China govt OKs Yulon's production of Luxgen sedans

Shanghai, August 3 (Gasgoo.com) Dongfeng-Yulon, a 50:50 joint venture in mainland China, between Dongfeng Motor and Taiwan's Yulon Group, recently received official approval from China's National Development and Reform Commission (NDRC) to produce Yulon's own-brand Luxgen sedans in the country, media reported today.

The Dongfeng-Yulon JV, with a total investment of 3.4 billion yuan ($499 million), will be dedicated to the production of Luxgen vehicles, including MPV, SUV, Sedan and gasoline models as well as various electric cars deriving from those models in their plant, located in Xiaoshan District, Hangzhou city, east China's Zhejiang province.

The first-phase construction of the JV's Xiaoshan plant will be completed in 2011, with an annual capacity of 120,000 vehicles and 120,000 engines. The vehicle capacity will be gradually augmented to 240,000 units, approaching Yulon's annual sales of 280,000 autos in Taiwan.

Reportedly, Yulon sought the partnership of Dongfeng for the joint venture, following failure to obtain the approval of a joint-venture plan with Zhongyu Group of Zhejiang Province by NDRC. Dongfeng was Yulon's first choice for the partnership, which, though, failed to materialize at the beginning.