Tue, Feb 22, 2005 - Page 10 News List

Yulon expects increased sales in Chinese market

AUTO MARKET Drastic price declines that kept many consumers on the sidelines last year have ended, and the firm expects to sell 100,000 vehicles in China this year

By Amber Chung  /  STAFF REPORTER

Yulon Nissan Motor Co (裕隆日產), which distributes Nissan cars in Taiwan, said yesterday that it expected to see a leap in sales in China, as cut-throat price competition in the crowded Chinese market is expected to ease this year.

"We have seen the severe price war [in China], which agonized automakers last year, soften somewhat," Hsu Shih-tung (徐世棟), general manager of Yulon Nissan's finance department, said yesterday.

Consumers who previously delayed purchasing new cars out of expectations that prices would decline further have recently started buying, Hsu said.

"We saw decent sales of over 10,000 vehicles in January alone," Hsu said.

Yulon Nissan said they expect to sell 100,000 cars in China this year, up from over 60,000 units last year, through its Chinese unit Fengshen Automotive Co (風神汽車), a three-way joint venture formed by Yulon Nissan, Nissan Motor and China's Dongfeng Motor Corp (東風汽車), in which the Taiwanese company has 40-percent stake.

Despite the optimistic outlook, Fengshen's sales could remain at around last year's level of NT$700 million, due to the lingering impact of price competition and increased manufacturing costs.

The company will also release a new 1.5-liter Tiida compact model later this year, Hsu said.

The company saw yields from its Chinese business shrink to over NT$600 million last year from NT$3 billion in 2003.

Yulon Nissan, which is the nation's No. 3 auto maker, also forecast after-tax income of around NT$3 billion this year, or NT$10.1 per share, on revenue of NT$54.3 billion, up from NT$49.6 billion last year.

The company, which sold 11,276 cars locally last month hopes to sell 70,000 units this year, a slight increase from 70,318 units last year.

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