Ford sets up electric car venture with Zotye
November 14, 2017 Category China News Round-up, Weekly
Ford has signed an agreement with Anhui Zotye Automobile to set up a CNY5 billion joint venture focusing on electric cars, in a substantial step towards tapping China’s new energy vehicle (NEV) segment. A new factory will be established in Zhejiang province and a new sales and service network dedicated to the new cars will be created. The 50-50 venture, known as Zotye Ford Automobile, is subject to regulatory approval, Ford said.
Zotye, described by Ford as a market leader in China’s electric small vehicle segment, will become the U.S. carmaker’s third major partner in China, after Chongqing Chang’an Automobile and Jiangling Motors. “Zotye Ford will introduce a new brand family of small all-electric vehicles,” said Peter Fleet, President of Ford Asia-Pacific. The vehicles manufactured by the venture will be sold under a new brand name.
Ford joins global rivals such as General Motors and Volkswagen in vying for a share of the fast-growing new energy vehicle segment in China. These big-name carmakers will also come up against Tesla, with the Silicon Valley-based electric carmaker also planning to set up a plant in China.
UBS Analyst Hou Yankun said China’s electric car segment will have huge potential in the coming years, with annual sales expected to reach 700,000 to 800,000 units. Most car manufacturers will be required to sell a minimum number of new energy vehicles every year from 2019. Sales of NEVs jumped by 63% to 336,000 units in 2016.
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