CHINESE ZOTYE AUTO IS ON THE WAY TO BANKRUPTCY

The crisis that took place at the Chinese company Zotye is escalating to bankruptcy. Local media report that the company is currently trying to undergo reorganization, but the question of the future existence of the trademark has not yet been resolved.

Founded in 2005, the company is famous for its ability to create clones of popular European car models. One of the clearest examples of this approach to production was the almost complete copy of the Porsche Macan, which the company produced as an SR9 crossover.

Zotye experienced its finest hour in 2016, when it managed to sell more than 328 thousand cars.

Since then, the demand for products has been falling annually. Already in 2018, the demand dropped dramatically to 232.4 thousand cars, and in 2019, it fell by more than 100 units. Last year, the company managed to sell only 3,658 vehicles.

In 2018, the company tried to get away from the practice of copying Western European car models by developing its own unique trademark Traum (from German ‘dream’). The development of the car's design was carried out by a designer from the UK, Anthony Williams-Kenny, specially hired by the company. However, Zotye did not find the finances and time to implement the campaign to promote the original brand on the world market.

The company had made an attempt to enter the US market by negotiating with HAAH Automotive Holdings, but no cooperation took place.

Seeing the Zotye's problems, the American distributor switched to working with Chery by July 2020, but eventually went bankrupt. The plans for joint work of the Chinese company with the Ford concern on the production of electric vehicles, announced by Donald Trump in 2017 (when the President of the United States visited China), have not been implemented as well.

The company’s main investor, Tech-New Group, went bankrupt last year. Aware of the lack of sales data for Zotye for the first half of 2021 in China, many experts decided that the firm was dead. However, after the recent publication of the information that the company had investors and was undergoing reorganization, published by the Chinese website Autohome, it became clear that the company may still be resurrected.

In Russia, Zotye cars were known among a narrow circle of drivers.

Their assembly was organized at the Unison plant in Belarus. It is known that the plant stopped receiving components last year. In total, Russians bought 122 Zotye cars in 2020. A year earlier, 1151 more cars were purchased. In the first quarter of this year, only 36 cars, which were stored in the warehouses of Russian dealers, were sold.