The Chinese group Evergrande launched this Friday the production of its first car, an electric vehicle, in a factory in Tianjin (north), announced a subsidiary of the group, whose financial situation has worried the markets for several months.
China’s real estate heavyweight Evergrande is strangled by abysmal debt last year estimated at €260bn. The group fights for its survival.
In addition to real estate, Evergrande is present in many sectors, and the automotive sector is set to become a showcase for the firm.
The group is “pleased to announce the start of mass production” of the Hengchi 5 model, its first vehicle, Evergrande Auto said in a press release. The first deliveries will take place from October, the company said.
First deliveries in October
Founded in 2019, the Evergrande New Energy Group subsidiary immediately showed its ambition to compete with the American manufacturer Tesla.
Evergrande gave itself “three to five years” to become the “most powerful” group in the world in the field of electric cars.
But the firm from Canton (south) has lagged behind in the design and marketing of its vehicles. Operational difficulties were exacerbated by significant cash flow problems, and the launch of the Hengchi 5 was postponed several times.
The financial situation of Evergrande, long No. 1 in real estate in China, has also worsened considerably since last year.
Since then, markets have been following developments with concern that the collapse of such a large group would have disastrous consequences for the economy.
Sale of assets
Evergrande was originally supposed to reveal the outline of a restructuring plan in July, but the announcement was postponed until an unspecified date.
To get out of the water, the firm has been trying in recent months to sell assets and reduce its holdings in other companies.
Evergrande, however, retains significant ambitions in the automobile industry.
According to local media, his boss, Xu Jiayin, wants to turn his group into an electric champion within 10 years and make this sector his core business.
In China, the electric car market is especially competitive. Local builders are numerous and compete to take advantage of the opportunities offered by this sector, supported by purchase subsidies.
Source: BFM TV
