Chinese Bus Maker Xiamen King Long to Invest in Taiwan

Taipei, Sept. 17, 2009 (CENS)--Xiamen King Long United Automotive Industry Co., Ltd., the largest bus maker in mainland China, recently signed a cooperation memorandum of understanding (MOU) with local Sanyang Industry Co., Ltd.

The two parties plan to set up a joint venture company in Taiwan to produce coach buses, and other vehicle products and parts. The venture is also expected to help the Chinese bus maker rapidly and efficiently venture into passenger-car business by utilizing Sanyang's passenger-car production experiences accumulated in the past 50 years.

Several Chinese automakers have announced cooperation projects with Taiwanese partners and plan to introduce some car models to be locally assembled on the island, including Geely Automobile Holdings Ltd., Chery Automobile Co., Ltd. etc. But the King Long-Sanyang project seems to catch up with at a high speed.

Sanyang chairman Huang Shi-hui led a delegation to sign MOU with Xiamen King Long representatives. According to Sanyang, Xiamen King Long was established in 1988 as one of the earliest China-foreign joint ventures in the auto industry. Its major shareholders include Xiamen King Long Motor Co., Ltd, Xiamen State-owned Assets Investment Corp., and Sanyang, holding 51%, 24% and 25% stake in the company, respectively.

The incumbent vice chairman and president at Xiamen King Long are dispatched by Sanyang, which introduced the Chinese partner's coach bus models for local assembly in 2008 and already sold 40 units.

In April, Xiamen King Long announced that one of its subsidiaries, the Xiamen Golden Dragon Van Co., Ltd., would pour 134 million renminbi (RMB, or Chinese yuan) into self-development of series passenger-car models with engine displacements from 1,300cc to 1,600cc and would utilize its existing light-bus production lines to produce such new products for exports.

Industry insiders said that Xiamen King Long's venture into the passenger-car business is highly relevant to Sanyang, which just announced to install an automotive-engine production line at its Chinese powered two-wheeler (PTW) manufacturing subsidiary Xiashing Motorcycle Co., Ltd. in Xiamen, Fujian Province of China. The engines are expected to be supplied to Xiamen King Long, the sources said.

Sanyang officials pointed out that the coming signing of the Economic Cooperation Framework Agreement (ECFA) between China and Taiwan is expected to greatly improve the trade relations on the both sides of the Taiwan Strait and would open a window for Chinese automakers who want to develop cooperation ties with Taiwan partners.

Sanyang officials stressed, however, that the details in the King Long-Sanyang veture would be further discussed and finalized according to the contents of the ECFA.