Yulon Reportedly Plans to Set Up Auto Plant in Russia

Taipei, July 9, 2012 (CENS)--Yulon Group, the largest carmaker in Taiwan, plans to set up a factory in Russia to assemble its line of Luxgen passenger cars, according to a Taiwanese daily.

Already mass making Luxgens in Taiwan and China, Yulon operates a joint venture with Chinese automaker Dongfeng Motor Group in China.

If everything goes as planned, Yulon will be the first Taiwanese automaker to set up a plant in Russia, where some three million new cars are sold yearly, with the neighboring markets as Eastern Europe, Central Asia being also emerging markets.

Industry insiders say that Yulon originally planned to cooperate with a private Russian carmaker to assemble Luxgens, which was canceled. Yulon hence decided to set up independently a factory and sales company in Russia with initial investment of about NT$1 billion (US$30.3 million), with cars expected to be launched by the end of 2013, the sources said.

Yulon will soon send a team of senior managers to Russia for extended market development.

Industry insiders said that Yulon has repeatedly changed decisions related to the Russian investment, starting with exporting Luxgens from Taiwan, setting up a joint venture with a Russian partner to the latest.

At its recent shareholders meeting, Yulon announced to kick off land development on its old factory site in Taipei, which will yield enough cash to fund the Russian project.

Not exactly boasting a winning track record, Yulon once exported its self-developed Feeling 102 sedan to Russia over 20 years ago, a poorly assembled, designed car with bad fit of doors, dislocating steering wheel, which likely led to project termination a few years later.