Wanxiang makes bid for US car company
China’s largest auto parts manufacturer, Wanxiang Group Corp, has made a last-minute bid for a United States-based alternative-fuel car producer. The move follows the Chinese company’s earlier acquisition of US battery producer A123 Systems Inc, a regular supplier of Fisker Automotive Inc, for which Wanxiang America Corp is considering a bid in a proposed auction.
Fisker creditors asked the US Bankruptcy Court in Wilmington, Delaware, to scrap Fisker’s agreed sale with a company affiliated with Hong Kong tycoon Richard Li and instead hold an open auction at which Wanxiang’s US arm plans to bid, according to Reuters.
Wanxiang planned to make an initial bid of $24.7 million and pledged to assume some liabilities of Fisker, according to court documents filed before the Monday deadline to object to Fisker’s plan.
A hearing is scheduled for Friday in the US to consider whether Fisker should adopt creditor proposals or proceed with the sale to the affiliate of Li, according to Reuters.
A spokesman at Wanxiang’s China headquarters didn’t immediately respond to a request for comment from China Daily on Thursday.
A year after suspending production, Fisker, the dormant maker of the plug-in sports car Karma, filed for bankruptcy in November, while it obtained $168 million in loans from the US Department of Energy in developing new- energy technologies.
The investment group led by Li proposed to pay an initial $25 million for the debts in October and buy out the rest of the company using “credit bid”, an ability to control their collateral that wiped out other creditors.
Wanxiang was also among prospective bidders in the October auction, but it was beaten out by Li’s team, which was reported to be already “nailing down details” with the US Energy Department, according to Reuters.
In the latest petition, Wanxiang plans to restart Fisker production as early as April and eventually move manufacturing from Finland to Michigan, according to Wanxiang’s presentation to the court.
The Chinese company estimated it would sell more than 1,000 Karma hybrids in the first 18 months in the US and 500 in Europe.
Wanxiang said in its presentation it could lower production costs, without elaborating. Fisker sold the Karma for more than $100,000 each.
“They (Wanxiang) are extremely capable and knowledgeable of the industry and know how to get things done,” William Baldiga, a Brown Rudnick attorney who represents Fisker’s official creditors’ committee, was quoted by Reuters as saying.
In China, the concept of electric vehicles is being accepted and the technologies are making progress, said Michael Hanley, global automotive leader of Ernst & Young.
“But key to the real takeoff is to provide manufacturing scale and help bring down the cost,” said Hanley.
The hybrid model is, for now, the most promising one, as it takes away the concern people may have about the operating range of alternative-energy cars, bridging the cars’ practicability and environmental protection, he noted.
Inventors in China had filed more than 2,000 patent applications for new-energy cars as of the end of last year, one-fourth the number in Japan and half the number in the US, according to data from the United Nations World Intellectual Property Organization.