On August 22, Zotye Automobile Co., Ltd. (hereinafter referred to as “Zotye Automobile”) issued an announcement regarding the resignation of the vice president. The announcement shows that the board of directors of Zotye Automobile recently received the written resignation report submitted by Mr. Wang Lei, the company’s vice president. Mr. Wang Lei applied for resignation from the position of vice president of the company for personal reasons. The resignation report took effect from the date it was delivered to the company’s board of directors. After his resignation, Mr. Wang Lei will no longer hold any position in the company.
On May 17 this year, Zotye Automobile announced a change in senior management, including appointing Mr. Yin Xuefeng as the company’s vice president; appointing Mr. Wang Lei as the company’s vice president; appointing Mr. Xiang Chao as the company’s vice president; appointing Ms. Zhu Gunü as the company’s financial controller (chief financial officer). That is to say, Wang Lei held the position of vice president of Zotye Automobile for only about three months.
Public information shows that Wang Lei was born in June 1979, has a bachelor’s degree, and graduated from the Transportation major of the Automobile Management College of the Chinese People’s Liberation Army. Looking back at his work resume, he has worked in the marketing position for many years and is considered a veteran of Chery Automobile. He has served as the sales manager of Shenzhen Launch Tech Co., Ltd.; the regional general manager of Chery Automobile Sales Co., Ltd.; the executive deputy general manager of Chery Jetour Automobile Sales Co., Ltd.; the general manager of Chery New Energy Sales Company; the general manager of Chery Aika Ecology Co., Ltd.; the COO of Chery iCAR brand; and the standing director of the China Automobile Marketing Managers Qian Lianghui.
This year, many senior executives of Zotye Automobile have left. In February of this year, Ms. Yu Lili applied for resignation from the position of the company’s chief financial officer for personal reasons; in March, Mr. Lian Gang applied for resignation from the position of the company’s president for personal reasons; in April, Ms. Wang Fei, the representative of securities affairs, resigned for personal reasons; in May, Mr. Lian Gang applied for resignation from the position of director of the eighth board of directors for personal reasons, and at the same time resigned from the positions of member of the strategic committee and member of the nomination committee under the board of directors.
In addition to the frequent departure of senior executives, the operating performance of Zotye Automobile is also far from ideal. The annual report of Zotye Automobile shows that in 2022, Zotye Automobile’s revenue was 783 million yuan, a year-on-year decrease of 5.09%; the net loss was 909 million yuan, a year-on-year decrease of 28.82%; in 2023, the revenue was 734 million yuan, a year-on-year decrease of 6.28%; the net loss was 927 million yuan, and the loss expanded year-on-year. It is understood that since 2019, Zotye Automobile has suffered losses for five consecutive years, with a cumulative loss amount of more than 24.5 billion yuan.
Looking back at the development process of Zotye Automobile, its layout in China was not late. Zotye Automobile was established in 1998 and was formerly known as Huangshan Jinma Co., Ltd. The official website shows that Zotye Automobile has vehicle production bases in Zhejiang, Hunan, Hubei, Shandong, Chongqing and other places. Its products cover sedan cars, SUVs, MPVs and new energy vehicles and other market segments. In the early stage, it gained high recognition from the market by imitating the appearance of many well-known brand models and low prices. But unfortunately, it fell shortly after a brief highlight.
Let’s first talk about a highlight moment here. In early 2006, Zotye Automobile obtained the vehicle manufacturing qualification through Chengdu Xindadi Automobile Company and officially started vehicle manufacturing. In the same year, Zotye Automobile’s first model, Dadi Zotye 2008, was launched. The appearance of this car was no different from that of Toyota Terios. With its practicality and price advantage, it quickly gained market pursuit. The following year, Zotye Automobile acquired 70% of the shares of Jiangnan Automobile, which was facing reorganization. While solving the vehicle manufacturing qualification, it also acquired the Jiangnan Alto brand. In 2013, Zotye launched its first medium-sized SUV T600, whose appearance was highly similar to that of Audi Q5. In 2016, Zotye launched the SR9, which was highly similar to Porsche Macan. Although the appearance was highly controversial, it was also recognized by the market with its low price. Data shows that in 2016 and 2017, the annual sales of Zotye Automobile exceeded 300,000 units, reaching 330,000 units and 317,000 units respectively.
However, in 2018, the sales of Zotye Automobile dropped to 154,800 units, and in 2019, it plummeted to only 21,000 units. In 2020, Zotye Automobile was deeply trapped in a financial crisis. In December of this year, the parent company of Zotye Automobile, Tieniu Group, was ruled by the court to go bankrupt and liquidate due to serious insolvency and inability to continue operating. Affected by this event, in 2020 and 2021, the vehicle production and manufacturing of Zotye Automobile was almost at a standstill.
After a year-long legal and financial rectification, Jiangsu Shenshang finally took over Zotye Automobile with a reorganization investment of 2 billion yuan in October 2021. In January 2022, Zotye Automobile completed the bankruptcy reorganization, but its main business has not yet achieved substantial improvement and continues to suffer losses.
On July 10 this year, Zotye Automobile released the semi-annual performance forecast for 2024. The financial report shows that in the first half of this year, Zotye Automobile expects operating income to be 220 million yuan – 270 million yuan, compared with 371 million yuan in the same period; expects a net loss of 290 million yuan – 390 million yuan, compared with a net loss of 284 million yuan in the same period; expects a net loss after deducting non-recurring profits and losses of 250 million yuan – 350 million yuan, compared with a loss of 340 million yuan in the same period. Regarding the reasons for the performance loss, Zotye Automobile stated that compared with the same period, the company’s revenue from vehicle sales decreased significantly in the first half of this year, while the sales revenue of other subsidiaries also decreased, resulting in an overall decrease in revenue; the company’s vehicle business is still recovering in the first half of the year, and the sales volume is very small. At the same time, the operating performance of other subsidiaries declined, so the overall performance is still in a loss state.
To this day, the main business of Zotye Automobile has still not shown improvement. The industry believes that Zotye Automobile reached its peak by imitation, but also due to imitation, its product problems broke out, and its reputation declined. Coupled with the upward expansion of independent brands such as Geely, BYD, and Changan in the same period, eventually led to a sharp drop in Zotye’s sales. How Zotye Automobile will develop in the future is currently unknown.
Earlier this month, Zotye Automobile issued an announcement on abnormal fluctuations in stock trading. The closing prices of Zotye Automobile on August 1 and 2 deviated by more than 20% for two consecutive trading days. According to the regulations of the Shenzhen Stock Exchange, it is an abnormal fluctuation in stock trading.
As of the close of trading on August 23, Beijing time, the stock price of Zotye Automobile closed at 1.57 yuan, an increase of 9.79%, with a total market value of 7.917 billion yuan. By contrast, the peak stock price of Zotye Automobile in 2016 was 18.16 yuan.
Only three months! The vice president of a certain car company resigned.
