The Taiwanese automotive market entered a period of maturation in the 1990s. Passenger cars accounted for more than 70 percent of the market, and after peaking at 577,000 vehicles in 1994, the market gradually contracted.

In 1997, the Japanese and Taiwanese governments reached agreement on phased liberalization of automotive commerce. In response, Toyota introduced Lexus-brand vehicles and sold nearly 3,000 units in Taiwan in 1999.

In the early 2000s, even as the market continued its downward trend, sales of Toyota vehicles were strong, increasing from a little more than 100,000 units in 1994 to a record high of 150,000 units in 2005. Toyota also surpassed Mitsubishi Motors Corporation for the top position in market share in 2002, and Toyota's share reached 38 percent in 2009. In 2010, however, a recall caused sales to fall to 102,000 vehicles and Toyota's share to drop to 31 percent.