China Motor Corporation reported a sharp decline in first-quarter profit as Taiwan’s stricter local content requirements hampered sales of its MG vehicles. Net income fell to NT$629 million (US$19.7 million), down 49.7% from a year earlier, with earnings per share dropping to NT$1.15.
The company attributed the profit slump primarily to Taiwan’s “localized supply chain cooperation value ratio” policy, which requires Chinese-origin vehicles to incorporate progressively higher percentages of locally produced components. This regulation, implemented last August, specifically targeted MG models, which previously relied heavily on parts imported from China.
Despite these headwinds, CMC pointed to positive developments in its product lineup. The company noted that all MG fuel vehicles have resumed normal production and sales following adjustments to meet compliance requirements. Meanwhile, its new J Space light commercial vehicle has gained traction since launching in late 2024, with first-quarter sales volume rising 18.1% year-on-year.
The J Space, which replaced CMC’s aging Veryca series, has rapidly climbed Taiwan’s sales charts, reaching a record third place in March. Featuring level 2 ADAS and an 8-speed automatic transmission, the vehicle’s market success validates the company’s product development strategy.
CMC continues investing heavily in smart and new energy vehicle technologies to enhance long-term competitiveness, though these expenditures are currently weighing on short-term profitability as the broader Taiwanese auto market faces challenging conditions.
