Tom Corcoran did what he came to do—get Karma Automotive LLC up and running, and ready for the next big leg of its journey: China. Now he’s handed over the wheel to Liang Zhou, “a global leader” who’s moving from Shanghai to Irvine.
“I wanted a Chinese executive, because that’s the fastest-growing market for electric cars,” said Corcoran, the luxury automaker’s chief executive since Hangzhou-based Wanxiang Group Corp. acquired Fisker Automotive in a 2014 bankruptcy auction and rebranded it Karma Automotive.
“[Liang’s] grown businesses, he’s turned them around, he’s been involved in all functions, from marketing through manufacturing. But most importantly … in every case he got significant results.”
China Market
Liang’s expertise is in leading joint ventures in China, typically partnerships with local investors that enable foreign companies to avoid 25% tariffs imposed on imported vehicles. He headed Beijing Foton-Daimler Automotive Co. Ltd., a joint venture Daimler AG in Stuttgart formed in 2012 with Guangzhou, China-based truck manufacturer Foton Motor. In 2007 he became general manager at Naveco, a venture between Iveco S.p.A. in Turin, Italy, and Shanghai-based SAIC Motor Corp. Ltd.
Karma Automotive plans to start selling California-made cars in Europe and Asia next year, and will have to form a similar partnership with a Chinese company, according to Corcoran. It will have one more vehicle to offer by then, aside from Revero, a $130,000 hybrid sports sedan it launched in 2016.
“Starting in 2019 and from that point forward, we’ll have at least a car a year to launch—that’s imperative,” Corcoran said, detailing a lineup that will include an SUV, a coupe and a convertible, all built on “different platforms” and embodying the “Karma look.”
The automaker wants to establish manufacturing operations in China in the near future—in 2016 it secured approval to build a $375 million plant in Wanxiang’s hometown of Hangzhou. The factory’s capacity will be capped at about 50,000 cars a year. Karma, which employs about 1,000 people, produces Revero at a facility in Moreno Valley, whose capacity is about 10,000 cars per year.
Karma named Bernhard Koehler China region president last month, a new position. Koehler co-founded Fisker Automotive in 2007 with Aston Martin designer Henrik Fisker and served as chief operating officer until Wanxiang’s $149 million acquisition. He played “the pivotal role” in leading Karma’s efforts to secure a manufacturing license from the Chinese government, and will be responsible for building its “engineering, supply chain, manufacturing and administrative support functions” in Hangzhou.
Corcoran Connections
Koehler will continue to report to Corcoran, who said he’ll remain at Karma in “more than an advisory role,” though he declined to elaborate. His history with the parent company, however, could shed some light.
“Wanxiang and I do a lot of business together. We’ve been partners since 2003 and friends since the 1990s,” Corcoran said, referring to his relationship with Wanxiang America Corp. President Pin Ni, son-in-law of the late Lu Guanqiu, who began making tractor blades out of old canons in 1973, and grew the shop into a conglomerate that last year posted about $23 billion in revenue.
Wanxiang bought an equity stake in Corcoran’s Rockford Powertrain Inc. in 2003 giving Corcoran a reliable parts supplier in China and Waxiang engineering capabilities and new distribution channels.
The two also serve on the board of A123 Systems LLC, which Wanxiang acquired in 2012 for $256.6 million in a bankruptcy court auction. The Livonia, Michigan-based company supplied faulty batteries that contributed to the demise of the 2011 Fisker Karma model, a setback that along with several car fires led to the bankruptcy.
Corcoran is chairman of the board, which recently approved A123 Systems’ investment in Solid Power Inc. a Louisville, Colo.-based developer of solid-state rechargeable batteries made with materials that “possess no flammable or volatile component.”
Wanxiang earmarked about $3 billion to get Karma Automotive off the ground and turn a profit by 2022, according to news reports. Liang will take over a “fully integrated car company,” including operations in Detroit, Munich and China, Corcoran said.
“We are about where we are expected to be right now, both in terms of production and sales.”
