Yulon, IT giants in Taiwan to jointly develop auto-electronics business

Taipei, April 4, 2005 (CENS)-- Taiwan's Yulon Group, the largest automobile-manufacturing conglomerates on the island, is expected to set up a joint venture company with several leading information technology (IT) and electronic makers to develop auto electronic parts and systems.

The project, dubbed IA (IT and automobile), aims to integrate the available resources of Taiwan's IT, electronic and auto makers to turn out 100%-homegrown automobile sub-systems, including chassis, auto chips, car computers, reverse radars, electronic brake force distribution (EBD) system, brake system, automatic cruise system, air bags, safety-protection system, and in-car multimedia system etc.

Industry sources said that the total investment in the IA project is estimated at NT$12 billion NT$15 billion (US$380.95 million to US$476.19 million at US$1: NT$31.5). There are some possible partners in the project, including Quanta Computer Inc., Hon Hai Precision Ind. Co. Ltd., Asustek Computer Inc., Compal Electronics Inc., and a venture capital run by former vice Primer Minister Lin Hsin-yi, in addition to the Yulon Group. The Yulon Group consists of many auto-parts affiliates and two major auto makers in Taiwan, including the Yulon Motor Co., group flagship firm that maintains partnership with Nissan of Japan, and China Motor Corp., in cooperation with Mitsubishi Motors of Japan. The two companies were the No. 2 and No. 3 auto sellers in Taiwan last year.

The committee of the government-run Executive Yuan Development Fund is scheduled to hold a meeting and pass the proposal to inject NT$1.5 billion (US$47.62 million) into the IA project, with the Yulon Group expected to have a 50% stake in the joint venture company.

Yulon Motor president Chen Kuo-rong confirmed that his company has been invited by the Ministry of Economic Affairs (MOEA) to join the IA project to jointly develop an auto-electronic platform and grab some business opportunities in the global auto-electronic parts market valued at some NT$900 billion (US$28.57 billion) a year.

Chen pointed out that there is not a clear-cut timetable for the establishment of the new venture, but he hopes the government to inject more funds into the project.

According to Chen, the project is scheduled to develop a common automobile chassis, which will be applied onto 16 sedan and commercial-vehicle and sport utility vehicle (SUV) models to be produced by Yulon Motor and China Motor. The platform will be integrated with targeted transmission, suspension and auto-electronic systems.

In line with the development of the common platform, Yulon-reinvested China Engine Corp., the only complete auto-engine developer and producer in Taiwan, is scheduled to develop automobile engines with displacements ranging from 1,800cc to 2,400cc.