Formosa Plastics wooing Skoda

Formosa Plastics Group (台塑集團) may move to produce Skoda vehicles locally in 2007, at the earliest, in an attempt to expand collaboration with the Czech automaker, a company official said yesterday.

"We have plans to assemble Skoda cars in the local market sometime around 2007 or 2008 to bring down prices of these models and deepen our partnership," said Jacky Yueh (樂嘉祺), assistant vice president of the marketing department at Formosa Automobile Sales Corp (台宇汽車), in a telephone interview yesterday.

Formosa Automobile Sales is the sole distributor of Skoda models in Taiwan. A number of industry sources have speculated that the group may pass the job of manufacturing Skoda vehicles to Formosa Automobile Corp (台朔汽車), also a subsidiary of Formosa Plastics, but Yueh said it was still too early to make a decision.

Formosa Automobile Corp currently assembles Matiz compacts and Magnus sedans at a plant in Tatu Township (大肚) near Taichung, with technology from South Korea's Daewoo Group.

DEAL CLINCHED

Formosa Automobile Sales announced last week that it had clinched a deal with Skoda Auto AG -- an affiliate of German auto giant VW Group along with Volkswagen AG and Audi AG -- to bring in 12 vehicles under the Octavia, Superb and Fabia labels.

Pricings begin from NT$688,000 to NT$2 million (US$20,800 to US$60,400) with delivery starting next month.

Yueh said that local production will firstly target the mid-size saloon Octavia range.

"This series is newer models with superb exteriors, which are ideal for the Taiwanese market," he said, refusing to say how much prices would be lowered if the cars are manufactured locally.

According to Yueh, manufacturing facilities at Skoda Auto have almost reached capacity in rolling out more than 400,000 vehicles a year for global sales.

For the first 11 months of the year, Skoda Auto sold a total of 452,973 vehicles globally, with Europe as its main market.

This figure represented an increase of 10.5 percent over last year, according to a press release posted on the company's Web site.

ON THE LOOKOUT

In view of the growing demand, the Czech vendor is now on the lookout for qualified domestic partners to produce models in overseas markets, which will bring down production costs and boost capacity, Yueh said.

Formosa Automobile Sales would not rule out working with Skoda Auto in other Asian markets, including China.

This would depend on how well the partnership and sales proceed in Taiwan over the next two years, he said.

The company has set a sales target of 2,000 Skoda vehicles next year, and is pushing the lineup at the 2006 Taipei International Auto Show. The expo, which is being held at the Taipei World Trade Center Exhibition Hall I, will run through Sunday.

Yueh said that the company was not placing high hopes on receiving huge orders from the show; rather, it was banking on greater exposure of the vehicles.

"Skoda cars are new to consumers here and they are mostly checking them out at the auto show. This will be a good platform for buyers to feel and touch these cars," Yueh added.