Yulon Motor, Renault sign deal

Yulon Motor Co (裕隆汽車), the nation's second-largest automaker, formed a business alliance yesterday with Renault SA to distribute the French firm's vehicles in Taiwan beginning in April.

Under the partnership, Yulon will import Renault brand cars from France and distribute them through its dealers, said Kenneth Yan (嚴凱泰), vice chairman and president of Yulon, which produces automobiles and trucks in a joint venture with Nissan Motor Co.

Nissan, which owns 25 percent of Yulon, has been aligned with the local carmaker since 1957.

The Taiwanese automaker did not rule out the possibility of not only selling but also manufacturing Renault vehicles in Taiwan, Yan said during a question-and-answer session following the signing ceremony. The partnership, however, is part of an effort by the French automaker to expand its presence in Asia through tapping Nissan's dealership and distribution network, which Renault bought a 36.8 percent stake in last year.

Renault also came to the rescue of Samsung Motor Inc by acquiring a majority stake in the financially-troubled South Korean automaker this year.

"The contract signing with Yulon Motor marks an important step in Renault's redeployment in Taiwan and more generally in the Asia-Pacific region as a whole," said Patrick Debrot, vice president of marketing and sales for Renault Asia Pacific.

With the new partnership, the French company is looking to secure a 5 percent share of the domestic market in the medium term from a 0.15 percent share today, Debrot said.

Although Renault has been in Taiwan since 1983, the company -- under its previous dealership alliance with Sanfu Motors Industrial Co (三富汽車) -- has had meager sales to date of roughly 150,000 units. While Debrot is relatively optimistic about the market for new vehicles in Taiwan, saying the nation is able to consume 450,000 units a year despite a slowing economic environment, the Taiwanese market is expected to slow in the coming months as political turmoil increases and the global economic environment becomes increasingly uncertain, according to an analysis on the automotive industry by Web site Motorbusiness-asia.com.

But if the current uncertainties -- including the tension between Taiwan and China as well as weakness of Chen Shui-bian's (陳水扁) minority government -- are worked through, there will be a period of moderate but sustainable growth for local market, the analysis stated.

In related news, Yulon received yesterday the green light from the Ministry of Economic Affair's Investment Commission for a US$11.25 million investment in Guangzhou-based Fengshen Motor Co (風神汽車).

The investment involves the establishment of auto-parts sales and maintenance system, according to the commission.

Asked of whether Renault will choose Yulon as a possible partner to take a slice of the market in China, Debrot told the Taipei Times that no such a plan exists at the current time, but added that it was open to all possibilities.

With the potential for China to be one of the world's biggest auto markets, Debrot said, "We may form a joint venture or joint ventures to develop the Chinese market ... Yulon is one of the considerations."