Zotye: Expanding Production of Compact EVs at Joint Venture with Ford
Expanding SUV Lineup with a New TRAUM Brand
|Yun 100 plus city commuter car|
Following the announcement of the VW Group's third joint venture in June 2017, Ford also announced in August 2017 that it would sign a memorandum of understanding (MOU) to establish its third joint venture. Ford's new joint venture partner, Zotye, is a medium-sized private OEM in Zhejiang province. The newly established Zotye Ford joint venture will build an EV production plant in Zhejiang province which will assemble 100,000 units per year, as well as construct a sales and service network. Ford is the first foreign capital OEM joint venture partner of Zotye Auto.
The predecessor of Zotye Auto was an automobile parts supplier established in 1992. The company built their own plant by acquiring an automotive production line from another company. After that, the company entered the automotive industry after a series of adsorption mergers and acquisitions. The sales of Zotye have increased rapidly since 2010, selling 333,000 units in 2016, representing a 49.4% increase y/y. As far as New Energy Vehicles (NEV) are concerned, the company has been primarily focusing on the sale of city commuter cars, selling 37,000 EVs in 2016, representing an increase of 51.6% y/y, making it the second largest manufacturer of EVs in, following BYD. However, because the introduction of EVs by competitors intensified in 2017, Zotye sales of EVs in the first half of 2017 (January - June) dropped the market position of Zotye to 5th place. The company plans to raise the percentage of NEV vehicles in their product portfolio to 60%, targeting a sales volume of over 800,000 units by the end of 2020.
China sales in the first half of 2017: 13.35 million vehicles sold, and growth rate slowing (Aug.2017)
Auto Shanghai 2017 (Part 4): Geely, Great Wall Motor, BYD, Chery, JAC, Zotye, Lifan, and emerging EV OEMs (Jun.2017)
Overview of Zotye: 333,000 units sold in 2016, targeting to boost sales with Ford joint venture
The predecessor of Zotye Auto established in 2003 was a private automotive coponents supplier which was established in Yongkang city, Zhejiang province in 1992. Zotye acquired a vehicle assembly line from a Taiwanese OEM in early 2000, and inaugurated a production plant in 2005. After that, to receive certification from the Chinese government to manufacture vehicles, the company formed a joint venture with Chengdu Xindadi Automobile and began full-scale production of automobiles under their own brand. The automobile components manufacturer of wire harness and meters, Huangshan Jinma Co., Ltd acquired all shares of the company in 2016. The company subsequently changed the company name to Anhui Zotye Automobile Co., Ltd. in June, 2017, and again to Zotye Auto Co., Ltd. in November, 2017.
As a result of the popularity of the Zotye 5008 and Zotye 2008 models, Zotye Auto sales volumes dramatically increased in 2010. After that, their sales volumes declined steadily until 2013 as well as the ratio of SUV; afterwards, by expanding the production of SUVs, which are popular in China, sales volumes increased. In 2016, Zotye sold 333,000 units, representing an increase of 49.4% year-over-year (y/y), primarily as a result of the sales contribution of the SUV models Zotye T600 and Damai. The sales volume in the January - October, 2017 timeframe was 217,000 units, representing a decrease of 16.5% y/y.
Zotye Auto has increased their sales volume as a medium-sized OEM, purchasing the intellectual property and molds of the Fiat Multipla model in 2010, the production of which has since been discontinued, and reintroduced under the Zotye brand. Zotye Auto entered into a joint venture agreement with Ford in August, 2017, their first joint venture with foreign capital OEM.
Zotye's major models
|Gasoline cars||Z series||Sedan||Z360, Z560, Z700|
|T series||SUV||T300, T600, T600Sports, T600Coupe T700|
|S series||SUV||SR7, SR9|
|Damai series||SUV||Damai X5, Damai X7|
|EV||E series||City commuter car||E200, Yun 100S, Yun 100 plus, Damai Zhima, Z500EV *|
(As of Nov. 2017) * Z500EV is also included in the Z series.
|Zotye T600||Damai X5|
Mid- and long-term targets: Sell over 800,000 units per year, and introduce new brands
Zotye Auto is targeting a sales volume of over 800,000 units by the end of their five-year planing period (2016-2020), of which 60% will be New Energy Vehicles (NEV). Furthermore, the company aims to achieve a sales volume of over 1,000,000 units by 2025. Although many of the models currently sold are gasoline-powered vehicles, the company plans to introduce EV and PHV models in parallel with gasoline models.
Targets by 2025
|Targeting sales volumes of 400,000 in 2017, 500,000 in 2018, and over 800,000 by the end of 2020, becoming the market leader with their own brand.|
|The ratio of NEV will be 60% or more by 2020.|
|Targeting revenues of over 80 billion CNY by the end of 2020.|
|Targeting sales volumes of over 1,000,000 units by 2025.|
|Focusing on developing human resources in 2016-2020, training more than 1,000 product development experts.|
Roll out the TRAUM brand, aimed at the young consumer segment
In 2017, Zotye Auto announced the new TRAUM brand, aimed at the young consumer segment. The new brand will target younger consumers, people born in the 1980s and 1990s or later. The new brand will focus on expanding the sales of SUVs, which popular in China. Specifically, the company plans to release nine models (eight SUVs and one sedan) by the end of 2019. Zotye plans to introduce four out of the nine models in early 2019, as well as to introduce NEVs around the same time as the introduction of the gasoline models.
