ZTE buys Granton Auto to join the game of assembling electric buses and new-energy vehicles
ZTE, China's largest-listed telecommunications equipment maker, said it plans to expand into the country’s burgeoning industry of new-energy vehicles by buying a domestic coach manufacturer.
The company’s new unit, ZTE Smart Auto Corp, bought 70 per cent of Granton Automobile Co in Zhuhai, with annual sales of around 1,000 buses and about 1 billion yuan in annual revenue, according to ZTE vice-president Academus Tian. Granton exports some of its buses to Hong Kong, Germany and the Netherlands.
The move is the first to help ZTE forge a new business in smart and new energy vehicles, projected to generate as much as 100 billion yuan in annual revenue by 2026 in China, Tian told the South China Morning Post. ZTE paid “several hundred million yuan” for its acquisition, he said, declining to specify.
“Undoubtedly, the new-energy vehicle market boasts huge growth potential in China,” he said. “Acquiring the traditional coach manufacturer is an efficient way for ZTE to get into smart vehicles and apply our wireless charging and telecommunication technology.”
Electric buses equipped with ZTE’s wireless-charging technology, which currently operates in Zhengzhou, can be fully charged in 4 hours, he said. After the acquisition, Granton plans to assemble 2,000 coaches including electric buses and mini delivery trucks next year, he said.
ZTE also plans to invest several billions of yuan to set up a smart car manufacturing base in Zhuhai with the annual capacity of producing 10,000 new-energy buses and 20,000 logistics vehicles when construction is completed in two years, he said, declining to specify the company’s investment.
Compared to Chinese tech start-ups for building smart and electric cars, ZTE has an advantage in capital and technology in wireless charging, artificial intelligence and vehicle-to-everything communications, Tian said.
The electric vehicle market is becoming a crowded field in China, with Beijing playing a major role in developing the sector through financial incentives aimed at making the country a global leader in the technology.
The government heavily subsidises sales of locally made electric vehicles, with rebates of more than 100,000 yuan per vehicle, depending on the city.
In the first 11 months of this year, sales of new-energy vehicles grew over 60 per cent year-on-year to more than 402,000 units in China, including about 316,000 pure electric cars and 86,000 plug-in hybrids, according to the China Association of Automobile Manufacturers.
The central government has estimated that cumulative sales of new-energy vehicles to reach 5 million units from 2012 to 2020.
Gree Electric Appliances, one of China’s largest white goods manufacturers, announced in early August it would take over Zhuhai Yinlong New Energy Co for 13 billion yuan (HK$14.52 billion), to diversify its business. The plan was halted after Gree failed to win approval from the electric vehicle maker’s shareholders.
Separately, the subsidiary of Harmony Futeng, an electric car venture formed by Tencent Holdings, Taiwan’s Foxconn Technology Group and luxury car dealer China Harmony Auto, signed an agreement with the Jiangxi government in late October to invest 13.3 billion yuan to build a production plant in Shangrao city.
Rival internet companies, including Baidu and LeEco, have also unveiled plans to build electric vehicles.