TYC, FAW Group to set up auto lamp venture in mainland China

Taipei, Nov. 10, 2003 (CENS)--Taiwan's TYC Brothers Industrial Co., Ltd. Recently announced that it would cooperate with FAW Group Corp., the largest auto maker in mainland China, to set up an auto lamp joint venture in Changchun, Jilin Province, mainland China.

TYC chairman Wu Jun-ji said the new venture would start mass production in late 2004. Now the No. 1 auto lamp maker in Taiwan, TYC is also aggressively seeking to set up cooperation ties with a major auto lamp supplier in Chongqing, Sichuan Province.

TYC said that the mainland Chinese government has chosen the automobile industry as one of its key industries for special development and plans to soon lift the bans on auto financing services to boost the market demand. TYC said that there were about three million autos sold in mainland China last year and the annual volume is expected to reach four million units this year. The rapidly increasing auto sales there has made the mainland a key arena for all major auto parts suppliers in the world.

Wu said that automobile sales in mainland China would be clustered into five major regional markets in northeast, northern, central, southern and southwest China. In conjunction with the development trend, Wu added, TYC has planned to set up at least one auto lamp production base in each of the said five regions to build a comprehensive business territory in the huge market. Wu claimed that TYC aims to become the largest auto lamp supplier in the Greater China region in five years.

In northeast China, TYC early last year set up an auto lamp-production venture with Harbin Hafei Auto Manufacturing Co. in Harbin, Heilongjiang Province. The venture is initially capitalized at 20 million renminbi (US$2.4 million at US$1:RMB8.2), of which the Taiwan partner owns 40%.

Wu said that his company began contacting the FAW Group and signed a cooperation memorandum of understanding (MOU) early this year. In the past months, the chairman said, all the details of the cooperation project have been ironed out and are waiting for final confirmation.

Wu said that the Changchun venture would be a 50-50 venture, which would supply auto lamps to Toyota and Mazda car plants in mainland China. The chairman said that construction of the new venture's plant would start immediately after the signing ceremony.

In southwest China market, Wu said, TYC is in intensive talks with an auto lamp maker in Sichuan Province over possible cooperation ties. Wu said that his company is expected to invest in the mainland partner by having some stakes in it. As the partner has supplied auto lamps to some major auto makers in Sichuan, including the Changan Ford, Wu said TYC is expected to immediately become a qualified supplier for auto makers there through the cooperation ties.

In southern China, Wu said, TYC has decided to set up a new auto lamp plant in Guangzhou, Guangdong Province, and does not rule out cooperating with the Aeolus Motor Corp., a joint venture between Taiwan's Yulon Motor Co. and the Dong Feng Automobile Group there to produce Nissan car models, in setting up a venture.

In addition to Changchun, Wu said that TYC is also planning to set up plants in Beijing, Tianjin, and Huludao City, Liaoning Province for the northern China market.

TYC's Business Deployment in mainland China
Region	Location	Partner	Note
Northeast China	Harbin (Heilongjiang Province)	Hafei Auto	The venture has started mass production.
Northeast China	Changchun (Jilin Province)	FAW Group	Plant will be constructed soon.
Central China	Changzhou (Jiangsu Province)		A plant has started mass production.
Southern China	Guangzhou (Guangdong Province)	Aeolus	Under planning.
Southeast China	Chongqing (Sichuan Province)	local auto lamp maker	Under planning.
Northern China	Beijing, Tianjin, Huludao		Seeking proper lands.

Source: TYC