U.S. distributor suspends plans to import Zotye vehicles

LOS ANGELES — California distributor HAAH Automotive Holdings is suspending plans to import vehicles from China's Zotye Automobile Co. until financial conditions improve in its home market.

HAAH will now focus on a second Chinese partner, Chery Automobile Co., CEO Duke Hale told Automotive News. In February, HAAH announced plans to sell Chery-engineered crossovers assembled in the U.S. under the newly created Vantas brand.

U.S. dealers who signed up to sell Zotye vehicles in the U.S. can keep their franchises while adding Vantas at no additional cost, Hale said.

The decision marks the latest setback in Chinese automakers' attempts to establish their brands in the U.S. Since the early 2000s, a number of plans have been announced but so far none have been realized.

Zotye was to have been the first Chinese brand that HAAH introduced to the U.S., starting with a low-price crossover originally slated for late 2019 or early 2020. Those plans were pushed back to 2021. As of late last year, HAAH, of Irvine, Calif., said it had signed up Zotye dealers in 100 U.S. markets.

Zotye's sales in China have fallen dramatically in the past few months amid the coronavirus pandemic, Hale said.

"Zotye took an enormously big hit in China," Hale said Monday in explaining the shift in business plans. He estimated its sales decline at 70 to 80 percent.

"They have to focus on home and get that turned around," he added.

HAAH could revive its U.S. plans with Zotye in the future, perhaps in two or three years, Hale said.

"We still are good friends of Zotye," he said. "We're still working with them. We're going to work with them in Central America. And we have a long-term agreement with Zotye to bring their vehicles to the U.S. market — when it makes sense to do so."

But certifying Zotye vehicles for U.S. sale right now would require millions of dollars of investment, he said.

"To tell them that we're going to spend 'X' amount of dollars to homologate the first and second vehicles — in their current situation — does not make a lot of sense," Hale said. "Hopefully, that starts to turn around."

Automotive News China reported that Zotye's sales had fallen sharply in the first half of last year when it swung to a net loss of $38 million, and deliveries fell to 73,900, or about half what it sold in the year-earlier period.

Reuters reported that Zotye's stock on the Shenzhen exchange was trading at around 1.9 yuan (27 cents) this week, compared with 4.6 yuan (64 cents) at the same time last year.