TAIPEI, Sept 20 (Reuters) - Taiwan's Yulon Motor Corp said on Friday its China venture would expand auto production after its mainland partner, Dongfeng Motor Corp, and Japan's Nissan Motor Co signed a US$1 billion deal.
Output from the venture, Aeolus Automobile Corp, in which Yulon has a 40 percent stake and Dongfeng the remaining 60 percent, will rise to 150,000 cars by 2004 from about 35,000 currently, said Yulon Executive Vice President Han Chen-ping.
Han's comments came after Nissan, which also owns 25-percent of Yulon, said on Thursday it would invest US$1 billion in a new auto venture with Dongfeng in China, marking one of the most ambitious forays by a foreign automaker in the huge China market.
The 50-50 venture between Japan's number-three automaker and Dongfeng aims to roll out 550,000 vehicles by 2006, and become a globally competitive player with production capacity of 900,000 units within 10 years.
"The triangular relations will not change. Aeolus Automobile Corp would be a key production base for the new venture (between Nissan and Dongfeng)," Han told Reuters by telephone.
Shares of Yulon, Taiwan's third largest car maker in terms of sales, closed up T$0.40 or 1.55 percent at T$26.20, outperforming a 1.38 percent drop on the main TAIEX index.
Yulon has risen 70 percent this year against a 20 percent fall on the main board.
In the first six months, Yulon saw its net profit jump 12.29 percent on a year earlier to T$2.4 billion.
(US$=T$34.8)