To prevent Chinese auto parts from entering Taiwan in a piecemeal fashion, the Ministry of Economic Affairs (MOEA) has introduced a new policy on domestic vehicle assembly, which requires the proportion of local parts to rise progressively to 35 percent three years after their licensing.
MOEA Industrial Development Administration director Yang Chih-chin (楊志清) talked about the new measure during an interview on Thursday with the Liberty Times, the Taipei Times’ sister newspaper.
The new policy, which went into practice early this month, requires imported cars to increase their share of locally made parts to 20 percent in the first year of listing, 30 percent in the second year and 35 percent from the third year onward, Yang said.
Photo: Amy Yang, Taipei Times
The incremental design is intended to protect local autoparts suppliers from unfair competition by Chinese car companies that are reportedly dumping cars worldwide to resolve a severe supply glut, the official said.
The unfair trade practice has raised concern in Europe, the US and other markets whose authorities are drawing responsive measures and raising tariffs to level the playing field, he said.
The new policy is targeted at four kinds of automakers, namely pure Chinese car brands, cars from joint ventures with Chinese partners, car brands acquired by Chinese firms and foreign car brands that are manufactured in China, Yang said.
The introduction to the local market by China Motor Corp (中華汽車) of an MG HS sport utility vehicle from a Shanghai automaker has drawn the attention of lawmakers and has sped up the new policy, Yang said.
The Chinese automaker acquired the British car company MG, which changed owners several times over the past century.
The MG HS model ranked eighth-most popular in Taiwan by measure of new car sales, which spiked to an unprecedented 476,000 last year, as the market emerged from the COVID-19 pandemic, Yang said.
The ministry said it decided on the three-year buffer after factoring in practical considerations that some cars at issue have gone through their manufacturing and design stages, the official said.
The 35 percent cap would serve to protect Taiwanese auto part makers, while giving room for free competition, he said.
Taiwanese firms are competitive in making car bumpers, headlights, batteries and other electric components that have gained rising importance in electric vehicles, Yang said, adding that several companies collaborate closely with international car brands.
At the same time, the government has poured money into helping local firms upgrade their research-and-development capacities as well as technology and manufacturing processes, the official said.
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