Dongfeng-Yulon JV gets nod
By Jin Jing |
00:00 UTC+8 August 10, 2010
|
Print Edition
Print Edition
DONGFENG Motor Group Co said its joint venture with Taiwan's largest auto maker Yulon Motor Co Ltd has been approved by China's central government.
Both firms pledged to invest 775 million yuan (US$115 million) into the 50-50 joint venture, the nation's third-largest auto group said in a statement yesterday. The deal was signed off by the National Development and Reform Commission on July 29.
The deal suggests that overseas auto firms continue to retain confidence in China's automotive sector despite a recent industrial slowdown added to the risks of market oversupply amid car makers' ambitious expansion.
Yulon plans to produce its own-brand Luxgen passenger vehicles and new energy autos at a plant in eastern China's Zhejiang Province with the first model expected to roll off the assembly line in the middle of next year.
Initial capacity of the venture is 120,000 engines and 120,000 vehicles, covering sedans, sport utility vehicles, multi-purpose vehicles as well as pure electric cars, the statement added.
Industrial analysts said the huge market potential on Chinese mainland would give Yulon advantages to boost sales outside its home market. But the Taiwanese car maker also faces tough competition from both international rivals, like Volkswagen, as well as China's home-grown auto producers such as BYD and Chery.
Yulon also runs a joint venture with Daimler and Fujian Motor Industry Group Co for making Mercedes vans in southeastern Fujian Province.
Shares of Dongfeng rose 1.32 percent to 5.37 yuan yesterday.
Both firms pledged to invest 775 million yuan (US$115 million) into the 50-50 joint venture, the nation's third-largest auto group said in a statement yesterday. The deal was signed off by the National Development and Reform Commission on July 29.
The deal suggests that overseas auto firms continue to retain confidence in China's automotive sector despite a recent industrial slowdown added to the risks of market oversupply amid car makers' ambitious expansion.
Yulon plans to produce its own-brand Luxgen passenger vehicles and new energy autos at a plant in eastern China's Zhejiang Province with the first model expected to roll off the assembly line in the middle of next year.
Initial capacity of the venture is 120,000 engines and 120,000 vehicles, covering sedans, sport utility vehicles, multi-purpose vehicles as well as pure electric cars, the statement added.
Industrial analysts said the huge market potential on Chinese mainland would give Yulon advantages to boost sales outside its home market. But the Taiwanese car maker also faces tough competition from both international rivals, like Volkswagen, as well as China's home-grown auto producers such as BYD and Chery.
Yulon also runs a joint venture with Daimler and Fujian Motor Industry Group Co for making Mercedes vans in southeastern Fujian Province.
Shares of Dongfeng rose 1.32 percent to 5.37 yuan yesterday.
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