HiPhi Auto finally shuts down and enters bankruptcy pre-reorganization stage
2024-08-10
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After nearly six months of suspension of work and production and self-rescue, HiPhi Auto's parent company Human Horizons (Jiangsu) Technology Co., Ltd. (referred to as "Human Horizons") has entered the pre-bankruptcy reorganization stage.
Already have grounds for bankruptcy
On August 8, the People's Court of Yancheng Economic and Technological Development Zone issued a decision to accept the pre-reorganization application of Human Horizons.
The decision shows that as of April 30, 2024, the known debts that Human Horizons has not repaid due have exceeded the company's total assets, and the assets are insufficient to repay all debts, which has led to the establishment of reasons for bankruptcy.
Image source: Visual China
At the beginning of this year, HiPhi held an internal meeting and announced that it would stop production for 6 months. Insiders said that the salaries of employees before February 18 will be paid as usual; employees who are still in HiPhi before March 15 will only receive basic salary; employees after March 15 will only receive Shanghai basic salary. It is reported that HiPhi pays salaries on the 15th of each month.
Later, the industry revealed that HiPhi had established a restructuring working group and a joint operation working group. Almost at the same time as the establishment of the restructuring working group and the joint operation working group, Human Horizons and iAuto Group Inc. officially signed a comprehensive strategic cooperation agreement on May 16, local time in the United States. According to the agreement, iAuto Group Inc. plans to invest more than US$1 billion in the first round of special funds to fully support the restructuring of Human Horizons HiPhi Automobile.
However, from the current perspective, HiPhi's various efforts have not brought it back to life.
Niche brings risks
HiPhi Auto was founded in 2017 and initially focused on the high-end luxury car market. HiPhi Auto's official website shows that the company has four models, including HiPhi A, HiPhi X, HiPhi Z and HiPhi Y, and the latter three are on sale. Among them, the guide price of HiPhi X is 570,000 to 800,000 yuan, the guide price of HiPhi Z is 610,000 to 630,000 yuan, and the guide price of HiPhi Y is 339,000 to 459,000 yuan.
Image source: HiPhi official website
Due to its high pricing, HiPhi's sales are not optimistic. According to the sales rankings of China Passenger Car Association and Yiche, from September 2023 to January 2024, HiPhi's sales were 1,735, 1,834, 696, 564, and 232 respectively. Since the first product was launched at the end of September 2020, HiPhi's sales in 2020 are unknown. Its annual sales from 2021 to 2023 are 4,237, 4,520, and 8,681 respectively.
Industry insiders estimate that if HiPhi's annual sales volume is set at 5,000 units, its annual operating income can reach 2.5 billion to 3.5 billion yuan. Take NIO and Xpeng as examples, their revenues are both over 10 billion yuan, but they are still losing money, not to mention HiPhi. Therefore, some industry insiders expected HiPhi to enter the pre-reorganization stage.
Previously, when automotive industry analyst Zhong Shi was interviewed by the media regarding the suspension of production at HiPhi Auto, he said that domestic brand models are too high-end or luxurious. Although they are in the blue ocean, they are also unpopular and can easily lead to a niche market. This will inevitably bring great market uncertainty and risks, and will not be enough to support the healthy financial situation of auto companies.
In the view of Cui Dongshu, secretary-general of the National Passenger Car Market Information Joint Conference, the current complex automobile market situation will to a certain extent accelerate the elimination of some weak brands with small sales volumes and tight capital chains.
Information sources: Cailianshe, Yangtze Business Daily, National Business Daily, The Paper
