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Recently, GAC GROUP announced that GAC MOTOR Co., Ltd., a wholly-owned subsidiary (hereinafter referred to as "GAC MOTOR"), will transfer its 49% stake in GAC MOTOR (Hangzhou) Co., Ltd., a wholly-owned subsidiary, through the Guangzhou property Exchange. The reserve price of the public listing transaction shall be no less than 1.2388083 billion yuan (subject to the results of the archived evaluation report) as the basis. At the same time, GAC MOTOR (including related parties) will transfer by way of agreement the 246.0322 million yuan held by GAC MOTOR (Hangzhou) Co., Ltd. (the specific transfer price is subject to the filed asset evaluation report).

In the announcement, GAC GROUP stressed that Hechuang Automotive Technology Co., Ltd. (hereinafter referred to as "Co-Chuang Automobile"), the company directly and indirectly holds a 25% stake) to participate in the auction of GAC MOTOR's 49% stake in GAC MOTOR (Hangzhou) Co., Ltd. at a price not lower than the reserve price of the public listing transaction, with the source of funds raised by the enterprise itself.

Data show that GAC MOTOR (Hangzhou) Co., Ltd. originated from Geo Automobile, is one of the early domestic independent brands, the enterprise has mini cars, cars, SUV, pick-up trucks and other model production qualifications. In April 2010, Gio Group formally reached a strategic cooperation with GAC GROUP, and in December, Guangzhou Automobile Geo Automobile Co., Ltd. was formally established, in which GAC GROUP holds 51% and Gio Group holds 49%. However, Guangzhou Automobile Geo suffered losses in 2014 and 2015, and after investing in the MPV model Xinglang, Geo was unable to invest in equal shares, and GAC MOTOR fully accepted the Hangzhou factory in 2016. At that time, GAC MOTOR was in a stage of rapid development, and the upgraded Hangzhou factory became GAC MOTOR's production base and made several profits in 2016.

According to public data, the total investment of the factory of GAC MOTOR (Hangzhou) Co., Ltd. is 18 billion yuan, which was completed on December 26, 2017. the overall production capacity is planned according to 400000 vehicles per year, and the first phase is completed at 200000 vehicles per year. At the same time, it has common production capacity of traditional fuel vehicles and new energy vehicles. In addition to Hangzhou, GAC MOTOR has also set up factories in Guangzhou, Xinjiang, Yichang and other places. However, the current development of GAC MOTOR is not optimistic. According to GAC GROUP's financial report, GAC MOTOR's annual production capacity in 2020 is 820000 vehicles, annual sales are 345900 vehicles, capacity utilization rate is only 42.18%, and the capacity is obviously idle.

As a participant in GAC MOTOR's auction, the predecessor of Hechuang Automobile is Guang Qi NIO, which was founded in April 2018 and is jointly owned by GAC GROUP, GAC Ean, Xilai Fund, Lai Motor and the founding team. its brand is Co-founder HYCAN. A year after its establishment, the first model, Hechuang HYCAN 007, was officially launched with a subsidised price of 25.98-279800 yuan. However, after the launch of new cars, the performance is not satisfactory, monthly sales are basically maintained at about 100.

In January this year, Guangqi Wei came to achieve 2.405 billion yuan of strategic financing. Pearl River Investment Management Group, as a strategic investor, increased its capital by about 1.923 billion to Guangqi NIO, and GAC GROUP increased its capital by about 482 million yuan through its wholly-owned subsidiary GAC Ean New Energy, and experienced a series of changes. the legal person was changed from Li Bin to Yang Ying, GAC NIO changed its name to Hechuang Automobile, and released the second mass production model Co-Chuang Z03. It is understood that at the upcoming Guangzhou Auto Show, Hechuang will unveil two new cars, including a MPV and a sedan SUV.

It is understood that Hechuang is currently manufactured by GAC Ean. If it can acquire a 49 per cent stake in GAC MOTOR (Hangzhou) Co., Ltd., Hechuang may be able to change its production mode and GAC MOTOR's production capacity can be reasonably utilized. GAC GROUP said: "if the auction is successful, Hechuang will get 49% stake in GAC MOTOR (Hangzhou) company, while GAC MOTOR still holds 51% stake in GAC MOTOR (Hangzhou) company." GAC MOTOR (Hangzhou) Company will comprehensively consider the willingness of all parties to cooperate and reasonably allocate production capacity according to market demand. "

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