China’s Huanshan Jinma to Acquire Zotye Auto

China’s Huanshan Jinma to Acquire Zotye Auto

Gasgoo (Shanghai, October 26)— Huangshan Jinma, a private provider of automotive parts in China, held press conference to announce its plan to acquire Zotye Auto, in the Shenzhen Stock Exchanges on October 24.

After the exchange, Zotye Auto has been a wholly-owned subsidiary of Huangshan Jinma. Established in 2003, Zotye Auto has run business including developing and manufacturing overall vehicles. The company has developed products including cars, SUV, alternative energy vehicles, and others. And it has dealers in the third- and fourth-tier cities in China. Sales of the company were 22,902 units in 2015.

According to Huangshan Jinma, acquisition of Zotye may cost about 11.6 billion RMB, which has been thought to be higher than expectation. However, Huangshan Jinma believe that the acquisition is worthy, considering that  Zotye has made great product positioning, taken up considerable market shares, built brand recognition, developed advantageous technology in R&D, made great company management, had innovative business model and built wide net-work for after-sales.

There may be no adjustment on administration and management of Zotye, as Huangshan Jinma pointed out. As parent company, Huangshan Jinma may integrate assets of Zotye for synergic. Moreover, R&D resources may be shared by two companies for integrative development of business.