In order to realize its dream of creating an automobile-production "kingdom" in Taiwan and mainland China, Taiwan's Formosa Plastic Group (FPG) reportedly plans to license different technologies and designs from a stable of select partners and use them to self-assemble finished cars. This approach has been chosen over seeking cooperation ties with only one automaker.

Industry sources report that FPG, centered around Taiwan's largest petrochemical conglomerate and also engaged in numerous other industries, is looking to set up cooperation ties with the Matra Group of France in its quest to become a large-scale automaker. They also report that there have been talks with Fiat of Italy, which have been discontinued for unspecified reasons.

FPG currently runs an auto-production subsidiary in Taiwan, the Formosa Automobile Corp. Formosa Automobile was established in 1999 and rolled out its first locally made car model, the Magnus or Formosa One, a 2,000cc sedan, in late 2000. This was accomplished by procuring design blueprints and the chassis from Daewoo Motor of South Korea. The subsidiary also began local production of another mini-car model, Daewoo's Matiz or Formosa Two, in early 2002. To maintain its independence, Formosa Automobile maintained only very loose cooperation ties with the South Korean partner in all areas.


Formosa Automobile has been actively seeking another appropriate car model for local production to follow up the Matiz, though sales of both the Magnus and Matis have not been as smooth as competing models on the island. All work with Daewoo was stopped due to the establishment of GM Daewoo Auto & Technology Co., in which General Motors (GM) of the United States has a 42% stake.

With FPG's strong financial backing, Formosa Automobile originally also planned to cooperate with GM and become a contract maker on both sides of the Taiwan Strait to produce selected models for the American partner, but talks broke down with FPG chairman Y.C. Wang's insistence on using FPG's logo on finished units.

Matra sold its automotive business division, Matra Automobile Engineering, to Pininfarina SpA of Italy earlier this year, but FPG will still try to license select technologies in automobile production through a third-party mediator. In a bid to develop its auto-production business in mainland China and meet the mainland government's newly promulgated regulations for the domestic automobile industry, the aforementioned sources state, FPG has changed its original strategy of buying the production rights from an automaker for a specific car model to buying technologies and designs for the production of engines, transmission gearboxes, and chassis from various foreign partners and contract foreign auto-design companies. This will allow it to maintain its operational independence.

French automaker Renault's Taiwan branch officials recently confirmed that Matra has informed Renault's headquarters of Formosa Automobile's intention to buy the relevant production molds/dies, jigs, and fixtures, as well as finished engines and transmission gearboxes, for the Espace multi-purpose van (MPV) model developed by the French automaker.

Renault's headquarters apparently, however, have rejected Formosa Automobile's proposal that Renault end its current cooperation ties with Taiwan's Yulon Motor Co. and work with it. FPG, in fact, the officials report, contacted Renault several years ago for possible cooperation on a dual-fuel vehicle development project but was turned down because Renault decided FPG lacked the necessary capabilities.

The Taiwan-based Renault officials have also reported that they have been informed Formosa Automobile bought an imported Espace and disassembled it at its auto plant in Taichung, but have decided not to take any action on the matter.

Formosa Automobile management has refused to comment on possible ties with Matra, and has strongly denied the buying of the Espace for disassembly.