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Jul
2021
29

HAAH Automotive Goes Bust, Abandons Plans To Import Chinese Cars To America


Countless companies have been trying to bring Chinese models to the United States with little success.  That trend continues as HAAH Automotive Holdings is going bust.

This is a surprising development as the company signed a letter of intent in April, which was set to pave the way for Vantas and T-GO branded vehicles to come to the United States. As part of that announcement, the company said the Vantas VX and TXL would be assembled in China and arrive in America by the end of 2022.

However, that’s not happening as HAAH Automotive Holdings is slated to file for bankruptcy today. CEO Duke Hale spoke to Automotive News and said “We don’t see a way forward right now for Vantas and T-GO.”

Also Read: Vantas Launch Pushed Back To Late 2022, First Models To Be Built In China

Hale went on to explain worsening relations between the United States and China effectively scuttled their plans as imports would have faced steep tariffs and a negative sentiment towards Chinese products as “Americans aren’t very fond of where they believe COVID came from.” Given these and other challenges, investors bailed right as the company needed a “big infusion of cash” to finalize a joint venture with Chery-owned Shanghai Sicar Automotive Technology Development Co.

While it’s not hard to understand why investors got cold feet, would-be dealers are left holding the bag as the publication says they’ll lose their deposits of between $100,000 (£73,126 / €84,750) and $175,000 (£127,970 / €148,312) per store. Adding insult to injury, a few dealers reportedly put deposits down for as many as five dealerships.

As a refresher, Chery-based Vantas and T-GO models were originally slated to cost 15-20% less than their competitors and be available with “one-price, no-hassle, no-haggle pricing.” There were also plans for an extensive T-GO lineup that included everything from crossovers and SUVs to a pickup and a car.

Jul
2021
22

HAAH gives up on Chinese cars, will file for bankruptcy

LOS ANGELES — HAAH Automotive Holdings is ending its seven-year effort to import Chinese vehicles and distribute them through a dedicated U.S. dealership network, CEO Duke Hale told Automotive News.

Hale cited tense U.S.-China relations that scared off potential investors.

The Irvine, Calif., startup will file for bankruptcy Monday after a conference call with prospective dealers, who have paid nonrefundable deposits from $100,000 to several hundred thousand dollars for franchise points in the U.S., Hale said.

“We don’t see a way forward right now for Vantas and T-GO,” Hale said of the two U.S. brands created to sell vehicles from China’s Chery Automobile Co. “There’s going to be no cars, there’s going to be no parts, there’s going to be no revenue,” Hale said of the bankruptcy filing.

Although he said in a previous interview that HAAH would file for bankruptcy on Monday, Hale would not confirm that the filing had been made when asked on Tuesday. “Our attorney has asked that I not comment further,” Hale said in a text message to Automotive News. An electronic search for the bankruptcy filing did not turn up any results as of Tuesday afternoon.

HAAH pulled the plug after the investors it needed to move forward became increasingly risk averse because of tensions in U.S.-China trade relations, stiff auto tariffs and negative U.S. public sentiment toward China’s role in the coronavirus pandemic, Hale said.

Hale said that half a dozen investors had expressed interest in the HAAH plan with Chery, which is a major Chinese automaker and top exporter. But in recent months, that interest dried up. And HAAH’s previous confidence in raising the needed money dried up as well.

“All of the big investors moved away from the deal because of U.S.-China relations,” Hale said. “They do not see it as the right place to invest. Even though I didn’t want to hear it from the investors, it wasn’t hard to understand.”

He did not identify the investors.

“These were major Wall Street private equity types of investors,” Hale said. “These were the big money guys.

“I don’t have total insight into their decision, but basically the response is that China-U.S. relations are not very good, not very stable and really haven’t gotten better under President Biden,” Hale said. “Americans aren’t very fond of where they believe COVID came from.”