A business entity of the Nanning city government will provide Neta with supply chain financial support for raw material sourcing, production, logistics, and export.
Neta Auto, whose operations are facing challenges, is seeing relief as it gains support from a local government and moves forward with a major reorganization of its teams.
The Nanning Industrial Investment Group has entered into a strategic partnership with Neta's parent company Hozon Auto to provide supply chain financial support, local media Yicai said in a report today, citing a Neta source.
The group will help Neta organize the sourcing of raw materials, production, logistics, and export of KD (knocked down) kits from its manufacturing base in Nanning.
It will also help Neta with the production and delivery of its overseas models, as well as further expanding its international markets and ensuring the stability of its supply chain overseas, according to the report.
The Nanning Industrial Investment Group was established in November 2013 under the leadership of the Nanning city government in Guangxi, with its main businesses being industrial investment and management, park construction and operation, and asset operation and management, according to a profile on the Nanning government's website.
Hozon was established in October 2014, and in April 2017, it was approved by China's economic planner, the National Development and Reform Commission (NDRC), to produce automobiles.
The Neta brand sells models including the Neta X, Neta GT, Neta S, Neta Aya, and Neta L in China, targeting a price range of between RMB 100,000 ($13,800) and RMB 200,000 yuan.
In June this year, Hozon filed an application to list in Hong Kong. But there have been no new developments since then, and the company's operations have faced difficulties recently.
Neta has initiated massive layoffs, which could reach up to 70 percent, according to a November 7 report by local media outlet Cailian.
Another Neta insider said the percentage of layoffs varies from department to department and was not that high overall, according to the report.
Yicai's report today cited a Neta source as saying the company is pushing ahead with a major strategic realignment, significantly compressing and integrating its first- and second-tier departments and optimizing its management levels.
After this round of restructuring, Neta's organizational operational efficiency is expected to increase by 50 percent and operating expenses will be reduced by more than 50 percent, the person said.
Neta will devote more resources to overseas market expansion, while focusing on the sustainable operation of its major models at home, aiming to turn its operating cash flow positive by February 2025, according to the report.
A recent move by the company also suggests that its overseas operations don't appear to slow down.
Neta announced on November 12 that it had signed an agreement with Grupo Saavedra, Bolivia's largest auto sales group, to jointly build channels and sell vehicles in Bolivia.
Neta plans to open its first store in Bolivia in the first quarter of next year and launch sales, and by 2025 it will have established at least 10 local sales channels and launched the Neta Aya as well as the Neta X.
Most of China's NEV carmakers saw a rise in deliveries in October, but Neta didn't release October delivery figures like its local counterparts.
The company saw deliveries of 10,118 vehicles in September, down 23.41 percent year-on-year and down 8.06 percent from August, according to data compiled by CnEVPost.
With the exception of January and July, Neta's monthly vehicle deliveries this year have been lower than the same period last year.
($1 = RMB 7.2425)
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