Yulon Motor Co (裕隆汽車) yesterday said it is seeking to boost contract car manufacturing business and accelerate energy business development as tariff uncertainties undercut its profit in the second quarter.
The automaker reported a 73 percent slump in net profit to NT$116 million (US$3.83 million), from NT$435 million in the first quarter. Earnings per share were NT$0.11, down from NT$0.42.
Yulon said consumers have been hesitant to buy new cars amid tariff policy uncertainties and speculations about commodity tax cuts.
Photo: Amy Yang, Taipei Times
Taiwan’s new vehicle sales dipped 14.4 percent year-on-year to 198,959 units in the first half of this year.
“Under such political, economic and tariff-related circumstances, our manufacturing is certainly affected,” Yulon president Hsu Kuo-hsing (許國興) said at an investors’ conference.
The company has formulated four major strategies, including optimizing its car manufacturing scale and vying for new contract orders, Hsu said.
The company is also seeking to assemble more Nissan Motor Co cars in Taiwan, he said.
The company’s major customers for contract manufacturing services include Yulon Nissan Motor Co (裕隆日產) and Foxtron Vehicle Technologies Co (鴻華先進). Foxtron is an electric car venture between Yulon and Hon Hai Precision Industry Co (鴻海精密), which is known as Foxconn overseas.
Yulon is also stepping up efforts to expand its new energy business via its car financing subsidiary Yulon Finance Corp (裕融), which owns renewable energy company Shinshin Credit Corp (新鑫). The energy business currently accounts for a small revenue share.
Shinshin operates more than 400 solar energy plants and has a license to retail green energy. It also operates an energy storage business along with an electric vehicle charging and battery business in Taiwan, as well as energy storage in the US and the Philippines.
Yulon would also be looking to revitalize its overseas assets and expand its energy, car financing, car leasing and secondhand vehicle businesses overseas, targeting Southeast Asian markets such as the Philippines and Malaysia, Hsu said.
Separately, Yulon subsidiary China Motor Corp (中華汽車) maintained this year’s sales target of 49,000 units — half from its CMC-branded vehicles and another half from Mitsubishi Motors Co and MG Motor Corp cars it helps assemble — despite the tariff uncertainty, company spokesman Chien Ching-wu (錢經武) said.
The company plans to introduce a new MG model this quarter, Chien said.
Yulon would manufacture the seven-seater MG 50 itself on a contract basis, rather than China Motor manufacturing it like previous MG vehicles, he said.
China Motor is 8.05 percent owned by Yulon and 25 percent owned by Tai Yuen Textile Co (台元紡織), the biggest stakeholder of Yulon.
The company’s net profit grew 11.3 percent to NT$700 million in the second quarter from NT$629 million in the first quarter. Earnings per share rose to NT$1.28 from NT$1.15.
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