Wu Qingyuan, Chairman of Sanyang Industrial, announced on 1st December that the company would cease paying dues to the Automobile Association and withdraw from its membership, citing dissatisfaction with both the Association and the government's handling of new regulations on domestic car production rates.

He criticised the lack of prior notice and the rushed implementation of the regulations, which he claimed resulted in significant financial losses for Sanyang.

Wu explained that Sanyang had not been informed prior to the introduction of the self-made rate regulations by the Industrial Development Administration of the Ministry of Economic Affairs.

These regulations, announced on 1st July and enforced from August, caught the company off guard, as Sanyang had 600-700 vehicles in transit when the policy came into effect, leading to unpreparedness and financial losses. Wu described the situation as "extremely unreasonable," drawing a comparison to the United States, where industries are given a grace period to adjust to similar import controls.

Wu also criticised the Automobile Association for failing to support its members adequately. He accused the Association of not providing advance notice and of allegedly reporting to government authorities that certain models, such as Hyundai's Custin, should be restricted. This lack of support led to Sanyang's decision to withdraw from the Association.

Sanyang, along with its subsidiary Nanyang Industrial, serves as Hyundai Motor's general agent in Taiwan. Wu emphasised that Hyundai, one of the world's top three automakers, operates its own spare parts production strategy, over which Sanyang has no influence.

The new regulations impacted Hyundai's Custin model, as its parts are produced in mainland China and could not meet the domestic production requirements. As a result, hundreds of parts were detained at customs, disrupting production and sales plans.

To comply with the regulations, Sanyang invested NTD 200 million (USD 6.1 million) to upgrade Hyundai's production line and more than NTD 100 million to localise components for the Custin model, including product development and moulding costs.

In total, nearly NTD 400 million has been invested within a short period. A review by the relevant authorities is scheduled for mid-month, with the expectation that Custin production will resume soon.

Wu concluded by reiterating his dissatisfaction with the Automobile Association's failure to notify or assist its members during this transition.

Given the lack of support, Sanyang has decided to proceed independently, along with its subsidiary Nanyang Industrial, which handles SYM motorcycles and Hyundai vehicles, without continuing its membership in the Association.