Yulon Motor Co (裕隆汽車) yesterday posted revenue of NT$48.15 billion (US$1.58 billion) for the first half, a 15.3 percent decline from a year earlier, with last month’s revenue dropping 17.5 percent annually to NT$8 million, according to a company filing with the Taiwan Stock Exchange.
The firm blamed the sales decline on weaker-than-expected demand in Taiwan’s auto market, in spite of a government subsidy to encourage consumers to buy, while falling sales at its Chinese subsidiary, Dongfeng Yulon Motor Co (東風裕隆), also put pressure on its top line.
Dongfeng Yulon — a joint venture between Yulon and China-based Dongfeng Motor Corp (東風汽車) — in the first six months sold 7,300 Luxgen (納智捷) brand cars in China, a 60.5 percent plunge from the same period last year. The venture sold 40,500 Luxgens in all of last year in China, down 32.9 percent from a year earlier.
Miaoli-based Yulon said it has no plans to withdraw from the Chinese market, even though the venture reported a net loss of NT$4.319 billion last year.
The company’s board last month approved an additional capital injection of 397 million yuan (US$58.5 million) for Dongfeng Yulon to improve its financial structure. It also plans to launch 10 new models over the next five years to revitalize its Chinese business, the company said.
Dongfeng Yulon has paid-in capital of 2.75 billion yuan, data showed.
The capital injection plan still needs the approval of the Investment Commission, according to a company statement.
Yulon has not released its earnings results for the second quarter. The company’s net income rose 21 percent annually to NT$761 million in the first quarter, with earnings per share of NT$0.52, helped by earnings from its vehicle financing unit, Taiwan Acceptance Corp (裕融), which saw net profit rise 19.5 percent to NT$552 million in the quarter.
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