The General Flees Formosa

by Bertel Schmitt

Published: December 26th, 2008

After Taiwan’s Yulon Motor pays a symbolic Taiwan dollar for the 49 percent stake General Motors holds in their local joint venture Yulon General Motors, GM will give them the keys, and say bye-bye for good, reports the Dow Jones News Wire via CNN Money.

Yulon, like many other car companies, needs cash. GM doesn’t have it, so they decided, to heck with Taiwan, it’s not worth the hassle, we’re outta here. Or in the more proper words of F.J. Pan, the CEO of the former joint venture: “Yulon General Motors needs a fund injection to cover losses and develop business, and General Motors has cash flow problems, so they said they don’t plan to inject funds,”

For long, Yulon was more known for flooding the island with rebadged Nissans. In 2004, Yulon split itself in two entities to allow a dalliance with another joint venture partner.

That partner turned out to be General Motors. Two years ago, Yulon General Motors started assembling totally knocked down versions of the Buick LaCrosse, manufactured across the Taiwan Straits by Shanghai-GM. That romance sure didn’t last long.

As reported earlier, Taiwan doesn’t just suffer from a lack of buyers, it suffers from a lack of people. The island itself has about the population of the Shanghai metro, 22m. What’s worse, millions of Taiwanese business folk forsake Formosa for the supposedly greener pastures of the Chinese mainland.

As for the Taiwanese car market, it sucks: According to the Taiwan Economic News, new-car sales in the first 11 months of 2008 totaled only 212,379 units, a 30 percent decline from the same period of last year and also a 22-year low for the period. In November, sales were down 44.6 percent. The paper says the Taiwanese market is good for 230,000 units a year. That’s what mainland China registers in a good week.

Bertel Schmitt

Bertel Schmitt comes back to journalism after taking a 35 year break in advertising and marketing. He ran and owned advertising agencies in Duesseldorf, Germany, and New York City. Volkswagen A.G. was Bertel's most important corporate account. Schmitt's advertising and marketing career touched many corners of the industry with a special focus on automotive products and services. Since 2004, he lives in Japan and China with his wife <a href="http://www.tomokoandbertel.com"> Tomoko </a>. Bertel Schmitt is a founding board member of the <a href="http://www.offshoresuperseries.com"> Offshore Super Series </a>, an American offshore powerboat racing organization. He is co-owner of the racing team Typhoon.

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Pch101 on Dec 27, 2008
22 million is about the same population as Australia, but no one finds it unusual for the Aussies to have a good sized car industry. The only reason that there is a car industry in Australia is because their government uses measures and subsidies to keep the industry there. The market there is too small to justify its existence. But the government wants the jobs, enough that they are willing to help pay for them.

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Carlisimo on Dec 28, 2008

Hey, my uncle worked at Yulon! He moved to a transmission company recently, but two years ago I visited his workplace and he was designing alternate interior door panels for ASEAN Buicks. His coworkers were redesigning the front and rear bumpers, too. It's a pity they're on their way down. Taiwan's economy was slightly healthier than that of other mature economies in the region, but the US crisis has hit them hard and their new government is out of ideas besides latching onto China and hoping some of the scraps fall their way. The previous party in charge of the executive branch started opening up those economic links to China, but jeez, they didn't make it their ENTIRE economic policy. Anyway, just in case anyone else reads this comment thread, here's a brief Powerpoint presentation about the company and the closest they came to making their own car - the Feeling, a rebodied Nissan Sentra from the '80s. I tried out my uncle's, and it felt like it had a better chassis and suspension than my Sentra. The electronics weren't doing so well after 15 years though. http://storm.oldcarmanualproject.com/yulon/Taiwan%20car%20design%20history_V2.ppt

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