Yulon Develops "tobe" Own-brand Car Products for World Market

The Yulon Group, the largest automobile manufacturing conglomerate in Taiwan, recently announced its second own-brand, "tobe", which will focus on the development of both middle-end internal combustion engine (ICE) cars and pure electric vehicles, or battery electric vehicles (BEVs).

At a press conference held to announce the establishment of a new subsidiary, the Yulon Tobe Motor Co., to operate the new car brand, Yulon president Chen Kuo-rong, said that Yulon aims to become the world's largest EV manufacturer.

Models under the "tobe" logo are expected to have clear market differentiation from the larger, higher-performance, and more luxury-oriented counterparts carrying Yulon's other own-brand, LUXGEN. After more than five years of preparation and deployment, Yulon recently introduced its first LUXGEN-brand product, the LUXGEN7 multi-purpose van (MPV) in two versions, one powered by a 2,200cc turbocharged gasoline engine and the other by batteries.

Yulon said that it would try to bring together all major suppliers of key EV parts on the island, including the E-One Moli Energy Corp. (lithium-ion batteries), Fukuta Elec. & Mach. Co. (motors), and Chroma ATE Inc. (power management), by forming strategic alliances or joint-venture companies so as to create a world-class EV industry team.

President Chen stressed that "tobe" car models will target at the "mass market" with a clear product positioning strategy, citing the example of Japan's Toyota and Daihatsu as a model for the differentiation planned for LUXGEN and tobe. That, Chen stressed, would avoid direct competition between Yulon's two own-brands while providing a complementary effect in terms of increasing unit production and improving equipment utilization.

The president noted that around 65 million new cars are expected to be sold worldwide in 2009, with light models providing the main momentum for growth. Further, all the new emissions and energy regulations being implemented around the world are driving development of the global automotive industry in such directions as weight reduction, downsizing, and new-energy power. EVs undoubtedly provide the best solution for these development trends.

Yulon chose to cooperate with big Chinese automaker Geely Automobile for the joint development of BEVs. In the future, Yulon might assembly Geely models in Taiwan for export to countries other than China, while Taiwan-developed Geely EVs might be sold in China, according to industry insiders.

First "tobe" Models

The first two products to hit the market carrying the "tobe" logo will be the tobe M'car internal combustion mini car and M'car BEV.

To change the image of Chinese-made cars for poor safety performance, Yulon tweaked the M'car, which is built on Geely's Panada platform, to pass collision standards by sending the model to be crash-tested at the domestic Automotive Research & Testing Center (ARTC), and by installing four to six airbags in each car as standard equipment. In Taiwan, Yulon provides the internal combustion model with a three-year warranty with no mileage limitation.

To meet the requirements of local consumers, the tobe M'car is equipped with a multimedia entertainment system with a seven-inch touch-screen display, DVD/CD/MP3-compatible player, Bluetooth communication function, and 5.1 channel speaker system.

The entry-level gas-powered tobe M'car is priced under NT$400,000 (US$12,307 at NT$32.5:US$1) in Taiwan. The M'car EV (which was also demonstrated at the press conference) will not be introduced until after the government finalizes all related regulations and subsidy programs.

Yulon has already introduced a BEV version of the LUXGEN7 MPV, which uses an 180kw electric propulsion system developed by AC Propulsion Inc. of California with lithium-manganese power cells supplied by E-One Moli Energy Corp. of Taiwan. Demonstration operations for the LUXGEN7 MPV will begin in 2010, allowing Yulon to collect data and fine-tune the car. When the model will be commercialized, however, is uncertain.

The tobe M'car EV uses the same solution as the LUXGEN BEV, but is designed to be more urban transportation-oriented and cost-friendly.

While Taiwan will still have to wait for the tobe M'car, Yulon has announced that it is already available in the Vietnam market (through local agent Kylin Group), and that exports to the Philippines are under negotiation.

Yulon Group's Own-brand Strategy
	LUXGEN	tobe
Positioning	Mid- to High-end	Popular-oriented
Production Base	Taiwan Hangzhou, Zhejiang Province of China	Taiwan
Models Developed	MPV, CEO (Top-end MPV version), SUV, sedan	M'car (Geely Panda)
ICE Market	Taiwan: More than 2,000 Luxgen7 MPVs sold in less than two months after introduction. China: To be assembled in China for sale there	Taiwan: Kick off sales in January 2010 Vietnam: Sales to start in December 2009 (exported from Taiwan) Philippines: Date for exports under negotiation
EV Positioning	Over-150KW large BEV	Under-100KW city BEV
EV Commercialization	Taiwan: Test operation in April 2010; sales in 2011.	Taiwan: Pending China: To be exported from Taiwan and sold in China through Geely sales channels
Source: Yulon Group.