China’s Zotye says it has enlisted 100 U.S. retailers for 2021 launch

Chinese automaker Zotye says it has inked deals to sell through retailers in 100 U.S. markets when its first vehicle launches here in 2021. That puts Zotye USA, the American distributor, ahead of schedule and gets it toeholds in the top 10 states for sales and in cities including Atlanta, Austin, Houston, Las Vegas and Tampa.

The timeline for launch is slightly later than original projections of late 2020, though there’s no explanation offered for why. Zotye had said it plans to have 325 total retail locations but now says it plans to have agreements for 250 markets before launch.

But let’s hold off on the confetti. Reports have been swirling in China about a leaked bank memo that identified four Chinese automakers including Zotye as being likely to enter bankruptcy proceedings by the end of the year, a claim all four companies have denied. The Financial Times reported last week that Zotye is also being sued for breach of contract over unpaid bills by a supplier of lithium batteries, with the plaintiff seeking to freeze more than $5.7 million in assets of Zotye and three subsidiaries.

China’s auto market is seeing a profound slump because of its trade war with the United States, a slowing economy and the phasing out of subsidies for new-energy vehicles. Chinese business publication Caixin reports that Zotye sold 63,825 vehicles during the first half of 2019, a decline of 45%, including 85% fewer EVs than the prior-year period. Zotye posted a $41 million loss for the first six months of the year.

Like many other Chinese automakers, Zotye has been sniffing around for an entry into the U.S. market for a while now. Back in 2011 it pledged to have a battery-electric SUV on sale here through a different distributor, though that never materialized. In 2017, the company announced a $756 million 50-50 joint venture with Ford to build electric vehicles from a manufacturing plant in Zhejiang province, to be sold under a new Chinese brand, though that deal appears to have stalled.

Zotye has selected a new version of the T600 compact crossover, which has been in production in China since 2013, as the first vehicle to go on sale stateside at a price up to 20% below the competition, though it’s not yet clear which vehicles will serve as benchmarks. It’s expected to be powered by a 1.6-liter turbo-four engine sending power to a six-speed automatic. That will be followed by a second utility vehicle and, later, a car.

“Dealers are hungry to be part of our new, disruptive method of selling vehicles to consumers in a low pressure, high satisfaction, no-haggle, highly efficient environment,” Duke Hale, CEO of Zotye USA and parent company HAAH Automotive Holdings, said in a statement. He added that the T600 SUV “will have an extremely high level of safety equipment, great quality and durability, outstanding styling and a very attractive price.”

Privately owned Zotye Holding Group traces its origins to 2003 in China as a sheetmetal stamping manufacturer. It now comprises 30 companies, including Zotye Automotive, and says it is a supplier to most OEMs in China.