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FAW Xiali signed a joint venture agreement with Boxun Automobile, a new power car-building company, and the two sides will jointly form a joint venture company to produce and sell new energy vehicles.

On the evening of April 29, FAW Xiali announced that FAW Xiali intends to contribute with assets and liabilities related to the whole vehicle, such as land, plant and equipment, and Nanjing Bojun New Energy Automobile Co., Ltd. with cash, the two sides set up a joint venture. It is reported that in the joint venture, Boxun will invest more than 1 billion yuan and have an absolute controlling stake, while FAW Xiali will mainly contribute to production qualifications, and the future debt of FAW Xiali will be borne by the joint venture company.

According to the agreement, the joint venture company is registered at 578 Jingfu Road, Xiqing District, Tianjin, where FAW Xiali is located. At the same time, Nanjing Boxun agrees that the joint venture will give priority to and employ as many FAW Xiali employees as possible in accordance with the principle of two-way choice. In addition, Nanjing Boxun guarantees that in the future new product launch and development planning, priority will be given to ensuring that the production capacity of the joint venture company is fully utilized.

Nanjing Boxun is a member of the new force of domestic car building, established on December 13, 2016. its predecessor is American Advanced vehicle Technology Co., Ltd. (AVT) and Shanghai Sizhi Automotive Engineering Technology Co., Ltd., with a team of nearly 1000 people, it claims to adhere to its own independent research and development model, and already has core technologies such as chassis platform, three-power system, lightweight and ADAS solutions. And is developing the Boxun i-SP, i-MP, i-LP three major platforms. Huang Ximing, founder of Boxun, Nanjing, was born in the traditional automobile industry and once worked for Ford and General Motors in the United States.

Prior to this, Boxun iV6 and iV7 models were also on display at the Shanghai Auto Show in Nanjing, and the Boxun iV6 opened a global pre-sale with an official pre-price of 25-350000 yuan.

In terms of FAW Xiali, the cumulative sales of FAW Xiali for the whole of last year was 18791, down 30.57% from the same period last year. According to the specific car system, the Xiali brand has completely stopped production, and the production and sales of the Xiali series are zero in 2018. The remaining Wei series and Junpai series are struggling to support. Among them, the total output of the Wei series in 2018 was 1120 vehicles, and the sales volume was also 1120 vehicles; the Junpai series produced 20508 vehicles and sold 17671 vehicles in 2018.

The decline in sales also led to a decline in performance, resulting in FAW Xiali in financial difficulties, many times to sell "family property" in order to reverse the performance. Last year, Tianjin FAW Huali Automobile Co., Ltd., a subsidiary of FAW Xiali, also completed the transfer to Baiteng Automobile, a start-up car company, at a price of 1 yuan. Baiteng assumed 800 million yuan in debt and 54.62 million yuan in salary for its employees. In addition, FAW Xiali will transfer its 15% stake in FAW Toyota to its controlling shareholder FAW.

The operating income of FAW Xiali in 2018 was 1.125 billion yuan, down 22.5% from the same period last year; the net profit belonging to shareholders of listed companies was 37.3084 million yuan, an increase of 102.27% over the same period last year. Although FAW Xiali has turned losses into profits, its profits mainly come from non-recurrent profits and losses. Data show that the net profit of FAW Xiali excluding non-recurrent profits and losses in 2018 was-1.263 billion yuan, an increase of 24.2% over the same period last year. FAW Xiali lost 199 million yuan in the first quarter of 2019, compared with 223 million yuan in the same period last year.

FAW Xiali once won the title of self-brand car sales for 20 years in a row, but it has not continued its glory since its reorganization in 2002. now it has become a "hot potato", with declining sales and heavy debts. Nanjing Boxian cooperates with FAW Xiali. FAW Xiali gives plant and equipment, while Boxun pays money and assumes FAW Xiali's debt, and the two sides jointly set up a new company. It's more like Boxun bought FAW Xiali shares for production qualification.

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