Taiwan June. Yamaha falls down, before launching the EC-5, in a recovering market

Taiwan Motorcycles Market moderately recovered during the second quarter, ending the first half of the 2019 down 8%, despite the huge e-scooter segment growth, thanks to the success of the new star Gogoro. Total domestic market is reported at 421.810 units, including both domestic produced and imports, with Yamaha losing more all others.


Economic Environment

Growth decelerated slightly in Q1, following Q4 2018’s already feeble showing. Weaker domestic demand was behind the print, as private consumption growth ticked down while government consumption contracted. On the flipside, investment growth picked up thanks to a solid rebound in private investment. Meanwhile, though export growth slowed, imports decelerated faster, leading to an improved contribution to headline growth. Looking at Q2, PMI data for April-May suggests the manufacturing sector remains weak amid low tech demand and the shadow of the trade war.

Growth will likely slow this year due to trade uncertainty and lower tech demand. The possible imposition of U.S. tariffs on Chinese tech imports is a key downside risk as Taiwan is heavily involved in the Chinese electronics supply chain. Nevertheless, public infrastructure investment, coupled with low unemployment and inflation, should support domestic dynamics. 


2019 Market Trend 

Following the already negative score reported in the 2018, the domestic Taiwanese two-wheeler market fall continue in the 2019, with the industry hit by the sharp reduction of internal consumption and by the reduction of global international affairs created by the commercial war in place between US and China.

According to data released by the Taiwanese Minister of Transportation & Logistic, the market dropped significantly in the first quarter losing 18.1% while in the second recovered moderately, ending the first half of the 2019 with 421.810 sales, down 8.0%.

Of course, this trend has a direct impact on the two market leaders, Kymco and Sym, financial performance. So far this year they have lost respectively 2.0% and 0.9%. However, the main fall was reported by the Japanese Yamaha, down an impressive 32.5%. 

While traditional combustion engines segment is falling, electric vehicles (100% scooter) are booming with the local brand, Gogoro, jumped in fourth place with 46.500 sales (+30%) with data still preliminary (could be higher).

The first model fruit of the partnership between Gogoro and Yamaha was recently presented and is the Yamaha EC-5, which will be available for booking since August 1st, with deliveries in September. The model was developed by Yamaha, with the electric motor by Gogoro and will be produced in the Taiwanese Gogoro plant. 


Market Heritage

Taiwan is the home-base for well-known global motorcycles companies, like Kymco and Sym and is one of the major motorcycles and scooter producer in the World. However, the domestic market is even one of the Top 10 largest worldwide and the motorcycles are a key device for individual mobility.

The development of the market started already in the ’80 of last century, but the key factor for the industry development was the joining of WTO agreement in the 2002, which pushed the industry to improve standards to match requirements of European and American markets and to allow at the local producer to defend their domestic positions against the arriving importers.

Indeed, an almost favorable legislation has limited the distribution of large size motorcycles and so far the market is dominated by local producers, with Yamaha and Suzuki producing in the country.

Interesting to note as the global leader, Honda, is not producing locally limiting their activity to the distribution of large motorcycles. Indeed, Honda had begun local production of small-sized motorcycles in 1961, mainly 125 cc-class models, in the form of a technology licensing agreement with a local company (under a technical collaboration agreement) and continued until 2003, when has closed operations.


Recent Market Trend

The domestic Taiwanese motorcycles industry is one of the healthiest in the World. The first time the industry hit the half a million units milestone in a calendar year was in the 2014, but keeping to grow the domestic market reached the all time record in the 2017 with sales not far from the 1 million units milestone.

According to data released by the Taiwanese Manufacturers Association, in the 2018 the market pushed the brakes and sales declined at 756.170 units, which is the second highest level ever. 

Two Taiwanese brands, Kymco and SYM are among the top global producers of scooter exporting all over and – of course – they play the rule of leaders in the home-base country. However, while SYM is the biggest in terms of export, Kymco is the local leader, with 2018 sales at 302.306 units.

The new brand Gogoro, producing advanced e-scooter, is booming, with a 2018 record of 71.800 sales (+138%).


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