Tong Yang, Guangzhou Automobile to Set Up Auto-Parts Venture in Hunan Province, China

Taipei, March 30 , 2011 (CENS)--Tong Yang Industrial Co., Ltd., the largest auto parts conglomerate in Taiwan, recently announced that it would soon set up an auto-parts manufacturing joint venture with Chinese automaker Guangzhou Automobile Group.

The new venture, to be located in Changsha of Hunan Province, will have initial capitalization of US$17.5 million, with Tong Yang and Guangzhou Automobile holding 49% and 51% stakes, respectively.

Raymond Wu, president of Tong Yang, claimed earlier that his group is ready for developing business in the booming Chinese automobile market. He also said that Tong Yang will set up another joint-venture plant in Guangzhou of Guangdong Province in cooperation with FAW Group.

Tong Yang's new venture in Hunan Province is scheduled to be completed in mid-2012 for mass production of auto parts, which will be supplied to a joint venture auto manufacturing plant set up in 2010 between Guangzhou Automobile and Italian automaker Fiat. Initial production capacity is about 400,000 units/sets per year.

So far, Tong Yang has operated 16 production bases in mainland China, including five coating plants, one tooling plant and one sheet-metal parts plant. The new venture in Hunan Province is expected to help Tong Yang tap into supply chains of other joint ventures between Guangzhou Automobile and foreign partners such as Honda and Toyota.

Tong Yang's Wu said that in the booming Chinese automobile market, the top-10 automakers there have shown the best sales performances, and therefore Tong Yang's strategy is to further strengthen its cooperation ties with the top-10 Chinese automakers. So far, it has maintained cooperation with FAW, Changan, Dongfeng etc.

To explore the high-potential auto-parts aftermarket (AM) in China, Tong Yang has reinvested in a subsidiary, Nanjing Tong Yang Plastics Co., Ltd., which is scheduled to begin mass production of AM items in the first half of 2011.

With auto parts among the fast-tracked gainers for tariff cut or market opening after the signing of the cross-Taiwan Strait Economic Cooperation Framework Agreement (ECFA) between Taiwan and China, Wu stressed that Tong Yang would step up tapping into the big aftermarket (AM) auto-parts market in China. Taiwan is expected to become Tong Yang's global production center of AM auto-parts products after the signing of ECFA, Wu said, so the group would expand such production capacity on the island by 30% this year.