Shung Ye to distribute, locally assemble Mercedes-Benz trucks

Taipei, Aug. 16, 2005 (CENS)--Taiwan's Shung Ye Group is expected to distribute and locally assemble Mercedes-Benz heavy-duty trucks in Taiwan, according to the leading automobile-distribution conglomerate on the island.

According to Shung Ye, it is commissioning its subsidiary Yue Ye Motors Corp., local agent of Mitsubishi Fuso trucks and Taiwan's largest commercial-vehicle distributor, to discuss possible cooperation ties with DaimlerChrysler Taiwan (DCT), the local agent for imported Mercedes-Benz trucks and buses.

DCT refused to comment on the project, but some industry insiders estimated that Yue Ye would begin distributing Mercedes-Benz trucks late this year.

Industry sources pointed out that the Shung Ye-DaimlerChrysler truck-biz cooperation project would start from trucks and truck cabins in the initial stage and then extend into buses and truck/bus chasses.

In the future, they added, DCT will still be the local agent for Mercedes-Benz trucks and buses and responsible for importing truck parts and components, which will be assembled by Golden Stout Industrial Co., Ltd. (another subsidiary of Shung Ye) into complete vehicles. Yue Ye, hence, will simultaneously distribute Mitsubishi Fuso and Mercedes-Benz trucks in Taiwan in the future.

According to a local distributor of trucks and buses, the domestic heavy-duty vehicle market has long been dominated by Japanese brands, including the top-four brands such as Mitsubishi Fuso, Hino, Isuzu, Nissan UD. Only Scania of Europe can enter into the top-five list in the local market.

Regarding heavy-duty trucks as a money-making tool, owners of such vehicles care most about prices and after-sales services. Generally speaking, the prices of European trucks are higher than those of Japanese counterparts, and the competitiveness of the former further weakened along with the sharp appreciation of the euro.

In addition, the insiders said, the local agents of Japanese heavy-duty vehicles have deployed complete service and distribution chains around the island, further cementing their dominance position.

Some European truck brands, such as Scania and Volvo, have started local assembly of their trucks in a bid to cut cost and upgrade local market shares. DCT's local-assembly project, insiders said, is expected to change the ranking of suppliers to local heavy-duty vehicle market in the future.

Currently, Mercedes-Benz is the world's largest heavy-duty truck conglomerate. In the past, the group's truck and bus products were sold mainly in Europe and the U.S. But in recent years, the company has been actively developing sales in Asia.

After DaimlerChrysler gained an 85% controlling stake in Mitsubishi Fuso Truck and Bus Corp. of Japan, DCT is trying to integrate its resources of heavy-duty vehicles in Taiwan by first cooperating with Shung Ye, a long-term agent of Mitsubishi Fuso trucks.

Shung Ye now owns 20 heavy-duty vehicle service points around the island, the most among local counterparts, and Mitsubishi Fuso has long been the No. 1 truck brand in Taiwan. The resource-integration project is expected to boost Mercedes-Benz's truck sales on the island in a short period, industry sources said.