Formosa No. 1 hits Taiwan roads

The Formosa Plastics Group (台塑集團), Taiwan's petrochemical giant, officially entered the automobile industry yesterday with the debut of its first sedan.

The line of 2,000cc cars -- jointly developed by the group's subsidiary Formosa Automobile Corp (台塑汽車) and South Korea's Daewoo Motor Co (大宇汽車) -- will be marketed in Taiwan as the "Formosa No. 1."

Daewoo offered technological cooperation as part of an accord signed with Formosa in October last year. Formosa Automobile was founded two years ago with a paid-in capital of NT$1.5 billion.

"I am honored to work with Daewoo, which has offered their fullest technical support in this project," said Formosa Group chairman Wang Yung-ching (王永慶). "The project is the beginning of our dream to build an electric-powered car."

Under the pact, Daewoo supplies Formosa with major auto parts for motor vehicles. Formosa Automobile currently produces 45 percent of the car's parts, with the rest, including the engine and gear box, originating from its South Korean partner, Formosa Automobile Vice President Tseng Sheng-cheng (曾盛誠) said yesterday.

Tseng said the company expects to increase the self-development ratio of auto parts to 70 percent in 2001, but declined to say which year they will have 100-percent home-grown parts for the new Formosa cars.

"It's hard to say when we will reach the goal of making 100-percent home-grown parts ... it depends on whether or not our production can reach a certain scale of economy," Tseng said.

At present, some 400 people work at a Formosa Automobile plant in Tatu (大肚), near Taichung, which can supply 1,750 cars per month and is targeted to make 20,000 cars annually.

Tseng declined to say if Formosa plans to make cars in China, but he admitted that the mainland market has great potential.

But Byung-Hak Son (孫炳學), Daewoo's sales and marketing director for Asia Pacific, Middle East and Africa, said Daewoo hopes to team up with Formosa in the development of China's auto market.

The introduction of motor vehicles from Formosa has been viewed by many as an ambitious move to enter the nation's already highly competitive car market. Formosa -- who also produces and sells petroleum products nationwide -- offered a special incentive to prospective buyers: buy a new Formosa car before Chinese New Year and get credit for 500 liters of free Formosa gasoline, according to Chang Chin-lung (張錦龍), president of Formosa Automobile.

Pricing the three model of cars from NT$639,900 (US$19,300) to NT$759,900, Chang views the Nissan Cerfiro as the company's main competitor in the sedan market.

According to Chang, the company aims to sell 1,000 vehicles a month within the next six months, and in the medium term it hopes to take a 15 percent share of Taiwan's sedan market.