Chongqing Changan Automobile Co Ltd, a state-owned Chinese automaker, is reportedly in discussions to acquire struggling Chinese electric vehicle manufacturer Human Horizons. According to media reports, Changan Chairman Zhu Huarong revealed the ongoing negotiations.
Meeting between founders
Ding Lei, the founder of Shanghai-based Human Horizons, met with Changan Chairman Zhu in Chongqing on February 27. However, the details of their discussion remain undisclosed.
Confirmation from Changan Auto
According to media reports, Changan Automobile confirmed the meeting between Ding and Zhu but refrained from commenting on the reported acquisition or merger talks. Human Horizons has not responded to requests for comment on the matter.
Suspension of operations
Human Horizons, established in 2017, informed its employees on February 18 about the suspension of operations for six months. This decision followed the retraction of a $5.6 billion investment plan by the Ministry of Investment of Saudi Arabia.
Sales and manufacturing
Human Horizons markets three models of Hiphi-branded electric vehicles in China, priced between 339,000 yuan and 800,000 yuan. Despite the range of offerings, monthly sales remain modest, with production based in a facility in eastern Jiangsu province, previously used by Kia Motors.
Why the acquisition talks?
The reported acquisition talks between Changan Automobile and Human Horizons highlight the challenges faced by smaller electric vehicle manufacturers in China’s competitive market. Human Horizons’ struggles, including the suspension of operations due to the withdrawal of a significant investment plan, indicate financial instability.
Changan Automobile’s interest in acquiring Human Horizons could be driven by various factors. Firstly, it presents an opportunity for Changan to expand its presence in the electric vehicle sector, which is growing rapidly in China. Acquiring Human Horizons could provide Changan with access to new technology, expertise, and market share in the electric vehicle segment.
Additionally, the acquisition could enable Changan to diversify its product portfolio and strengthen its position in the competitive automotive market. By incorporating Human Horizons’ electric vehicle models into its lineup, Changan may enhance its competitiveness and appeal to a broader range of consumers.
However, the outcome of the acquisition discussion remains uncertain since neither parties have provided detailed information or confirmed any information publicly.
Nonetheless, the potential acquisition underscores the dynamic nature of China’s electric vehicle industry and the strategic moves made by automakers to stay competitive in this evolving market landscape.