Automakers eye car-leasing market to expand sales

This article was published by the Taiwan Headlines on October 5, 2006. It reports that more and more local automakers are eyeing the car-leasing market. They are working together with suitable partners in an effort to warm up new car sales amidst the frosty domestic automobile market.

Statistics show that in the first 9 months of 2006, new-car sales in Taiwan fell about 30 percent when compared to the same period in 2005. This is much worse than the anticipations of local automakers. Indeed, the car-leasing market in Taiwan grew at a two-digit pace about 5 to 6 years ago, but in the past few years it has slowed to single-digit growths.

In sharp contrast, in the first 9 months of 2006, over 16,000 new cars were leased, up 4 percent from the same period in 2005. According to Taiwan's No.1 car-leasing company, Prestige Limousine Services Co., a total of 23,240 new cars were leased in 2005. The volume is expected to stay the same or slide a fraction in 2006.

Ford Lio Ho Motor Co., a local maker of Ford and Mazda cars, recently decided to tie up with ORIX Auto Leasing Taiwan Corp. in an attempt to develop the corporate car-leasing market. Ford Lio Ho plans to contract ORIX Taiwan to lease both locally-made and imported Fords. But the company does not exclude the possibility of extending the program to include Jaguars and Mazdas.

ORIX Taiwan is responsible for lease-contract signing and after-lease services.