Fu Tung-cheng, Vice Chairman of Taiwan's "Mainland Affairs Council" (the MAC), declared on May 5 that rules and regulations for the first batch of mainland investment to Taiwan have been finalised. Automobiles are included among the 65 industries to cross the straits, a clear message of the mainland auto industry's ambition.

On April 27, Ying Tongyue, Chairman of Chery Auto, China's biggest private car maker announced that his company would cooperate with Taiwanese Shengrong Auto, a subsidiary of Prince Motors. The new car models launched jointly by the two companies will go to the global market, and some of them will also come back to the mainland.

"We have signed the deal with Shengrong." Spokesperson Jin Yibo of Chery told the reporter that the cooperation would be handled as CKD (Complete Knock Down). Mainland's Chery will invest its technology and brand, valued at 2 billion Taiwan New Dollars (US$60.2 million). The spokesperson did not reveal the parties' share proportions in the joint stake. The plant is scheduled to go into operation as early as the third quarter of this year.

Since Chery's investment only involves technology and brand value, the deal does not need the approval of mainland departments. Once the Taiwanese local authorities issue the 'go-ahead' order, the joint company can launch the production of a car model under Chery's brand name, and the annual capacity is estimated to be 100,000.

Alongside Chery, Geely Auto is also attempting to enter the island. Its Chairman Li Shufu confirmed to Taiwanese reporters in March that his company was in contact with Taiwanese Yulong Automobile about exporting Geely to Taiwan.

On May 6, Geely's VP Wang Ziliang told the journalist that negotiations are still going on and a deal would be expected within the year. According to him, only a type of Geely Panda will cross the sea, while no further information is available about whether Geely will make concrete investments on the island.

For more information, please consult the Chinese coverage at:

http://www.caijing.com.cn/2009-05-06/110160960.html

(China.org.cn by Maverick Chen, May 7, 2009)