[dmitra]

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.

 

[erik (laofan) cmvdc]

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?

 

[dmitra]

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).

 

[dmitra]

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).

 

[Lawrence]

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.

 

[dmitra]

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-dadi-automobile-co-ltd/mpv-minivan-minibus.html

Profile:
https://www.qichacha.com/firm_2ae49fd08b403740ffa35afa84da9a13.html
(see the "change log" and "shareholder information" sections)

 

[dmitra]

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.

 

[dmitra]

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.

 

[Lawrence]

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.

 

[dmitra]

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

 

[Lawrence]

You know in retrospect I am glad that this website did not drop Hafei from its listing. I always liked what I saw in Hafei products and now its good to see that going forward, it may have another life after all.

 

[dmitra]

I have tried to make a crude diagram showing the relationships between the companies we just discussed about. It is not exhaustive, only representative.

 

[Lawrence]

That's a great help for us visual learners.
By the way Hafei is not new to the NEV scene back around 2010 it's Saibao was fitted with an electric powertrain by both Coda in the U.S. and CATARC in China.
The Coda EV I test drove in California was fine, but its design was too dated to attract the attention it needed to succeed.
In any case, we'll now be watching HAMC to make its mark in the now very crowded NEV world. But it had better hurry.

 

[dmitra]

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.

To the above statement, I must add that Chengdu Xindadi's license was transferred to Geely subsidiary Chengdu Gaoyuan Automobile Industry Co., Ltd. This company currently produces the Vision X6 SUV at Geely's Chengdu plant (east) in Longquanyi District. As we know, Geely Chengdu plant complex also houses the Volvo factory (west) that makes the S60L and XC60.

Volvo left (light blue); Geely right (green), approximate boundaries.