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Home > Conferences and Events > 2010 MAPECT Cross-strait M&A and Private Equity Summit: Chen Kuo-rong
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Date: 2010-09-21
2010 MAPECT Cross-strait M&A and Private Equity Summit: Chen Kuo-rong

2010 MAPECT Cross-strait M&A and Private Equity Summit:
The new post-ECFA era of cross-strait investment and its opportunities
 
Monday, September 20th 2010
ShangriLa’s Far Eastern Plaza Hotel
201 Tun Hwa South Road, Section 2, Taipei 106, Taiwan
 
 
Keynote Address III: Chen Kuo-rong
Yulon’s establishment in the cross-strait automobile industry and the experiences garnered
 
Chen Kuo-rong, co-general manager of the Yulon Motor Group (裕隆集團) spoke on Yulon’s establishment in the cross-strait automobile industry and the experiences garnered in the past ten years. According to Chen, these past ten years in Yulon Motor’s history can be divided into three segments. The first phase was Yulon Motor’s expansion into China; the second phase was Yulon Motor and Nissan Motor’s split into two independent companies; and the third and current phase is Yulon Motor’s expansion in this post-ECFA era. But while Yulon Motor’s growth can be delineated in three different segments, Chen asserted that the common trend that links the car company’s business development is that through M&A and divestiture activity, Yulon Motor has been able to expand its market in Asia.
 
Chen recalled that while many predicted that the Taiwanese automobile industry would grow, one can see that the industry in fact has remained stagnant. In fact, Chen asserted that ten years ago, “We saw that a lot of Taiwanese businesses were moving broad, which meant that a lot of the middle-class families were moving abroad. Consequently a lot of Yulon Motor’s main customers were leaving as well.” Thus, the large Chinese market appeared to be a better option for the car company, which in May 2000, signed a joint venture agreement with Aeolus Group, China in order to move into the Chinese market. This, according to Chen, was the first in a series of M&A activity that helped Yulon Motor become the company it is today; Chen asserted that “through mergers and divestitures, we expanded Yulon Motor’s reach.”
 
In 2003, Yulon Motor and Nissan Motor, with whom Yulon Motor had signed a technical collaboration agreement in 1957, announced a split into two independent companies: Yulon Motor Co. and Yulon-Nissan Motor Co. Chen asserted that this move was made to streamline operations within the company. Yulon Motor wsa repositioned into a manufacturing service company while Yulon-Nissan Motor assisted Nissan Motor in designing, researching, and manufacturing cars in China.
 
Finally, the signing of ECFA in 2010 marked the third stage in Yulon Motor’s growth. As Chen emphasized, “ECFA is the bridge that will link China with Taiwan;” a bridge that creates new business opportunities. In fact, with ECFA, the “Taiwanese market becomes an extension of the Chinese market and Chinese market becomes part of Taiwan’s market.” Under these conditions, Chen asserted that he expects Yulon Motor to perform well in this new market.

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