Luxury sedans would seem a risky bet in a time of global economic strife, but Yulon Motor Co (裕隆汽車) believes it has found the right formula: Its car is cheap and it is destined for China.
Yulon’s Luxgen model boasts global positioning, night vision and blind-spot cameras — and at NT$800,000 (US$25,000), the company hopes it will appeal to tech-savvy but only moderately wealthy Chinese consumers.
“Many of the functions can only be found on luxury sedans worth up to five times as much,” Hu Kai-chang (胡開昌), president of Yulon Group subsidiary Luxgen Motor Co (納智捷汽車), said in an interview.
Yulon put the finishing touches to the Luxgen — coined from the words “luxury” and “genius” — last year, when the car market worldwide was deep in the doldrums.
“Looking back, we’ll find that we couldn’t have picked a better time than last year to recruit the talent and buy the equipment we need,” Hu said.
“If we had postponed the launch of the brand, it would have cost a whole lot more money,” he said.
Yulon was founded in 1953 as the Taiwanese government pursued ambitions to create a home-grown auto industry. That goal was scaled down over the decades and now Yulon is best known for producing Nissan cars in Taiwan on license.
The Luxgen project, started more than four years ago, has cost Yulon about NT$15 billion, but it says the gamble is already paying off.
The first Luxgen — a 2.2-liter minivan for family use — was unveiled in Taiwan last September and since then Yulon has received orders from more than 3,000 local motorists.
In a market where monthly sales of people-carriers are a meager 300 units, the response has been encouraging.
Buyers say they like its high-tech system, developed jointly with Taipei-based HTC Corp (宏達電), one of the country’s leading smartphone suppliers.
Last month, Yulon saw its sales grow 59.5 percent year-on-year to NT$2.96 billion, the highest monthly figure in three years. But Taiwan, with its population of 23 million, offers limited opportunities, which is why Yulon is looking to the billion-plus Chinese market.
Cross-strait trade has rocketed since Taiwan relaxed a decades-old ban on civilian contacts with China in 1987.
And with sales topping 13 million units last year, China has replaced the US as the world’s biggest auto market.
“It’s unlikely the Luxgen would turn a profit if its sales were confined to Taiwan,” said Kevin Tsui (崔毓雄), an analyst with SinoPac Securities (永豐金證券). “The local market is too small to support the development of a local brand.”
The Luxgen series for the Chinese market may be produced at a plant in Zhejiang Province, a joint venture with Dongfeng Automobile Co (東風汽車) that is awaiting the green light from the Beijing government.
“The odds of success are 50 percent,” Tsui said. “However, if [Yulon] did not do it this way, it would have no chance of surviving in today’s extremely competitive market.”
Yulon has already invested in a joint venture with a Chinese automaker and Daimler to make Mercedes vans in the southeastern province of Fujian.
Meanwhile, Yulon’s smaller local rival, Sanyang Industry (三陽工業), controls 25 percent of Xiamen King Long (廈門金龍), a Chinese bus maker.
However, Taiwan’s carmakers, unlike their German, US, Japanese and South Korean rivals, have failed to build a major role in the Chinese market because of their lack of proprietary technology.
This marks Yulon’s most ambitious foray since 1986, when it launched another model based on its own technology, a series of cars called “Feiling.”
But the Feiling project failed because it could not match the cutting-edge auto technology of the day.
“Yulon learned a lot from the painful lesson. The success of Luxgen, at least initially, has built on that experience,” said Toreo Lin, editor-in-chief of Taipei-based Auto Graphic magazine.
CAUTIOUS RECOVERY: While the manufacturing sector returned to growth amid the US-China trade truce, firms remain wary as uncertainty clouds the outlook, the CIER said The local manufacturing sector returned to expansion last month, as the official purchasing managers’ index (PMI) rose 2.1 points to 51.0, driven by a temporary easing in US-China trade tensions, the Chung-Hua Institution for Economic Research (CIER, 中華經濟研究院) said yesterday. The PMI gauges the health of the manufacturing industry, with readings above 50 indicating expansion and those below 50 signaling contraction. “Firms are not as pessimistic as they were in April, but they remain far from optimistic,” CIER president Lien Hsien-ming (連賢明) said at a news conference. The full impact of US tariff decisions is unlikely to become clear until later this month
With an approval rating of just two percent, Peruvian President Dina Boluarte might be the world’s most unpopular leader, according to pollsters. Protests greeted her rise to power 29 months ago, and have marked her entire term — joined by assorted scandals, investigations, controversies and a surge in gang violence. The 63-year-old is the target of a dozen probes, including for her alleged failure to declare gifts of luxury jewels and watches, a scandal inevitably dubbed “Rolexgate.” She is also under the microscope for a two-week undeclared absence for nose surgery — which she insists was medical, not cosmetic — and is
GROWING CONCERN: Some senior Trump administration officials opposed the UAE expansion over fears that another TSMC project could jeopardize its US investment Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) is evaluating building an advanced production facility in the United Arab Emirates (UAE) and has discussed the possibility with officials in US President Donald Trump’s administration, people familiar with the matter said, in a potentially major bet on the Middle East that would only come to fruition with Washington’s approval. The company has had multiple meetings in the past few months with US Special Envoy to the Middle East Steve Witkoff and officials from MGX, an influential investment vehicle overseen by the UAE president’s brother, the people said. The conversations are a continuation of talks that
CHIP DUTIES: TSMC said it voiced its concerns to Washington about tariffs, telling the US commerce department that it wants ‘fair treatment’ to protect its competitiveness Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) yesterday reiterated robust business prospects for this year as strong artificial intelligence (AI) chip demand from Nvidia Corp and other customers would absorb the impacts of US tariffs. “The impact of tariffs would be indirect, as the custom tax is the importers’ responsibility, not the exporters,” TSMC chairman and chief executive officer C.C. Wei (魏哲家) said at the chipmaker’s annual shareholders’ meeting in Hsinchu City. TSMC’s business could be affected if people become reluctant to buy electronics due to inflated prices, Wei said. In addition, the chipmaker has voiced its concern to the US Department of Commerce