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Yulon Group Targets Selling 90,000 New Luxgens in Taiwan and China in 2015

Feb 16, 2015 | By Quincy Liang

Luxgen Motor's president Hu Kai-chang and the Luxgen  U6 crossover, which has sold well in Taiwan and China since demonstration. (photo from UDN)Luxgen Motor's president Hu Kai-chang and the Luxgen U6 crossover, which has sold well in Taiwan and China since demonstration. (photo from UDN)

Driven by the introduction of the Luxgen U6 crossover, sales of new Luxgens in Taiwan and China hit record highs in 2014, and are expected to continue challenge new records in 2015, according to Yulon group of Taiwan.

Luxgen is a self-developed line under Yulon, one of the oldest carmakers in Taiwan with roots dating back to Datsun and B210. Yulon's flagship company Yulon Motor Co. designs, develops and produces in-house Luxgens, in addition to  contract assembling for other brands.

In 2014 Yulon sold more than 16,000 Luxgens in Taiwan and about 55,000 units in China via Dongfeng Yulon Motor Co., Ltd., a joint venture with Chinese automaker Dongfeng, compared to  about 7,000 and 32,000 units in the previous year.

Cheng Guo-rong, Yulon's president, said to further upgrade production efficiency at its factory in China, Dongfeng Yulon will soon streamline  production lines, and that in 2015 total production of Luxgens in Taiwan and China is expected to reach some 90,000 units, a record high in company history.

Yulon launched the Luxgen U6 crossover in China in H2, 2014 and has received flooding orders that are backlogging delivery for three months. Monthly sales volume of the U6 crossover exceed 1,000 units in Taiwan, and 3,000 to 4,000 units in China, Chen said.

Avoiding Direct Competition
To avoid direct competition with same-class counterparts made by Chinese independent automakers without technical partnerships with international auto brands, Chen said that Yulon differentiates Luxgens by many strategies. Yulon opted to first launch the full-sized sport utility vehicle (SUV), Luxgen U7 turbo, at a price of  than 200,000 renminbi (RMB) to tap the higher-end segment, then a multi-purpose van the M7, a four-door sedan (S5), and the U6.

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Yulon operates about 200 Luxgen dealers throughout China but needs more. The first priority is to help distributors achieve profitability as soon as possible, so the popular U6 in China should motivate distributors to further expand dealer networks, said Chen.

Chen said that many Chinese automakers with technical partnerships with international nameplates have been promoting popularly-priced  models since early 2014, further making life tougher for independent Chinese automakers (without direct technical cooperation with foreign counterparts). However, Luxgen has since the outset positioned itself in China as an upscale brand to have built prestigious image. As result, as the brand begins to expand product lineup, sale volume and market share will also expand, a phenomenon can not be easily achieved by other independent Chinese rivals.

Chinese automotive media has reported that Luxgen aims to sell 70,000 new cars in China in 2015, and total production and sales volume on both sides of the Taiwan Strait this year is expected to hit some 90,000 units if all goes as planned.

New Star
According to industry insiders, Yulon plans to  launch its first A-class compact in Taiwan powered by a 1.5-liter turbo, direct-injection engine to offer enviable horsepower and superior fuel efficiency, to be regarded by Yulon as its star model, which the group plans to announce in China early 2016.

Yulon has also been aggressively trying to globalize the Luxgen brand. In Russia, Yulon has signed an agreement with auto assembler Derways to locally assemble models for sale in the country, where annual new-car sales total about three million units. Chen said that recent economic sanctions on Russia have impacted new-car sales, and Yulon will adjust business-development  accordingly.

Yulon also targets the rising Association of Southeast Asian Nations (ASEAN) market by exporting Luxgens to regional distributors there. To more effectively develop sales there, Yulon has acquired the remaining shares of the Nissan Motor Philippines Inc. (NMPI) from Nissan Japan this year to fully own the Filipino factory, where Yulon is evaluating to assemble Luxgens for export to ASEAN and the Middle East.

Luxgen Sales in Taiwan & China
Year
Unit sales in  Taiwan
Unit sales in  China
2009
1,177
--
2010
11,000
--
2011
13,000
7,058
2012
8,515
31,000
2013
7,000
32,000
2014
16,500
55,000
2015(f)
20,000
70,000
Source: Yulon


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