New brand TRAUM
|In June 2017 it was announced that the new TRAUM brand would be managed by Zotye Auto. The brand targets young people born in the 1980s and 1990s or later, and the brand is likely to be positioned as a model aimed at the middle or upper income consumer segment.|
|Nine models (eight SUVs and one sedan) will be launched over three years, from 2017 to 2019. The company will introduce the SUV series first, and roll out the sedans serially. SUVs will include variations from small- to large-sized.|
|As of November, 2017, Zotye has about 15 dealerships (4S stores). They are planning to expand their sales network to about 200 dealerships (4S stores) and about 800 other sales outlets by January, 2018.|
|The first model of the TRAUM brand is the SUV S70, which was scheduled to be launched in November when the launch of the brand was announced, but the date was slipped to December. Subsequently, the launch date of the S70 was again delayed to January, 2018, which coincides with the launch timing of the TRAUM brand's second model, which is the compact SUV, MEET3.|
|The S70 powertrain is available in two versions, a 1.5L turbo engine (102 kW) and a 1.6L turbo engine (83 kW). Its dimensions are Length: 4,746 mm, Width: 1,882 mm, Height: 1,700 mm and Wheelbase: 2,800 mm.|
Launch schedule of TRAUM models
|2018||S70 (SUV), MEET3 (SUV), 7-seat mid-sized SUV, 5-seat SUV coupe, 7-seat compact SUV|
|2019||5-seat mid-sized SUV, mid-sized sedan, 7-seat large-sized SUV, 5-seat compact SUV|
Conclusion of joint venture with Ford, and production of compact EVs with dedicated brand
In August 2017, Zotye Auto and Ford signed a memorandum of understanding (MOU) to form a joint venture for the research and development, production, and distribution of EVs. Zotye Auto is the third China joint venture partner of Ford following Changan Automobile Company Limited and JIANGLING MOTORS CO., LTD. The newly established company "Zotye Ford", with a capital investment amount of CNY 5 billion, will build a new plant in the Zhejiang province with a manufacturing capacity of 100,000 units per year. Ford and Zotye Auto promote jointly in the field of mobility service as well as the passenger automobile production. The Chinese government has approved the deal, so according to press releases, if the JV is successful, it is likely that the company will announce the new brand's models as early as 2018.
|Joint venture with Ford||In August 2017, Ford and Zotye Auto signed a memorandum of understanding (MOU) for the joint venture to collaborate on the research and development, production, and distribution of EVs. The JV has a 50:50 investment ratio.|
|In November 2017, a signing ceremony was held to commemorate the establishment of the new company Zotye Ford. The investment amount is CNY 5 billion and the registered capital amount of the joint venture is CNY 1.7 billion.|
|In order to manufacture compact EV passenger automobiles, the company is building a new plant in Zhejiang province with a production capacity of 100,000 units per year, and establishing a sales and service network.|
|Ford and Zotye Auto will also collaborate in the area of mobility services.|
Note: On December 7, 2017, a signing ceremony was held for Zotye Ford's EV production site project. A new plant with an annual capacity of 100,000 units will be built in Jinhua City, Zhejiang Province. The plant is scheduled to launch in September 2019.
The Zotye brand will focus on compact EVs
Zotye brand EVs are manufactured by Hunan Jiangnan Automobile Mfg., a Zotye Auto Group subsidiary, at the Jintan plant of Zotye Holding Group Co., Ltd. The number of EVs of the Zotye Auto Group sold in 2016 was 37,000 units, an increase of 51.6% y/y, making Hunan Jiangnan Automobile Mfg. the second largest manufacturer of EVs with production of the Zotye brand models. Because many China OEM focused on the introduction of New Energy Vehicles (NEV) competition was intense and sales volumes in the first half (January - June) of 2017 caused their market position to drop to 5th place. The sales volume in the January - October, 2017 timeframe was limited to 26,000 units, representing a 15.7% increase year-over-year (y/y).
Both the Zotye and Zhima EVs of Zotye Auto are compact city commuter cars. Going forward, Zotye plans to market their mid- and large-sized EVs under their new TRAUM brand.
Yun 100 plus
|EV||Zotye E200||Hunan Jiangnan Automobile Mfg.||0||0||13,154||11,612|
|Zotye Yun 100||2,311||15,467||16,417||6,007|
|Zotye Yun TT||14||1,984||3,957||979|
|Zhima E30||Zotye Holding Group (Jintan Plant)||0||572||3,471||3,957|
(Source: Created based on MarkLines's data)
Zotye sales volumes in China (factory shipment)
|Hunan Jiangnan Automobile Mfg.||MPV||Langyue||1||0||0||0||0|
|Zotye Yun 100||2,311||15,467||16,417||9,778||6,007|
|Zotye Yun TT||14||1,984||3,957||1,652||979|
|Mini Van||Zotye V10||2,627||325||390||344||0|
|Zotye Holding Group (Jintan Plant)||SUV||Damai X5||0||23,921||90,039||74,808||20,683|
|Chengdu Xindadi Automobile||SUV||Zotye T200||6,059||1,553||195||195||0|
* Note: 2016 sales volumes for some of the models shown in the above table may not be consistent with actual sales volumes in January - October, 2016, as a result of volume adjustments that were made to the data.
(Source:Created based on MarkLines' data)
Zotye, Ford, TRAUM, NEV, EV, PHV
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