AutoBeta(AutoBeta.net)08/17 Report--

According to Tianyan investigation, seven new equity freeze messages have been added to Hechuang Automotive Technology Co., Ltd. (hereinafter referred to as "Hechuang Automobile"). The enterprises whose shares are executed are all GAC MOTOR (Hangzhou) Co., Ltd., with a total amount of 41.16 million yuan frozen. The freeze period is from August 15, 2024 to August 14, 2027.

Data show that GAC MOTOR (Hangzhou) Co., Ltd. was established in December 2010. formerly known as Guangzhou Automobile Geo Automobile Co., Ltd., it was acquired by Guangzhou Automobile Group passenger car Co., Ltd., a wholly owned subsidiary of GAC GROUP in October 2016. and changed its name to Guangzhou Automobile Group passenger car (Hangzhou) Co., Ltd., after GAC GROUP carried out production transformation of the Hangzhou factory to free up production capacity for the GAC MOTOR brand. In June 2019, it was renamed GAC MOTOR (Hangzhou) Co., Ltd.

In November 2021, GAC GROUP announced that GAC MOTOR Co., Ltd., a wholly-owned subsidiary, will transfer its 49% stake in GAC MOTOR (Hangzhou) Co., Ltd., a wholly-owned subsidiary, through the Guangzhou property Exchange. And transfer 246.0322 million yuan of related vehicle-related special assets held by GAC MOTOR (Hangzhou) Co., Ltd. It is agreed that Hechuang Motor should participate in the auction of the 49% stake in GAC MOTOR (Hangzhou) Co., Ltd., which is publicly listed by GAC MOTOR, and participate in the auction at a price not lower than the reserve price of the public listing transaction. The source of funding is the enterprise itself. In January 2022, Hechuang Motor took over 49 per cent of GAC MOTOR (Hangzhou) Co., Ltd. According to the shareholding structure, the two major shareholders of GAC MOTOR (Hangzhou) Co., Ltd. are GAC MOTOR and Hechuang Automobile, which own 51% and 49% respectively, of which Hechuang Automobile subscribed capital contribution of about 2.073 billion yuan.

In 2017, GAC GROUP signed a contract with Weilai to jointly invest 1.28 billion yuan to set up GAC Weilai, which also caused a lot of heated discussion in the automobile circle at that time. In terms of ownership structure, GAC GROUP and Weilai each hold 45 per cent of the shares, while the remaining 10 per cent are owned by management. In April 2018, Guangzhou Automobile Weilai New Energy Automotive Technology Co., Ltd. (hereinafter referred to as "Guang Qi Weilai") was established, which is the predecessor of Hechuang Automobile. GAC GROUP and Weilai respectively sent senior executives to hold important positions in the company, and Wei Lai Liao Bing was appointed as Guangzhou Automobile Weilai CEO. With the help of the resources of GAC GROUP and Weilai, Guangqi Weiwei launched its first mass production car Hechuang 007 in just one year, with a subsidized price of 26.26-303000 yuan.

However, the ideal of the combination of strong and powerful is plump, but the reality is very bony, and the sales performance of Hechuang 007 is not considerable after it is delivered on the market. In 2020, Guang Qi Wei Lai only 508 vehicles in the whole year. In early 2021, GAC Wei came to introduce third-party investment, totaling 2.405 billion yuan. Guangdong Pearl Investment Intelligence became the new shareholder, with a stake of 68.65%. GAC GROUP and his wholly-owned subsidiary GAC Ean jointly hold a 25% stake in GAC Kilai. After the completion of the capital increase, the proportion of shares held by Weilai was diluted to 4.46%, and then directly withdrew from the ranks of shareholders. Senior executives of the Weilai department, including Li Bin and Liao Bing, also withdrew from GAC, and later changed its name to "Hechuang Automotive Technology Co., Ltd.".

Despite the introduction of new major shareholders, Hechuang's sales have not improved significantly. Hechuang sold 2907 vehicles in 2021, 18941 in 2022 and 18559 in 2023. In this context, Co-Chuang Motor is once again facing change. At the end of 2023, major changes took place in Hechuang Automobile, and Zhang Yuesai was appointed President of Hechuang Automotive Technology Co., Ltd., who was fully responsible for the production, operation and management of the company. It is understood that Zhang Yuesai is a veteran of the Guangzhou Automobile Department. He has worked in the Guangzhou Automobile Department for more than 35 years, and has served in Guangzhou Peugeot, Guangzhou Automobile Honda, Guangzhou Automobile Toyota, GAC MOTOR, Guangzhou Automobile Mitsubishi. However, the addition of Zhang Yuesai also failed to reverse the decline of Co-Chuang Automobile.

After entering 2024, Co-Chuang also seems to be in a moment of crisis. In March this year, Hechuang forced employees to participate in car sales and linked sales performance directly to personal performance reviews. In April, some employees posted on the Internet that Co-Chuang paid only the basic salary in March, cancelled the original performance pay, and got 1/3 less than before. At the end of June, Hechuang implemented a layoff plan, because the capital chain has been broken, Hechuang can not follow the normal procedures for layoffs, employees can only choose to leave voluntarily without compensation.

Synergy is facing a serious cash flow crisis and is unable to pay its employees, but GAC GROUP seems to be powerless. According to media reports, all of Hechuang's products are manufactured by GAC MOTOR's Hangzhou factory, but by July most of the production lines had been cut, front-line employees were being gradually relocated, and only a small number of workers were still working in front-line production. In order to alleviate the funding problem, Co-Venture will have to pledge equity in exchange for financing.

In February 2023, due to the tight capital chain of JV, GAC GROUP introduced a round of financing for JV. GAC GROUP and his subsidiary GAC Ean will increase the capital of HEC by 107 million yuan and 493 million yuan respectively. At that time, Guan Dayuan, director of GAC GROUP, chose to abstain from voting and expressed concern about the uncertainty of the future development of Hechuang Automobile and advised to invest cautiously. However, the bill was eventually approved by the board of directors. At present, GAC GROUP holds a 4.45 per cent stake in Hechuang, while GAC Ian holds 20.54 per cent, making it the second-largest shareholder.

Judging from the background at that time, GAC GROUP still did not want co-chuang to collapse, so he raised 600 million yuan out of his own pocket for co-chuang. However, a year later, co-chuang failed to ease the business crisis and began to get stuck in a quagmire. This time, I'm afraid there's nothing GAC GROUP can do.

At present, GAC GROUP is also having a hard time. GAC GROUP's sales from January to July 2024 were 1.0042 million vehicles, down 15.83% from the same period last year. It is understood that GAC GROUP's sales have declined for seven consecutive months compared with the same period last year, and his companies have all declined to varying degrees. Among them, Guangzhou Automobile Eian, which focuses on the pure electricity market, has accumulated sales of 154600 vehicles, down 39.21% from the same period last year. GAC GROUP is the company with the largest decline.

The market competition in 2024 will be further intensified, and now Co-Chuang Motor is standing at a crossroads, and the fate of the future will ultimately be decided by the market. As a sub-brand of Guangzhou Automobile, Hechuang Automobile has been classified as "other" category, combined with Guangzhou Automobile Hino, Guangzhou Automobile BYD New Energy bus and so on. Retail data show that Hechuang sold only 4048 vehicles in the first seven months of 2024. For a long time, Co-Chuang has not found its own brand label, its market positioning, company structure is unclear, management is often changed, so that Co-Chuang did not lay a solid foundation in the early stage of development.

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