Taiwan’s Yulon Motor has reportedly agreed to set up a car venture with China’s Zhejiang Zhongyu Holding Group.
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It may also take a stake in a unit of its partner according to reports.
The two sides have signed an agreement last October to build a CNY4.65bn greenfield facility in the eastern Chinese province of Zhejiang capable of making 120,000 vehicles per year according to industry sources. Engines may also be included in the deal at 200,000 units per annum.
Reuters reported that 50-50 venture had yet to receive approval from the mainland government, China’s State Council or cabinet.
However, a report in Taiwan’s Chinese-language Economic Daily News said on Wednesday that China’s cabinet had already given the the project a green light.
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By GlobalDataThe Taiwan automaker may also take a stake in Zhongyu Automobile, a unit of Zhongyu Holding, to deepen their cooperative ties, a source reportedly said.
Reuters reported that the facility will make sedans, sport utility vehicles and multi-purpose vehicles using Yulon’s technology.
Roughly 70% of the vehicles will be sold in mainland China, while the remainder would be shipped overseas via Yulon’s sales network, Reuters reported.
The plant is likely to support Yulon Motor’s plan to launch its own brand of automobiles on the mainland, at the end of next year at the earliest, reports say.
