By ZHANG Mingrui, ZHOU Shuqi
It’s getting quite hard to find a big company in China that isn’t trying to make cars. Floundering real-estate developer Evergrande is the latest player in the EV manufacturing race. The developer is evasive about progress but an actual car is on the horizon – the Hengchi 5. Orders opened on July 6. Delivery is scheduled for October.
At a showroom among new residential buildings in the far northeast of Beijing, there were only two salespeople in the 100-square-meter exhibition area. The showroom itself is on the ground floor of an Evergrande development. In the center of the room is a white car, which, according to one of the salespeople, was used in testing and might still go through small changes before the final version. But those were all the details on the offer.
The showroom opened in June, but not many people have stopped by. The location is not that good and promotion next to non-existent. No other visitors arrived while Jiemian News was there.
Evergrande organized test drives and showings for staff and homeowners before presales began. “So far, most orders in Beijing are from Evergrande managers and executives. Some Evergrande homeowners have put down deposits too,” the salesperson said, adding that the car has been well received internally. An employee said the driving experience was better than that of the Tesla Model Y.
The Shanghai showroom, also the Hengchi global flagship store, is ten times bigger and much better located. When Jiemian News visited right before the presale started, the sample cars had just arrived and still needed to be cleaned. A salesperson said there was a brief presale in the first week of May, and that Evergrande homeowners had been particularly supportive.
It is rumored that over 50,000 orders were placed in the first ten hours of the May presale, which Evergrand neither denied nor confirmed. The Shanghai salesperson estimated that Evergrande received over 100,000 orders in May. For now, as in May, interested customers only need to put down a 1,000-yuan (US$150) deposit. But to secure delivery, each buyer will have to commit another 9,000 yuan in August. By some estimates between 10- 20 percent of presale orders will end up as actual purchases.
Only 10,000 units are scheduled for October. Hengchi has factories in Guangzhou, Shanghai and Tianjin. The first batch will be made in Tianjin. The price is expected to be around 200,000 yuan. The Shanghai salesperson estimates that Evergrande will lose 20,000 yuan for each unit. On July 5 Evergrande said the first 10,000 consumers have the option to pay for their cars on delivery and return them within 15 days.
But will Evergrande’s massive debt problems stop deliveries? During the presale, customers who had questions were connected to customer service agents who were not even aware that presales were underway. When Jiemian News called, right before the July 6 presale, to ask whether the showroom in Beijing was open (it was), a customer service agent said he was not sure and was not able to reach the showroom.
China Evergrande New Energy Vehicle Group, Evergrande’s EV unit and the builder of Hengchi 5, supposedly operates separately from the real estate part of Evergrande. Staff at the Shanghai showroom said salaries have been on time and operations are orderly.
Evergrande once told the media that dealerships were so enthusiastic to sign up that all the spots in the 18 cities it plans to enter have been filled. When Jiemian News polled dealerships and distributors in 7 of the cities, none had been in talks with Evergrande.
