I believe they were willing to part with the property because of this deal that was in the works ..
ZAP Acquires Majority Stake of Jonway Auto
Chinese Market Reach Expands
By Jimmy Mengel
Wednesday, September 22nd, 2010
California electric vehicle company ZAP has acquired a majority stake in China's Jonway Auto.
The move will allow ZAP to capitalize on the growing electric vehicle (EV) market in China.
ZAP will acquire 51% of Zhejiang Automotive Co. Ltd. for a total of $29 million in cash. Jonway Auto is a subsidiary of Jonway Group, whose annual revenues in 2009 totaled around $40 million, and $20 million for the first quarter of this year.
After final regulatory approval, ZAP intends on purchasing the other 41% of Jonway.
“By combining ZAP’s experienced team of EV engineers with Jonway’s manufacturing capabilities, the combined ZAP Jonway will be able to scale up with the fast-growing worldwide market for affordable electric and fuel-efficient vehicles,” said CEO Steve Schneider.
Jonway's distribution channels include over 80 factory direct dealerships that feed hundreds of factory authorized dealerships.
The company's 3.6 million square foot plant in Sanmens is currently churning out around 1,000 vehicles a month, but has the capability to produce 30,000 vehicles a year.
"ZAP’s engineering enables us to expand into the EV market and position our company to be one of the leaders in China’s EV market,” said Alex Wang, CEO of Jonway Automobile.
“The ZAP team also brings us international market access and automotive distribution channels for the new models that we are designing, and ZAP will help us meet the required international standards for these new markets."
Earlier this year, ZAP and Jonway entered a joint venture called ZAP Hangzhou to produce electric vehicles.
The group unveiled an electric SUV, modeled after Jonway's 5-door A380, at the Beijing Motor Show in April. They plan to release a smaller version of the A380 — dubbed the A280 — in the coming year.
Since China overtook the United States last year as the world’s largest automobile market, U.S. companies are seeking to expand their Chinese operations and distribution.
This partnership should allow both ZAP and Jonway to broaden market reach not only in the U.S. and China, but into Europe as well.
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