The abrupt announcement formally made by Evergrande Auto, a division of the Evergrande Group, at midday on January 8 despatched shockwaves because it revealed the detention of Liu Yongzhuo, an govt director, as a consequence of suspected unlawful actions.
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Liu Yongzhuo, presently holding positions because the Govt Vice President of Evergrande Group, President of Evergrande New Power Vehicle Group, Chairman of Evergrande New Power Expertise Group, and Director of the Automobile Analysis Institute, has been a outstanding determine throughout the conglomerate and its Hengchi model of automobiles that launched in 2021.
This arrest marks a major improvement within the ongoing authorized points surrounding the outstanding figures inside China Evergrande Group. Notably, Liu Yongzhuo, thought of a key determine throughout the firm, beforehand served as a vital determine alongside Xu Jiayin, the chairman of China Evergrande Group. Liu Yongzhuo’s affect prolonged past the enterprise realm; he was on the helm of the Guangzhou Evergrande Soccer Membership throughout its ascent to dominance in Asian soccer, which has had its personal collection of controversies.
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The arrest has added gasoline to the hearth at Evergrande Auto, which has already been navigating a collection of setbacks, together with suspension from buying and selling, monetary discrepancies, and the fallout from failed agreements with buyers. The corporate’s try to safe a strategic funding of roughly 500 million USD from the Newton Group, meant to bolster its operations and manufacturing, led to disappointment as agreements lapsed simply days in the past on the finish of December 2023.
The corporate did announce in Could 2023 the resumption of manufacturing of its Hengchi 5, and Mr. Liu was seen at a Hengchi buyer supply occasion simply two weeks in the past. Nevertheless, 2023 noticed dismal gross sales of lower than 1000 items for the 12 months. In 2021, Hengchi introduced daring ambitions of promoting 1 million items in 2025, a purpose that appears extraordinarily far off its present actuality.
As Evergrande Auto grapples with these points and the repercussions of key personnel controversies throughout the bigger conglomerate, its future stays unsure. The corporate’s capacity to navigate these hurdles, stabilize its operations, and regain investor confidence amid a turbulent enterprise surroundings shall be essential for its continued viability within the aggressive automotive trade that has considerably heated up over the previous few years.
– Commercial –
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