Shanghai, December 22 (Gasgoo.com) Yulon Group, the largest automaker in Taiwan, recently decided to cut its spending by 20% to 30% in 2010 as it predicted auto sales on the island would slow down next year, the Taiwan Economic News reported today.
The spending cuts policy is the first major decision made after Yulon Group's five-member top management team was established. Outsiders say Yulon's decision is unusual because Taiwan's new-car sales have seen clear recovery in the second half of 2009, with full-year sales expected to grow 30% about 300,000 units.
Some Yulon executives, however, pointed out that most of the group's earnings for 2009 came from non-core businesses and the group might end the year with a red ink due to serious losses resulting from frozen new-car sales in the first half.
Yulon didn't expect a real recovery in Taiwan's auto market, but forecasted new-car sales at only 250,000 to 260,000 units for 2010 on the island, mainly because the local government will terminate a subsidy program for buyers of new cars.
However, Yulon has decided to provide full budget support to its newly released own-brand Luxgen in a bid to build up the nameplate's image among consumers effectively and rapidly.
Yulon will produce mini-electric vehicles with Geely and make Nissan Bluebird cars for Dongfeng Motor, its another partner on the mainland. The Dongfeng-Yulon joint venture in Hanghzou will make SUVs, sedans and probably the Luxgen7 MPV.
