FPG considering auto plant in China

Formosa Plastics Group (台塑) is studying the possibility of setting up an auto plant in China to gain an entry into one of the world's fastest growing markets, a spokesman from the company's fully-owned Formosa Automobile Corp (台塑汽車) said yesterday.

"We are studying the feasibility of building an auto plant in Ningbo but nothing concrete has been decided at the moment," the spokesman said.

A Chinese-language newspaper reported yesterday that Formosa Plastics would lead some 50 local auto component makers to build a car production complex in Ningbo.

The company had been in talks with two European and one Japanese automaker on possible cooperation, the newspaper said, adding that an agreement was expected to be reached in the third quarter of this year.

The spokesman declined to comment on the report.

The newspaper cited unnamed Formosa Plastics sources as saying the company and its future foreign partners would launch a new car model which would be produced both here and in China.

Negotiations with General Motors for a joint venture in China had failed to come through since Formosa Plastics had insisted on using its own brand for the products, it said.

Formosa Plastics is the flagship company of Formosa Plastics Group, which has invested US$350 million in more than 20 plants in China.