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Old 04-11-2018, 03:52 AM   #1
dmitra
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Default Idle auto companies may face derecognition

MIIT has put on notice 7 auto manufacturers, 53 bus or special vehicle manufacturers, and 12 motorcycle manufacturers to be derecognized.

According to rules framed in 2012, any preexisting auto enterprise that fails to produce a minimum prescribed number of licensed vehicles for two consecutive years will be given a warning. They may apply for a grace period of another two years and try to turn the business around; however, no new product from these companies will be approved. After the probation period the situation will be reassessed, and if things are still not looking up, the vehicle production license will stand suspended. Moreover, after suspension, this license cannot be transferred to a new company by way of renaming or relocation.

http://news.cnev.cn/Info_108661.html

The seven automakers are:

1. Tianjin FAW Huali Automobile Co., Ltd.
2. Guangqi Hino (Shenyang) Automobile Co., Ltd.
3. FAW Harbin Light Vehicle Co., Ltd.
4. Hafei Automobile Manufacturing Co., Ltd.
5. Chengdu Xin Dadi Automobile Co., Ltd.
6. China Hengtian Automobile Group Light Vehicle Co., Ltd.
7. Jiangsu Kawei Automobile Industry Group Co., Ltd.

For the whole list, see http://www.cvtsc.org.cn/cvtsc/notice/1433.htm

Apparently this exit policy was undertaken to retire "zombie" companies sitting on licenses without any production when at the same time new or innovative companies are being starved of licenses, often resorting to roundabout measures like reverse mergers with idle companies in order to make a backdoor entry into the motor industry.

The rules stipulate the minimum production conditions as:
1000 passenger cars, 50 medium or large buses, 100 light buses, 50 medium or heavy trucks, 500 light trucks, 100 special vehicles (code 5), or 1000 motorcycles.

Of the above seven, notable is Jiangsu Kawei, i.e. the company making the SUVs [and not the pickups which are made by YTO-Kawei (Luoyang) Vehicle Co. Ltd]. Although figures for Kawei are not usually published, I did find out that it produced 110 passenger cars in 2017.

Last edited by dmitra; 04-11-2018 at 04:41 AM.
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Old 04-12-2018, 03:35 AM   #2
erik (laofan), cmvdc
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Default Re: Idle auto companies may face derecognition

About Kawei: Kawei had even some type approvals of combustion engine driven SUVs in September 2017. And what about the new activities on the EV field, a lot of type approvals from mini cars to buses, a stand with several cars on the EV section of the Guangzhou Show in November 2017? Will they be influenced by these measures?
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Old 04-12-2018, 06:18 AM   #3
dmitra
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Default Re: Idle auto companies may face derecognition

Likely Kawei will apply for the probation period since there is an opportunity for appeal by April 13th. Perhaps they need to convince CVTSC they have a viable turnaround plan (relying on those very vehicles which have been type-approved before this April 9th notice).

Last edited by dmitra; 04-12-2018 at 06:39 AM. Reason: typo
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Old 04-12-2018, 07:26 AM   #4
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Default Re: Idle auto companies may face derecognition

For some historical perspective:

In 2013, 48 companies were notified for deletion. Two years later, 14 of these companies failed to apply for reassessment or were unable to pass the requirements, 22 were still undergoing reassessment, and 12 had passed and were not liable for deletion. (link)

Similarly, at the end of 2015, 92 companies were notified. When reassessed two years later, 61 had passed, and 31 failed (link).
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Old 08-09-2018, 12:45 PM   #5
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Default Re: Idle auto companies may face derecognition

Reports had it that Hafei had ceased production back in 2014, and its plant had been purchased by the Chang'an Ford JV.
And Xin Dadi was reported by gasgoo.com to have been acquired by Zotye (or Tieniu 铁牛?) in 2005. However there was never any evidence afterward, of Zotye activity at that Chengdu plant location. Both had brandished the (double D) logo however.
As for Huali, there is no info that would suggest it had any production after 2006.
I'm also surprised not to see Jonway on this list. Its website seems to have gone away.
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Old 08-09-2018, 02:31 PM   #6
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Default Re: Idle auto companies may face derecognition

OK, lots of issues here; I 'll tackle them one by one:

Chengdu Xindadi went to (surprise!) Geely in 2011. Geely used the Xindadi license, but not the plant, to manufacture the GX7/SX7 (RX6453) and GX9 (RX6483) SUVs. These models are out of production now.

http://auto-che.com/m/chengdu-new-da...n-minibus.html

Profile:
https://www.qichacha.com/firm_2ae49f...a84da9a13.html
(see the "change log" and "shareholder information" sections)

Last edited by dmitra; 08-09-2018 at 03:01 PM.
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Old 08-09-2018, 02:56 PM   #7
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Jonway is not idle; although it made the last SUV in January 2016, Jonway had a contract to supply Donfgeng with electric cargo vans (EQ5022) for three years, which has just expired (hence the shift to New Gonow). Now Jonway is making the same van (FD5022/FD5025) for itself. The Feidie license is also utilized by WAW (Wuzheng) for making trucks, and more recently by Cenntro Auto (Hengyuan) and Plante for the Metro microtruck (FD1021/FD5021), which could be a Jonway OEM-supplied model.
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Old 08-09-2018, 05:18 PM   #8
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With Hafei, things are a bit more complicated:

Hafei Automobile Co., Ltd. (estd. 1994) is 75% owned by Harbin Hafei Automobile Industry Group Co., Ltd., which is 100% owned by China Changan Automobile Group Co., Ltd. (CCAG).

