Taiwan's Chinfon Group to Make Own Car Engines in China

Taipei, Aug. 12, 2009 (CENS)--Chinfon Group recently announced that its mainland Chinese subsidiary Xiashing Motorcycle Co., Ltd. is setting up a brand-new automotive-engine production line and would tie up with Xiamen King Long United Automotive Industry Co. to tap the booming car market in China, according to group chairman Shi Huang.

Industry sources said that Xiashing will locally produce a 1,300cc self-developed automotive engine to serve Xiamen King Long's plan to venture into the passenger-car market. Xiamen King Long is applying for official permission to produce passenger cars in addition to its existing bus-production business.

Founded in 1988, Xiamen King Long Ltd. is one of the earliest joint ventures in the bus manufacturing industry in China, whose 24% stake is held by Taiwan-based San Yang Industry Co., Ltd. under the Chinfon Group.

Xiamen King Long contributes stable earnings to Sanyang every year, making it a major money-making overseas affiliate of the Chinfon Group.

To help Xiamen King Long to diversify into passenger-car production, Sanyang has been invited to introduce automotive-engine technology to China by directly supplying Xiamen King Long.

Sanyang had assembled Hondas for more than 20 years in Taiwan, and now locally assembles Hyundai. Once Xiashin is authorized to make engines, the Chinese subsidiary will be Chinfon Group's third automotive-engine production base, besides the one in Taiwan and Vietnam.

Some industry sources said that Sanyang might export its China-assembled automotive engines to Taiwan or even develop an own-branded mini-car business on the island after Taiwan signs the Economic Cooperation Framework Agreement (ECFA) with China.