Yulon Motor Co (裕隆汽車) yesterday said that factory utilization would be stable this year as US President Donald Trump’s reciprocal tariff proposal should not have an immediate impact on the business of its major electric vehicle customers including Foxtron Vehicle Technologies Co (鴻華先進).
Yulon’s comments came as investors were concerned that Taiwan might slash import car tariffs from 17.5 percent to zero as lawmakers have proposed, or to a level matching the 2.5 percent levied by the US. The Ministry of Economic Affairs has suggested a gradual tariff cut amid fears over a drastic decline in locally manufactured vehicles’ market share.
Foxtron is a joint venture between Yulon and Hon Hai Precision Industry Co (鴻海精密). Yulon counts Foxtron and Yulon Nissan Motor Co (裕隆日產) as its major customers for contract manufacturing services.
Photo courtesy of Yulon Motor Co
“We have to monitor how the tariff issue plays out, as it is closely linked to the US’ reciprocal tariff policy,” Yulon president Hsu Kuo-hsing (許國興) said at a virtual earnings conference yesterday.
“We will have significant business from our major client, Foxtron, and our own brand in the future. We believe those [businesses] will not be affected by the import tariff adjustments [by Taiwan],” Hsu said.
Yulon’s shipments this year would remain largely flat from last year’s level, he added.
Hsu declined to comment on a Bloomberg report last week that Hon Hai had reached an agreement with Mitsubishi Motors Corp to make electric vehicles (EVs) in Taiwan, or on whether Yulon would use its factories in Miaoli County’s Sanyi Township (三義) to assemble Mitsubishi cars.
“We will make cars for Foxtron on a contract basis. Any information about Foxtron and its customers should be disclosed by Foxtron,” Hsu said.
Yulon is the only carmaker in Taiwan that is capable of making EVs. The company has produced more than 10,000 EVs for affiliated Luxgen Motor Co (納智捷汽車), it said.
Yulon yesterday forecast that the nation’s new car sales this year would grow 2.9 percent to 462,000 units, compared with 449,000 units last year on the back of new model launches and sales promotion campaigns.
The company reported net profit declined 36 percent to NT$6.93 billion (US$209.4 million) last year, compared with NT$10.79 billion in 2023. Earnings per share dropped to NT$3.78 from NT$4.63.
The board of directors has approved a cash dividend distribution of NT$1.3 per share. That represented a payout ratio of 34.39 percent, matching the company’s policy of paying 30 percent to 50 percent of its earnings.
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