TAIPEI, Taiwan - Shrugging off political and military tensions between Taiwan and communist China, this island's four principal vehicle assemblers are carving out a significant manufacturing and retailing beachhead in the mainland's booming auto market.
Joining with local partners on the other side of the narrow Taiwan Strait, Taiwanese automakers, parts suppliers and dealers are building and selling in China versions of the same Japanese cars they build and sell under license here.
Taiwan's top automaker, China Motor Corp., estimates that it could be booking more revenue from mainland China by 2007 than from its home market. The company assembles Mitsubishi vehicles.
Yulon Motor Co., which assembles Nissan vehicles, says its mainland operations contributed 70 percent of its 2002 pretax profit of 5.0 billion New Taiwan dollars, or $145 million at current exchange rates.
Ford Lio Ho Motor Co., No. 3 in Taiwan, has not invested in China but has provided management support for Ford Motor Co.'s move into China. For example, the CFO for Changan Ford Automobile Corp., which began building the Ford Fiesta on the mainland last month, is a former Ford Lio Ho executive.
The mainland promises huge opportunities for an industry with its home market mired in the 350,000 to 400,000 range in recent years and little prospect for sharp growth. That volume is shared among 10 assemblers and imports, although the top four automakers claim about three-quarters of the market.
China is close, and the language is the same. So for a company such as China Motors, which sold 100,007 cars in Taiwan's flat market last year, the possibilities are especially engrossing.
"Within three years, we have a chance to expand our sales to 300,000," China Motor President Su Ching-yang says. "How to make this dream come true is a big challenge."
The only government restriction on mainland investments or operations is that companies cannot invest more than 40 percent of their total capitalization there.