SYM Deploys in India Market

Taipei, April 11, 2006 (CENS)-- Sanyang Industry Co., Ltd. (SYM), Taiwan's leading powered two-wheeler (PTW) manufacturer, recently announced that it acquired an 11.1% stake in Kinetic Group, a leading PTW and automobile conglomerate in India, for US$3.07 million.

SYM is the first Taiwan PTW brand to gain a foothold in the booming Indian market, which is the world's second-largest PTW market with an annual sales volume of about seven million units.

SYM promised that it would provide Kinetic with motorcycle models and technical transfers, and that it would help Kinetic develop new products suitable for the Indian market. The two parties plan to introduce Kinetic-SYM-branded PTW models in early 2007 in India.

SYM president Huang Kuang-wu said that Kinetic and SYM are finalizing their models for the Indian market, and in the future SYM could get a 3% royalty from each Kinetic-SYM model sold.

SYM previously claimed that it does not exclude the possibility of further upgrading its shareholding in Kinetic in the future, but Kinetic would continue to control the daily operations of the joint venture.

Huang deemed that the PTW-parts industry in India is mature, and most of the parts adopted needed for future Kinetic-SYM models could be supplied by suppliers there.

In addition, Huang said, SYM's new plant in Indonesia is scheduled to begin production in June this year. After that, he added, SYM would complete its business deployment in the world's top-three PTW markets, including mainland China, India, and Indonesia.

SYM aims to achieve an annual production-volume goal of 1.5 million units in 2007, Huang claimed.

SYM's subsidiary in Vietnam, the Vietnam Manufacturing and Export Processing Co. Ltd. (VMEP), recently won the permission from the Vietnam government to locally produce automobiles. Huang said that VMEP is scheduled to begin production of SYM automobile products in Vietnam in 2007, and that the first model would be a 1, 300cc commercial vehicle.

According to Huang, Taiwan's domestic PTW market has matured, and doesn't offer much growth space for manufacturers. This is why SYM has been aggressively focusing on developing export sales, and is why this year's overseas sales volume is expected to outstrip the volume in Taiwan.

According to SYM, Kinetic Group was established in 1974 and now owns two PTW-manufacturing arms, including its flagship company, Kinetic Motor, as well as Kinetic Engineer. Kinetic Engineer currently produces mainly geared motorcycles, while Kinetic Motor makes gearless scooters. Both of the firms are listed in India's capital market.

Kinetic cooperated with Honda of Japan, the world's largest PTW brand, in 1998. Honda, however, subsequently decided tie up with another Indian partner to set up the Hero Honda joint venture. Kinetic's major rival Bajaj also cooperated with Kawasaki and set up a joint venture, further threatening Kinetic's market position.

With the tie-up with SYM, Kinetic has decided to stop its cooperation ties with Hyosung and other foreign partners, as well as to turn to SYM for parts procurement.