Taiwan. Motorcycles market is roaring and in November stamped a +68%

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Taiwan Motorcycles Industry is booming. After October +46.7% growth, in November domestic two wheeler market hit 58.215 sales, up a roaring 68.4%. In the first eleven months of the year sales have been 843.104 (+3.0%).

Economic Environment

The economy rebounded strongly in the third quarter, contrasting the marginal contraction in the second quarter and marking the best result in two years. The turnaround was spearheaded by firmer exports growth, chiefly thanks to soaring demand for Taiwanese electronic goods from China and the U.S.

On the domestic front, consumer demand showed signs of recovery in Q3, contracting at a much softer pace than in Q2. On top of that, government spending bounced back in the quarter, solidifying the overall economic recovery in turn.

Turning to Q4, available data suggests sustained momentum at the tail end of the year. In October, the manufacturing PMI remained virtually unchanged at September’s 30-month high, which, coupled with an uptick in business confidence, points to solid private sector activity growth at the outset of the quarter.

Two-wheels Domestic Market Trend

Following an almost negative first part of the year, the government introduced incentives to stimulate the economy and – among other industries – the motorcycles industry had been pushed up the demand in the third quarter, allowing the industry to partially recover the first half lost.

In the fourth quarter demand was still very strong and the market is performing above any expectations. Thus, after October + 46.7% growth, in November domestic two wheeler market hit 58.215 sales, up a roaring 68.4%. In the first eleven months of the year sales have been 843.104 (+3.0%).

Looking at figures by CC-Class, the 251-500 and the 501-750 segments were fast growing during the first nine months of 2020. On the negative side, Electric sector is suffering since e-incentives reduction is in place.

Looking at the performance by brand, the market leader Kymco records 293.031 sales in 11 months  (+0.7%), followed by SYM with 251.166, up an amazing 41.8%.

The third place is held by Yamaha with 174.177 (+0.4%) ahead of  GOGORO with 78.165 units (-36.4%), PGO with 21.435 (-22.0%) and Suzuki with 14.690 (+84.5%).

Yamaha EC-05

Market Outlook 2020-2025

The reactiveness of Taiwanese government to the Covid19 economic impact was outstanding and the country counted just few cases of virus, the economy was hit by the global economy Q2 fall, before to recover in Q3, thanks to a new stimulus package defined by the government.

In fact, Taiwanese government – aiming to boost the economy – launched printed vouchers to stimulate consumption and August data have been immediately positive.

In the 2021 sales propulsion will not be over and the market is projected to establish a new all time record, first time over the 1 million annual sales.

Electric Motorcycles Subsidy Plan

The Environmental Protection Agency ’s (EPA) draft electric vehicle subsidy changed  the subsidies policy for both cars and motorcycles, reducing new purchases by 6.000 yuan (US$850).

From next year, new electric motorcycles/scooter subsidies will be reduced from 10.000 yuan (US€1.427) to 7.000 yuan (US$1.000) with a further reduction at 5.000 yuan in the 2021. This plan assumes that the strong incentives provided so far already helped the manufacturers to create scale economy in the production.

Indeed, the incentive provided so far helped the boom of local start-up Gogoro and incentivized the other players develop a their own electric scooter lineup, with this segment already up a significant share of market, the highest in the World.

Taiwanese 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. 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.