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Will Changan buy HiPhi?

Yesterday Huawei wasn’t buying HiPhi but today Changan is the new suitor for the troubled car company and this time there’s a lot more credibility in the story. Ding Lei, CEO and founder of HiPhi paid a visit a few days ago to Changan, presumably the headquarters in Chongqing.

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Previously Ding Lei has said that there is only a three month window to turnaround HiPhi as a going concern and he has reportedly been working tirelessly to achieve this, having little sleep. Earlier this month HiPhi announced that it was ceasing production for 6 months and that employees remaining with the company after March 15 would be paid only the minimum salary dictated by Shanghai regulations.

Empty office at HiPhi’s Shanghai headquarters

Internet rumors claim that Changan will buy a 51% stake in HiPhi and that together with cash injections from Qingdao and Saudi Arabia it will be enough to shore up the books of the company to keep HiPhi going as a brand.

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Zhu Huarong, chairman of Changan Automobile, responded to media questions saying, “We are talking, and we are far from ‘proper’.”

HiPhi CEO Ding Lei (left) talks to Changan Chairman Zhu Huarong (middle) while standing between HiPhi x and Z models.

An insider at Changan confirmed that Ding Lei and his team visited Changan but said the Internet rumors were not true. “They did hope that Changan would consider acquisition at this time, but the acquisition ratio and details reported on the Internet are fake, it is impossible to finalize such details in one trip,” said the unnamed insider.

During the Changan visit inspections of the respective brands cars and test drives were undertaken.

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HiPhi CEO Ding Lei being shown around Changan headquarters.

On February 22 HiPhi released the “Announcement on Recent Service Operation Guarantee” on its official App. HiPhi said that during this period it was prioritizing user’s service operation, vehicle after-sales maintenance and other related work. However work on HiPhi’s charging infrastructure is suspended this includes operation of existing chargers, the installation of new chargers, and the use of the charging app (including free charging) with it set to recommence only when follow-up resources are in place.

Changan is a large state-owned enterprise which has largely been known for sales of what Chinese refer to as bread vans (mianbaoche), minivans to the rest of us. The company also currently has joint ventures with Ford and Mazda. In recent years it has started having some success with its own brands of new energy vehicles. These consist of Changan Nevo for the lower priced segment, Deepal for more mid-range and Avatr as a premium brand. It should be noted that the price of Avatr models are nowhere near as high as HiPhi.  

Editor’s note:

Changan with its NEV brands is gaining ground and is a company that despite high sales as a auto producer has never really got much notice. That thanks to NEVs is beginning to change. The Avatr range in particular has made waves. HiPhi would not be completely out of place under Changan stewardship.

Avatr uses Huawei’s system for its autonomous driving which is an area that HiPhi never seems to have seriously tackled. As I mentioned yesterday HiPhi cars getting the Huawei tech would make them far more appealing.

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