Neta Auto, a subsidiary of Hozon Auto, has secured critical backing from the Nanning Industrial Investment Group as it undertakes a significant organizational restructuring and international market push. The move comes as the Chinese electric vehicle (EV) maker faces operational challenges and intensifies efforts to stabilize its supply chain and reduce costs.
The Nanning Industrial Investment Group, under the leadership of the Nanning city government, has entered a strategic partnership with Hozon Auto to provide financial and logistical support, local media Yicai reported, citing a Neta source. The partnership will assist with sourcing raw materials, production, logistics, and the export of knocked-down kits from Nanning. It will also facilitate production and delivery for Neta’s overseas markets while ensuring supply chain stability.
“Neta is undergoing a major strategic realignment to improve efficiency and reduce operating expenses,” said a company source, adding that the reorganization will increase operational efficiency by 50% and cut costs by more than half.
Hozon Auto, founded in 2014 and approved by China’s National Development and Reform Commission to produce automobiles in 2017, has seen declining domestic deliveries this year. Neta reported September sales of 10,118 vehicles, a 23.41% year-on-year decrease. Despite this, the company is focusing resources on its international markets to drive growth.
On November 12, Neta signed a deal with Bolivia’s Grupo Saavedra to build sales channels in Bolivia, with plans to launch its first store in early 2024. By 2025, the company aims to establish at least 10 local sales channels and introduce the Neta Aya and Neta X models.
The restructuring, which involves layoffs impacting up to 70% of certain departments, aims to streamline operations. The company plans to prioritize its core domestic models while working towards positive operating cash flow by February 2025.
Source: CNEVPOST
