all-time high for the second year in a row, after 166,000 units last year, he said.
Due to strong demand, Hotai has accumulated an order backlog of over 10,000 vehicles, Lai said.
At the beginning of the year, Hotai set a goal of increasing its domestic market share from 34.9 percent last year to 37.8 percent this year.
“We expect the launch of new vehicles and updated models to boost car sales and secure further market share for us in the second half of the year,” Lai said.
The company also maintains its forecast that new car sales in Taiwan will reach 450,000 units this year, Lai said.
Hotai is cautious about car sales next year as government tax incentives for new car purchases will expire at the end of next year, he said.
The company said net profit for the first half of the year fell about 3 percent to NT$11.76 billion (US$368.1 million) from the same period last year, compared to NT$12.11 billion in the same period last year. Earnings per share fell to NT$21.1 from NT$21.74.
The company attributed the decline to a higher base last year as it received a higher quota of Lexus vehicles from Toyota Motor Corp. after vehicle production returned to normal following the COVID-19 pandemic.
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