Dec 18, 2008
The AM (after-sale maintenance) auto parts market is warming up! As snowing has begun on the east coast of the US and distributors are stocking up on auto parts, AM auto parts orders are growing. Auto parts manufacturers like Tong Yang and Gordon expect sales increases in December, compared to November. Overall, this is one of the few industries that are still able to sustain sales in the wake of the financial tsunami.
Tong Yang Group President Wu Yongmao, however, believes no one should overlook the adjustment in the global supply chain structure brought by the financial tsunami. As a result of government funding to relieve European, US and Chinese carmakers, the auto industry will be reshuffled. It won't be clear who will win out until the second half of next year. The impact on auto parts makers will therefore last for at least another six months.
According to Vice General Manager Pan Minghsiung of Gordon, as the high season approaches, plus the snowfall on the east coast of the US and most people being unable to purchase new cars, the AM market is indeed warming up. Distributors have started to increase stock. However, as the recession and rising unemployment rates continue, people might drive less often. The first quarter of 2009 probably won't be as good as that of 2008 for the AM auto parts business.
Some auto parts makers have pointed out that profits in the first three quarters of this year were less than those in the same period last year, mainly because of the devaluation of the New Taiwan Dollar and rises in raw material prices. Yet in fact, figures show that sales in the first eleven months didn't seem as bad compared to last year. Sales grew for TYC, Kai Yih and Gordon.
Even if sales in this quarter were not as good as that of the same period last year, there should still be a slight increase in the gross profit rates for the AM auto parts industry. Compared with other industries, it is still a more resilient group of businesses.
Source:TAITRA