Zotye Automobile Co., Ltd. announced on August 9th that its subsidiary’s general assembly production line and related equipment failed to be sold in a judicial auction. This unsuccessful auction will result in the inability to resume production at its Chongqing base as planned, posing a risk of delisting. In the past six and a half years, Zotye Automobile has accumulated losses of 25.5 billion yuan, with a debt ratio of 96.1%.
According to a filing on August 9th regarding the proposed changes in shareholding, the general assembly production line and related equipment under the name of Chongqing branch of Hunan Jiangnan Automobile Manufacturing Co., Ltd., a subsidiary of the company, were put up for judicial auction on Alibaba but failed to sell. The court in Bishan District of Chongqing required the equipment to be dismantled after the second auction, with the work to be completed by September 15th.
The announcement further stated that since the Chongqing branch of Hunan Jiangnan Automobile Manufacturing Co., Ltd. is the production base for the T300 model, which is crucial for the company to resume production, the inability to do so after the judicial execution will impact operations significantly.
As of the end of the first quarter of 2025, Zotye Automobile reported unaudited net assets of 132 million yuan. The company warned that failure to resume production in 2025 would severely affect its financial condition and operational capabilities, potentially leading to negative net assets by the end of the year and triggering financial risks, operational crises, and delisting concerns.
In their performance forecast for the first half of 2025 released on July 14th, Zotye Automobile estimated a net loss of 135 million to 200 million yuan and an adjusted net loss of 101 million to 151 million yuan.
Zotye Automobile attributed the losses in the first half of 2025 to a lack of operating funds, which hindered the resumption of vehicle production, resulting in continued financial losses.
An article by Changjiang Business Daily on August 11th highlighted that Zotye Automobile has been incurring losses since 2019, with accumulated net losses of 25.5 billion yuan over six and a half years. By the end of the first quarter of 2025, the company’s debt ratio stood at a high 96.10%. Sales data indicates that Zotye Automobile sold 21,000 vehicles in 2019 but experienced production stoppages starting in 2020.
In 2024, Zotye Automobile’s sales volume, production volume, and inventory were reported as 14 vehicles, 0 vehicles, and 336 vehicles, respectively, suggesting that all vehicles sold by the company were from existing inventory.
Of concern is the current situation where the position of the company’s CEO is held by Xie Lihong, who also serves multiple roles including corporate secretary, vice president, and acting CEO and CFO.
Founded on August 31, 1998, Zotye Automobile Co., Ltd. is headquartered in Jinhua City, Zhejiang Province. In 2017, Zotye Automobile underwent restructuring and was listed on the Shenzhen Stock Exchange.