Friday, August 6, 2010

Taiwan`s Auto Conglomerates Eye Lucrative Used-car Biz

Taipei, Aug. 4, 2010 (CENS)--Eyeing lucrative business opportunities in the used-car business, both Yulon and Hotai, the top-2 carmakers in Taiwan, are increasing investments in such sector.

Justin Su, president of Hotai Motor Co. Ltd., pointed out his group now accounts for only 3% of the overall used-car market in Taiwan, implying room for expansion. This year, Su claimed, Hotai would further integrate its new-car distributors to expand Toyota`s share in also the used-car market.

In the first half, some 3324,700 used-cars saw transferred ownerships, Hotai said, up 7.7% from that in 2009. Hotai attributed the YoY increase to the increasing willingness to buy new cars due to the recovering economy. Hotai`s distributors are planning to jointly pour NT$30 million to NT$40 million to increase dealers for Toyota-certified used cars to 19 by the end of the year from 14 currently.

Fortune Motors Co., Ltd., general agent of Mitsubishis, has set up the SUM high-quality used-car sales alliance with more than 250 franchised dealers around the island. The SUM alliance was set up to provide installment loans to used-car buyers, and now contributes to 40% to 60% of its overall profits.

To keep the residual value in used Mitsubishis, China Motor Corp. under the Yulon Group that locally assembles Mitsubishis also set up a used-car distribution chain in Taiwan.

Sinjang Corp., a member of Yulon Group, is an agency, wholesaler and retailer of used cars. The company used to auction 2,000 to 3,000 used-cars per month when it monopolized domestic used-car auction business. To confront strong competition from Hotai Group, Sinjang established the SAVE certified used-car sales alliance in 2009, with 106 used-car dealers having joined, and plans to increase the number to 150 by the end of the year.

Shuen Yi Motor, another distributor of Mitsubishis, recently set up the "Car OK" used-car alliance and aims to attract at least 40 members by the end of this year.

(by Quincy Liang)

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