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Jun 18, 2023

Hozon steps up plans to develop right

Hozon New Energy Automobile said it would step up its plan to develop a right-hand drive electric vehicle with its Indonesian partner in Southeast Asia as it prepares to raise capital through an

Hozon New Energy Automobile said it would step up its plan to develop a right-hand drive electric vehicle with its Indonesian partner in Southeast Asia as it prepares to raise capital through an initial public offering (IPO) in Hong Kong.

The carmaker, which signed a preliminary pact with PT Handal Indonesia Motor on July 26, said it is poised to commence its assembly of Neta-branded electric cars in the second quarter of 2024.

"We are investing to meet the needs of the Indonesian people and support the [local] government's decision to make the automotive industry more environmentally friendly," said Hozon's vice-president of overseas businesses Wang Chengjie, in a statement to the Post. "We hope that Neta will be well received, and can synergise with a good vision and mission in Indonesia."

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The Shanghai-based carmaker did not reveal the size of its investment. The factory, whose location has not been disclosed, will have the capacity to churn out 30,000 cars a year, Reuters reported.

An undated photograph of Hozon's Neta V sport-utility vehicle (SUV). Photo: Weibo alt=An undated photograph of Hozon's Neta V sport-utility vehicle (SUV). Photo: Weibo>

Its Indonesian sales office has begun taking orders for right-hand drive models assembled in China: the flagship Neta S sedan, and the compact sports-utility vehicles Neta U-II and Neta V. Official sales of the models will start in the fourth quarter of 2023, but Hozon did not say when the cars will be handed to Indonesian buyers.

Hozon began construction in March on its first Southeast Asian factory in Bangkok, where it aims to assemble 20,000 EVs a year when production begins at the end of 2024.

A Nezha U-Pro all-electric sports utility vehicle, made by Hozon Auto. Photo: Handout alt=A Nezha U-Pro all-electric sports utility vehicle, made by Hozon Auto. Photo: Handout>

"Unlike other start-ups, Hozon takes aim at both the domestic and overseas markets when it develops new models," said Phate Zhang, founder of CnEVPost, a Shanghai-based electric-vehicle data provider. "Chinese-made mass-market models can [sell easily] in those populated markets without established EV brands."

Between January and June, the Shanghai carmaker shipped about 8,000 vehicles abroad. In June, sales of Neta V topped any other pure electric car available in Thailand, it added.

Neta is a variation of the Chinese name Nezha, a protection deity in Chinese mythology. Cars of this brand fall into the category of budget EVs in China, aimed at middle- and low-income drivers who prefer battery-powered vehicles to automobiles powered by petrol-guzzling internal combustion engines.

Entry-level Neta V, with a driving range of 301 kilometres, starts at 73,900 yuan (US$10,219) on the mainland, the world's largest automotive and EV market.

More than a dozen carmakers, from BYD to Honda's Chinese joint venture, are ramping up efforts to sell vehicles overseas, which has helped China overtake Japan as the world's largest car exporter.

According to Chinese customs authorities, the country exported 2.34 million cars in the first six months of 2023, beating the number of 2.02 million units of overseas sales reported by the Japan Automobile Manufacturers Association.

In July, Hozon delivered 10,039 units to Chinese buyers, down 17.3 per cent from a month earlier.

Hozon is seeking to raise US$1 billion via a Hong Kong share sale, which may occur as soon as this month, Bloomberg reported in June.

This article originally appeared in the South China Morning Post (SCMP), the most authoritative voice reporting on China and Asia for more than a century. For more SCMP stories, please explore the SCMP app or visit the SCMP's Facebook and Twitter pages. Copyright © 2023 South China Morning Post Publishers Ltd. All rights reserved.

Copyright (c) 2023. South China Morning Post Publishers Ltd. All rights reserved.