December 13, 2004
Yulon Motors, the long-time manufacturing and sales representative for Nissan in Taiwan, and GM, the world's largest auto company, are reported to be nearing finalization of a plan for the establishment of a partnership in Taiwan. A deal could be signed as early as the end of the year.
Under the plan, Yulon Motors would be responsible for production, design and sales for GM's new Buick and Opel models in Taiwan.
Yulon Group, the parent company of Yulon Motors, quietly established Yutong Motors at the end of 2003, a move generally read as preparation for a partnership with GM. Perhaps the most obvious indication of this intention is that the "tong" half of the Yutong name is the same Chinese character as that used in Tong Yong, GM's Chinese name, while the "yu" half is the same as that in Yulon. Yulon Motor's president Chen Kuo-rung is chairperson of the board at Yutong.
Yulon Motors established Yutong with just
NTD 100 million, but invested an additional
NTD 4.2 billion this year in order to hire new personnel, purchase new equipment and import technology.
GM is preparing to relocate its Asia Pacific headquarters from Singapore to Shanghai in 2005. This means that this partnership could represent a significant first for Taiwan: the first foreign-invested company established in China to invest in Taiwan. Yulon and GM share some of the same parts and components suppliers in Taiwan and China, so a joint venture would benefit both companies through the integration of cross-straits resources and markets.
It is reported that Yulon will control a share of over 60% in Yutong, while GM will hold the remaining share.
Yulon would not be GM's first Taiwanese partner. The US auto company was paired with Taiwan's Chinese Automobile Co. before, but this relationship came to an end due to financial problems at CAC ignited by the 1997 Asian financial crisis. These partners were racking up annual sales in excess of 10,000 vehicles annually at their peak, a very respectable figure in Taiwan's import auto market. The advantage of the Yulon-GM plan is that the vehicles would be made in Taiwan, thus avoiding Taiwan's automobile import tariffs.
Yulon Motors and its fellow Yulon Group subsidiary CMC, the domestic manufacturer of Mitsubishi cars and trucks, have been leaders in the local auto market for years. Yulon Group's businesses range from textiles to auto manufacturing and sales, but it has branched out into the high-tech sector in recent years, including the purchase of a semiconductor company. Yulon Motors and CMC have also experienced extraordinary success in forming joint ventures with Chinese automakers for auto manufacturing and sales operations in China.
A number of overseas auto companies investing in China have assigned local executives from their Taiwanese partners to their China-based operations. As Taiwan's auto market grew, these Taiwanese executives gained valuable experience designing cars to suit ethnic-Chinese tastes.
(United Daily News)
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