On July 15, six vehicle companies including Leopaard began to undergo merging and restructuring. Chinese media outlet Yicai learned that Hongdian New Energy has been chosen as the exclusive investor for restructuring.
Hongdian would obtain corresponding vehicle production qualifications, vehicle production bases, engine production bases, automobile R&D bases, axle production bases and other assets of these six companies, at the expense of 800 million yuan ($118.5 million) for paying off debts.
Founded in August 2013, Leopaard was once one of the largest manufacturers of light off-road vehicles in China. It provides users with high-quality SUVs and pickup trucks, and its products cover all market segments, such as official government vehicles, military command vehicles, industrial business vehicles and personal family vehicles.
Six companies now in restructuring, including Changfeng Motor, Leopaard, Changfeng Cheetah, Changfeng Power, CH-AUTO Technology and Fengshun Axle, will retain their main bodies, while all their equities will transfer to Hongdian free of charge.
Hongdian was established on October 31, 2019, with a registered address in the city of Hengyang, Hunan Province. It has two shareholders, of which Hengyang Hongqi Investment Co., Ltd. holds 96% and WM Motor (Hengyang) Co., Ltd. holds 4%. The former is controlled by Hengyang State-Owned Assets Supervision and Administration Commission, while the latter is wholly owned by WM Motor.
Although WM Motor has a low share ratio among investors in restructuring, it plays an important role in the process. According to the drafted version of the merger and restructuring program, following the acquisition, Hongdeng aims to focus on the mass market for pure electric passenger cars in the range of 150,000 yuan to 250,000 yuan per vehicle. WM Motor will provide technical support from the three electric motors to vehicle calibration, intelligent cockpit and intelligent driving, and will consider sales through WM Motor’s established channels. Hongdeng New Energy will also draw on WM Motor’s internal training, incentive policy, compensation system and supervision mechanism for car company talents in all aspects.
Shortly before the establishment of Hongdian, WM Motor situated its new energy vehicle project in Hengyang. In July 2020, Hengyang officials announced its goal to achieve an output value of 100 billion yuan for the local auto industry in 2025.
At present, WM Motor has two production bases in Wenzhou and Huanggang in China, and its production capacity is significantly higher than its actual sales volume. In the first half of this year, WM Motor sold only 16,031 vehicles, up 2.3% year-on-year, while the overall growth rate of the industry was 122.8%.