Prince Motor may invest in Taiwan Isuzu: reports

Prince Motor (太子汽車), a local car maker which also distributes Isuzu and Suzuki-branded vehicles, will reportedly buy up to 50 percent of Taiwan Isuzu Motors Ltd, a move which will enable Prince Motor to assemble new Isuzu cars locally and gain distributorship for all Isuzu vehicles here.

According to reports yesterday in the Chinese-language newspapers, the Commercial Times and the Economic Daily News, Prince Motor would invest around NT$100 million (US$3.06 million), making the company the largest shareholder of Taiwan Isuzu.

The two companies are expected to formally announce the deal on Monday, the reports added. Both declined to comment when contacted by the Taipei Times yesterday.

The current shareholders of Taiwan Isuzu, which was set up in 1995, include Japanese firms Isuzu Motors Ltd and Itochu Corp, with Isuzu holding around 90 percent of the company's shares.

In addition to retailing Isuzu-branded vehicles here, Taiwan Isuzu has a commercial truck assembly plant in Tatu (大肚) Township in Taichung County. It also commissions Prince Motor to assemble and sell Isuzu 3.49-tonne ELF trucks.

Prince Motor also works closely with Suzuki Motor Corp in technology transfer and car assembly. It said the new strategic alliance with Isuzu would not affect its relationship with Suzuki, the reports said.

The papers added that Taiwan Isuzu plans to expand its collaboration with Prince Motor by allowing the latter to assemble Isuzu's recreational vehicles in the future.

However, Prince Motor's facility in Tucheng (土城), Taipei County, will already be running at full capacity this year as a result of assembling over 20,000 units of Suzuki's recreational vehicles and sedans, the newspapers said.

After the partnership with Isuzu is sealed, either party might seek to purchase a facility at Tatu belonging to Formosa Automobile Corp (台朔汽車), which is looking to sell or lease the plant, as its capacity has not been filled owing to lukewarm consumer response to its vehicles.

Last December, Formosa Automobile clinched a deal with Skoda Auto AG — an affiliate of German auto giant VW Group which includes Volkswagen AG and Audi AG — to bring in 12 vehicles under the Octavia, Superb and Fabia labels to Taiwan.

Its plan to utilize the Tatu facility by producing Skoda vehicles locally was put on hold as the Skoda cars had not sold well in the domestic market partly due to weak buying sentiment.