Hotai Motor Co (和泰汽車), which distributes Toyota and Lexus vehicles in Taiwan, has hiked prices for domestically made vehicles by up to NT$20,000 to reflect rising manufacturing costs amid surges in prices for raw materials, from rubber polymers used in tire manufacturing to steel.
The move is expected to precede a series of price hikes, probably after the Lunar New Year holidays, as almost all vehicle distributors and local automakers are under mounting pressure to pass on higher manufacturing costs to buyers.
“We have seen constant price hikes for steel, alumina and rubber polymers,” Hotai spokesman Simon Liu (劉松山) told the Taipei Times by telephone yesterday. “We have absorbed part of the increases in raw material costs before making the price adjustments.”
Photo: Amy Yang, Taipei Times
The price hikes for domestically made vehicles are milder than the upticks for imported vehicles, Liu said.
A chip crunch and short supply of some components have disrupted production, and boosted transportation fees and prices of raw materials and chips due to production cuts amid COVID-19 pandemic restrictions, he said.
Hotai’s latest price adjustments came after it raised prices for imported Toyota models by 2 to 3.4 percent in November, while hinting that the next step would be upticks for locally made vehicles.
Based on the new prices unveiled on Hotai’s Web site, new Sienta crossover vehicles will cost NT$665,000 to NT$845,000, up NT$16,000 from last year.
Prices for Corolla Cross GR Sport models rose NT$20,000 to between NT$895,000 and NT$965,000.
In a bid to prevent the price hikes from scaring buyers away, Hotai is giving away high-end foot massagers worth NT$24,900 to people who buy Toyota models made at local plants.
Hotai is optimistic about new vehicle sales this year given Taiwan’s robust economic growth and relatively stable COVID-19 situation, Liu said.
The company has recorded solid vehicle replacement demand, as people are willing to spend on new, bigger vehicles to travel in Taiwan, he said.
“The effect was first noticed in 2020,” Liu said.
“We expect that to happen this year as well, as people are still restricted from traveling overseas,” he said.
Hotai in 2020 sold 5 percent more vehicles than the prior year, he said.
The nation’s new vehicle sales are forecast to rise to more than 460,000 units this year, Hotai president Justin Su (蘇純興) said last month.
Hotai expects sales of new vehicles this month to drop about 14 percent year-on-year to 44,000 units, with 51,179 units sold in January last year, Su said, citing seasonal factors.
Sales of new vehicles for all brands last year dipped 1.66 percent annually to 449,900 units, industry statistics showed.
Supply constraints affecting chips and components, as well as gridlock at ports limited sales of imported vehicles were a drag on overall sales, market researcher U-Car.com said in a report on Monday.
The unfavorable environment pushed down the market share of imported vehicles to 44.7 percent last year, compared with 47.2 percent in 2020, the U-Car data showed.
Hotai continued to dominate the market, selling 146,687 new vehicles last year, up 0.3 percent annually.
That gave the firm a market share of 32.6 percent.
Ford Lio Ho Motor Co (福特六和) was second with sales up 5.2 percent to 30,377 units, seizing 6.8 percent of the market.
Honda Taiwan Co (台灣本田) was third with sales decreasing 6.2 percent to 8,533 units, or a market share of 6.3 percent.
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