The China Post news staff and CNA
■ Local bourse moves in narrow range after Yulon forecast Auto shares dropped yesterday after Kenneth Yen, chief executive of the Yulon Group and a local car guru, slashed his forecast of auto sales in Taiwan this year. At the end of trade, Yulon Motor under the group closed down 2.65 percent to NT$58.7. An affiliate firm, Yulon-Nissan, fell 2.88 percent to NT$219. Hotai Motor fell 2.07 percent to NT$236.5, while China Motor fell 2.4 percent to NT$30.45. Altogether, the auto category of the TAIEX fell by as much as 3 percent during mid-trade and was one of the weakest stock categories.
Tuesday, auto shares surged on expectations companies will be profitable this year after a slide of the Japanese yen. The depreciation is expected to make Japan-imported parts and components cheaper. Yet the rally was just a one-day deal and evaporated yesterday, after Yen slashed his forecast on auto sales as a whole in Taiwan this year. While he expressed confidence in his group’s performance this year, he lowered his Taiwan auto sales forecast from the original 400,000 to 380,000, about the same as last year’s 378,000, due to various external factors, including a slow recovery of the U.S. economy and the European debt crisis. His remarks stunned investors, who now fear that the growth in Taiwan’s auto market over the past three years would come to an end. Yen’s peers in the industry, however, weren’t so surprised. “Based on Taiwan’s auto sales over the first two months, which experienced an 11-percent decline year-on-year, I can’t see how you can have car sales of 400,000 this year,” said Su Chun-hsing, president of Hotai Motor. Separately, the local bourse moved in ranged trade yesterday as many investors stayed on the sidelines, keeping turnover thin amid concerns over a possible technical pullback after a recent strong showing, dealers said.