Following our previous report, Neta has been grappling with severe challenges throughout the month. Neta founder Fang Yunzhou recently touted the company’s success during an online chat, expressing optimism about its ability to overcome current challenges and turn things around.
The initial problems at Neta’s Nanning plant appeared to be isolated. Based on earlier reports in early March, the production facility had come to a halt 20 days prior. By mid-November, reports emerged from China indicating that the main production facility at Xizhi, located in Zhejiang Province’s Tongxiang county, had halted operations for approximately four weeks.
Facing concurrent manufacturing struggles, the company has also experienced a reduction in its workforce, coupled with wage reductions for those employees who remain. According to recent data, the overall number of Neta workers has declined significantly, dropping from approximately 7,932 at the end of last year to around 5,000 currently. Within the R&D Division, salaries have been lowered by between 5% and 30%. Individuals earning less than ¥300,000 annually will receive a 5% salary reduction, while those with salaries exceeding ¥1 million will face a 30% wage cut. Reports suggest that every department has undergone wage reductions.
According to industry experts, the estimated age of the company’s foundation is approximately 4,500 years old.
It is reported that each assembly focused primarily on the Tongxiang production facility, with production significantly disrupted at the Yichun and Nanning sites. According to an anonymous source within Neta’s inner circle, known only by their pseudonym He Qi, factories in Nanning and Yichun were plagued by more than just illegal practices – they also struggled with poor sales of the products manufactured there. Neta products are manufactured at two distinct facilities: Yichun, which yields the Neta S and Neta GT varieties, and Nanning, which specializes in producing the Neta Aya range.
During a recent interview, Fang Yunzhou revealed that over the past two months, Neta has dominated the market’s peak season, securing a substantial number of orders. Additionally, he revealed a significant number of orders had been secured at the Guangzhou Auto Show.
“We will be revamping our internal operations, focusing on our core business, optimizing our team, and modernizing our payroll system to build a more efficient organization, with the goal of achieving positive cash flow by next year and boosting our competitive edge.”
At the 2023 Shanghai Auto Show, the Neta GT Speedster, an electric roadster touted for its potential to enter production, will make its debut.
While it is widely reported that Feng Xingqiu, or Fang, founded and co-founded Hozon Auto, which produces the Neta electric vehicle model, a closer examination reveals that he does not actually hold the title of CEO within the company. The company has had a tumultuous history, frequently changing hands between private and public ownership. In 2018, he found himself at the helm again, this time owing to a takeover by local authority funds, which prompted him to appoint Zhang Yong as CEO.
Despite a past track record of success, it’s possible that Zhang’s streak of good fortune might be about to come to an end. According to a Neta insider interviewed by Do Information, “Neta’s biggest challenge isn’t the workforce’s shortcomings or technical limitations, but rather the CEO’s decision-making flaws – he prioritizes his personal preferences over public demand.” He Qi adds, “He simply wants to build cars that he enjoys building.”
Zhang’s potential sidelining now looms large in light of Fang’s sudden emergence from obscurity? Whether this milestone marks a turning point in the corporation’s sustainability, allowing it to thrive for another decade, remains to be seen as it commemorates its tenth anniversary this year.
Recently, Nanning Industrial Funding hosted a supplier conference to offer financial support for Neta’s value chain. The resumption of manufacturing and operations at the Nanning facility has been successfully implemented.
Despite controversy surrounding its performance in China, the corporation has quietly ramped up production at facilities in Thailand and Indonesia over the past year. Additionally, the corporation is aggressively pursuing export opportunities across multiple markets while establishing a new manufacturing facility in Malaysia to drive further growth.
Despite receiving a ticker code, H1940, Hozon Auto’s Hong Kong IPO remains on hold for now.
Sources: Autohome, Do Information,
