| NTN
Corp. (Japan) is forming a joint venture with Yulon Group (Taiwan)
to manufacture and sell automotive constant velocity (CV) joints
in China. The two companies already operate a similar venture
in Taiwan.
This is
NTN's third Chinese manufacturing venture announcement in
less than a month. Until these announcements, NTN had no plants
in China.
The latest
move not only helps underscore the inexorable pull of China
as a manufacturing base, but also the high expectations for
the success of China's budding automotive industry.
In recent
months, all of the world's major automakers have revealed
initiatives to enter or extend manufacturing in China.
The joint
venture, Guangzhou NTN-Yulon Drivetrain Co., Ltd. (China)
will be set up by October 2002 in Guangzhou. NTN will contribute
USD $6 million and Yulon $4 million, for a 60% - 40% ownership
split.
By June
2003, the new factory is expected to be online and employing
approximately 70 people. Sales for the first year are forecast
to be ￥ 1 billion or less. However, within two years sales
should reach ￥ 3.5 billion and employment increase to 150
or more. All of the production is targeted to China's in-country
automobile manufacturers; none of the production is expected
to be exported.
NTN and
Yulon both indicate this venture is valuable because it combines
NTN's CV production expertise with Yulon Group's experience
operating in China - Yulon has several unrelated manufacturing
subsidiaries in China.
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