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Happy car is officially built!

2024-03-04 Update From: AutoBeta autobeta NAV: AutoBeta > News >


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On August 22nd, Kaixin announced that it had completed the acquisition of MORNING STAR AUTO INC. (Maolinstad for short). After the completion of this transaction, Maolin Sida became a wholly owned subsidiary of Kaixin Automobile, marking the company's official entry into the field of new energy vehicle manufacturing. It is reported that Maolin Sida mainly produces miniature electric cars.


On the same day, Kaixin Motor shares rose 6.05% to close at $0.2121, with a total market capitalization of $48.419 million.


It is understood that Happy Automobile was founded in 2015, formerly known as Renren Automobile, is Renren's domestic Gao Guang used car dealer group. In 2015, Kaixin Automobile entered the used car industry with auto finance business, opened used car retail business in 2017, and focused on used car trading services, becoming one of the used car dealers in China. In May 2019, Kaixin Automobile was listed on NASDAQ, becoming the second successful second-hand car company in China after Youxin.

Do used car dealers build cars, too? After Renren announced the sale of all Renren social network assets for $20 million in November 2018, Renren CEO Chen Yizhou said he would concentrate on the domestic used car retail business, pinning his hopes on happy cars. However, Happy cars, which focus on second-hand car distribution, are not "happy" and have not reached Chen Yizhou's profit target. According to the data, from 2017 to 2020, the operating income of Kaixin Motor was $117 million, $431 million, $335 million and $33.16 million, respectively, and the net loss was $28.695 million, $89.532 million, $69.068 million and $5.32 million, respectively. Under the long-term loss, the share price of Kaixin Motor continues to decline and faces the risk of delisting.



In order to reverse the situation, Happy Automobile began to change and announced its entry into the new energy vehicle market. In August 2021, Kaixin Automobile announced the establishment of a new energy vehicle department and the formation of new energy vehicle R & D, production and marketing teams. In the same month, Kaixin Motor plans to acquire a 100% stake in Henan Yujie time Automobile Co., Ltd., officially entering China's small electric car market. In August 2022, Kaixin Motor announced that the headquarters of new energy commercial vehicles had been put into operation in Suzhou City, Anhui Province.


Why do happy cars build cars? In addition to continuing to lose money to seek market opportunities, the main reason is that new energy vehicles are too hot. According to the China Association of Automobile Manufacturers, the domestic sales of new energy vehicles from 2020 to 2022 are 1.367 million, 3.521 million and 6.887 million respectively. However, the prospect of the new energy vehicle industry is good, but the competition is becoming more and more fierce. BYD, which has steady monthly sales of 200000 vehicles, Tesla, who continues to reduce prices, and the new forces of domestic car building have also formed a certain scale. the traditional car companies based on fuel vehicles have also accelerated their transformation, while Huawei, Xiaomi, Baidu and other technology enterprises have also begun to enter this market. Whether Happy car, which started as a second-hand car, can open up a new breakthrough is the key.

New energy vehicles have become the development direction, while the relevant industrial chain is also in the tuyere period, both capital and consumer markets are optimistic about the development prospects of new energy vehicles, which also attracts many enterprises to join the bureau. As one of the enterprises in the field of second-hand cars, Happy Automobile has sufficient channel support to provide a lot of convenience for entering the bureau to build cars, but from the point of view of the development of the industry, Happy Automobile wants to drive into the new energy racetrack. Need to cross the "capital" and "technology" two major threshold.

As we all know, car manufacturing is an extremely expensive industry, and so far the only new power manufacturers that have made profits are Tesla and ideal cars, while Ulay and Xiaopeng Motor have been in a state of loss for many years. BAIC Blue Valley and Cyrus in traditional cars are also losing money, while Happy Automobile, as a used car dealer, has been losing money for many years. Under the background of poor capital and high debt ratio, it is very difficult for Happy Motor to enter the new energy industry. In addition, technological innovation is the core competitiveness of new energy vehicles, which also requires long-term capital investment to form barriers, while Happy Automobile, as a used car dealer, may still be a blank page for new energy car manufacturing technology. this will affect its ability to compete with other new energy car companies.

Of course, Happy car is not without its advantages. As an enterprise of second-hand car background, Happy Automobile has laid out a large number of dealer stores both online and offline, which has certain advantages in sales channels, and store expansion in the future can also save a sum of money, but the goal of the new energy vehicle market is in front. Whether Happy cars that have lost money for years can win applause in the capital market by building cars, the "Tramway report" will continue to pay attention.

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