[YesAuto News] Byton Auto will solve the problem of car manufacturing qualifications through equity acquisition. On September 28, FAW Xiali (000927.SZ) announced that it will transfer 100% of FAW Huali's equity to Nanjing Zhixing Electric Vehicle Co., Ltd. at a price of one yuan. The company's car brand is Byton Motors. The announcement shows that this equity transfer has been reviewed and approved by the Extraordinary General Meeting of Shareholders. The Tianjin Property Rights Exchange Center will issue a property rights transaction certificate for this equity transfer, and subsequent procedures such as changes in industrial and commercial registration are required.
Byton Motors was established in 2017. The company's global R&D center and factory are located in Nanjing. In January 2018, Byton Motors released the first concept car BYTON Concept. The mass production model will be launched in 2019 with a starting price of around 300,000 yuan.
FAW Huali, the full name of Tianjin FAW Huali Automobile Co., Ltd., was originally a joint venture between Tianjin Automobile Manufacturing Plant and Malaysia Golden Lion Speed Ben Industry Co., Ltd. After two equity transfers, FAW Huali became a wholly-owned subsidiary of FAW Group. FAW Group also transferred all of its 100% equity to FAW Xiali at a price of 300,000 yuan.
The mass production of products is approaching, and the qualification of car manufacturing is an urgent problem that Byton Motors needs to solve. FAW Huali has complete passenger car production qualifications. After successfully taking over, Byton Motors can legally produce the planned SUV, sedan and MPV models. On the surface, Byton only bought FAW Huali's qualifications for one yuan. In fact, Byton Motors has to assume 800 million yuan in debts and 54.62 million yuan in employee salaries.
It is also worth noting that FAW Huali was listed in the “Specially Announced Vehicle Manufacturers (3rd Batch)” by the Ministry of Industry and Information Technology in May this year. Enterprises that enter the special announcement will not be accepted for product announcement applications, and will be re-qualified for application announcements after being assessed.
According to Byton's previous plan, it hopes to use its Nanjing plant to produce the first batch of cars by the end of 2019. To use the qualifications of the Nanjing plant and FAW Huali at the same time, Byton has to solve two problems: one is to assign the ownership of the Nanjing plant to FAW Huali, and the other is to remove FAW Huali from the special public announcement. After that, Byton's Nanjing plant still needs to be accepted by the Ministry of Industry and Information Technology. Only after passing the acceptance can Byton have officially obtained the qualification for car-making.
According to people familiar with the matter, according to the time to market of the first mass-produced car, it is expected that Byton will be able to completely solve the qualification problem around May next year. The person also said that because FAW Huali's passenger car qualification system is relatively comprehensive, after the completion of the acquisition, Byton will abandon the application for qualification through the “new pure electric passenger car project”.
There is a close strategic cooperation relationship between Byton Motors and FAW Group. In June of this year, at the opening ceremony of Byton's Nanjing headquarters, it was reported that FAW Group, as the lead investor, injected US$260 million into Byton, accounting for about 50% of its total B round of financing.