Yulon to Set Up Group Management Center

Taipei, Sept. 12, 2008 (CENS)-With sales of new cars in Taiwan hitting a 20-year-low this year, Yulon Group has decided to set up a group management center this month so as to more effectively integrate relevant resources sand cut costs.

The center will be led by Yulon CEO Kenneth Yen; while Chen Kuo-rong, president of Yulon Motor Co., the group flagship firm, will be the secretary general responsible for execution.

Yulon officials pointed out total annual production volume of two major automakers in the Yulon Group, including Yulon Motor (in partnership with Nissan of Japan and GM of the U.S.) and China Motor Corp. (CMC, Mitsubishi and Chrysler), once saw sales hit 200,000 units in 2003, generating pretax earnings of over NT$10 billion (US$327.9 million at US$1: NT$30.5). The domestic automobile market, however, began plunging stiffly from 2006.

In the first half of this year, total production of Yulon Motor and CMC was only 36,100 units, scoring total pretax earnings of NT$1.27 billion (US$41.64 million) from three major affiliates including Yulon Motor, Yulon Nissan Motor Co. (which was spun off from Yulon Motor two years ago and focuses on sales and investment), and CMC.

Yulon Nissan and CMC were the No. 3 and No. 2 auto sellers, respectively, in the domestic market in the first half. However, their major rival Hotai Motor Co. Ltd., the agent of both locally assembled and imported Toyota and Lexus cars, sold 44,200 units and generated pretax earnings of NT$2.27 billion (US$74.43 million).

According to Yulon ranking officials, Yulon Motor and CMC began joint procurements of some materials and key parts such as steel plates, batteries, rubber tires etc. in 2000, and therefore the group has boasted experiences in resource integration.

By adopting suggestions from group consultant Lin Hsin-yih, who was also ex-chairman of CMC as well as former Economics Minister and Vice Premier., Yen decided to set up the group management center to more aggressively integrate resources to achieve the highest synergy among all automotive-related businesses.