Yulon Group wins sales agency for LG auto lubricant

Taipei, Nov. 17, 2004 (CENS)--Sinqual Technology Co., a subsidiary of Yulon Group, Taiwan's largest automobile conglomerate, has won local sales agent right for LG automobile lubricant products imported from South Korea.

Sinqual said that it would first supply LG lubricant products to 300 existing repair and maintenance points operated by Yulon Motor Co. (in partnership with Nissan) and China Motor Corp. (Mitsubishi) around the island. Yulon, the flagship firm of the group, and its affiliated China Motor each own a 50% stake in Sinqual.

In addition, Sinqual will also develop a rapid auto repair and maintenance chain-store system in Taiwan under the LG Oil brand.

Industry sources said that there are some five million automobiles running on Taiwan's roads and the annual sales of automobile lubricant products in Taiwan outstrips NT$10 billion (US$302.11 million at US$1: NT$33.1). The lucrative auto lubricant market has drawn most international brands to tap and attracts more and more local auto makers to jump on the bandwagon.

With the support from both Yulon and China Motor's repair and maintenance chain stores, industry sources said, the LG automobile-lubricant products are expected to soon become one of the top-three brands on the island.

Sinqual also plans to supply LG lubricant products to local auto makers on an original equipment manufacturing (OEM) basis.

Some auto makers doubted Yulon Group's move as currently the domestic auto-lubricant market is still dominated by big American and European brands. With lower quality image and brand popularity, they are not so optimistic about the sales performance of the newcomer from South Korea.

Sinqual, however, said that LG is one of the top-three conglomerates in South Korea and the group's home-appliance and 3C (computer, communication, and consumer electronics) products already own great popularity in Taiwan.

Established in 1967, LG-Caltex Oil (LG Oil) produces various kinds of petrochemical products and commands over 30% of the South Korean market. LG Oil reported revenue of US$9 billion last year, with product lines encompassing automobile and marine ship lubricants, gasoline, diesel and liquid petroleum gas.