• 14.04.2024

TOP AUTO NEWS

Auto news from China

Weimar Automobile Technology Group Co., Ltd. Reorganization Update & WM Motor’s Struggles

Jan 31, 2024

Weimar Automobile Technology Group Co., Ltd. Reorganization Update & WM Motor's Struggles

On January 29, it was learned that the reorganization procedure of Weimar Automobile Technology Group Co., Ltd. has been accepted by the court, and the first creditors’ meeting will be held on March 29.

Weimar Automobile Technology Group Co., Ltd. Reorganization Update & WM Motor's Struggles

In October last year, WM Motor submitted a pre-reorganization application to the Shanghai Third Intermediate People’s Court, stating that the company still had commercial value and restructuring value, and that it had a basically complete governance structure and basic autonomous negotiation capability. At the beginning of January this year, WM Motor announced that it had completed audit evaluation, creditor reporting, and asset verification, and had made preliminary progress in contacting multiple potential investors, and therefore applied to the court to enter the reorganization stage from the pre-reorganization stage. There is no more news about WM Motor, and WM Motor has not yet disclosed information about the potential investors. WM Motor chose to build its own factory from the beginning, and established two production bases in Wenzhou, Zhejiang and Huanggang, Hubei, with a total production capacity of 250,000 vehicles. In March 2018, the first batch of WM EX5 mass-produced vehicles went offline in Wenzhou. WM Motor’s production base at the mouth of the Oujiang River in Wenzhou also became the first independently built and put into production smart complete vehicle factory among the new forces of domestic automobile manufacturing, which is different from the original OEM model of “Wei Xiao Li”. In 2019, Weimar delivered 16,876 vehicles, ranking second in the new car-making forces, second only to NIO’s 20,565 vehicles. The first model, EX5, delivered 16,810 vehicles, ranking first in the new car-making forces’ single vehicle delivery that year. However, since 2020, Weimar’s delivery volume has gradually fallen behind. At the same time, high R&D and production costs have been continuously consuming Weimar’s funds. According to Weimar’s prospectus submitted to the Hong Kong Stock Exchange, its revenue in 2019-2021 was 1.762 billion yuan, 2.671 billion yuan, and 4.742 billion yuan, and the losses during the same period were 4.145 billion yuan, 5.084 billion yuan, and 8.206 billion yuan, respectively. The accumulated adjusted net loss over the three years is approximately 13.632 billion yuan. As of March 31, 2022, Weimar’s book cash and cash equivalents were 3.678 billion yuan, further reduced from the end of 2021. In the second half of 2022, Weimar frequently reported factory shutdowns, salary cuts, layoffs, and overdue payments to suppliers. In November of that year, a document allegedly from Weimar’s internal communication circulated on the internet. The document stated that to cope with the financial pressure, the company’s management took the lead in voluntarily cutting their salaries in half and streamlined the overall operating expenses of the company, reducing operating costs through a series of financial measures. Since last year, Weimar has repeatedly spoken publicly, stating that it is trying to overcome various difficulties and fully resume work and production after experiencing the significant impact of the epidemic. Reporters repeatedly dialed the official customer service number for WM Motor today, but the line was always busy. As of now, it appears that WM Motor has not yet overcome the crisis.