Taiwanese Automakers, Parts Makers Buoyed by Chinese Market

Taipei, July 17, 2009 (CENS)--Many Taiwan-based assembled-vehicle and auto-parts makers with sales or investments in mainland China are profiting from the booming automobile market in China, in which a record 1.14 million new cars were sold in June.

Amid heating-up new-car sales, Dongfeng Nissan Motor, a major auto-production joint venture between China's Dongfeng Group and Nissan Motor of Japan, sold about 226,100 new cars in June, an about-42% month-on-month (MoM) increase. Taiwan-based automaker Yulon Group, which is an investor in Dongfeng Nissan, is expected to reap investment returns of more than NT$900 million (US$27.7 million) from the affiliate for the first half, at least a 50% year-on-year (YoY) increase.

Taiwan-based carmaker China Motor Corp. (CMC, the local assembler of Mitsubishis, a major investor in the South East (Fujian) Motor Co., Ltd. (SEM) of mainland China is also expected to profit from its Chinese affiliate. SEM sold 34,300 new cars, a more than 50% YoY increase and already close to last year's total sales volume 41,000 units. SEM is expected to turn profitable in the second half, though the company was still in the red in the second quarter.

Tong Yang Group, the largest auto-parts manufacturing conglomerate in Taiwan with 18 production bases in mainland China, said that its Chinese operation had accumulated revenue of NT$3.19 billion (US$98 million) in the first five months, generating pretax earnings of NT$176 million (US$5.4 million).

A senior official of TYC Brothers Industrial Co., Ltd., one of Taiwan's largest auto-lamp makers, pointed out that his company's three reinvested affiliates in China, Visteon TYC Auto Lamps Co., Ltd., Harbin Haxing Auto Parts Co., and Chang Chun E-Chi Shi Huan Auto Lamps Co., Ltd. have been reporting increasing sales thanks to Chinese government's subsidies for car buys.

Visteon TYC reported a more than 40% quarter-on-quarter (QoQ) revenue growth in the second quarter, TYC said, and the Chinese affiliate accounted for over 80% of TYC's operations in China.

Ta Yih Industrial Co., the largest OE auto-lamp maker in Taiwan and the parent company of TYC Brothers, said that its subsidiary Fuzhou Tayih Industrial Co., Ltd. turned profitable with more than 20% QoQ revenue increase in the second quarter thanks to newly added shipments of 7,000 unit/sets of Mazda 6 headlamps and increased delivery to SEM.

Jui Li Enterprise Co. Ltd., a major sheet-metal body parts maker in Taiwan, said that its Chinese factory in Hainan Province is expected to report more than 30% QoQ revenue in the second quarter and its second-half revenue is also expected to be higher than that in the first half.