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Image Source : China Visual
BEIJING, August 17 (TMTPOST) -- Evergrande Auto, a subsidiary of China-based real estate developer Evergrande Group, may be acquired by another car company, with the local government as the intermediary, 43 days after the launch of its new electric vehicle Hengchi 5 for pre-sale, according to Jiemian News.
The Hengchi 5 model is being produced in the Tianjin plant of Evergrande Auto, the only plant with the production qualification.
Due to financial problems and the continuous losses of Evergrande Auto, Evergrande Group announced last August that it was "in contact with several potential independent third-party investors to discuss the sale of some of the Company"s assets," including Evergrande Auto. But this discussion did not get substantial results.
Evergrande Auto renovated the production line of the Tianjin factory to accelerate production. Equipment and personnel were transferred from other factories to Tianjin to ensure that Hengchi 5 could be delivered successfully.
On January 12 this year, Evergrande Auto officially announced that the first vehicle of Hengchi 5 was delivered, adding that it was "12 days earlier than the original schedule."
On July 20, Evergrande said that the accumulated orders exceeded 37,000 units two weeks after it started its pre-sale. On August 6, Evergrande declared that "nearly 40,000 units were pre-sold." Considering Evergrande"s previous sales to its own employees, outsiders question the real number of pre-sold cars.
Meanwhile, the production of Hengchi 5 was also in trouble. Buyers of Evergrande financial products and real estate products, together with Hengchi"s suppliers, entered the assembly workshop of the Tianjin factory to defend their rights, resulting in a production suspension, according to informed sources.
In addition, the Tianjin factory will also be shut down on Thursday because of insufficient materials. More than half a year has passed since the first unit of Hengchi 5 was delivered, but only about 200 Hengchi cars have been produced in the Tianjin factory.
Whether Evergrande Auto will be acquired is still an open question. Compared with Evergrande"s cash crunch, what is more serious is the supply chain crisis after the credibility bankruptcy.
