There has been “no new progress” in ongoing talks regarding a joint venture between Shenzhen-listed carmaker Zotye Auto and Ford, Zotye
said Thursday in an update published on a platform affiliated the Shenzhen Stock Exchange.
The statement offered no further details. In 2017, Ford and Zotye
signed a definitive agreement to set up a 50-50 joint venture, Zotye Ford Automobile, to produce electric vehicles for Chinese consumers.
But the trail went quiet soon afterward, prompting some investors to question whether the tie-up was dead in the water. In August, state-run media outlet China Daily
reported that the two companies were re-evaluating the partnership, citing sources close to the matter that attributed the talks’ stagnation both to “
dramatic changes” in China’s car market and to industrial policies such as the
phasing out of subsidies for new-energy vehicles.
Some of those concerns seem well-founded. During the first six months of 2019, Zotye
sold a total of 63,825 vehicles, only 1,868 of which were pure-electric. Those figures
were respectively 115,044 and 12,802 over the same period last year — a sign of China’s cooling car market.
The collapse in sales has threatened Zotye’s bottom line, with the company posting a 290 million yuan ($41 million) net loss during the first half of 2019, down from a 305 million yuan profit over the same period last year. The company anticipates a net loss of at least 450 million yuan for the first three quarters of this year.
