In recent news from Jiangsu Province, a court has decided to accept the application for pre-reorganization from the parent company of Gaohe Motors. Gaohe Motors ceased production and operations back in February, initiating a self-rescue process. During this period, there were rumors of other car companies taking over Gaohe Motors, however, all such attempts ended in failure.
On August 8, the Yancheng Economic and Technological Development Zone Court issued a decision to accept the pre-reorganization application from the parent company of Gaohe Motors, Huaren Yuntong (Jiangsu) Technology Co., Ltd. The pre-reorganization period, as stated in the decision, is six months from the date of the decision, with the possibility of a 3-month extension upon justified reasons and application by the pre-reorganization administrator.
The pre-reorganization process involves negotiation between the debtor and creditors outside of court before applying for reorganization. If a majority of creditors agree to the reorganization plan, it can be legally binding to all creditors through the reorganization process, serving as a mechanism to facilitate the recovery of the debtor.
According to the decision document, on July 1st, Huaren Yuntong applied to the Yancheng Economic and Technological Development Zone Court for reorganization of the company, citing the inability to fully repay the due debts with its assets but highlighting the value and potential for reorganization.
As of April 30, Huaren Yuntong’s known matured debts exceeded the total assets of the company, indicating insufficiency to repay all debts, thus meeting the criteria for bankruptcy.
Information from the AiQiCha App shows that Huaren Yuntong was established in September 2017, with Ding Lei as the legal representative and a registered capital of 1 billion Chinese yuan. Huaren Yuntong Holdings (Shanghai) Co., Ltd. and Jiangsu Yueda Automobile Group Co., Ltd. hold 80% and 20% of the shares, respectively. Risk information indicates the involvement of the company in hundreds of legal cases, with Ding Lei having a total of 5 recorded cases with a combined amount of approximately 185,200 yuan.
Reported by the Securities Times, Gaohe Motors was forced to halt operations in February due to tight cash flow and production difficulties. Founder Ding Lei expressed optimism about finding a turnaround within three months and initiating self-rescue efforts.
On March 8, Gaohe Motors embarked on a “self-rescue journey” through live streaming sales. Gaohe Motors’ Project Director, Yang Yueqing, appeared as the host, showcasing products like steaks and stating that all income from the live streams would be invested in the company’s after-sales service. However, data from third-party platforms indicate that the last live stream sales event for Gaohe Motors was on April 23.
Over the past six months, there have been multiple reports of car companies considering taking over Gaohe Motors, including China FAW Group, Changan Automobile, Avita, and Lifan Technology. Ding Lei mentioned that 5 to 10 companies had engaged in in-depth negotiations with Gaohe Motors, but none were successful in the end.
Gaohe Motors has positioned itself as a high-end new energy vehicle brand, with models like HiPhi X, HiPhi Z, and HiPhi Y priced between 570,000 to 800,000 yuan, 610,000 to 630,000 yuan, and 339,000 to 459,000 yuan respectively. Despite this, sales performance for Gaohe Motors’ products has been underwhelming in a fiercely competitive market.
According to data from the China Passenger Car Association and Yiche Sale Volume Ranking, Gaohe Motors’ sales figures from September 2023 to January 2024 were 1735 units, 1834 units, 696 units, 564 units, and 232 units. Since the launch of its first product at the end of September 2020, annual sales figures were 4237 units in 2021, 4520 units in 2022, and 8681 units in 2023.
Based on information from the Car Owner’s Guide, Gaohe Motors sold a total of 272 vehicles in 2024, with 156 units of HiPhi Y, and 31 units and 85 units of HiPhi X and HiPhi Z respectively.
Cui Dongshu, Secretary-General of the National Passenger Car Market Information Joint Conference, believes that in the current complex automobile market, the elimination process of weak brands with small sales volumes and tight financial chains will be accelerated to some extent.
On August 9, discussions under the tag “#GaoheAppliesForBankruptcy” sparked widespread attention.
Gaozhuan Qingnian-Huache Wei sir, General Manager and Legal Representative of Ningbo Caimo Visual Media Co., commented in a blog post, “It’s a pity, but experiencing the product proves that cars are products, not art pieces. They need to focus on utility without excessive costs. For example, when I asked for air purification, HiPhi Y opened all four windows, even while driving at high speeds.”
Automobile blogger and Weibo influencer “Zhan Zhibin Xuesheng” remarked, “In the end, some brands are unable to sustain themselves, and gradually, some brands will fade from the public eye. Buyers should be cautious about purchasing low-selling new energy vehicles!”
Internet technology blogger and Weibo influencer “Shouwo Keji” stated, “Previous rumors suggested that a certain automaker would acquire Gaohe Motors, but in the end, it went bankrupt… Despite Gaohe’s car models exuding a strong sense of technology in their designs, the lack of core technology and pricing strategies without conviction led to their current predicament. Without a clear positioning strategy, they ended up in this difficult situation.”
Wuhan Liuzhengtao, Founder of Jintong Shengshi Investment Co., fund manager, and financial blogger, expressed in a blog post, “The company’s cars were beautifully crafted and were once at the forefront of the industry. It seemed like they were once partners with Jia Yueting. Now, they have fallen first. Who will be next?”