Hafei Automobile Co., Ltd. had three production plants: in Harbin, Weihai, and Shenzhen. Part of the Harbin facility is utilized by Changan-Ford; the Shenzhen plant has gone to Changan-PSA (DS). The Weihai plant, going by satellite images, has been demolished.

In 2017, Hafei Automobile Co., Ltd. and Beijing Jintang Yifeng New Energy Automobile Technology Co., Ltd. (a company funded by project investment firm Yifeng Technology Investment Holdings Co., Ltd.) set up a new company called Hafei Automobile Manufacturing Co., Ltd..

Hafei Automobile Co., Ltd. is providing its production qualification (duly notified by MIIT), the brand "Hafei", plant & equipment as well as technical expertise to this venture for a 10% share and some monetary consideration. This will help it repay some of the huge debts owed to sister firm Harbin Dongan Auto Engine Co., Ltd., the engine maker. Beijing Jintang Yifeng is financing the project and holds 90% of the venture. This new company plans to set up an electric vehicle project in renovated sections of the Harbin site (on Zhengyi South Road) not used by Ford. Reportedly, some manufacturing equipment is still retained and well-maintained.

After the transfer of the car-making business, Hafei Automobile Co., Ltd. will try to settle all arrears and then concentrate on sales and supply of auto parts to OEMs like Ford.

Article:
http://www.nbd.com.cn/articles/2017-08-10/1137116.html
http://auto.163.com/17/0810/08/CRFCA1CU000884ML.html

Profiles:
Hafei Automobile Co., Ltd.
Hafei Automobile Manufacturing Co., Ltd. (estd. 2017)
Beijing Jintang Yifeng New Energy Automobile Technology Co., Ltd.

Last edited by dmitra; 08-09-2018 at 05:33 PM. Reason: edited with additional info and article link
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Old 08-10-2018, 12:17 PM   #9
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Default Re: Idle auto companies may face derecognition

Complicated is putting it mildly. I see that Harbin Hafei and Harbin Don'gan, the engine builder once merged in around late 2004. Both of course had started life under the AVIC umbrella. Here's a piece from the China Daily, sometime in 2005, referring to that merger:

"The merger with Dong'an will open a long-awaited fund-raising channel in the stock market for Hafei, which will facilitate its rapid expansion in China's auto market," said Jia Xinguang, chief analyst with China Automotive Industry Consulting and Development Corp. Hafei planned to go public in the mainland and Hong Kong stock markets in the middle of the 1990s, but failed to do so…. (before the merger) AviChina and China Aero (382) limited - AviChina's wholly-owned affiliate incorporated in the British Virgin Islands – (held) 55.73 per cent and 25 per cent shares of Hafei respectively. The (remaining) shares are controlled by three other small shareholders.

With this in mind I refer to your comment:
"This will help it repay some of the huge debts owed to sister firm Harbin Dongan Auto Engine Co., Ltd., the engine maker." (underlining is mine)
Well in 2009 when Chang'an acquired Harbin Hafei and Chang'he I always wondered whether Harbin Dong'an was thrown in with that deal. Apparently not, from what you say here, it seems it remained a separate enterprise.
Thanks again for your kind clarification.
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Old 08-10-2018, 01:41 PM   #10
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Default Re: Idle auto companies may face derecognition

Quote:
Originally Posted by Lawrence View Post
Well in 2009 when Chang'an acquired Harbin Hafei and Chang'he I always wondered whether Harbin Dong'an was thrown in with that deal. Apparently not, from what you say here, it seems it remained a separate enterprise.
Thanks again for your kind clarification.
China Changan Automobile Group Co., Ltd. (CCAG) is Harbin Dongan Auto Engine's (Dongan Power) controlling shareholder with 51.42% of the "Circulating A shares" (i.e. public float) (link).

Recall AVIC used to hold a 23% stake in CCAG per terms of the same 2009 deal by which CCAG acquired several companies from AVIC including Harbin Dongan Auto Engine (link). Now CCAG is 100% owned by China South Industries Group (CSGC/COEGC).

Also see the first paragraph labeled "2012" on this page:
http://www.daae.com.cn/web/about/fzlc.htm

Harbin Dongan Auto Engine and Hafei Automobile become sister companies because their controlling shareholder is the same.

China Aviation (382) Co., Ltd. (British Virgin Islands) still owns 25% of Hafei Automobile Co., Ltd.
___________________________________

Here is a very recent article on the settlement of debts and arrears between Hafei Automobile Co., Ltd. and Harbin Dongan Auto Engine Co., Ltd. which includes asset transfers as well:

http://ucheke.jrj.com.cn/2018/08/10105024936771.shtml

Last edited by dmitra; 08-10-2018 at 01:48 PM.
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