Fri, Dec 03, 2004 - Page 10 News List

Yulon, GM discuss carmaking venture

By Kevin Chen  /  STAFF REPORTER

Yulon Motor Co (裕隆汽車), which makes cars for Nissan Motor Co in Taiwan, is currently in talks with Detroit-based General Motors Corp (GM) to form a joint carmaking venture in Taiwan, the Taipei Times has learned.

The venture, in which Yulon proposes to own a 51 percent stake, will manufacture small and medium-sized models designed by South Korea's GM Daewoo Auto & Technology Co, an industry veteran said on condition of anonymity.

The venture may also help distribute Cadillacs and Opels for GM in Taiwan, he said.

"The two [Yulon and GM] have been in long talks to produce Buick models here. They are now working on details of the venture and plan to make a formal announcement toward the middle of this month," the source said.

Calls to Yulon's senior vice president and spokesman Han Chen-ping (韓正平) were not answered yesterday.

On Tuesday, Han told local cable channel USTV that the purpose of seeking more foreign partners is to help enhance Yulon's factory utilization rate.

Local media have been speculating over the past few weeks that Yulon may be in talks with foreign automakers such as GM and France's Renault SA to help it reduce reliance on Nissan for model development and key automobile components.

For GM, owning a 49 percent stake in the venture will help it strengthen its distribution and marketing network in Taiwan, the industry veteran said.

GM has had inconclusive talks about contract manufacturing with Formosa Automobile Corp (台塑汽車), Ta Ching Motors Co (大慶汽車) and Prince Motor (太子汽車).

Boosted by news, Yulon shares rose 0.9 percent to NT$35 on the local bourse.

Yulon is the third largest auto manufacturer in Taiwan, with a market share of 14.7 percent of total domestic passenger car sales during the first 11 months this year, compared with 15.9 percent last year.

Taiwan has a saturated and very competitive market environment for automakers. The number of locally made vehicles applying for license plates, an indicator of new vehicle sales, grew to 398,877 units in 2002 and 413,741 units last year after experiencing a sharp decline of 17 percent in 2001 compared with 2000 to 347,423 units, according to figures compiled by the Ministry of Transportation and Communications.

Boosted by the promotion campaigns by various companies, new car registrations reached 446,525 units in the first 11 months this year, up 17.1 percent from a year earlier, according to the ministry.

Kuozui Motors Ltd (國瑞汽車), which assembles cars for Toyota Motor Corp, led sales with 122,295 units in the January-to-November period, with a 27.4 percent market share, followed by China Motors Corp's (中華汽車) 84,979 units, or 19 percent, and Yulon's 65,619 units.

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