Yulon Motor Co (裕隆汽車), one of Taiwan’s leading automobile manufacturers, was the most active share on the local stock market yesterday, as investors bet that the auto company would enjoy robust sales in the Chinese market.
Local dealers said that Yulon Motor and other China-related shares are expected to benefit from China’s week-long holiday that surround its National Day on Oct. 1.
“Yulon Motor’s self-developed Luxgen brand has been well received by local markets, and that also bodes well for the company’s prospects of expanding its China market,” analyst with Taiwan International Securities (金鼎證券) Benson Huang said.
Yulon Motors rose 3.34 percent to NT$51 yesterday, on turnover of 53.3 million shares — the most active share of the day’s trading.
Allan Lin, assistant vice president of research department at Concord Securities (康和證券), said that the establishment of Yulon’s new joint venture in China is also expected to substantially boost the company’s sales in the future.
“The joint venture’s expected contribution to Yulon’s sales might even be equal to the current sales of the company by itself,” Lin said.
Yulon received approval from the Chinese authorities last month to set up the joint venture — Dongfeng Yulon (東風裕隆) — with China’s Dongfeng Motor Corp (東風汽車), China’s fourth-largest automaker by sales, to manufacture vehicles in China.
This will also allow Yulon to promote its Luxgen vehicles and will mark the first time that a Taiwanese auto brand has set up production overseas.
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
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