Evergrande Auto’s Production Line Renovation Project in Tianjin Suspended Due to Supplier Payments in Arrears

hengchi
(Source: Carscoops)

According to a report by Chinese media outlet LatePost on Wednesday, following Evergrande Auto’s failure to pay equipment suppliers, the production line renovation project of the firm’s Tianjin factory has recently stalled. The Hengchi 5 model was planned to be launched early next year, but its production preparations have not begun as scheduled.

The suppliers involved in this matter include Kuka, the general contractor of welding workshop of Evergrande Auto Tianjin base, Taikisha, the general contractor of painting workshop, China Automotive Engineering Corporation, the general contractor of assembly workshop, and Tianjin Motor (TQM), the co-builder of the stamping workshop with China Energy Group.

At present, except that the stamping workshop is mainly used by TQM to supply stamping parts to other automobile enterprises, other workshops are in a state of shutdown or partial shutdown.

Evergrande Auto held a partner conference in Tianjin on Monday. President Liu Yongzhuo said that the company had launched a three-month tough battle to ensure that the first Hengchi car would be rolled off the production line in Tianjin factory in early 2022.

However, according to insiders, this car is currently still in the production verification stage. Generally speaking, it will take another half a year from this stage to mass production.

Evergrande Auto released its new brand Hengchi in August 2019, and planned more than a dozen car models at the same time, with complete vehicle factories in Guangzhou, Shanghai and Tianjin. However, with the vehicle supplier’s outbreak of capital chain issues, only the projects of Hengchi 5 and Hengchi 6 have been retained at present.

Due to a delay in obtaining the production qualification for the Guangzhou factory, Evergrande Auto shifted its strategic focus to Tianjin at the beginning of 2021. The company planned to produce Hengchi 5 in Tianjin because compared with bases in Shanghai and Guangzhou, Tianjin’s production base has the new energy vehicle production qualification issued by the National Development and Reform Commission and the Ministry of Industry and Information Technology.

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However, the production line of Tianjin factory was built for the NEVS 93 model, which could not meet the production requirements of Hengchi 5. Evergrande began to dismantle and renovate the production line at the end of last year, and now this project is stagnated.