Mon, Nov 28, 2011 - Page 11 News List

French protest KYMCO deal

NEW MARKETS:In July, Kwang Yang signed an new engine project with BMW, a sign that its motorbike engine technology is valued by the German motor vehicle giant


The French Post Office’s procurement of 3,000 50cc KYMCO (光陽) scooters from Taiwan sparked a protest at a Peugeot Scooters factory on Friday, as the deal has affected the workers’ job prospects at the plant, according to a report on the Le Pays newspaper Web site.

The report said the state-run post office’s decision to place the order with Kwang Yang Motor Co (光陽工業), which sells its motorbikes under the brand KYMCO, was like ringing the death knell for France’s struggling motorcycle industry.

The French Post Office, previously a major client of Peugeot Scooters, decided late last year to switch its business to Kwang Yang. However, the news did not become public knowledge until recently, prompting workers at the motorbike company’s factory in Dannemarie in northeastern France to stage a protest, Le Pays said.

Peugeot Scooters is scheduled to close its Dannemarie factory at the end of next year and transfer all of the plant’s 140 workers to other sections of the company. The company, a part of PSA Peugeot Citroen — the second-largest carmaker in Europe — laid off 250 workers at its Dannemarie and Mandeure plants in 2008.

Another French daily, Le Figaro, reported earlier this month that Peugeot Scooters had relocated two-thirds of its production to China since 2007 in an effort to cut operational costs.

About 90 percent of Peugeot motorcycles and scooters are sold to European countries, but annual motorbike sales in that market have dropped by 40 percent since 2007, the report said. Peugeot Scooters lost more than 200 million euros (US$265 million) last year, it added.

Meanwhile, BFM Business radio station said the French Post Office’s procurement of KYMCO scooters has had little impact on jobs at Peugeot Scooters because the company has secure orders for its 125cc scooters, which offer better profit margins than the 50cc models.

Asked about his view on the French media’s discussion of KYMCO’s successful foray into the French scooter market, Taiwan’s representative to France Michel Lu (呂慶龍) said small scooters are a highly competitive product.

“Kwang Yang’s success in winning the order from the French Post Office indicates that the price, design, quality and performance of its scooters have won consumer recognition,” Lu said.

Blue-chip Taiwanese companies are more than capable of seizing business opportunities through fair competition, he added.

In Taipei, the United Daily News reported on Saturday that Europe has become a major export focus for Kwang Yang and that KYMCO is now a popular scooter brand in the European market, drawing wide attention at major European motorcycle trade fairs.

In July, Kwang Yang signed a new engine project with BMW, indicating that the company’s motorbike engine technology is recognized by the German motor vehicle giant, the report said.

Italy, Spain, Germany and France have become major export destinations for the Greater -Kaohsiung-based company, the report added. Its ATV multifunctional vehicles now have more than a 30 percent share of the French market.

A group of French Post Office executives visited the company earlier this year to confirm the details of the 50cc scooter deal, the report said.

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