Wed, Jan 05, 2005 - Page 10 News List

Formosa Auto, DaimlerChrysler in talks

By Amber Chung  /  STAFF REPORTER

Formosa Automobile Corp (台朔汽車), the automobile manufacturing arm of Formosa Plastics Group (台塑集團), is in talks with German-US automaker DaimlerChrysler to produce its Matiz minicars, using turbo engine technology from Mercedes-Benz's Smart models, a Chinese-language newspaper reported yesterday, without citing anyone.

Under a preliminary plan, Formosa Automobile may invest between NT$100 billion and NT$150 billion in the technology transfer project, the report said.

"This plan was initiated over one year ago but has not materialized," a Formosa Automobile official told the Taipei Times, on condition of anonymity, in a phone interview yesterday.

But the official said the proposed cooperation is just one of the company's internal plans.

The newspaper reported Formosa Automobile may target an annual production of 300,000 units of the Matiz, with Smart turbo engine technology, which sparked speculation that the company may sell the vehicles in China. Taiwan bought 5,226 units of Matiz last year.

But the official dismissed the possibility of selling Matiz minicars in China in the near future, saying that the model is being marketed there under the Chevrolet brand by General Motors Corp.

Consequently, Formosa Automobile cannot roll out the model without GM's consent, not to mention that the company has no factories in China, the official added.

The project was reportedly approved by the group's founder, Wang Yung-ching (王永慶) who planned to revamp the company's brand image and advance its auto business through a partnership with the European brand, the report said.

Formosa Automobile was founded in 1998, with technology obtained from South Korea's Daewoo Motor Co.

Apart from the some 5,000 Matiz cars, the company also sold around 1,500 Magnus sedans last year in Taiwan. Even so, the company accounted for only 1.39 percent of the around 484,000 new vehicles sold in Taiwan last year.

To boost its business, Formosa Automobile is considering expanding its product lineup by introducing cars from Czechoslovakia's Skoda Auto between the first and second quarter of this year at the earliest, according to the official.

The first Skoda model to be introduced into Taiwan will be an imported sedan equipped with a 2.5-liter diesel engine that might be priced at over NT$1 million, the official said. Formosa Automobile also plans to manufacture the Czech car locally to save costs, the official said.

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