With cross-strait economic cooperation framework agreement (ECFA) to sign in sight, deals between the mainland and Taiwan automakers have driven the cross-strait’s economic ties to a new level and boost the island’s moribund auto sector.
Taiwan's Yulon Motor Co. is in conjunction with China's mainland automaker Geely Automobile Holdings Ltd to sell electric cars both in Taiwan and mainland, senior executives at both companies said on Tuesday.
Chery Automobile Co, China's largest indigenous automaker with 356,000 vehicles sold last year, seeks to increase cooperation with another Taiwan firm, Auto21, the island's Economic Daily News said on Wednesday.
Automakers in Taiwan have a combined annual capacity of 700,000 vehicles, but current output is just over 200,000. The idle production facilities could be utilized by forging closer ties with mainland manufacturers.
Taiwan’s carmakers have the edge in component manufacturing and their mainland counterparts are more technologically advanced, said Liao Ching-chiu, assistant R&D vice president of Taiwan's Automotive Research & Testing Center.
With the rise of oil price, Taiwan’s mainstay motorcycle industry has heavily stricken. Small cars, a possible substitution for the motorcycle, could provide a big chance for mainland automakers.
While the policies from both sides offered as a big boost for cross-strait auto industry, risks certainly exist.
The withdrawal of GM, the giant automaker worldwide, from the JV with Yulon could serve as a cautionary tale for the mainland automakers, as Taiwan’s auto market, long ruled by Japanese automakers, has not been familiar with Chinese own-brand vehicles, which could prove a difficult task.
