Chongqing - Two local electric vehicle companies, Changan Auto and Livan Automobile based in Southwest China's Chongqing Municipality, have recently announced major new initiatives to reach breakthroughs in the intensely competitive domestic electric vehicle (EV) market.
Changan established an EV company with Ford
Changan Ford New Energy Automotive Technology Co., Ltd. was established on September 20, with a registered capital of RMB 250 million (USD 34.2 million), according to Tianyancha, a large data technology service company with a vast repository of Chinese enterprise information. The legal representative is Yang Dayong, who is also the executive vice president of Changan Ford.
Shareholder information shows that the company is jointly held by Changan Auto and Changan Ford, with shares of 40% and 60%, respectively. As Changan Auto holds 50% of the shares of Changan Ford, it actually has 70% of the shares in the new EV joint venture.
The inner chamber of Ford Mach-E. (Photo/Changan Ford)
Ford has not made a good fortune despite the rapidly growing domestic EV market. In 2021, Ford introduced the Mach-E in China, initially targeting the Tesla Model Y. Despite the brand endorsement of Mustang, the monthly sales of Mach-E have been lingering in the hundreds. Data from the China Passenger Car Association show that this June, the production of the Ford Mustang was zero, and the sales were only 77, with a total of 268 in the first six months.
Analysts believe that the establishment of the electric vehicle company is an attempt by Ford to find a breakthrough in the electric vehicle market in China, and Ford will develop products with the help of Changan’s electric vehicle technology. Bridging News approached Changan Ford for more information but has not provided more details.
Joint venture brands, which used to dominate the gasoline vehicle market in China, have not replicated their success in the new energy vehicle market. In terms of penetration rate, this August, the share of new energy vehicles of joint venture brands was 5.2%, a year-on-year decrease of 0.8 percentage points, while the share of independent brands reached 70%.
Finding new ways to break into the new energy vehicle market has become a pressing issue for many joint venture automobile companies. Volkswagen had previously announced cooperation with Xpeng and SAIC Motor. Honda established a new brand, “Lingsi,” with its Chinese partner Dongfeng.
Livan increases capital for its EV company
Tianyancha shows that on September 15, Chongqing Livan Automobile Manufacturing Co., Ltd. increased its capital from about RMB 2.11 billion to RMB 5.18 billion, an increase of approximately 145.4%.
After the capital increase, the shareholding ratios of various parties in Livan remain unchanged, with Lifan Technology holding 28%, Wanguang New Energy holding 71%, and Lifan Asset Management holding 1%.
According to an insider of Lifan Technology, this capital increase for Livan is through debt-to-equity conversion, which will help optimize its asset-liability structure, enhance financial strength, and promote healthy operation and sustainable development.
The advertising site of Livan 7. (Photo/Livan)
Livan, co-owned by Chongqing local enterprise Lifan, and Geely, one of China's rapidly developing automotive groups with auto brands like Geely, Lynk&Co, and Zeekr. In August this year, Livan sold 3,423 vehicles, accounting for 7.2% of Geely Group’s EV sales.
Livan has long focused its sales on the enterprise end, and its current sluggish growth also stems from the saturated state of China’s ride-hailing market. With the gradual decline in the average income of ride-hailing drivers this year, several cities, including Sanya, Changsha, and Shanghai, have suspended the approval of ride-hailing services, sending a warning signal to the market. Sales of Livan models, heavily reliant on ride-hailing, have naturally been affected.
At present, Livan is eagerly introducing a star product to the consumer end. The recently launched Livan 7 is considered to be serving this purpose.
The car, priced between RMB 100,000 and 170,000, is considered to be very cost-effective and is a major play by the company at the moment. According to official announcements, the company received 3,187 orders for this model within 20 minutes of its launch on September 21.