Taiwan’s new vehicle market declined by 10% to 37,281 units in March 2025 from 41,312 units in the same month of last year, according to registration data compiled by Taiwan’s Ministry of Transportation.

Overall vehicle demand in the country has weakened significantly in recent months, following two years of strong growth, reflecting a slowdown in economic growth. GDP growth slowed to 1.8% in the fourth quarter of 2024, from 4.2% in the third quarter, with private consumption and government spending both significantly weaker.

The vehicle market declined by 11% to 99,860 units in the first quarter of 2025 from 112,399 units in the same period of last year, with sales of domestically-produced vehicles dropping by 21% to 51,734 units while import sales declined by over 6% to 48,126 units. Sales of battery electric vehicles (BEVs) amounted to 6,947 units in this period, led by Tesla and followed by local automaker Luxgen, BMW, Mercedes and Porsche.

The performances of the individual brands varied significantly in the first quarter, with market leader Toyota enjoying a 9% increase to 33,278 units; followed by its Lexus division with a 14% rise to 8,613 units; Mercedes-Benz 6,971 units (+7%); China Motor 6,519 (+17%); Honda 5,231 units (-30%); Hyundai 3,893 (-39%); BMW 3,806 (+1%); Mazda 3,163 (-11%); Mitsubishi 3,150 (-13%); and Nissan 3,117 (-39%).

Earlier this year Hotai Motor, the distributor of Toyota, Lexus and Hino vehicles, said it expected to sell 165,000 vehicles in 2025 to claim a market share of close to 37%. The company said it expects the overall vehicle market to remain “resilient” this year, with overall sales exceeding 450,000 units compared with 457,837 in 2024.

Last year Taiwan reintroduced minimum local content requirements for locally-assembled vehicles – regulations that had been discontinued more than two decades ago. Under the new rules locally-assembled vehicles are required to have a minimum local content of 15% in their first year of production, rising to 25% in the second year and 35% in the third year. The government claims the new regulation is mainly aimed at ensuring minimum safety standards while also protecting the country’s component sector. As Taiwan does not allow direct imports of built-up vehicles from China, the ruling is expected to slow the entry of Chinese brands into the market.