Yulon to Build Cars in Taiwan With China-made Parts
2010/12/22 | By Quincy LiangTaipei, Dec. 22, 2010 (CENS)--Yulon Group of Taiwan recently said that it plans to begin shipping sheet-metal, engine, and plastic parts back to Taiwan to assemble the group's LUXGEN own-brand cars.
Yulon assembles several LUXGEN models in Taiwan with most parts supplied locally. The group, however, is scheduled to begin mass production of LUXGENs also in China by the third quarter of 2011 and has set up a joint venture across the Taiwan Strait, the Dongfeng Yulon Motor Co., Ltd., with China's third-largest carmaker the Dongfeng Group.
The Taiwanese carmaker is scheduled to begin shipping the tailgates, roof, machined engine parts, and plastic parts back to Taiwan for assembling the LUXGEN SUV. Such move makes Yulon the first local automaker to kick off division-of-labor scheme on the both sides of the Taiwan Strait, after Taiwan and China signed the Economic Cooperation Framework Agreement (ECFA).
A senior Taiwanese manager at Dongfeng Yulon said that both the LUXGEN MPV (multi-purpose van) and SUV (sport utility vehicle) have been commercialized in Taiwan. So Yulon will purchase more parts from local suppliers in China in the future to cut cost and accelerate the amortization of tooling.
Dongfeng Yulon has a very ambitious goal announced at the firm's founding recently to sell 500,000 new cars a year by 2018. Some 12 Taiwanese auto-parts suppliers have promised to set up factories in China to directly supply products to the automaker.