TAIPEI, Nov 25 (Reuters) - Two major Chinese automakers seek to research and develop cars in Taiwan, driving economic ties between the two political rivals to a new level and boosting the island's moribund sector, industry sources said on Wednesday.
China's Geely Automotive Holdings will work with a company under Taiwan-based Yulon Motor Co Ltd to make a new economy-class car in 2010 per an agreement signed earlier this month, a Yulon news official said.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.
Both Chinese companies want bases in Taiwan to carry out manufacturing for overseas, the paper said.
A number of home-grown Chinese automakers, including, are keen to break into foreign markets and are aggressively developing their own brands while moving beyond the small, low-priced car segment into more upmarket vehicles.
Relations between China and Taiwan have warmed since the island's President Ma Ying-jeou took office last year, heralding landmark trade talks and the signing of a flurry of deals to push open the tourism, transportation and financial sectors.
Further cooperation between Chery or Geely and Taiwan counterparts had not been "ruled out," as officials from the Chinese firms attend an automotive convention in Taipei this week, said a publicist with Taiwan's Automotive Research & Testing Centre, a convention organiser.
"We're pretty optimistic about it," the publicist said. "It's an advantage for the Taiwan industry, which is now flat."
Yulon shares were up 0.5 percent on Wednesday, outperforming the broad market in Taiwan. Geely shares were down about 1 percent, in line with the broad market in Hong Kong. (Reporting by Ralph Jennings; Editing by Jacqueline Wong) ((firstname.lastname@example.org; +886 2 2500 4882; Reuters Messaging: email@example.com)) ((If you have a query or comment on this story, send an email to firstname.lastname@example.org))