Sat, Jun 02, 2007 - Page 12 News List

Yulon denies reports on building own-brand cars

CONTINUING DREAM?Despite the denials of company officials, some believe the automaker has never given up on making its own lineup of cars

By Jason Tan  /  STAFF REPORTER

Yulon Group (裕隆集團), one of the nation's leading automakers, yesterday denied reports that it planned to manufacture own-brand vehicles.

"Yulon has always been a professional contract carmaker for other brands. We will always welcome contract production possibilities but have no plans to venture into the own-brand business," Yulon's spokesman Han Chen-ping (韓正平) said in a telephone interview yesterday.

Hua-chuangz

Han said reports that Yulon would produce own-brand cars were not true and its affiliate Hua-chuang Automobile Information Technical Center (華創車電) was established in order to better integrate electronics into automobiles, not produce cars.

The center was set up in December 2005 by Yulon and six other stakeholders from the information technology industry including High Tech Computer Corp (宏達電) and E-ton Solar Tech Co (益通光能).

NT$10 billion

The Chinese-language Economic Daily News reported yesterday that Yulon has invested more than NT$10 billion (US$301 million) in an own-brand car project, with five new cars in the pipeline.

The new cars -- consisting of a multi-purpose vehicle, a sports utility vehicle, a medium sedan and two concept models -- were expected to make their maiden appearance at the year-end automobile show in Taipei and be sold in China next year through Yulon's unit in China, the Dongfeng Motor Co (東風汽車), the newspaper said.

China saw car sales reach more than 7 million last year and has overtaken Japan to become the second-largest market in the world after the US.

Despite the official denials, an analyst said Yulon's pursuit of its "own brand car dream" has never died.

In 1986, Yulon launched the "Feeling 101" (飛羚101), the company's first car designed and developed in house, but the car did not take off in Taiwan.

`Not given up'

"Yulon has not given up on its dream to create own-brand cars. It has decided to focus on the market in China because the market is small in Taiwan," said Sam Wu (吳鴻昇), an analyst at Yuanta Core Pacific Capital Management (元大京華投顧).

However, the market across the Taiwan Strait is competitive because there are already a number of own-brand cars developed by Chinese makers there, he added.

Yulon should try hard to convince the Chinese government to purchase its cars, which would assure sufficient volume to ensure sustainability, he said.

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