The Year of the Dragon is set to be a testing one for many of Taiwan’s manufacturers across a range of industries. But Yulon Group, owner of Luxgen Motors, is more than up for the challenge, shifting into overdrive with possible plans to target some of the world’s most exciting markets.
A top destination for Luxgen vehicles in 2012 is said to be India, where competition is heating up between automakers from around the globe for the loyalty of increasingly motor-mad consumers. Although sales growth last year in the South Asian giant fell to 4.3 percent compared with 31 percent in 2010, the market is tipped to bounce back over the next 12 months as economic growth picks up pace.
Foreign companies such as Ford Motor Co., Hyundai Motor Co., Toyota Motor Corp. and Volkswagen AG have made substantial investments in India, predicting that sales in the world’s third-largest car market will eventually prop up diminishing margins at home. In addition, other manufacturers, including Renault SA and strategic partner Nissan Motor Co., are eyeing projects to build cars on the subcontinent.
For Yulon, India represents a unique opportunity to put over 58 years of automobile manufacturing experience on behalf of several global car brands to the test. The technical agreements it holds with Chrysler Group LLC, General Motors Co., Nissan, Mitsubishi Motors Co. and others will also play a key role in helping Luxgen enjoy a smooth ride to market.
The vast amount of experience, know-how and capacity to incorporate Taiwan’s world-leading information technology breakthroughs has allowed Yulon to create its Luxgen line of sophisticated vehicles with distinctive attributes. The company is betting that Taiwan’s first auto brand, which is designed to appeal to drivers who want the latest features, cutting-edge technology, environmentally friendly designs and a reasonable price tag will win the hearts and minds of India’s more discerning consumers.
While industry experts believe Indian motorists want small, low-cost vehicles that can be operated within the constraints of rising fuel costs and surging loan rates—the Reserve Bank of India has increased rates 13 times since March—Yulon is not 100 percent on board with this take. In fact, the group believes that sales of 1.95 million cars in the past calendar year from 1.87 million the year before show that Indian consumers are open to buying better-appointed offerings, but are simply awaiting for improved conditions.
According to the Society of Indian Automobile Manufacturers, December 2011 sales for market leader Maruti Suzuki India Ltd. fell 8.4 percent due to lower production of diesel cars and suspended operations at local plants due to maintenance. But No. 2, Hyundai Motor India Ltd., posted a 13-percent increase to 29,449 cars, with Tata Motors Ltd. jumping 40 percent to 23,661.
Yulon’s streamlined and efficient sourcing and production capabilities ensure Luxgen stands as a unique Asian automotive brand offering Indian consumers affordable luxury. Standard vehicle features, which are currently only available in some selected luxury cars as add-ons, are sure to persuade price-conscious punters to open their wallets and invest in a product that represents the best Taiwan has to offer in terms of innovation and technical expertise.
The decision for Yulon to drive into bigger markets such as India’s comes at a time when the global automotive industry has been hit hard by the European sovereign debt crisis and downturn in the U.S. Many larger and smaller players in the industry have been subject to mergers and acquisitions, creating a number of unique opportunities that the group is quickly moving to capitalize on.
One benefit of industrywide M&A is that R&D funds are being freed up, enabling Yulon to grab a larger slice of this pie and boost its components, design and engineering capabilities. This means that its Luxgen range is up to par with major global brands technically and in regard to safety and occupant protection.
Another plus is that through its partnership with Taiwan’s leading IT experts, Yulon has developed world-class automotive electronic systems, some of which have never been seen on the road before. This feature sets the group apart from the rest of the pack, further strengthening its position as a maker of smart cars—a boast sure to impress tech-savvy Indian motorists.
But Yulon’s trump card in the Indian market is the group’s choice to work with AC Propulsion, a leading electric vehicle pioneer, and lay the foundations for Luxgen’s long-term success. With environmental awareness on the rise, the group is designing EV cars that deliver power, performance and are environmentally friendly through and through.
It is hoped Indian consumers will eventually choose green cars for their environmental benefits rather than the cost savings. This means that with the right marketing and business plan, Yulon will be in prime position as a responsible automotive maker to cash in on this trend.
Although the Indian market glitters alluringly for Yulon, the group must continue to broaden its horizons and cultivate opportunities further afield. A strong presence in India will allow it to expand into neighboring countries, further flying the flag for Taiwan industry in a part of the world that is rapidly growing in importance.
Nick du Toit is a freelance writer based in Kinmen County. These views are the author’s and not necessarily those of Taiwan Today. Copyright © 2011 by Nick du Toit
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