Tycoon exiled over Bo Xilai feud attempts comeback with new-energy vehicles for China
Hybrid Kinetic Group, controlled by Yang Rong, is aiming to build assemblies on the mainland with capacity to produce up to 300,000 new-energy vehicles within three years.
Yang Rong, the automotive tycoon who went on a self-imposed exile in the United States after losing a 2002 feud with Bo Xilai, is making a comeback to the industry that made him China’s third-wealthiest businessman almost two decades ago.
This time, he is ditching the boxy minivans that gave his Brilliance Auto Group an early lead in China’s commercial vehicles market, hitching a ride instead on the government’s drive to produce new-energy vehicles. A total of 31,120 fully electric cars and hybrids were sold in China in March, 35.6 per cent jump from a year ago.
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Yang, also known as Benjamin Yeung Yung (仰融), owns 13.5 per cent of Hong Kong’s Hybrid Kinetic Group, a producer of lithium-ion batteries and hybrid vehicles. Yang is chairman of the company.
Hybrid Kinetic, which reported a first-half loss of HK$136.8 million on turnover of HK$13.8 million, has spent the past eight years working on a plan to build new-energy vehicles in China.
The company is aiming to build car assemblies in three to five locations across the country, with an initial production capacity of 300,000 units within three years, eventually expanding the capacity to 1 million units.
“Three years are more than enough for us to complete the preparatory work for the production,” said Hybrid Kinetic’s chief executive Jason Xu Jianguo, during the Shanghai Auto Show this week. “Our vehicles will be affordable to those average wage-earners in China. We don’t necessarily compete against those electric carmakers.”
For now, Hybrid Kinetic’s plan is high on possibilities but low on details. Xu would not elaborate on the pricing of his vehicles, or the locations of his company’s assemblies.
Yang’s son Carter Yeung, who oversees Hybrid Kinetic’s graphene division, did not speak to the media during the Shanghai Auto Show.
At the show, Hybrid Kinetic unveiled two sport-utility vehicles -- the five-seat K550 and the seven-seat K750 -- which it describes as prototypes.
These are supposed to be powered by a 30 kilowatt battery using the yet-to-be-commercialised material graphene with a 60 kw micro turbine power generator that theoretically can extend the battery’s range to 1,000 kilometres on each charge. That’s about 10 times more than the Nissan Leaf’s 117 km range, and BMW i3’s 160 km range, both already on roads.
Yang’s Brilliance Auto -- before he lost control of it -- was the biggest maker of minivans in China during the early 2000s. It is today the Chinese partner that assembles BMW’s 3-series, 5 -series sedans and its X1 mini SUV in Liaoning province.
The early success of Brilliance’s Shenyang Jinbei vans made Yang the third-richest man in Forbes’ list of 2001, with a personal worth estimated at 30 billion yuan (US$4.35 billion).
A year after he made the Forbes list, Yang incurred the wrath of then Liaoning governor Bo Xilai, over a plan to locate Brilliance’s proposed BMW venture in Ningbo, close to Shanghai. Bo had wanted Brilliance, one of the biggest companies in the Liaoning provincial capital of Shenyang, to expand in his power base, help create jobs and alleviate the rust belt’s chronic unemployment.
When Yang persisted with moving to Ningbo, Bo seized control of Brilliance, accused Yang of embezzlement and issued a warrant for his arrest, sending the tycoon fleeing to the US.
Bo’s political career took off over the next decade following the feud, with him being appointed China’s commerce minister in 2002, then Communist Party Secretary of Chongqing in 2007.
In Chongqing, Bo mounted a campaign to raise his political profile to prepare for higher office, until political power play and a murder-and-sex scandal landed him in prison in 2013, where he serves life imprisonment.
While all this was going on, Yang remained mostly ensconced in California, where he registered a company to pursue his dream of building electric vehicles.
Plans were announced in 2009 to build car assemblies in Alabama, and Mississippi, but nothing came of the plans amid the global financial crisis and the near bankruptcy of the US carmaking industry.
With China’s economic growth, and after the country surpassed the US as the worlds largest automotive market, Hybrid Kinetic said it is poised to pounce on the opportunity.
It’s using US technology, and has commissioned designs by the Mahindra Group’s design studio Pininfarina SpA.
“Expansion of the production will depend on the market reactions,” said chief executive Xu. “Negotiations with car part makers are going on smoothly.”