GWM plans to solve the 2020 credit pressure by buying shares of Hebei Yogomo

Shanghai July 25st, 2017 Gasgoo-GWM plans to establish a joint-venture company to solve its weak alternative energy business. It released an announcement on July 16th that it would sign a joint-venture framework agreement with Hebei Yogoma Auto to buy its 25% shares by increasing investments. “The cooperation would bring complementary advantages for both sides, by producing good economic benefits and social benefits.”

The credit management regulation released by Ministry of Industry and Information Technology in June this year shows that the Chinese alternative energy vehicle credit policy will be implemented in 2018, with the credit proportion reaching 8%, 10% and 12% respectively for alternative energy vehicles from the year 2018-2020. Auto companies which have not achieved the target should buy credits.

It turns out to be a problem for GWM, which performs well in SUV market. Currently, it has only one alternative energy model C30EV, and immediate adjustments are needed for its future developments. It can be concluded that GWM would face negative credit of 350,000 to 400,000 in the year 2018-2020. The cooperation with Yogomo has become the first step for GWM to solve the large credit gap.

In the meantime, GWM’s Board Director Wei Jianjun said to media previously that GWM was facing great oil consumption pressure but it was taking measures to solve it. He revealed that GWM would launch a new platform in 2018 to solve oil consumption and emission problems. The newly-launched WEY brand would also be a key point to solve the alternative energy vehicle credit problem.