Chinese carmaker Zotye Automobile International Co. plans to use a new Lake Forest-based distribution company to sell vehicles in the U.S. by 2020.
Zotye, formed in 1998, employs about 30,000 people. It announced plans last week to set up a U.S. dealer network under the Zotye USA name, which will “handle all sales, distribution, parts and service for Zotye vehicles in the United States,” it said in a statement last week.
The vehicles will “initially be imported from China,” where the company has manufacturing and operations facilities in nine cities.
The stated goal of Zotye USA, pronounced Zoh-tay, is to sell more than 10,000 cars at nearly 350 U.S. dealerships.
Its first offerings in the U.S. appear to be focused on either a small crossover vehicle or a midsize sports utility vehicle, according to automotive trade reports.
Such products would likely compete domestically with the Toyota RAV4, Honda CR-V and Nissan Rogue, according to a report last week in the Detroit News. Those vehicles sell in the $25,000 range.
“Engineering development and homologation work on the model is underway and is proceeding smoothly,” the company said.
Zotye seeks to be the first Chinese automaker to sell vehicles under its own brand name in the U.S., but it and other carmakers there could be hindered in the effort due to the Trump administration’s recently imposed tariffs on vehicle imports from China.
HAAH Partnership
Zotye’s exclusive distributor in the U.S. is Lake Forest-based HAAH Automotive Holdings. State records indicate HAAH was formed in January to “advise foreign auto manufacturers” on operating in the U.S.
HAAH’s website indicates it’s also working with Dubai-based sports car company W Motors to make luxury sports cars in the Middle East catering to “ultra high net worth individuals.”
HAAH is based in a Commercentre Drive business park near the Baker Ranch housing development. It hasn’t been disclosed whether Zotye will be at the same location.
The HAAH office is about three miles from the Spectrum-area headquarters of Irvine-based Karma Automotive LLC, Orange County’s largest automaker by employee count with nearly 800 on staff here.
Karma is financially backed by Wanxiang Group Corp., the largest China-based automotive components company.
Local Ties
Last week’s announcement resulted from “more than four years of discussions and negotiations” with Zotye in China, said HAAH Chief Executive Duke Hale in a statement announcing the U.S. plans.
Hale has lengthy experience in the domestic automotive industry, including management positions with Isuzu Motors America Inc., Mazda North American Operations and Jaguar Land Rover North America LLC, all of which have or have had significant operations in Orange County in recent years.
He also previously served as chief executive of Oklahoma Global Motors, a venture with China-based Nanjing Automobile Group that once tried to bring the MG Rover brand to the U.S.
“With the agreement, we have begun setting up a franchised dealer network to handle sales and service in America,” Hale said. “We’ve had discussions with several major dealers already and will have more to say about that in the months to come.”
The Zotye USA sales team is headed by Senior Vice President of Sales Bob Pradzinski, who worked more than 20 years for Fountain Valley-based automaker Hyundai Motor America Inc., last serving as vice president of national sales.
“HAAH Automotive Holdings is a disruptor, and we will be adding innovative features and processes to the customer and franchise dealer system,” Pradzinski said.
Zotye USA said it’s still working to fill other senior executive team positions.
