|
|
 |
 |
 |
|
Sanyang Moves to Go Global by Staking Out World`s No. 2 Market
2007/05/11
The Sanyang Industry Co., a leading Taiwanese maker of powered two-wheelers (PTWs) which are marketed under the "SYM" brand, moved vigorously to boost its international competitiveness last year.
One of its moves was to acquire an 11.1% stake in the Kinetic Group, a top Indian PTW and auto conglomerate, for US$3.07 million. Sanyang is the first Taiwan PTW manufacturer to gain a foothold in the booming Indian market, which is already the world`s second-largest with annual sales of about seven million units.
The Taiwan firm may increase its shareholding in Kinetic in the future, but the Indian company will continue to handle the joint venture`s daily operations.
The Taiwan company is committed to providing Kinetic with motorcycle models and to transfer technology to it, and to help it develop new products catering to the Indian market. The two companies planned to introduce PTWs bearing the "Kinetic-SYM" brand in India early in 2007.
Sanyang president Huang Kuang-wu says that his company and Kinetic are finalizing models destined for the Indian market. The Taiwan company will receive a 3% royalty on sales of the models there.
Sanyang executives report that the Kinetic Group was established in 1974 and now has two PTW-making arms, both listed on the Indian stock market: the flagship company, Kinetic Motor, and Kinetic Engineer. The latter concentrates on the production of geared motorcycles, while the former makes gearless models.
In 1998 Kinetic went into cooperation with Honda of Japan, the world`s largest PTW brand, but Honda later switched to a different Indian partner. Kinetic`s top competitor, Bajaj, also set up a joint venture with a Japanese partner, Kawasaki.
Moving Production Offshore
Another of Sanyang`s competitiveness-boosting moves was the establishment of a PTW plant in Indonesia, which entered production in June 2006. That completed the company`s deployment in the world`s three biggest PTW markets: China, India, and Indonesia.
Sanyang also has a subsidiary in Vietnam, the Vietnam Manufacturing and Export Processing Co. (VMEP), which has won permission from the Vietnamese government to produce automobiles. Huang reports that VMEP will start turning out SYM auto products this year, with its first model being a 1,300cc commercial vehicle.
Huang explains that Taiwan`s domestic PTW market has reached maturity and no longer contains much room for growth. This is why Sanyang has been concentrating on overseas markets, where its sales volume is expected to outstrip that of Taiwan this year.
In May last year Sanyang announced the sale of a 10% stake in VMEP (now Vietnam`s second-largest PTW maker) to a company invested by Merrill Lynch for US$22 million, or US$3.757 per share, generating a disposal profit estimated at US$8.6 million. VMEP is scheduled to go public in Hong Kong this year, under the name of Gold Way Holdings, becoming the first Vietnam-based firm to list there.
Sanyang hopes to bring in more strategic shareholders so as to increase VMEP`s capitalization.
VMEP is currently the only PTW manufacturer in Vietnam that is totally foreign-invested. It has expanded along with that countries strong economic growth over the past decade.
Sanyang has positioned VMEP as its PTW production and marketing base in the Association of Southeast Asian Nations (ASEAN) area. Its sales of PTWs fell to around 180,000 units in 2005 (down from 250,000 units the year before) because of limits imposed by the Vietnamese government on the issuance of PTW licenses.
(by Quincy Liang)
|
|
| Advertisement |
 |
|
 |
|
