Hozon New Energy Automobile (Hozon Auto), the parent company to Neta, has officially announced that it has commenced bankruptcy reorganisation proceedings. In a statement, the company says that the reorganisation is a “government-led proactive initiative” to resolve its debt challenges, ensuring a sustainable way forward for the company’s future growth.
“This reorganisation prioritises safeguarding production, ensuring delivery stability, and protecting stakeholder rights. Through debt restructuring, management upgrades, and capital infusion, we will revitalise the company’s operations,” the statement reads.
Hozon Auto says that the reorganisation process will be conducted under the supervision of the Jiaxing Intermediate People’s Court of Zhejiang Province, and will be “professionally administered to protect the lawful rights of creditors, employees, and customers”.
Settlement of supplier arrears will be amongst the top priorities of the proceedings, and the company – through its appointed administrators – will seek to secure investment from “leading domestic and international industrial capital” to aid in resuming production, advancing its research and development operations, and expanding overseas markets.
Additionally, the management team will also be “optimised”, with a new CEO “experienced in multinational automotive operations” to be appointed.
For the domestic Chinese market, the company expects its existing production facilities, including the Tongxiang plant, to gradually resume operations within months, prioritising order fulfilment. Financial support will be provided to ensure a stable transition for dealerships.
As for its overseas markets, Hozon Auto states that its international business remain unaffected by the reorganisation proceedings. Post-investment, the company will also further increase its focus on key markets including Thailand, Indonesia, and Brazil, adding that its Thai subsidiary has already “accelerated parts supply through innovative models”.
The company also says that it will adopt a “Technology + Localisation” globalisation strategy to penetrate emerging overseas markets.
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R&D will restart on the “HAOZHI” technological platform, which emphasises EV development thanks to its skateboard chassis, as well as autonomous driving. Three global models targetting the mass market segment (priced between CNY100,000-200,000, approx. RM59-118k) will be launched by 2027, while “premium differentiated offerings” will also be continually developed.
For customers, after-sales support, over-the-air updates, spare parts supply, as well as vehicle software services will still continue to operate without disruption. The company reassures that customer service support will be prioritised to minimise societal impact.
Hozon Auto and Neta’s bankruptcy reorganisation comes after months of recent speculation on its financial health. The carmaker faced a total of CNY17.2 billion (approx. RM10.6 billion) in losses between 2021 and 2023, and recent reports suggest that the company have reached a debt-to-equity swap agreement with some 134 core suppliers worth over RM2 billion (approx. RM1.2 billion) in order to sustain production of its vehicles.
Closer to home, Neta Auto’s local distributor in Malaysia, Intro Synergy, has also announced that it has entered a restructuring process, which crucially will move from a traditional dealership model to offer direct sales to customer in the future.
READ MORE: Neta to restructure operations in Malaysia – new direct sales model, aftersales unaffected
