Yulon Steps Up Own-brand Homegrown Car Development

Taipei, Jan. 25, 2008 (CENS)--Taiwan's Yulon Group, the largest automobile manufacturing conglomerate on the island, has been actively developing own-brand car products, and has started developing distribution channels and recruiting needed talents.

In order not to upset the technical partnerships with Nissan Motor of Japan and General Motors of the United States, Yulon intends to set up a new subsidiary responsible for own-brand auto sales, which will contract Yulon flagship firm Yulon Motor Co. to locally assemble self-developed car models in the future.

Yulon reportedly got technical authorization from Matra Group of France for utilizing the chassis of Renault Espace minivan to develop series homegrown car models including sedan, sport utility vehicle (SUV) and multi-purpose van (MPV), through its affiliate Hua-chuang Automobile Information Technical Center Co. Ltd. (HAITEC).

The scheduled locally developed car model is expected to be equipped with a 2,000cc turbo-charge automobile engine developed by local Advance Power Investment Co., Ltd. (CECTEK, formerly China Engine Corp.) under Yulon Group, as well as many high-level automotive-electronics systems and parts developed by local companies such as telecom on-board unit (OBU), LED headlamp, solar-cell sun-roof, safety imaging system etc.

The first prototype of Yulon's targeted homegrown car products was completely developed in mid-2007 and has passed complete-vehicle, durability, and many other tests by local Automotive Research & Testing Center (ARTC).

Yulon is also aggressively eyeing the huge and potential market in mainland China and is waiting for the permission from the Chinese central government to set up a new joint venture and a plant with Zhejiang Zhongyu Group across the Taiwan Strait.

In order to prevent related moves from annoying foreign partners, Yulon has been maintaining a very low profile about development of own-brand car products.

Yulon, in fact, has recruited many talented and experiences professionals from local automakers or foreign automakers' local branches. In addition, Yulon Motor's board recently also resolved to invest additional NT$135 million (US$4.15 million at US$1: NT$32.5) in five auto distributors under its flag. Industry sources interpreted Yulon's investment move as part of its own-brand development plan.

Some insiders familiar with Yulon's plan pointed out Yulon's first homegrown car model is expected to be pushed into domestic market as early as in the second quarter of 2008, and the group would more focus on developing sales of its own-brand products in mainland China in the future.

Industry sources said that all major global auto brands have completed business deployments in China. If Yulon fails to catch up with China's 11th five-year national development project, in which the government wants to promote self-developed auto brands, they said, the huge investment amount might be wasted.