Yulon Motor Co (
Yulon will own 60 percent of the venture, with the remaining 40 percent held by Nissan, Yulon Vice chairman Kenneth Yan (嚴凱泰) said yesterday at a press gathering.
The venture with Nissan is part of Yulon's plan to further increase its competitiveness in the industry, Yan said. In doing so, the company decided to split Yulon into two companies -- one of which will be integrated into the new venture with Nissan.
The new company will be launched Oct. 1, with paid-in capital of around NT$3 billion, said Chen Kuo-rong (陳國榮), Yulon's senior executive vice president.
It will focus on sales, marketing, engineering and R&D of the Nissan vehicles in regional markets. The name of the new venture has yet to be finalized.
The company hopes to become listed on the Taiwan stock market within one year, Chen said.
The main company, with existing capital of NT$13.7 billion, will gradually develop itself into a holding company while continuing to make Nissan cars on an OEM basis in Taiwan, he added.
Yan praised the proposed cooperation with Nissan as these two companies have been working together for 44 years. He also said Nissan's competitiveness in terms of product development and financial strength is the key to Yulon's long-term success.
At home, Yulon is facing a highly competitive industry environment while vehicle sales have been shrinking over the past few years.
The automaker last year commanded about a 14.1 percent share of the 398,000 vehicles sold domestically.
Yan yesterday signed a memorandum of understanding with Nissan chief executive Carlos Ghosn in Japan via a video teleconference after the markets closed.
Yulon shares gained NT$1.50, or 3.7 percent, to close at NT$42.10 on the TAIEX, while Nissan shares rose as much as 2.9 percent to Japanese Yen 910 in Tokyo.
"The new venture will allow Nissan to better utilize its Taiwanese partner to expand in the Chinese market," said David Liu (劉志清), manager of IBT Securities Investment Consulting Co (台灣工銀投顧).
Nissan hopes annual sales in China will reach 550,000 vehicles by 2006 and 900,000 within a decade through its Chinese car-making venture, Dongfeng Motor Corp (東風汽車), the company said. Fengshen Automotive Co (風神汽車), which builds and sells Nissan sedans in China, is 40 percent owned by Yulon and the rest controlled by Dongfeng.
"The new company will allow us to grow profitably in Taiwan, and support our growing presence in China," said Ghosn, who became chief operating officer of Nissan in June 1999, in Japan.
The move represents "a very important step in sustaining Nissan's momentum of profitable growth," he said.