TAIPEI – Yulon Motor Co. Ltd. and China-based Geely Automobile Holdings Ltd. are mulling a plan under which Yulon would assemble Geely subcompact cars from kits in Taiwan, local press reports say.

Taiwan law prohibits the importation of cars assembled in China, but importing auto parts is permitted.

If the deal goes through, Yulon reportedly plans to sell the cars under a new, yet-to-be-announced brand, rather than under the Geely badge.