Yulon to Invest Extra US$23.1 M. to Sell LUXGEN in Mainland China

Taipei, July 28, 2008 (CENS)--The board of directors of Taiwan-based Yulon Group, the largest automobile manufacturing conglomerate on the island, recently resolved to pour additional US$23.1 million into setting up dealers for the house-branded LUXGEN automobile in mainland China.

Most of the capital would go to setting up dealers in major cities in China such as Shanghai, Hangzhou (Zhejiang Province) etc., Yulon said.

For the development of LUXGEN own-brand cars in both Taiwan and China markets, Yulon CEO Kenneth Yen originally planned to let affiliated Tai Yuen Textile Co., Ltd. be the major investor in the newly created business to evade upsetting foreign technical partners as Nissan, Japan and General Motors (GM).

Mainly concerned about brand image, Yen, however, finally decided to let Yulon handle the establishment of the Luxgen Motor Co., Ltd. because the group has a higher presence in China.

Senior Yulon executives confirmed that Yulon has established a joint venture with Zhejiang Zhoungyu Group to sell LUXGENs. Yulon hopes to formally kick off mass production of LUXGEN models with self-developed 2,000cc turbo-charged engine, including offering multi-purpose van (MPV), sport utility vehicle (SUV) and sedan.

Industry sources said that in Taiwan Yulon has commissioned its parts supplier to start tooling works, and Yulon's auto plant in Sanyi, central Taiwan, is scheduled to trial-produce a seven-seat MPV, which is expected to be launched in Taiwan by the second quarter of 2009.