Sanyang, International Truck to supply MND 4,788 military trucks

Taipei, April 26, 2005 (CENS)--A joint bidding team of Taiwan's Sanyang Industry Co., Ltd. And U.S.-based International Truck and Engine Corp. (ITEC) has recently won a government bid to supply 4,788 military trucks to the Ministry of National Defense (MND) in the coming five years.

Sanyang, which locally produces SYM-branded powered two-wheelers (PTWs) and Hyundai car models, confirmed that it was chosen by the MND as winner of the military-truck bid project but has yet to sign a formal agreement with the government.

Senior officials of Sanyang said that the project is expected to make Sanyang one of the top-three makers of heavy-duty vehicles in Taiwan, this is the first time for the firm to engage in the production of trucks.

Sanyang plans to set up new truck production lines at its car-manufacturing plant in Hsinchu, northern Taiwan, and contract its existing auto-parts suppliers to develop some truck parts to meet a 30% local-content requirement by the project.

Sanyang said that it would deliver a total 4,788 trucks to the MND in the next five years, including 643 units this year; 1,104 units in 2006, 2007 and 2008 each; and 883 units in 2009.

According to MND's bidding requirements, qualified truck models in the project have to meet the front-two, rear-four wheel and four-wheel drive (4WD) specifications so as to replace the old military trucks supplied by GMC and American long time ago.

ITEC is currently the No. 4 heavy-duty truck maker in North America. Industry sources said that Sanyang does not rule out expanding cooperation ties with the American partner to tap the local market for trucks.

Industry sources said that a strong rival bidding team between local China Motor Corp. (which locally produces Mitsubishi cars) and DaimlerChrysler Group's Mercedes-Benz truck division was expected to win the bid, but the team decided to give up finally due to the 30% appreciation of the euro in the past three years greatly pushing up costs.

Sanyang has fared smoothly in cooperating with Hyundai to locally produce car models of the South Korean automaker, after terminating its 40-year cooperation ties with Honda of Japan in 2002. Last year, Sanyang's revenue outstripped NT$20 billion (US$632.91 million, including PTW sales) and the figure is expected to reach NT$30 billion (US$949.37 million) this year.